Author: Charlotte Gill

Advancing globalisation spurs innovation in seaborne trade

Posted on by Charlotte Gill

Worldwide economies are linked more closely than ever. Although world merchandise trade volume slumped five years ago, it is hitting an all-time high at the moment. Advancing globalisation has also led to a significant intensification of seaborne trade. In 2012, the volume of million tonnes loaded in ports worldwide was 128 percent higher than in 1990. In order to keep pace with the growing cargo volume, ports face the need to continuously invest in modern port infrastructure.

Besides the omnipresent requirement to increase productivity, ports are further challenged by environmental regulations. As a result, numerous innovative tools have already been implemented to improve performance and reduce emissions.

International seaborne trade

2.605bn tons

1970

4.008bn tons

1990

9.165bn tons

2012

Advanced cargo handling
Liebherr Maritime Cranes is the market leader in the mobile harbour crane sector and has put its focus on innovation right from the start. In close collaboration with the customer, Liebherr has developed a number of game-changing innovations that combine higher productivity with increased eco-friendliness.

In 2010, Liebherr introduced its Pactronic hybrid power booster, which was awarded the State Prize Clean Technology Austria 2012. By adding an accumulator as a secondary energy source, Pactronic is regenerating the reverse power while lowering the load. The stored energy is transferred back to the system when the crane requires peak power during hoisting. In terms of turnover capacity, that means a plus of up to 30 percent and a reduction of fuel consumption in the same range, depending on operation. The hybrid drive system is virtually maintenance free, as it only needs visible inspection every 10 years. 100 percent recyclability and less noise exposure are additional ecological benefits of this advanced system.

In addition to drive system optimisations, innovative tools for advanced crane operation have the potential to boost performance in ports. Liebherr’s Cycoptronic ensures sway-free load motion by automatically initiating dynamic counterbalancing movements to equalize transverse and longitudinal sway of the load while operating at maximum speed.

Additionally, Cycoptronic extension Teach-In eases and accelerates bulk handling. This point-to-point control for semiautomatic operation pilots the crane to predetermined loading and unloading points at the highest possible speed. Moreover, the Vertical Line Finder guarantees the boom is exactly vertically above the load, thereby preventing side loading of the crane for a longer lifetime.

Simulation-based training
In the constant drive for increased productivity, ports not only focus on new equipment, they are also looking for ways of up-skilling their employees. Efficiency, safety and costs are three key factors in modern crane operator training. Recent technological developments open new possibilities in terms of training efficiency, and simulation-based solutions are recognised ever more widely as state-of-the-art training methods.

Read Part 4 of 4: Cargo Culture

One major benefit of simulator training is the ability to simulate user-defined environmental conditions. This allows both experienced operators and trainees to gain valuable experience operating under challenging conditions in a safe virtual environment. The resulting increase in operator skills allows for safe and productive crane operation in the real world and naturally boosts productivity.

Liebherr launched its LiSIM range of maritime crane simulators in 2013. The installation of original Liebherr drive systems, software and hardware guarantees a realistic and highly immersive training experience. LiSIM is the only realistic virtual solution available in the market for learning the precise handling of Liebherr’s maritime cranes and their innovative features.

Future growth of global trade, as well as more restrictive environmental regulations, will most likely accelerate innovation processes. Today, shipping lines are ordering new vessels with ever greater capacity at frequent intervals, and the production of the first 19,000 TEU vessel has already started. A strong commitment towards research and development is required on the port equipment manufacturer side to ensure future customer needs are met.

PEMA gives shipping industry a united voice

Posted on by Charlotte Gill

Such an integral part of the world’s economy, the shipping industry underpins the trading relationships of many regions. Although people tend to think of colossal cargo ships when discussing the industry, the surrounding infrastructure to which these vessels travel is equally as important.

The ability of ports around the world to cater for such high quantities of freight – quantities that have been steadily rising since the 2008 financial crisis slowed the industry to a crawl – means a coordinated strategy must be in place to ensure equipment is standardised and up-to-date.

PEMA has acted as a catalyst for reform over the last decade, helping shipping dramatically improve its environmental impact, safety issues and costs

Fortunately, an industry association has grown over the last decade that has brought together all the key stakeholders in shipping, ports and technology, so a united voice is heard when issues arise. The Port Equipment Manufacturers Association (PEMA) is the leading organisation for the port equipment industry, and has spearheaded many of the reforms and modernisation drives seen over the last few years.

United front
Founded in 2004, PEMA acts as a single voice and forum for the port equipment and technology industry. A non-profit organisation that is incorporated under Belgian law, PEMA has grown over the last decade to be the most prominent voice for the industry. Leading companies that were part of the initial launch of the organisation include Bromma Conquip, Hyster Europe and Konecranes. They have since been joined by a number of firms that operate in the port market, as well as those that make related equipment. This was in part done as a result of a change in PEMAs constitution in 2008, which allowed technology providers and consulting companies to join.

The group’s former president, Christer Granskog, says the need for the industry to discuss new trends and issues led to PEMAs formation: “We established PEMA because we identified a need for peer-to-peer dialogue in the industry, and the need for a mouthpiece for equipment manufacturers.”

PEMA’s current president, Ottonel Popesco, describes the body as integral to the industry: “As a trade body representing the interests of the 
international port handling equipment and technology 
sectors, our mission is to promote and support safe, secure, sustainable and productive ports. We also 
strive to forge strong, long-term relationships with all relevant stakeholders, and we help to define best practice within the communities that we serve.”

The group describes its mission as ensuring the port equipment and technology sectors are able to create a safe, secure and sustainable network of ports that serve the global shipping industry. Its focus has been specifically on safety, security, productivity and protecting the environment. Through a steady supply of research papers, surveys, educational events and forums, PEMA is able to make a positive, neutral contribution to the knowledge of the industry, ensuring there is a framework for best practice.

PEMA has published regular industry surveys since 2007, providing an overview of the themes and issues seen by port equipment and technology manufacturers across the world. The regular industry guidelines and recommendations it publishes are continually being updated, and help to provide operators and key stakeholders with a platform from which they can act.

Since 2011, PEMA has released its regular Information Paper series, which highlights key trends and developments in the industry. So far six have been produced, on the subjects of: radio-frequency identification in ports and terminals; energy and environmental efficiency issues; container terminal yard automation; the use of optical character recognition technology; weighing containers; and the electrification of rubber-tyred gantry (RTG) cranes. Forthcoming studies will look at tyre selection and maintenance, crane operator safety, collision prevention in terminals, and the use of laser technology.

$2.05trn

world trade value, 1980

$6.4trn

world trade value, 2000

$18.4trn

world trade value, 2012

PEMA arranges regular educational events, which encourage key industry players to mix with students. It has also developed a ‘Student Challenge’, which pits student teams against each other to produce a case study on a particular issue. The scheme was originally launched in cooperation with the Blekinge Institute of Technology, the Deft University of Technology and the University of Hamburg.

Environmental efficiency
With environmental policy playing an increasingly important role in how the world operates, the shipping industry has to make a number of changes to the way it works. PEMA’s environmental committee helps to decipher the regulatory changes the industry must comply with in order to be a more sustainable energy user and have less of an impact on the surrounding environment.

Modernising the equipment within ports is essential to bringing down the amount of carbon that is emitted, as well as improving efficiency. The group’s recent study on electrifying RTG cranes is seen as a breakthrough for the industry, and one that will be taken up by many leading ports. Popesco said the recent report highlighted the need for more energy-efficient ports and terminals. “Energy efficiency and reducing carbon emissions are two objectives that the world’s ports and terminals are taking steps to achieve through the electrification of RTGs, and an area where PEMA is able to raise awareness and provide information on technological alternatives.”

The importance of safety within the industry for workers is also an integral part of PEMA’s remit. The organisation is passionate about improving standards so workers in ports around the world can enjoy the same levels of safety. Stephan Stiehler, Strategic Industry Manager of Ports & Cranes for SICK and Chair of PEMA’s safety committee, says that, while things have improved, more can be done: “The risk of injuries and loss of life, as well as damage to equipment and cargo, is still very real in port and terminal operations worldwide, even though the situation has improved significantly in recent years. We believe that this level of risk is unacceptable because technologies exist that can dramatically improve safety. Our common aim as port equipment and technology experts is to help reduce injuries, damages and enable better risk management.”

Read part 3 of 4: Cargo Culture

All these issues are bound by the need to invest in developing new technologies for the port equipment sector. PEMA’s Technology Committee Chair, Allen Thomas, who is also COO of APS Technology Group, said it is the area that will improve both the environmental impact of the industry, as well as the safety concerns surrounding it. “Technology is the uniting force connecting our modern port landscape and the extended supply container chain. Technology lies at the heart of the safety environmental and operational improvements that are dramatically changing the competitiveness of port operators, their customers and the communities they serve.”

PEMA has acted as a catalyst for reform over the last decade, helping shipping dramatically improve its environmental impact, safety issues and costs. Popesco says this would not have been possible without a unified voice. “With our growing membership and expanding range of activities, [PEMA] is well positioned to play an important role in ensuring that port equipment and technology providers have a clear, unified voice in the industry; and that as a body we can make a genuine difference in improving the safety, security, efficiency and sustainability of the world’s ports and terminals.”

Shipping industry sails towards environmentally friendly future

Posted on by Charlotte Gill

Although regarded as a more environmentally sustainable means of mass-freight transport than many of the alternatives, the global shipping industry has needed to modernise the way it operates for a number of years now. Greener means of moving huge amounts of cargo offer the benefit of lower fuel costs, meaning lower long-term costs for operators and clients.

The industry is considerably more sustainable than the alternatives. Estimates suggest container ships emit roughly 40 times less carbon dioxide than large freight aircraft, and three times less than a large truck. Container ships are 2.5 times more energy efficient than train transport and seven times more than road. However, the industry is still not especially eco-friendly, with large amounts of polluting fuels being pumped into the seas by container ships.

[T]he industry is still not especially eco-friendly, with large amounts of polluting fuels being pumped into the seas by container ships

While improvements have been made at ports to comply with tightened environmental regulations – thereby improving terminal infrastructure and boosting efficiency – the ships themselves have received less attention. A cargo ship has an approximate lifespan of around 26 years. With concerns about their environmental impact having grown over the last decade, many of the mammoth ships that ferry goods across the seas need to be updated.

Existing fleets
The engines of traditional container ships can weigh around 2,300 tonnes and are roughly 1,000 times more powerful than a family car. The ships can stretch to 1,300ft in length, 180ft in width, and may have as many as 21 storeys separating the bridge from the engine room. Such floating beasts are capable of transporting 11,000 20-foot containers.

Unsurprisingly, such colossal ships require a staggering amount of fuel to propel them across the seas, and the fuel used is low-grade bunker fuel – also known as Heavy Fuel Oil – which contains more sulphur than traditional diesel. With consumption rising – in 2001 around 278m tonnes of bunker fuel was consumed, estimates suggest over 500m will be used in 2020 – changes need to be made to these huge cargo ships in order to do less damage to the environment.

The strategy of many shipping firms has been to pump money into researching new technologies, in the hope that newly efficient ships can be added to their fleets. However, with many of their ships still being seaworthy – and having been expensively built in the past – some firms are looking to retrofit cleaner technologies to their older vessels.

Many regulatory bodies are putting forwards new rules that will govern how much fuel these ships can use. The International Maritime Organisation suggested there should be a requirement for marine fuel to reduce its sulphur oxide emissions by 90 percent. Ingmar Loges, the firm’s Global Head of Shipping for International Clients, said in the report: “The drastic decrease in charter rates, increasing bunker prices and stricter IMO regulations mean that shipping companies have to minimise their operating costs while simultaneously ensuring that their ships operate in an environment-friendly manner.”

Eco ships
A number of manufacturers are developing eco versions of their ships, which they hope to persuade the likes of Maersk, Nippon Yusen Kabushiki Kaisha (NYK) and Evergreen Marine to add their fleets. NYK recently unveiled its NYK Super Eco Ship 2030 concept, which it hopes will act as a springboard for innovation across the industry. The design uses solar panels to help propel the ship, although the technology is not quite advanced enough to provide all the necessary energy.

Antti Yrjänäinen, Senior Design Manager at Elomatic, the firm commissioned to develop the ship, says: “The sails are striking, even though they deliver only a small part of the power requirement. The retractable solar cells that cover the container area likewise produce only part of the required energy. However, as they are emission-free energy sources, they are highly significant in reducing the ships’ total emissions.”

While the ship itself is far from being turned into a reality, designer Vittorio Garroni says it should act as a platform for future innovation: “We need a few more years to deepen research on the sun, wind, cells and energy to finalise a real ship that will hopefully be both profitable for business and the environment.”

Japanese firm Eco Marine Power (EMP) develops and markets environmentally friendly power and propulsion systems for ships, and has been researching all manner of renewable energy technologies for the industry. EMP revealed in January that it had created a new ship-sailing technology it called ‘EnergySail’. The technology allows sails to use both wind and solar panels to power the ship. EMP Director Greg Atkinson says: “We have… been encouraged by some very positive feedback that we have received from a number of shipping companies and the increasing interest from companies and organisations around the world in the technologies we are developing.”

In December, Finnish company Wärtsilä announced plans to offer a radical new container ship for US shipping company Crowley Maritime Corporation. The vessel will be powered by liquefied natural gas and has been designed with the new Emission Control Area regulations on the US eastern seaboard in mind.

Rick Zubic, Vice President at VT Halter Marine, the company tasked with building the ships, says: “This vessel design raises the bar for merchant shipping, not only for US flagged ships, but globally. We are proud to be taking this bold step in bringing environmentally viable designs to the market, with Wärtsilä as a key partner.”

Read part 2 of 4: Cargo Culture

Turning dreams into reality
While the research conducted by these companies certainly offers a glimpse of what the future may hold for the shipping industry, transforming concepts into fully functional container vessels is another matter. Freight costs are increasing for companies that already face competition from the airline and rail industries, as well as the rising costs of insurance and security as piracy has increased.

Bringing down energy costs and cutting the levels of emissions will take a large amount of resources. Until a new fleet of ships is unveiled that offers a more efficient mode of transport, the global shipping industry will continue to be attacked for its high level of polluting.

Repped to pieces: why firms need reputation management to survive

Posted on by Charlotte Gill

In the wake of allegations of war profiteering in 2003, the oil field services giant Halliburton faced fresh controversy when, in 2011, it was challenged by environmental authorities – the EPA among them – who claimed fracking could contaminate groundwater and impact local communities. In answer to the criticism, according to Fox News, a company executive took the opportunity over a keynote lunch speech to drink fracking fluid to prove its supposed purity.

The demonstration – of course – failed to offer any conclusive evidence of the sort, but does go some way to illustrate the lengths to which organisations are willing to go to mend a muddied reputation.

Reputation management
The turbulent economic conditions of the past half-decade and the resulting air of widespread mistrust has given rise to unprecedented challenges in the field of reputation management, as companies are subjected to closer scrutiny than ever before. Whether it stems from shareholders, consumers or taxpayers, the lofty expectations of the post-crisis world require companies to implement numerous and complex strategic measures to boost or restore their credentials.

[W]idespread mistrust has given rise to unprecedented challenges in the field of reputation management

“Succeeding with a good business strategy isn’t easy anymore,” says John Patterson, senior advisor at the Reputation Institute. “Growth is harder to come by, product launches fizzle out, the financial markets won’t cut you any slack, and even your employees say they don’t understand you. As a result of this loss of control, the gap between strategy and results has widened. You have more than enough information, and know that multiple channels are out there to be used, but you no longer have what you need to make confident decisions amidst the chaos and complexity that globalisation and commoditisation have wrought.”

Such was the problem for BlackBerry, a company pushed to the brink of extinction by rivals such as Apple and Google, who together rid the company of its once-impressive market share, damaging its reputation in the process. The present-day business of reputation management requires companies to explore all manner of strategic mechanisms – many of which did not exist until very recently – if they are to cement or restore trust between themselves and those affected.

“Gone are the days where a shareholder value mantra or a customer focus alone was sufficient. European multinationals must be trusted in order to garner enough support from the workplace to the marketplace to continue to operate sustainable businesses around the world,”says Patterson.

The post-crisis environment
The reputations of America’s big four banks – Bank of America, Wells Fargo, Citi and Chase – suffered spectacularly as a result of financial losses and oversight. All are still struggling to rekindle consumer trust amid the ongoing financial fallout. Even after the immediate crisis, the American public’s trust plummeted: in October 2010, a Gallup study revealed it had hit an all-time low of 18 percent.

The overwhelming response of financial institutions, particularly banks, has been to ramp up regulatory compliance, corporate social responsibility and innovation – which appear to have yielded little in the way of results. Only last year, JP Morgan paid $920m in penalties relating to a $6.2bn trading loss, Wells Fargo forked over $42m to the National Fair Housing Alliance due to unlawful foreclosures, and Bank of America agreed to pay Fannie Mae upwards of $11bn relating to bad mortgages.

The fundamental misunderstanding here is that a steady rollout of schemes and initiatives will gradually heal any wound, which is just not the case. In order to redress the trust lost as a consequence of mistakes in years gone by, firms must instead redefine their foundations and instigate fundamental cultural change from within.

The unwillingness of consumers to forgive those most entangled in the financial crisis is best illustrated by the predicament of AIG. The insurance giant’s reputation was sullied when its role in the subprime mortgage crisis – involving billions of dollars-worth of unstable credit default swaps – became clear. The firm accepted blame, only to later accept a $130bn government bailout to fund its survival, while also failing to curb its executive bonuses. AIG’s reputation was tarnished to such an extent that, even after it assured the masses it had returned the entire amount to the government, many were still unwilling to forgive the company.

People gather on Wall Street to protest against government bailouts of banks. Revelations in the wake of 2008's financial crisis gave financial institutions some serious reputation management issues
People gather on Wall Street to protest against government bailouts of banks. Revelations in the wake of 2008’s financial crisis gave financial institutions some serious reputation management issues

As an extension of the company’s reimbursement, AIG later introduced Negative Publicity Insurance, a product that acknowledges its past failings and seeks to right the reputational wrongs of those finding themselves in similarly sticky situations. The resulting product, ReputationGuard, gives clients access to experts at PR firms Burson-Marstellar and Porter Novelli to protect against reputational disasters. “In today’s world, one person’s negative opinion can quickly become adverse publicity on a global scale,” said Tracie Grella – the President of Chartis’ Professional Liability unit, the AIG division developing the product – in a statement. “Public perception of the response to an event can have a lasting impact on an organisation’s reputation.”

AIG is just one of many companies to have made drastic changes in response to past wrongdoings. Nike was chastised for exploiting adolescent girls, particularly in the manufacturing of their products. This prompted the Nike Foundation to establish The Girl Effect in 2008, to address poverty and lack of opportunity among young, female workers.

Reputation strategies
Financial services are disposed to bad reputations, but technology is usually at the opposite end of this spectrum. With its natural propensity for innovation and focus on customer service, it’s unsurprising many of the world’s most beloved brands are tech players. According to Harris Interactive, Amazon and Apple came first and second in the 2013 list of retail’s best reputations.

The evolution of the reputation environment, however, is far from a sum of emerging strategies, but rather the result of a wider cultural shift in the way consumers see companies. Corporates have taken more responsibility for the communities in which they work, and consumers now exercise more power than ever before over the way companies are run. Having said that, while these factors, along with the proliferation of media channels and the focus on action as opposed to PR spin, complicate proceedings, the underlying principles remain unchanged.

One key component of reputation management is brand reinforcement; consumers are quick to forget the relevance of a brand if they are not explicitly reminded why it is important to them. In the case of Audi, each ad comes with the tag line vosprung durch technic, reminding consumers of the company’s German heritage, conjuring associations with classic German engineering.

As an extension of this principle, marketers must consider brand segmentation when raising a reputation. The process of dividing and identifying market segments to meet a specific set of expectations is something that harbours the potential to boost or ruin a company’s fortunes. For example, Apple’s decision to introduce the iPhone 5s and comparatively cheaper 5c at the same time acknowledges the unwillingness of those in developing markets to fork out a premium for an Apple product.

Adequate leadership
Another factor that so often underpins reputational loss is the capacity of company heads to uphold the company image through turbulent times. “We’re clearly experiencing a crisis in leadership,” says Richard Edelman, president and CEO of Edelman, in a statement. “Business and governmental leaders must change their management approach and become more inclusive by seeking the input of employees, consumers, activists and experts such as academics, and adapting to their feedback. They must also pass the test of radical transparency.”

The relationship between business and consumer could not be further from the unquestioning dynamic that many assume it is. Regarding the responsibility of CEOs, they represent a company’s philosophy and strategic direction, so communication is key.

“From a process and relationship perspective, an organisation must not only know what they consider to be ‘doing the right thing’ it must also be ready to respond to changes in reputation through systems, processes and communications,” says Griffiths. Whereas the vast majority of company employees are given a specific role to play, the CEO’s job is far broader; they must ensure each employee and stakeholder is united in reaching a common goal.

JPMorgan Chase Chairman and CEO Jamie Dimon testifies during a US House Financial Services Committee hearing about the bank’s trading loss
JPMorgan Chase Chairman and CEO Jamie Dimon testifies during a US House Financial Services Committee hearing about the bank’s trading loss

Among the most impressive instances of a CEO-led reputational recovery is Angela Ahrendts’ turnaround of Burberry, which escaped ruin and went on to become one of the most successful luxury brands in the world. From the 1970s to the early 2000s, Burberry became increasingly associated with hooliganism, undermining the brand’s image of exclusivity and causing its credibility to plummet. Under Ahrendts, however, the company boosted its prospects through celebrity endorsement, social media and a formidable e-commerce presence.

Another effective company overhaul, this time instigated by Edward Whitacre, can be seen in the case of GM, when, after emerging from the shadow of bankruptcy, the firm embarked upon an aggressive reorganisation plan in 2010. GM discontinued and sold off numerous car brands, focusing on Chevrolet and Cadillac as the car manufacturer’s two driving forces.

Digital strategy
Frequently, new digital channels allow companies to communicate with disenchanted customers and give easy access to a proven method of righting past wrongs. For instance, when one of the Red Cross’s social media employees posted what was intended
as a private tweet on the organisation’s timeline, the company followed up with a humorous tweet. The two combined, rather than damage the organisation’s reputation, generated media attention and even received support from third parties.

On the other hand, social media allows the customer a direct line to voice their grievances. When one United Airlines passenger recorded a song explaining how the airline had broken his guitar, the video message went viral, denting the company’s share price. In the case of Airbnb, the property rental website has gone to extreme lengths to combat the negative publicity that can come with social media. The company offered $1,000 credit to one soon-to-be bride after her cottage accommodation was cancelled at the last minute, and even sent one guest a Pearl Jam T-shirt after she tweeted about a gig.

Beyond the realms of publicity, however, social media illustrates the ways in which relationship management has taken on a greater air of personalisation, demanding companies communicate with parties on an individual basis.

“Through a digital world, reputation is influenced and being influenced by engaged and connected stakeholder groups,” says Griffiths. “The realisation that reputation is both public and changing by the minute in the digital world has forced organisations to do two things; be responsive and ‘really be’ in reality the organisation that they could previously just have ‘claimed’ to be. Digital and online reputation has forced levels of accountability and transparency.”

There is no single method for successful reputation management. Rather, the responsibility lies with individual companies to identify what employees, shareholders and customers expect of them.

Future of robotics gets people talking at Innorobo 2014 | Video

Posted on by Charlotte Gill

It’s the stuff of science fiction: using robots as part of our daily lives. Or is it? We get up close and personal with the latest robotic inventions at Innorobo 2014 and report back.

REEM-C: Hi, I am REEM-C. Welcome to Innorobo.

The New Economy: The conference brings together the latest innovations in robotics: from domestic, educational, and even industrial robots. This is the latest evolution in telepresence, and offers remote access for people to attend events and interact with others from the comfort of their home.

Jeremie Koessler [Managing director, Awabot]: We use it in different markets, like education, for remote students. We use it in museums, so you can visit any museum in the world. Events like today. And also healthcare, for elderly people to have social relationships.

The New Economy: This is Buddy. He offers education for children, especially those with autism, who find it difficult to interact socially. He also provides home surveillance.Buddy is expected to hit the market by the end of 2014, with a price tag of around €1000.

Innorobo has witnessed a real development of robots over the four years it’s been holding conferences

But beyond personal services, robotics is transforming industries. They’re being put to work in medicine, agriculture, logistics, manufacturing, and the military.

This robot started life as a military prototype, designed to carry heavy weights. Now it’s become a civilian assistance machine. It can withstand weights of up to 40kg, and the developer said it could be used in the production of cars. This machine was designed for warehouse security.

Odile Laborie [Business Development, EOS Innovation]: The robot does patrols inside warehouses, and it can detect and alert when something wrong happens in the warehouse. And then send information to the telesurveillance agency, and it can control what happens – send alert to the police, so the police can act into the warehouse.

The New Economy: But why is the development of robots so important?

Frank Tobe [Owner/Publisher, The Robot Report]: I think it’s important to challenge the creativity of technicians, to solve real problems. And we have real problems in manufacturing, we have real problems in electronics, we have real problems in products that we already have. And there’s a technological solution on the horizon. There’s software technology, as well as mechanical technology. And the blend of them is robotics and automation.

The New Economy: Innorobo has witnessed a real development of robots over the four years it’s been holding conferences: from the prototype stage to machines that can now be used commercially, and gives a very real insight into what we might expect the future to look like.

REEM-C: Goodbye; see you soon.

Google genius Ray Kurzweil predicts the future of technology

Posted on by Charlotte Gill

Given that he’s been hailed as one of the greatest innovators of the last 50 years, it’s not hard to see why Google snapped up Ray Kurzweil’s services in 2012. A pioneering thinker since the 1970s, he has accurately predicted – despite derision at times – many of the technologies that people take for granted today.

Inc. magazine dubbed Kurzweil “the rightful heir to Thomas Edison”, while PBS described him as one of the 30 innovators that “created America”. Such gushing praise might seem over the top for someone who hasn’t enjoyed the same household recognition as many of his contemporaries, but those who know of his contributions to society hold Kurzweil in an extremely high regard. While the likes of Bill Gates and Steve Jobs have rightfully taken home the plaudits – and riches – for their own innovations, Kurzweil has preferred to stand outside the spotlight.

Kurzweil’s predictions have been varied and impressively accurate. In the 1980s, he suggested the internet would be a central part of people’s lives, even though it was just a niche technology at the time. He also predicted computers would be capable of defeating humans at chess shortly before Garry Kasparov, the world chess champion, was beaten by a computer designed by IBM.

Kurzweil’s predictions have been varied and impressively accurate

But it hasn’t all been talk: Kurzweil is also an extraordinarily successful inventor in a wide range of fields. He has pioneered hugely successful new technologies in health, speech recognition, artificial intelligence, and even music.

Kurzweil has been the recipient of a number of awards, including the $500,000 MIT-Lemelson Prize (considered the top honour in the world for innovators) in 2001. In 1999, he received the US’ highest technology honour, the National Medal of Technology and Innovation, from President Bill Clinton. In 2002, he joined the likes of Guglielmo Marconi, Edison, Jobs and Nikola Tesla when the US Patent Office inducted him into the National Inventors Hall of Fame. Over the course of his career he has received 20 honorary doctorates in recognition of his incredible contribution and inspiring dedication to innovation.

Early starter
Born in 1948, Kurzweil was raised in New York City by Jewish parents who had fled Austria shortly before the Second World War. An enthusiastic reader of science fiction, he would spend his days at school focusing on his own projects instead of studying. Heavily influenced by an uncle who worked as an engineer at research centre Bell Labs, he began to learn computer science in his early teens.

Kurzweil went on to study at MIT, gaining a bachelorship in computer science and literature in 1970. At the same time, he formed a company that used a computer programme to match high school students with relevant colleges. It was such a success that he soon sold the company to Harcourt, Brace & World for $100,000 (more than $600,000 in today’s money).

By 1974, he had founded Kurzweil Computer Products, which led the development of the first scanner. His work also led to great advances for blind people, with the invention of the first print-to-speech reading machine and the first text-to-speech synthesiser, as well as the first computer program capable of recognising written text. A commercial version of the scanning program was later released, which proved hugely popular and led to the company being bought out by Lernout & Hauspie. The new owners were later subsumed into Xerox and are now well known as Nuance Communications.

A meeting with legendary musician Stevie Wonder inspired Kurzweil’s next big project. Wonder, blind since birth, had complained about the disparity of capabilities between electronic synthesisers and traditional musical instruments. This inspired Kurzweil to devise a new synthesiser, the Kurzweil K250, as part of his latest business, Kurzweil Music Systems. The synthesiser accurately mimicked sounds of traditional instruments, from grand pianos to the string section of an orchestra, and an array of effects. It became an iconic instrument used by musicians from many genres.

[T]echnological progress will be so rapid that humans won’t be able to understand it, resulting in people altering their minds and bodies

While revolutionising musical instruments, Kurzweil had also formed Kurzweil Applied Intelligence. The new company specialised in developing speech recognition programs, with the first product launched in 1987. During the 1990s, Kurzweil dedicated more of his time to educational pursuits and developing technologies that would aid schoolchildren with disabilities such as dyslexia, blindness and attention deficit disorder. He founded the Medical Learning Company during this period, which created software that allowed doctors to practice on computer-simulated patients.

Predicting the future
Kurzweil is famed for his optimistic outlook on the future and fervent belief that science and technology will help solve some of the greatest troubles affecting mankind. His book The Singularity is Near, published in 2005, documents his beliefs regarding artificial intelligence. It describes his concept of ‘the law of accelerating returns’, which predicts technologies will continue to advance at a greater speed over the coming years, reaching a ‘technological singularity’ around 2045. At that point, technological progress will be so rapid that humans won’t be able to understand it, resulting in people altering their minds and bodies with nanotechnologies, genetic enhancements and artificial intelligence.

While primarily focused on developing advanced ways of harnessing the vast amount of data the company possesses, Kurzweil’s work at Google will ultimately free him to think big. Google prides itself on its commitment to innovation, and this will allow one of the US’ most remarkable thinkers to put his mind to developing the technologies that will dominate life long after he is gone.

Kurzweil’s predictions for the future:

1. Solar energy

Just-around-the-corner

Solving the global energy crisis and weaning countries off fossil fuels has become the mission of many scientists concerned with the state of the climate, but finding a sustainable and efficient alternative that doesn’t require government subsidies has proven difficult. Kurzweil recently told CNN: “By 2030, solar energy will have the capacity to meet all of our energy needs. The production of food and clean water will also be revolutionised. If we could capture one part in 10,000 of the sunlight that falls on the Earth, we could meet 100 percent of our energy needs, using this renewable and environmentally friendly source. As we apply new molecular scale technologies to solar panels, the cost per watt is coming down rapidly… The total number of watts of electricity produced by solar energy is growing exponentially, doubling every two years. It is now less than seven doublings from 100 percent.”

2. Vertical farming

Image courtesy of Vincent Callebaut Architectures
Image courtesy of Vincent Callebaut Architectures

Feeding the world is going to become increasingly difficult as the global population continues to soar. While land is too scarce for the sort of agriculture necessary, Kurzweil thinks we will soon see a smarter, more efficient way of providing food for the masses. Speaking to The Times, he said: “There will be a new vertical agriculture revolution, because right now we use up a third of the usable land of the world to produce food, which is very inefficient. Instead we will grow food in a computerised vertical factory building – which is a more efficient use of real estate – controlled by artificial intelligence, which recycles all of the nutrients so there’s no environmental impact at all. This would include hydroponic plants, fruits and vegetables, and in vitro cloning of meat. This could also be very healthy – we could have meat with omega-3 fats instead of saturated fats, this sort of thing.” However, sceptics have been vociferous in expressing their belief that vertical farms are unrealistic. Green campaigner and writer George Monbiot recently pointed out that the difficulties in getting sun onto indoor crops, along with the cost of providing artificial light, would negate any benefits from such farms.

3. Extending life

Extending-life

Revolutionising medicine and public health is a goal of scientists worldwide, with new discoveries constantly being made. Kurzweil believes technology will soon allow the effects of ageing to be slowed. He told CNN: “Up until recently, health and medicine was basically a hit-or-miss affair. We would discover interventions such as drugs that had benefits, but also many side effects. Until recently, we did not have the means to actually design interventions on computers. All of that has now changed, and will dramatically change clinical practice by the early 2020s. We now have the information code of the genome and are making exponential gains in modelling and simulating the information processes they give rise to.” Speaking to The Times, Kurzweil added there are three key stages to extending life: staying healthy today, improving biotechnology, and the forthcoming nanotechnology revolution. “20 years from now, we will be adding more time than is going by to your remaining life expectancy. We’ve quadrupled life expectancy in the past 1,000 years and doubled it in the past 200 years. We’re now able to reprogram health and medicine as software, and so that pace is only going to continue to accelerate.”

4. 3D printing

3D-printing

Although 3D printing has been discussed at great length in recent years, Kurzweil cannot stress enough just how transformative the technology will soon be. He describes the world as being on the cusp of a “golden era of 3D printing”. He said: “3D printing is getting a lot of attention. There are niche applications such as printing our replacement parts for machinery, but the opportunity to begin replacing significant portions of manufacturing is still about five years away. If we look at the life cycle of technologies, we see an early period of over-enthusiasm, then a ‘bust’ when disillusionment sets in, followed by the real revolution. Remember the internet boom of the 1990s followed by the internet bust around the year 2000? That was around the time Google was getting started, and now we have multi-hundred billion-dollar internet companies. We’re in the early boom phase of 3D printing enthusiasm and hopefully we’ve learned enough to avoid a period of undue disillusionment, but I do see the early 2020s as the golden era of 3D printing. For example, in the early 2020s, you’ll have a choice of many thousands of cool clothing designs that are open source and that can be printed out for pennies a pound.”

Woodland carbon capture: a carbon offsetting scheme with a difference

Posted on by Charlotte Gill

The business of carbon capture need not be an altogether grey affair, but rather one that incorporates that rarest of colours when speaking of carbon emissions – green. Pictures of pollution are often characterised by the fog of factory smoke and the inky black of oil – so much so that we forget woodlands constitute a vital component of the carbon cycle, as well as an effective means by which businesses can offset emissions.

Woodlands possess a natural ability to extract carbon dioxide from the atmosphere, curbing emissions in the process. While it’s true the science of climate engineering – of which woodland carbon capture plays a small part – more often looks to the ocean depths or else the skies above for the purpose of locking in carbon, woodlands remain an effective means to that same end.

The science is as simple as could be: trees capture carbon dioxide and store the carbon as organic matter, thus reducing emissions. This is an attractive solution for businesses that wish to ramp up their sustainability drive.

Granted, the business of woodland carbon capture falls short of a solution in itself, but it is most certainly a cost-effective and competitive means of combating climate change. This is provided consumers and businesses alike exhibit a willingness to look beyond the near term.

A long-term solution
One company that offers an answer to environmental concerns is the Carbon Tree, which marries carefully selected businesses and landowners to form a mutually beneficial carbon capture partnership. The premise is companies – who in return are granted the rights to the carbon captured over the project’s lifetime – will finance parties interested in planting new woodland.

“By creating carbon finance and encouraging more landowners to plant new woodland, we are committed to make a real and measurable impact in supporting the move towards a low carbon economy,” says the organisation’s founder Tom Riley.

“I believe forward thinking businesses realise the government will impose tighter regulations on private sector emissions, leading them to embrace change and implement a green culture now, early enough to allow it to grow organically, rather than having to adopt one at the last minute.”

Investing in woodland carbon capture allows businesses to organically increase their sustainability efforts, rather than panicking at the last minute
Woodland carbon capture looks straight to nature for sustainability solutions, injecting the clean, green image back into reducing carbon emissions

The service is one that has arisen in light of a growing concern with how businesses are affecting the environment. It is far from alone: like-minded organisations such as Forest Carbon also work towards mitigating the impact of greenhouse gas emissions.

“I think the idea that running your business sustainably – and restoring in some way what you take out of the environment – is inarguable for most people,” says the organisation’s director, Stephen Prior. “And since businesses are not all faceless – they’re run by people, and people love trees – a carbon woodland fits the bill.”

Having said that, the problem with this method is it takes some time for the project to mature – a factor that is serving to dissuade a number of businesses from participating in the scheme. Currently, the real value of a Woodland Carbon Unit (WCU) only comes once the trees are grown and classified as a WCU. Up to that point, they are considered Pending Issuance Units. Herein lies the biggest issue with woodland carbon capture: namely that the current complexion of the environment permits very little in the way of time.

Corporate culture
The fact it takes decades for woodland to grow should serve as a sobering lesson for businesses: it takes time to reap sustainable rewards. Businesses are plagued by a culture of short-termism, which leads them to believe woodland carbon capture is far from viable.

“Sustainability takes time,” says Riley. “Plant trees now. Sure, they might not provide a ‘guaranteed eight percent plus ROI’ type seal of approval, but if we can find a way of making woodland carbon capture a viable option today, future generations will look back on our decisions fondly.”

The solution to environmental pollution lies not with token gestures of goodwill, however significant they may be, but in redefining the longstanding cultural foundations on which big business is built.

The fact it takes decades for woodland to grow should serve as a sobering lesson for businesses: it takes
time to reap
sustainable rewards

“Businesses should not see profits and their environmental and social responsibilities as conflicts of interest, and with intelligent strategy, ethical businesses can unlock huge value when adopting a sustainable model,” says Riley.

While it’s easy to see immediate profit-bearing potential as the single-most gauge of success, cementing a firm base on which sustainable gains can be built is far more important in fostering long-term success. This is not to say profits aren’t integral to success – far from it – but they should not come at the expense of the future.

Consumer consciousness
In addition to the long-term benefits to be gained from woodland carbon capture, there exists a wealth of brand value to be extracted by engaging with environmental initiatives. Customers now possess more power than ever before, and, in an economic climate wherein marginal gains can make the difference between success and failure, cementing a strong brand identity is key.

“Businesses strive to set themselves apart and I think they are themselves realising opportunities to display uniqueness by taking actions that go above and beyond what is expected,” says Riley. “To grab the attention of consumers simply by shouting is great, but actually getting their hands dirty and doing something that is worth shouting about, that will unlock true value.”

Recent years have seen corporations take far more responsibility for the welfare of the communities in which they work, and environmental initiatives take centre stage. A commitment to matters apart from financial returns and a focus on issues that affect the population at large is something consumers today consider when opting for one company ahead of another.

“Awareness of the importance to us all of the health of the environment is now, thankfully, much more prevalent: from lessons in school, to recycling bins, to flooding and tracking in the news, the information is there,” says Prior. “A business works with the extra layer of consciousness that consumers don’t, namely CSR and reputation. But despite this, the partners we work with are driven less by PR but rather a genuine desire to ‘make a difference’ to the environment.”

Although woodland carbon capture may appear secondary to the profit-making concerns of business, it is in fact vital in building a strong brand identity and in communicating to consumers that the organisation in question is concerned with matters apart from profits. The benefits of woodland carbon capture might not be as immediate as financial returns: but that’s not to say they are any less valuable

How Netflix et al are killing off television as we know it

Posted on by Charlotte Gill

Content has long been king in the corporate jungle that is the entertainment and media (E&M) industry. Yet how it is delivered to consumers, and how it can be monetised, is becoming increasingly important, as providers look to revise their business models and digital media itself evolves. Old habits may die hard but they’re gradually dying nonetheless. Increasing use of mobile smart devices, coupled with greater consumer access to the internet globally, and the emergence of TV and film streaming services, has necessitated a rethink in corporate boardrooms.

In its Global Entertainment and Media Outlook 2013-2017 report, PwC suggests global E&M spending will rise from $1.7trn in 2012 to $2.1trn in 2017, with a 5.6 percent compound annual growth rate. Much of the impetus coming from China, Brazil, India, Russia, the Middle East and North Africa, Mexico, Indonesia, and Argentina.

Digital spending

34%

of E&M spending in 2012

44%

of E&M spending in 2017 (predicted)

These markets collectively will increase their share of total E&M revenues to 22 percent by 2017 (up from 12 percent in 2008) as a growing middle class and increased urbanisation have a major impact.

The report adds that in order to “harness this growth and compete effectively in the future, E&M companies of all types must evaluate their competitive advantages and seize their positions in the evolving ecosystem – which has the connected consumer at its core. To achieve this successfully, every industry participant will need to invest in constant innovation that encompasses its products and services, its operating and business models, and – most importantly – its customer experience, understanding and engagement”.

In the so-called mature markets of North America, the UK, Germany, Japan, France et al, growth has been encouraged by the widespread ownership of smart devices. Digital will constitute 44 percent of all E&M spending by 2017 – almost double the level in 2008 and up from 34 percent in 2012. The annual value of North America’s home video market – both pay-TV and over-the-top streaming services – is forecast to surpass box office value for the first time in 2017.

As Marcel Fenez, Global Leader of Entertainment and Media at PwC, puts it: “Universally, E&M companies need to invest in developing and distributing content in ways that compel customers to loyalty and take advantage of their tendency to engage in sharing content experiences. This will require enhanced digital media measurement tools and business models that respond to the changing patterns of consumer behaviour.” But right now, monetisation poses the biggest challenge for video on demand (VOD) providers.

Home box office title fight
Data from MPP Global Solutions shows demand for online video has soared in recent years. More than six billion hours of footage was watched every month via YouTube in 2013 – a 50 percent increase on 2012. Mobile devices make up around 40 percent of YouTube’s global watch time, while last Christmas, for the first time, more people accessed the BBC iPlayer on tablets than computers.

Paul Johnson, CEO of MPP says: “The success of Netflix has demonstrated that consumers are willing to pay for quality online video content, while YouTube’s ad revenues increased by 53 percent last year. It goes to show that media and entertainment companies can make huge profits if they offer three things: great services, great content and great offers.”


A trailer for season two of one of Netflix’s most successful series, House of Cards

Yet in order to monetise product, content creators need to understand the kind of content customers will pay for. Typically, this is done by harvesting data from social media, adapting the way products are created and distributed, and embracing new business models – including partnerships. The central role of content in attracting, engaging and retaining consumers has been strengthened by the fragmentation of media choices.

With more than 44m users worldwide, Netflix is one of the emerging beasts on the digital media landscape. While that figure might look small in comparison to the 114m who subscribe to satellite and cable network HBO (133 million if you factor in the company’s Cinemax division), a growing minority of consumers are falling out of love with linear TV. They feel inconvenienced by programmes presented at specified times, on non-portable screens, with complicated controls and grid-based interfaces.

Netflix’s business model rests on the basic assumption that internet TV is set to grow at the expense of linear TV. Apps will replace channels as smartphone and tablet viewing increases, while remote controls will disappear. At the same time, leading linear TV networks, such as HBO, ESPN and the BBC, have been branching out into internet TV.

The ESPN app, for example, runs on many internet platforms and is designed to showcase sports, both in real-time and on catch-up. With fierce competition from the likes of Major League Baseball and others, ESPN will need to keep updating its offering if it is to stay ahead. HBO, meanwhile, continues to make its films and series more readily accessible online, while the soon-to-be-revamped BBC iPlayer will offer an improved on-demand interface for a wide range of the corporation’s programming.

While internet TV currently represents a small percentage of video viewing, it will continue to grow as the net itself becomes faster, more reliable and more widely available. And, unlike linear TV, internet TV allows advertisements to be personalised and made more relevant to the end-user. Increasingly fierce competition should ensure apps continue to improve.

Overall E&M spending

$1.7trn

E&M spending in 2012

$2.1trn

E&M spending in 2017 (predicted)

While Netflix’s model is forcing other market participants to rethink their own strategies, the recent war of words between itself and HBO makes for intriguing reading. The two are not in obvious head-to-head competition: HBO’s streaming service is an add-on to cable TV packages, while Netflix is an online outlet that bills customers directly. Yet Netflix’s Chief Content Officer, Ted Sarandos, recently went on record saying Netflix’s strategy “is to become HBO faster than HBO can become us”.

HBO generated $1.8bn in operating profit in 2013, on a four percent increase in revenues to $4.9bn; Netflix’s revenues surged 21 percent to $4.37bn, but generated just $228m in operating income as content expenses weighed down profits.

And there’s the rub. Both companies recognise the importance of providing unique content, but Netflix, which produces shows such as House of Cards, Lilyhammer, Orange is the New Black and Arrested Development, operates from a position of weakness. It has to do most of its own marketing, while cable operators, which handle billing and customer services, can also provide marketing support for their channels (such as HBO).

However, that isn’t stopping Netflix’s plans to raise $400m to fund a major expansion into Europe. This will include investments, acquisitions and original content. It will face stiff competition from local offerings such as CanalPlay Infinity from France’s Vivendi, the recently launched Infinity from Italy’s Mediaset, and Snap from Germany’s Sky Deutschland.

Prime competitor
While HBO and Netflix conduct an increasingly bitter war of words, they may be missing the threat posed by Amazon Prime. Superficially, Amazon Prime looks like a clone of Netflix, with users paying a subscription fee for original and third-party streamed content. Where Amazon Prime has tweaked its business model is through customer feedback. The company’s content producer, Amazon Studios, recently posted a second season of TV pilot shows on its website. Viewers were invited to vote for their favourites and the most popular series will be commissioned for full series. The first three episodes of each series will likely be shown free of charge to everyone, after which a subscription will become necessary.

Amazon Prime’s customer database of approximately 160m users gives it a strong marketing advantage over its competitors – at least in terms of scale. The only major cloud on the horizon is the consumer resistance it will likely face if it carries out its threat to raise the annual subscription for its streaming service by $20 (from the current $79).

Catch up with consumers
The BBC recently abandoned plans for a standalone subscription-based version of its iPlayer after unfavourable market testing. Instead, the service will be incorporated into a revamped version of its website. The updated platform will include a new long-form video player, and a digital store where international consumers can buy, watch and keep programmes.


A trailer for the BBC’s series The Musketeers. Drama has led the migration to online viewing

The move has been partly motivated by branding: the BBC’s digital content is currently heavily fragmented, with too many websites and digital propositions. By creating a centralised point of reference, the corporation hopes to double its global reach from 250m to 500m users a week over the next nine years.

The new iPlayer will include pop-up channels around specific events, online channels featuring other BBC content, and the ability for users to create their own evening schedules, with access to more content before it is on TV. Crucially, the broadcaster will be widening the window during which content can be accessed from seven days after broadcast to 30.

Scourge of the digital sea
A growing threat to E&M producers, irrespective of business models, is video piracy – principally through peer-to-peer file sharing. The movie industry has placed pressures on governments to force internet service providers to block illegal download sites, but these moves could be counterproductive. The users of such sites are necessarily tech-savvy and easily capable of circumventing such blocks. Moreover, the publicity generated by any government crackdown will attract additional users.

Another threat – though perfectly legal and available as an add-on for Chrome and Firefox– is Hola. This app allows users to conceal their online identity and thus allows access to sites that might otherwise be blocked in their region. For example, a user in the US can give the impression they are connecting to the internet from New Zealand. Users have been quick to exploit Hola’s capabilities on video-streaming sites, where content from providers such as Netflix will vary depending on regional licences.

Known commercial threats invariably foster a response. Given the rapidity with which the global E&M industry is changing, the long-term winners will be those quickest to adapt. As to who those winners will be, it’s simply too early to tell.

Enough hating, unified Europe is what we need for economic growth

Posted on by Charlotte Gill

The IMF calculates that, in the coming years, 90 percent of world demand will emanate from outside the EU. It is no surprise, therefore, that the eurozone is desperate to secure its future economic prosperity by orchestrating new trade deals with key investors abroad. Many of these new trade agreements have been met with resistance from non-governmental organisations. Most notably, the Transatlantic Trade and Investment Partnership, which various consumer and environmental groups have argued will undermine individual member-states by handing legislative powers over to large corporations.

The unfavourable terms on which these deals are being made are indicative of Europe’s current position in the global economy. The rhetoric being thrown around by countless politicians as justification for continued austerity programmes is that Europe needs to be more ‘competitive’. “I love this word,” said US economist Richard Wolff. What the phrase really means, he says, is that European citizens “have to be willing to accept working at a wage that will make them very, very poor, for a very long time”.

Better together
There is no doubt Europe’s economic prospects will be greatly enhanced by the proposed deals, especially those with China and the US. The European Commission stated in a recent memo that, if it were to complete all its current free-trade talks tomorrow, it would add 2.2 percent (€275bn) to the EU’s GDP and create 2.2 million new jobs. But the continued pressure being placed on Europe’s citizens is a threat to the eurozone and its free-trade talks.

[A] plethora of xenophobic political movements have sprung up all over Europe

Many national governments have put their relationship with the EU in a precarious position. They have, in the past, blamed Europe for the economic problems felt at home, which has given rise to euro-scepticism among voters. As a consequence, a plethora of xenophobic political movements have sprung up all over Europe: the Five Star Movement in Italy, the Front National in France, and Germany’s Allianz für Deutschland all exemplify voters’ current sentiment towards Brussels. In the United Kingdom, all the major parties reacted – perhaps overzealously – to the UK Independence Party’s success in local elections last year. They are now all well aware that, without a commitment to a referendum on Europe pinned to their party’s manifesto, they stand little chance of garnering enough votes to win the upcoming elections in 2015. The worrying thing for mainstream political parties across Europe is that, with opinion polls the way they are at the moment, a referendum on EU membership would mean an end to a unified Europe, and, therefore, an end to the trade agreements the entire region so desperately needs to spur economic growth.

Strange love
Mainstream political parties have put themselves in a strange predicament. They use Brussels as a tool to clear themselves of blame when things go wrong, but as a result have fostered much hatred towards a unified Europe. The problem for many national governments is that they must stop using Europe as a scapegoat, and, more importantly, they must realise they are no longer able to be competitive economically unless they work together.

To make matters worse, many of the EU’s economic reforms, although heavily criticised, have made a positive impact in restoring stability to the region. Internal devaluations of currency have begun to reap some rewards, with European exports doing favourably and the proposed trade deals adding to Europe’s chances of making a full recovery in the near future. National governments are going to need to put Europe first and put an end to the debate about its future. Without a unified Europe, economic recovery, although not impossible, will be far more challenging.

The ice race: oil giants vie to be first to tap into Arctic black gold

Posted on by Charlotte Gill

Tucked away among the Arctic’s ever-shifting jags of ice, hidden from the naked eye, are billions upon billions of dollars in black gold. The Arctic landscape, spanning the Barents to the Beaufort Sea and beyond, is home to a reported 30 percent of the world’s undiscovered natural gas reserves and 13 percent of its oil. Whoever conquers it will lay claim to 1,669 trillion cubic feet of natural gas and 90 billion barrels of oil – almost three times the annual global consumption.

Much of the prospective total, according to the US Geological Survey, sits offshore and is available for the taking, provided that those with suitably high ambitions come equipped with the necessary tools, know-how and – most importantly – resources to do so.

The challenges of tapping the Arctic’s resources are plain to see: a harsh climate, underdeveloped infrastructure, long project cycles…

Although the whole region accounts for as little as six percent of the Earth’s surface, it accounts for a disproportionately large amount of its resources. It is this abundance of hydrocarbons that has led energy companies to clamour for the rights to the region’s opportunities.

“It is only in the last five years that hydrocarbon development has actually been contemplated as a possibility, principally due to technological and navigational advances,” says Trevor Slack, Senior Analyst at risk analysis company Maplecroft.

“To varying degrees, Russia, Canada, the US, Norway and Greenland have all increased exploration and development activity on their relevant portions of the Arctic continental shelf.”

The overwhelming majority of the countries bordering the Arctic have granted energy companies licenses to explore offshore reserves: however, the exploration phase is only a fraction of the overall effort required to reap the region’s riches. The work required of those in the business can perhaps best be seen in the case of Royal Dutch Shell and the crisis that befell the Kulluk drilling rig late last year.

“What is failure but a bump on the road to triumph?” asked the company’s website soon after its 266ft rig ran aground off the Alaskan coast: an event that resulted in an impairment charge of $200m.

Shell's-Arctic-adventure

The failed expedition constitutes a slither of the oil giant’s overall Arctic spending, which is already upwards of $5bn, and yielded very little in the way of returns. Despite introducing an armada of 20 support vessels, chartering well over a thousand dedicated flights, and unloading $1bn on the project in the last year alone, the Anglo-Dutch powerhouse is yet to complete a single well in the region.

While these circumstances could well be considered a failure, they could just as easily be seen as par for the course, as the extraction of Arctic oil and gas ranks among the most expensive business opportunities in the world.

An expensive endeavour

$500m

Predicted cost of drilling one oil well in the Arctic

$100bn

Potential spending in the Arctic by 2022

“Oil spill risks, high extraction costs, doubts over the amount of commercially recoverable reserves, and a precedent of cost overruns and delays combine to raise questions about the commercial viability of some proposed Arctic projects,” reads a Greenpeace report into Arctic exploration risks. “The drilling conditions facing oil companies operating in the Arctic are some of the most challenging on Earth.”

Breaking the ice
The challenges of tapping the Arctic’s resources are plain to see: a harsh climate, underdeveloped infrastructure, long project cycles, spill containment and recovery risks, and conflicting sovereignty claims, to name but a few. The complications have caused some to question whether the investment is worth the costs – whether they be financial or environmental.

In the months preceding the Kulluk rig disaster, Total became the first major oil company to publicly denounce offshore exploration in the Arctic, as the company’s CEO Christophe de Margerie expressed fears about the potential damage of a spill. “Oil on Greenland would be a disaster,” he said in an interview with the Financial Times. “A leak would do too much damage to the image of the company.”

Total’s stance on the matter is very much the exception, however, with various competitors – including ExxonMobil, Rosneft, Eni and Statoil – having committed a great deal of time and money to the Arctic endeavour. Shell, for its part, has cancelled plans to resume Arctic drilling this summer. The company’s new chief executive, Ben Van Beurden, admitted the company had “not always made the right capital choices” and that its exploration programme was “under review”.

However, the company will be subject to far closer scrutiny than before in light of its previous failings. Shell’s return to the Arctic – however delayed – will be watched by environmentalists, whose concerns for the surrounding environment need not be explained, as well as industry rivals, who will be keen to know whether or not the region’s treasures can be tapped.

Exploration obstacles
A US appeals court recently ruled the Alaskan government acted illegally in granting exploration rights to US Arctic waters. The region was sold for $2.66bn in 2008, of which $2.1bn was paid for by Shell, and has since been hotly contested by local and environmental groups, who claim the consequences were ill conceived and its environmental impact sorely underplayed.

Development costs and other such obstacles have also hindered the progress of Statoil. Late last year, the Norwegian firm expressed concerns about the challenges of exploring and extracting Arctic hydrocarbon reserves.

“Logistical difficulties, regulatory hurdles, jurisdictional tensions, environmental opposition and, above all, extremely inhospitable climatic conditions will ensure that oil and gas activity in the region remains problematic, complex and expensive,” says Slack.

“Cost is probably the most important factor, with Statoil estimating that the cost of drilling one oil well in the Arctic could be as much as $500m. This is likely to be prohibitive for most companies in the current climate, with some analysts predicting that the price of crude could drop in the medium term.”

Norway’s Arctic archipelago Lofoten. Looking for oil outside your front door may sound exciting, but in Lofoten, one of Norway’s best fishing areas, the prospect of black gold has sparked heated debate
Norway’s Arctic archipelago Lofoten. Looking for oil outside your front door may sound exciting, but in Lofoten, one of Norway’s best fishing areas, the prospect of black gold has sparked heated debate

Statoil’s Exploration Chief Tim Dodson spoke at a climate change conference last year about a few of the issues facing oil companies in the Arctic.

“We don’t envisage production from several of these areas before 2030 at the earliest; more likely 2040, probably not until 2050. I think what we have to realise is that the challenges our industry faces in the Arctic are at least as significant as we thought they were just a couple of years back, but they’re not insurmountable.”

Arctic resources

1,67trn

Cubic feet of natural gas

90bn

Barrels of oil

Edinburgh-based Cairn Energy, meanwhile, has announced it is deprioritising its Greenland operations. It spent over $1bn in the region and didn’t make a single commercial find. Many believe the inadequate infrastructure and tumultuous weather conditions, combined with the falling price of oil and gas, to be obstacles too big to be overcome. Theses circumstances mean the financial benefits can only be marginal at best, until stratospheric sums of capital are poured into developing the region.

Charlie Kronick, Senior Climate Advisor at Greenpeace UK, is sceptical.

“[It] is impossible to drill safely for oil in the ice-covered waters of the Arctic – the potential impacts on local livelihoods and biodiversity are uncostable. It would be literally impossible – for both technical and environmental reasons – to clean up after the inevitable spill, while the level of climate change that would result from successful (in economic terms) drilling there would be catastrophic.”

A report conducted by Lloyd’s and Chatham House found investment in the Arctic could reach $100bn by 2022, as companies scramble to gain a foothold. Richard Ward, Chief Executive at Lloyd’s, said: “Business activity in the Arctic region is undeniably increasing, and the impact of climate change means that this is likely to grow significantly in the future. But as new opportunities open up, decisions on exploiting them need to be made on the basis of as full an understanding of the risks as possible.”

Regardless of the opportunities, it is crucial that businesses align their goals with those of local governments, communities and the environment. In addition, it’s important that those partaking in Arctic oil and gas exploration take into consideration, and account for, the worst-case scenario if they are to be adequately equipped for costs that could quite easily ensue.

Ward said: “The businesses which will succeed will be those which take their responsibilities to the region’s communities and environment seriously, working with other stakeholders to manage the wide range of Arctic risks and ensuring that future development is sustainable.”

Utrecht’s competitive edge is taking its economy to new heights

Posted on by Charlotte Gill

Utrecht is a bastion of innovation, competitiveness and sustainability in a global climate that otherwise offers little in the way of economic opportunity. “Utrecht is at the heart of the future economy,” says Mirjam de Rijk, Deputy Mayor of Utrecht, “engaging in the grand social challenges of our time.”

This sentiment is echoed by the European Commission; Utrecht was ranked first of 262 participants in 2013’s EU Regional Competitiveness Index. “Globally renowned knowledge institutions, an exceptionally well-educated workforce, centrally located in the heart of the Netherlands, excellent business locations: these are Utrecht’s main economic strengths,” read a recent report co-produced by the Municipality and Province of Utrecht, in collaboration with the Economic Board of Utrecht (EBU).

Educated population

43%

have a higher professional education or degree

91%

speak at least one foreign language

77%

speak at least two foreign languages

The triple helix
The success of Utrecht is due not to any one factor, but rather, an ability on the part of its people to unite a number of strengths and work towards one common goal. This collaborative approach is best characterised by the EBU, whose job it is to foster relationships between business communities, government organisations and knowledge institutions – otherwise dubbed ‘the triple helix’ – to strengthen the regional economy and spark sustainable improvements to people’s lives.

Comprising 21 board members, each with roots in the region, the EBU believes economic value is best achieved through cross-sector relationships and sees social challenges as market opportunities. By focusing on the three themes of healthy living, the green economy and service innovation the EBU has established a platform by which cross-industry solutions, whether they are economic or social, can be arrived upon.

Last year was the EBU’s first in operation, but the organisation still managed to complete 11 initiatives, with an estimated impact of €50m and 500 new jobs. “We challenge the entrepreneurial spirit, be it in business, in research or in government,” says Henk Broeders, Chairman of the EBU. “We create an environment for excellent research and business, and stimulate the application of new concepts in our business and personal life.”

A competitive workforce
One key factor underpinning Utrecht’s growth is the composition of its workforce: 43 percent come equipped with a higher professional education or degree, which equates to the highest-educated workforce in the country. 91 percent of the city’s population speaks at least one foreign language, and 77 percent speak at least two; this, combined with the city’s central location, ensures there is a seemingly limitless pool of talent available for employers to pick from.

This, along with numerous world-class universities and research institutes, ensures the plentiful supply of a young, though no less talented, workforce, which in turn lends itself to a vast ecosystem of innovation. Utrecht has what De Rijk describes as “a flourishing knowledge economy”, due to its hosting the Netherlands’ largest and best university. This is a wellspring of skilled labourers for now and the foreseeable future.

In August 2011, the ING Economic Department named Utrecht the most innovative province of the Netherlands, and the city’s many achievements in this space have continued. “Utrecht is the ideal economic region in which to establish your business,” says de Rijk. “It offers companies a wide range of high-quality and highly technical business and office accommodation. A large number of reputable, innovative and creative companies in the ICT, commercial and financial services sectors have already selected Utrecht as their headquarters.”

A bicycle rack near Utrecht’s central station. The city is committed to sustainability and lowering emissions © Kjell Postema
A bicycle rack near Utrecht’s central station. The city is committed to sustainability and lowering emissions © Kjell Postema

A patchwork of intensive business services (financial, engineering and business consultancy), life sciences and healthcare, and creative industries form the bedrock of Utrecht’s success: together, they constitute nearly half the regional economy. The three fields combined have a strong track record of expansion and innovation, averaging three percent annual growth.

Commitment to sustainability
Aside from Utrecht’s sound business credentials and proven ability to host all manner of industries, the city has a steadfast commitment to matters of sustainability. The Utrecht Energy action plan is a citywide programme centred on the region’s three most important themes: living, working and mobility. For each theme there exists a number of campaigns to leverage sustainable energy opportunities wherever they may be and boost the prospects of those within the city limits.

“Wherever possible,” says de Rijk, “these activities are developed in cooperation with parties in the city based on the conviction that the start-up phase is not only a time for laying the basis for sound cooperation, but above all offers space to apply new innovative ideas and initiatives.

“It is precisely these innovative insights that literally and figuratively generate ‘New Energy’. Utrecht focuses on collaboration and innovation from the bottom up, at project level, on the basis of shared concerns, awareness, interest, support and action. This approach was deliberately chosen because it fits in with the city’s mentality and key values.”

By-and-large, the city’s climate policy consists of two parts: mitigation and adaptation. Whereas mitigation places a heavy emphasis on ways to reduce CO2 emissions, adaptation largely focuses on counteracting the effects of climate change. This strategy extends to all manner of approaches, whether they are energy saving, tapping sustainable sources or simply using fossil fuels more efficiently.

Utrecht city's Ecoboot: an innovative electrical boat that delivers goods and removes waste without creating pollution © Robert Oosterbroek
Utrecht city’s Ecoboot: an innovative electrical boat that delivers goods and removes waste without creating pollution
© Robert Oosterbroek

One of the areas in which Utrecht has made extraordinary progress is waste management – an area that many Dutch cities are generally lagging behind in. As opposed to the average of 10-15 percent, Utrecht manages 50 percent of its waste separation, and aims to reach 65 percent in the near future. Regardless of what remains a relatively efficient rate of separation, Utrecht is striving to take recycling to an entirely new level with a framework entitled ‘Back to the City’.

“We aim to re-use the raw materials obtained from our city’s waste in the city-limits,” says de Rijk. “We aim not only to use these new materials for the production of energy, but also for the construction of our city. At the same time, our plan is to rethink the waste management production chain and reduce CO2 emission in the process. We believe a balanced production system of raw materials derived from waste is (financially) manageable at district level and have started negotiations with district government and institutions to take the necessary steps.”

The city’s waste management scheme, however, constitutes but a slither of Utrecht’s wider plans to instil an ethos of sustainability and innovation in the region. The way in which the city is managed, as well as the opportunities it offers to prospective businesses and inhabitants alike, certainly merits the title of Europe’s most competitive region.

For further information contact citymarketing@utrecht.nl

PCO’s sCMOS camera systems give science new focus

Posted on by Charlotte Gill

For more than 25 years, PCO has developed and manufactured high-performance CCD, CMOS and scientific CMOS (sCMOS) camera systems in the centre of Bavaria. Thanks to the quality and performance of our regional suppliers, we have been able to create camera systems for scientific imaging, quality control, and TV and broadcasting – as well as customers who just want a high standard of image quality.

In the past decade, this has led to us becoming engaged in the development of new images sensors. Such special requirements as high frame rates, high dynamics, high sensitivity and extremely low noise are not usually fulfilled by image sensors for consumer cameras.

For example, PCO joined with a group of companies to develop sCMOS sensors, and, based on customer feedback, initiated development of other CMOS image sensors.

Scientific CMOS
Let’s take sCMOS technology as an example. We created a family of sCMOS cameras including pco.edge 5.5, pco.edge 4.2, pco.edge gold 5.5 and pco.edge gold 4.2, which, together with other sCMOS cameras, became a breeding ground for new microscopy techniques.

Some of these new methods overcame the limits of the laws of diffraction and allowed life scientists to investigate in more detail the relationships in embryogenesis, interactions in cells, and other phenomena. Techniques such as superresolution or localisation microscopy, selective plane illumination microscopy, and structured illumination have let us increase the spatial resolution of light microscopy down to a couple of 10 nanometers.

One of many sCMOS products, the pco.edge image sensors meet a number of special requirements not normally fulfilled by consumer cameras
One of many sCMOS products, the pco.edge image sensors meet a number of special requirements not normally fulfilled by consumer cameras

In localisation microscopy, for example, the relevant parts of a cell, protein or whatever are marked with luminescent markers so that, if they are excited by appropriate light, only a few of them emit light at the same time. The distribution of single light emitting molecules is imaged by a light microscope. Due to the limit of diffraction and the small size of the molecules, only blurred spots in the image can be detected. If these spots don’t overlap, it can be assumed a single molecule is the origin, and the centre of mass of the spot can be evaluated. Then a map with the exact positions of the centres of mass of all the spots is stored and the next image taken, in which different molecules will be emitting light.

A larger sequence of images is subsequently recorded and processed in the same way, and a combined map in which all localisations are accumulated is generated. This creates an image with a much higher resolution than the optics of the microscope allow for.

Obviously, in this type of application high sensitivity, low noise and a high frame rate are required. The sCMOS camera allows all of these. Images can be recorded at a frame rate 10 times higher and with a higher degree of detection precision than the emCCD camera systems previously used. Now the images are ready in 10-20 seconds; before, it took minutes. This improvement allows more efficient research and a greater number of investigations to be conducted at once.

Applications in 3D
Even in the other areas in which they are used, PCO sCMOS cameras reduce the recording time of images and allow the investigation of dynamics on this spatial scale. In industrial applications – such as precise, high-contrast, 3D measurements of objects – the high intra-scene dynamic of sCMOS cameras is exploited. The large dynamic of the sCMOS technology allows the detection of the bright and very dark parts of the same scene.

Now the images are ready in 10-20 seconds; before, it took minutes

Since the raw data has a high 16-bit dynamic and therefore a high image content, it is up to the user how the raw data is displayed in the 18-bit world of screens and magazines. The image can be converted into a printable 8-bit format while retaining a large amount of data, The use of this high intra-scene dynamic can be extended to other applications, such as 3D measurements of so-called ‘non-cooperative surfaces’ (e.g. strongly reflecting metal parts in car manufacturing) and the 3D modelling of ancient buildings for disaster recovery. In all these applications, a large contrast within the same image has to be detected and processed.

While the sCMOS cameras allow the development of cutting edge techniques, they also allow existing applications to be taken to the next level. In areas such as digital pathology and confocal microscopy, imaging times are significantly reduced and image quality is improved.

In general
PCO keeps an eye on developments in CMOS image sensor technology and we work with research applications to create further developments. This, in conjunction with our excellent contact with customers, enables us to push the limits of camera technology. Healthy and steady growth, an expanding worldwide sales network (a sales office was opened in Singapore in 2013 for a better Asian service) are the driving forces for the future of the company.

But the fundament of the excellent situation at PCO is the motivation and creativity of PCO’s personnel, as proven by a low staff turnover. The plan for the future is to continue the advancement of camera technology for the benefit of our customers – and ultimately PCO.