FDA: Selling genetic tests to consumers risky

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Companies that sell complicated genetic tests directly to consumers may be putting people at risk, a top US health official has announced.

Without a doctor’s guidance, consumers might choose to stop taking heart medications or skip routine breast cancer screening based on the results of tests that might not be accurate, said Dr Jeffrey Shuren, head of the US Food and Drug Administration’s devices division.

Since 1976, the FDA has chosen not to regulate simple diagnostic tests developed in individual laboratories, but an explosion of complicated tests, often for common but deadly diseases, has forced the FDA to revise that policy, Shuren said in a telephone interview.

“We’re not opposed to marketing directly to consumers. We just think consumers should be getting accurate, reliable results,” Shuren said.

Shuren said lab-developed tests are no longer simple tests for rare diseases done in individual labs. In some cases, these unregulated tests are being used instead of FDA-approved tests, and they are being developed by corporations instead of pathologists or public health labs.

With direct-to-consumer tests, sold by companies like 23andMe Inc, Navigenics Inc and Pathway Genomics Corp, Shuren said he was concerned that patients would not know how to act on the results, or might be falsely assured that their genetic risk of a disease was low. Google Inc is an investor in 23andMe.

Direct-to-consumer tests drew headlines in April when Walgreen Co said it would begin offering genetic test kits made by privately held Pathway Genomics. Walgreen put its plans on hold when the FDA raised concerns. Shuren said Pathway has stopped marketing its tests to consumers.

At the meeting, David Becker of Pathway said requiring companies to enroll their tests in the government’s genetic testing registry and requiring that the labs be accredited should offer enough protection for consumers.

But Alan Mertz of the American Clinical Laboratory Association, who testified at the meeting, said such tests should be ordered by doctors, who are familiar with their limitations.

“If a doctor orders a test, the doctor will know you were a good candidate, and they can help you interpret the results.”

Wall Street to offer helping hand

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But federal bank regulators haven’t seemed very inclined to grant him his wish. And their reluctance underlines an unusual conundrum at the centre of the US financial system today.

Hundreds of small banks across the country are struggling to keep their doors open, but the industry’s overseers in Washington are more wary than ever about the breed of high-rollers that inhabit Wall Street, who come bearing bags of cash and the promise of an easy fix.

The fear is that financiers like Ader are looking to make a killing off of distressed community banks. But he and other new bankers are determined to show regulators that they have them all wrong. To hear Ader tell it, he simply wants to help.

Still, the standoff continues.

Several months ago, Western Liberty Bancorp, a publicly-traded shell company managed by Ader, submitted applications to the Federal Reserve of San Francisco and the Federal Deposit Insurance Corp to acquire Service 1st Bank of Nevada, a small community bank in Las Vegas with just $210m in assets. The applications to approve the deal, which the companies first announced last September, are still pending.

The approval process has dragged on so long that Western Liberty upped the amount of new capital it plans to sink into the four-year-old bank from $15m to $25m. Shares of New York-based Western Liberty recently were bounced from the NYSE Amex Stock Exchange, after the company with $86m in cash but no active operations to speak of, failed to meet the exchange’s minimum listing requirements.

The 42-year-old Ader, who sits on the board of the Las Vegas Sands resort and casino company, hasn’t given up on his wager that he can turn Service 1st, which operates a single branch located just minutes from the Vegas Strip, into a local commercial lender for the gaming industry. A married father of four children and a fixture in the Hamptons, Long Island social scene, Ader is confident the deal will eventually get done.

“Our goal in this transaction is to strengthen an existing Nevada community bank, while generally infusing more capital into the Nevada banking system and local economy,” Ader said in a recent interview at the midtown New York offices of Hayground Cove Asset Management, the $550m hedge fund that he also manages. “Our plan is to relist (the shares) after the deal is completed and approved. The NYSE has told us they want us to relist.”

Ader’s this-will-help-the-economy sales pitch may be his best bargaining chip with regulators. And it’s something they are hearing more and more these days from money managers itching to break into the banking business.

To some degree, it’s a strategy born of necessity. While regulators remain wary of Wall Street’s new bankers, they recognise the pressing need for community banks to raise billions in new capital to avoid shuttering up.

Fear of easy money
The stalemate comes as a surprise to some. At the outset of the financial crisis the conventional wisdom was that private equity firms and hedge funds would emerge as the main buyers at government auctions of banks seized by regulators.

The experts said private investors would trip over one another for the right to buy a failed bank. After all, the deals still look like easy money – all upside if the economy recovers and little downside risk because the FDIC often agrees to share in the losses and keep some of the worst assets.

But to date, fewer than two dozen of the more than 236 banks shut by the FDIC since January 2009 have been sold at auction to investment groups sponsored by private equity firms, hedge funds and wealthy financiers. A handful of investor-backed groups have bought bank-owned real estate taken on by the FDIC. Maybe the most successful private deal so far was the FDIC’s March 2009 sale of IndyMac to a group led by a bunch of hedge funds and private equity firms.

Even investment vehicles officially sanctioned by bank regulators to do deals with the FDIC have largely remained on the sidelines.

SJB National Bank, a $1bn acquisition company led by billionaire investor and real estate developer Stephen Ross, has yet to ink a deal for a failed bank.

Also still in standby mode is an investment vehicle called Stone Bank, in which private equity giant Blackstone Group Inc is a major partner. Led by Brad Oates, the former president of Bluebonnet Savings Bank, a defunct Dallas thrift, the Texas-based investment company is waiting final regulatory approval to begin hunting for a struggling or failed bank to buy.

Then there is distressed investment shop Lone Star Funds. Last summer it opened an office in Washington, to be closer to regulators as the firm acquired failed banks, but it has yet to complete a single transaction.

Some of the lack of activity is no doubt the result of financiers reassessing their options after the FDIC adopted new rules last summer. One of them requires investment groups looking to buy failed banks to pony up more capital than more traditional financial buyers like TD Bank and US Bancorp. Another forces them to hold on to their bounty for at least three years before cashing out. The more stringent terms have led some private investors to conclude that regulators have made it too difficult to make a quick buck off an investment in a failed bank.

To be fair, regulators have long preferred doing business with either an existing bank, or a management team with a proven record of success in running a financial institution. But in the wake of the financial crisis they are more cautious than ever that some money managers and financiers – many of whom are unfamiliar faces in the world of community banking – are simply looking to snap up struggling lenders on the cheap but have no long-term commitment to lending to businesses and consumers.

Not one of us
Right or wrong, a money manager like Ader raises some eyebrows for bank regulators, said people familiar with the process of getting banking deals approved. Before going out and starting his Hayground Cove hedge fund in 2003, Ader became a minor celebrity when the gossip pages romantically linked him to the actress Tara Reid, back when he was single and still a star analyst at Bear Stearns.

A skinny and boyish looking money manager, Ader is someone who has never before shown much interest in banking – and that’s what makes regulators so hesitant. Up until now, his main trade has been casinos, hotels and restaurants.

In fact, Western Liberty, which used to be called Global Consumer Acquisition Company, was set up by Ader as a so-called blank cheque company to buy a consumer-related business. In a November 2007 initial public offering, Global Consumer Acquisition raised nearly $300m, most of it from other hedge fund investors.

Ader only settled on the idea of doing a bank deal after failing to find a consumer company to acquire. An earlier bid to buy another small bank in Nevada collapsed just months after the transaction was announced.

Since the 1st Service deal was announced, Ader has taken some steps to make the transaction more palatable to regulators. He rebranded the company and restructured it by allowing all those investors not committed to doing a bank deal to walk away and redeem their money. Many did, taking out some $200m in cash. He also agreed to keep on much of Service 1st’s management team to run the bank, which has a former Nevada governor and casino industry executives on its board, after the merger.

Hayground Cove’s once substantial equity stake in Western Liberty was converted into 8.5 million warrants, which can only be exercised if the stock hits $12.50. Right now, Western Liberty’s shares trade for half that price on the Over-the-Counter Bulletin Board.

Will these steps be enough to persuade regulators that Ader is a serious banking player and not out to simply salvage something for his Hayground Cove investors and other hedge funds still holding an equity stake in Western Liberty? The odds aren’t great.

“Carpet bagger bankers are not what the regulators or local communities want to see,” said Ken Thomas, a Miami-based independent bank consultant and economist. “Hedge funds and private equity firms may have big wallets but they don’t necessarily have big hearts.”

Take a chance on us
Still, the financial firms are as thick-skinned as they are deep-pocketed. And they are determined to win over regulators and show that they can be more like George Bailey than Henry Potter – the hero and villain of the classic Frank Capra movie “It’s a Wonderful Life” about a small town savings and loan company.

One way is to prove themselves to be helpful. In May, Carlyle Group, the Washington-based private equity firm, was the lead investor in a $235m capital raise by Hampton Roads Bankshares, a troubled mid-Atlantic lender with $2.2bn in assets. Warburg Pincus and TH Lee Partners are committing about $270m to the recapitalisation of Sterling Financial. The capital raise will give the two private equity firms a combined 40 percent ownership stake in the Spokane, Washington-based bank.

Private investors are hoping that regulators will look more kindly on financial transactions designed to prevent a capital-starved bank from becoming a failed bank. They also believe that government officials may even come to like them better after these recapitalisations, making them more likely to approve their bids for failed banks.

“Familiarity and trust are important commodities in any business relationship and particularly so in the regulatory arena,” said Thomas Vartanian, a bank regulatory attorney with Dechert in Washington, who has advised a private investment group involved in buying some failed banks from the FDIC. “There is still a lot of discussion that needs to happen between regulators and the private equity side. It is an important part of the process.”

One thing private equity shops and hedge funds are doing to speed along the getting-to-know-you process is teaming up with former bankers well known to regulators. The private equity firms are hoping that with these ex-bankers serving as the front men for acquisition vehicles and managers-in-waiting, it will be easier to get regulatory approval for proposed deals.

A group of former Bank of America executives, for instance, are at the helm of North American Financial Holdings, a Charlotte-based company that has raised about $1bn from investors including private equity firm Crestview Partners. Led by former BofA vice chairman Gene Taylor, North American Financial came together to buy failed banks from the FDIC. But North American Financial’s first deal was to invest $175m in Florida’s TIB Financial, a deal that gave the new bank acquisition company a 99 percent ownership stake in the Naples, Florida-based lender.

In an interview soon after the TIB deal, Christopher Marshall, North American Financial’s chief financial officer, said the company had not given up on buying failed banks in its quest to cobble together “a high-performing regional bank.” And sure enough, on July 16, the FDIC announced that it was selling three small banks it had closed in Florida and South Carolina to North American Financial.

Another way private investors are trying to smooth out some of their rough edges, in the eyes of top bank regulators at least, is by getting face time with them.

The public portion of FDIC Chairman Sheila Bair’s official datebook for the past several months, for instance, is peppered with meetings she has had with private investors and their legal and financial advisers. Some of the financiers looking to buy banks who trekked down to Washington to meet with Bair have included WL Ross & Co’s Wilbur Ross, Lightyear Capital’s Donald Marron, Blue Ridge Holdings chairman Milton Jones and National Bank Holdings’ Lawrence Fish.

It’s not publicly known what was discussed at any of these private audiences. But soon after many private investors began to shift their focus to recapitalisations and away from simply putting all their effort into buying failed banks.

Doha talks in 2011 hinge on US politics-India

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Rahul Khullar told reporters in an interview that Washington has dented chances of progress in the talks with unrealistic demands in the time since New Delhi hosted a Doha meeting last September, echoing recent comments by a Chinese trade official.

The Doha round has progressed in fits and starts since its inception in 2001 amid differences over market access and tariffs between Washington and major developing countries such as India, China and Brazil.

In a sign of the bleak prospects for a Doha deal any time soon, G20 leaders recently dropped their reference to 2010 as a target date for completion of the talks and set no new date.

Khullar said there would probably be “pretences of movement” in upcoming talks before the US goes to the polls.

“There is no guarantee whatever of closing this deal by December 2010, thereafter it is contingent on political developments,” said Khullar, a top civil servant who is key to Indian negotiations.

“Supposing the election results are a complete disaster for the (Obama) administration? A government which is not willing to engage today, what is the likelihood of their intensively engaging tomorrow?”

Few votes are currently to be won over trade in the US, where labour unions and other core Democratic constituencies remain suspicious of new trade deals.

Trade is such a sensitive topic that Obama may prefer not to argue for a new deal even next year, as he readies for a re-election bid in 2012, though US industry lobbyists have recently expressed optimism about Doha’s prospects next year.

Speaking about the likely outcome of negotiations ahead of the November polls, Khullar said:

“Some differences will narrow. What you will end up seeing is that on a couple of issues you will actually get some progress. And on some other issues there will either be no engagement, or there will be stalemate.”

Washington and Beijing have traded accusations that the other is blocking agreement on Doha, signalling frustration on the slow progress in a public war of words.

Obama in June called for substantial changes to the current negotiations, saying what was currently on the table was inadequate.

But Khullar said Washington’s efforts to bridge gaps in the Doha round through bilateral negotiations had fizzled out.

“The United States wants a bilateral is a euphemism for ‘please will the party I am negotiating with give me what I want’,” he said.

“If all you’re saying is give me more to keep me happy’, at some point of time the bilateral is going to run out of steam. And that’s exactly what happened with all these bilaterals.”

Washington wants greater access in particular for chemicals, pharmaceuticals, medical devices, forestry products, and construction and agricultural equipment, making different requests to different countries.

In the backdrop of slow progress in the Doha round, India has pushed ahead with negotiating bilateral free trade agreements, including with the European Union, its largest trade partner.

Khullar said he was “optimistic” about finalising a deal with the EU by the stated target of October. But he also said recent moves to restrict Indian exports such as grapes on dubious grounds had emerged as a potential obstacle.

“If there is going to be this lingering suspicion that every time I try to get market access to Europe, you are going to erect a non-trade barrier, this deal is not going to happen,” he said.

From schoolroom to boardroom

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Fifteen years ago, New York native Taha Abdul-Basser had a set plan for his future. The Harvard student was double majoring in pre-med and comparative religions with the expectation that he would serve society as a doctor.

But his life took a different turn as Abdul∞Basser, already a student of traditional Islamic disciplines, became involved with Harvard University’s Islamic Finance Project as a researcher and found his new calling: sharia.

“I always had an interest in traditional Islamic religious sciences with my early education coming from my father,” said Abdul-Basser.

“But I really stumbled across the opportunity to apply Islamic ethics to contemporary life.”

At 35, Abdul-Basser is now a respected and in-demand sharia advisor in the global Islamic finance industry and positioned to benefit from an acute shortage of qualified professionals in the sector.

Reflecting the change in times, many current scholars, including Abdul-Basser, now prefer to call themselves sharia advisors or technicians to suggest that their duties are more professional rather than simply clerical.

Professionally, it can be a lucrative endeavour. Scholars working on Islamic finance deals are paid consulting fees, depending not only on the services provided but also the seniority and fame of the scholar.

There’s no shortage of positions, with every Islamic finance company having a sharia board that monitors compliance, and ad hoc boards often set up for individual deals.

While there is no benchmark for fees, a renowned chairman of a sharia board, for instance, could earn $50,000 to $100,000 per board as a result of retainer fees, fees for issuing edicts, audit fees and documentation fees. Junior scholars make significantly less.

Abdul-Basser, who works full-time as Harvard’s Muslim chaplain, sits on five international sharia boards and served on six others that are no longer active. Juniors such as Abdul-Basser undergo an informal apprenticeship with senior scholars and move up the ranks as their expertise grows.

“It’s a process that never really ends,” he said. “The primary difference between the first and next generation of scholars is that institutions exist now, so the upcoming experts can be more focused on applying their expertise in sharia to financial techniques, rather than institution building.”

Top scholars dominate
There is currently no standard global training process or certification for a student of sharia to become a scholar. Sharia scholars can come from a small village madrassa in south Asia or have an advanced degree in religion from Cairo’s venerated Al Azhar University.

And well-rounded sharia advisors are scarce. Islamic finance experts say that the first generation of scholars may have laid down the foundation to help establish the business, but many still lack the business acumen, technology and language skills necessary to help the industry evolve.

“Many of them are too set in their ways to take the steps needed to help the industry move forward,” said one Gulf∞based Islamic banker, who asked to remain anonymous. “And the ones that have the skills are stretched way too thin. It’s up to the next generation to help Islamic finance reach its potential.” The same scholars are repeatedly seen at the helm of sharia boards.

“There are about 15 highly qualified internationally recognised scholars who are financially savvy and who understand modern finance,” said Harris Irfan, head of Islamic products at Barclays Capital. “It’s very difficult to get time with those 15 as they sit on dozens of boards and are very much in demand.”

Out of the 132 scholars active within the Gulf Cooperation Council, the same top ten scholars make up almost half of all sharia board positions, said consulting firm Funds at Work.

More options available
But that could change as more global programmes are created to help foster the Islamic finance industry by training upcoming sharia scholars in the ways of business.

Bahrain, for instance, has a certified sharia advisor and auditor programme in place to train scholars.

In Malaysia, the central bank established International Shari’ah Research Academy for Islamic Finance (ISRA), to help develop talent among industry practitioners and sharia scholars.

The programme offers scholarships to provide an incentive for a sharia student or scholar to pursue an advanced degree in Islamic finance and also offers mentoring for aspiring sharia practitioners to learn from established scholars.

“We now have around 120 advisors that we have developed sitting on different sharia boards,” said Mohamad Akram Laldin, prominent sharia scholar and executive director of ISRA.

Scholars must think internationally, by improving their English skills and knowledge of Western business practices in order to be successful, experts said.

To that end, the Islamic Finance Council in the UK has developed the Scholar Professional Development Programme to train sharia scholars in Islamic finance tenets, said Omar Shaikh, executive board member of the council.

“It’s extremely unrealistic for sharia scholars to give opinions on such a diverse space in finance without being up to speed with understanding the language of the finance professional,” he said.

While not offering a master’s degree or specific certification, the programme provides 21 hours or roughly three days of workshops designed to teach financial basics for mid-level and new scholars that may not be as familiar with Islamic finance. The programme has already conducted training in the UK, Malaysia and Bahrain.

Shaikh and Laldin said that the next generation of scholars will be asked to do more than simply approve deals and financial structures.

“The gap between sharia knowledge and market practice will be narrower,” Laldin said. “There will be more demand for scholars to help with coming up with better solutions and better products.”

But Abdul-Basser said it was important for upcoming scholars to hold on to their roots and the teaching of their mentors even as the industry evolves.

“There is a fairly large set of up-and-coming experts who are well-positioned to take positions on sharia boards,” he said. “We have received the torch, so to speak, and have a responsibility to move things forward.”

Legalise pot in Cali

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Pot pays the bills in Humboldt County, home to hippies and good old boys alike who espouse the weed’s curative and economic benefits. The expensive trucks, bustling restaurants, escalating rents and plentiful wads of cash all point to profitable pot cultivation in Humboldt.

Now, a state voter initiative on the November ballot that would make California the first US state to legalise and tax this cash crop has locals jittery about losing their dominant market position.

“We’ve always had a cannabis tinge to our culture,” said Kevin Hoover, editor of weekly newspaper The Arcata Eye. “What we have now is a very entrenched industry that’s making a lot of money off the fact that it’s illegal.”

Starting in the 1960s, free-thinkers wanting to get away from it all moved to the area long dominated by the lumber and fishing industries. Marijuana cultivation supported these new residents and newly unemployed blue-collar workers who watched the demise of Humboldt’s traditional manufacturing base.

Although the underground pot economy makes for poor statistics, Beth Wilson, an associate professor of economics at Humboldt State University, estimates the area’s annual income from marijuana at about $500m.

The “multiplier effect” of that money circulated to support local businesses ≥ garden centres do a brisk business and the town of Arcata’s sushi restaurant is always packed – could push that figure to $1bn annually, she said.

“It’s not negligible,” said Wilson. Everyone knows someone who grows pot. In the north county, indoor growing that fetches prices of over $3,000 per pound is popular, while in the south, marijuana is planted outdoors.

The industry has also fuelled an itinerant labour force of “trimmers” who make $20 per hour or more snipping the leaves from the more potent dried buds of the plant. “This vote has become a conflict of interest,” said Deniz Farnell, 31, an Arcata hotel worker, who, like the vast majority of locals, supports decriminalising pot smoking.

“Do you vote for the good of the state or for the next-door neighbour who’s a mom who’s supplementing her income through trimming? When that law passes, she’ll be on food stamps.” That is because legalising marijuana could turn a cottage industry into Pot Inc. Locals fear big tobacco will swoop in and drive down prices, supplying millions of new, legal pot smokers with “Marlboro Green.”

Rumours abound in Arcata that the tobacco giants have already snatched up land and copyrights to the most popular names of weed strains, whether Purple Kush, Big Bud, Headband, Trainwreck or L.A. Confidential. But at least one big tobacco company, Reynolds American, says it has no plans to move in. “Everything else would be purely rumours and speculation,” said spokesman David Howard.

“We better hope it doesn’t become legal because this area is going to become a ghost town,” one reader wrote to the North Coast Journal in a response to a recent article on how to stay afloat in the post-illegal pot era.

The Tax Cannabis campaign has gained traction in the cash-strapped state of California, historically at the forefront of contentious social issues. It led the nation in 1996 by approving the use of cannabis for medical purposes. An April 2009 Field Poll showed 56 percent of state voters supported legalising pot for social use and taxing the sales.

On a statewide level, that could bring in $1.4bn per year, according to the office that regulates sales tax. “Think of all the pot smokers out there,” said a mid-30s mom who has grown for six years, plans to enter law school, and favours legalisation. “They can bail California out of its deficit. Smoke more pot!”

Under the initiative, possession and cultivation of small amounts of pot for personal use would be legal for those 21 and over. The measure allows municipalities to determine how to tax and regulate the drug – with monies going to local governments – and does not affect medical marijuana laws.

Pot is illegal under US law but the Obama administration halted raids on medical marijuana clinics last year. It is unclear how state legalisation would be affected by federal law, and whether the US government would interfere.

Those who favor legalisation predict it could curtail the seamier side of the industry. The profusion of “grow houses,” gutted to accommodate indoor greenhouses, have pushed up rental prices, while robberies of cash and plants are on the rise. With no real organised opposition to the measure, local leaders in Humboldt say it’s time to face up to the future and brainstorm creative ideas to offset any impending slump.

“Here we have an industry with whom our county’s name has, quite frankly, become synonymous,” said County Supervisor Mark Lovelace. “We’ve lived with the downside of that name association for the past thirty years. Maybe it’s time to capture some of the upside.” Ideas include taking a tip from French champagne, branding the Humboldt name as an appellation and focusing on terror and tasting rooms. Others say that’s a pipe dream.

“We don’t need to panic and create weed Disneyland,” said one grower, who believes the risk to growers has been overblown and foresees a continuing black market even if the law passes. The 32-year-old illegal grower, who declined to be identified, predicts connoisseurs will eschew the cheaper varieties in a legal market and pay a premium for Humboldt’s best strains.

Pot growers could also harness their know-how for other horticultural pursuits, he said. “It’s easy money right now,” said the self-described “average indoor grower” with $40,000 in income every two and a half months. “But these might be the future organic farmers of the area. That skill can be applied to more things than just marijuana.”

Art revolution

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Blood drips from Hillary Clinton’s severed head. The Virgin Mary cradles a machine gun. Karl Marx shares a wall with Hugo Chavez. “Given that capitalism has taken over the media and tries to distort reality, we are taking our vision onto the street,” said Eduardo Davila, a young graffiti artist with a pro-government group called “Communication Guerrillas.”

The often government-sponsored art fits in with a major push by the Chavez government this year to dominate the public arena, ranging from a presidential Twitter account to training youths in Web skills and and painting the houses of the poor.

The profusion of murals, stencils and slogans on Venezuela’s streets has a striking visual effect and a rallying impact on supporters – even though Chavez’s foes dismiss it as a shallow attempt to boost his sinking popularity.

Perhaps the most notable image to spring up recently is a politicised take on Italian master Caravaggio’s “David With the Head of Goliath” that shows a young boy with a sword clutching US Secretary of State Clinton’s bleeding head.

Further illustrating the quick end to Chavez’s early fruitless overture to Barack Obama, another image shows the US president as a manic-eyed half-human and half-robot next to the slogan: “The Empire’s New Toy.”

Given the Chavez government’s bitter political feud with neighbouring Colombia, it is no surprise that Juan Manuel Santos, Colombia’s former defense minister and now a presidential candidate, appears on a wall with devil’s horns and wild eyes.

Elsewhere, in murals full of bellicose symbolism, the Virgin Mary and Jesus carry AK-47s.

Those pictures illustrate the self-described Christian- and Marxist-inspired militancy of Chavez, who quotes as often from the Bible as he does from past revolutionary thinkers.

Brightening the barrios
One of the most frequent images to show up is a reproduction of a famous photo from 1989 street riots known as the “Caracazo,” showing three men running through the capital’s streets carrying the corpse of a comrade shot by soldiers.

“Not forgotten, not forgiven,” says a slogan under one picture of the “Caracazo.” The event brought vilification on the government of then-President Carlos Andres Perez, whom former soldier Chavez sought to overthrow three years later in a failed military coup.

Chavez himself shows up frequently in street art, his face on one wall in a line including fellow revolutionaries Karl Marx, Vladimir Lenin, Ernesto “Che” Guevara and Simon Bolivar.

Street artists have formed groups in Caracas and elsewhere with one taking the name Communicational Liberation Army in a spoof of Colombia’s guerrilla movement, the National Liberation Army.

Chavez and his followers also are taking their propaganda war to new fronts, including the Internet. Chavez’s new Twitter account @chavezcandanga, for example, has become the most followed from Venezuela.

Dozens of teenage students have been formally enrolled and sworn-in as “Communication Guerrillas,” taught filming, web and other skills to counter the traditional anti-Chavez bias of Venezuela’s private media since he took over in 1999.

“These are our weapons: camera, microphone, recorder, the streets, the pamphlets, the murals,” Dayana Serrano, 15, said at a training session for a government initiative that has outraged opposition parties. “We don’t have pistols or anything like that and we hope they never give them to us.”

Chavez’s popularity has dropped this year but, he still retains a near-50 percent approval rating. Much of his popularity comes from social missions in poor neighbourhoods – providing free schools and clinics and painting houses for free.

The “Barrio Tricolor” or “Three-colour Neighbourhood” mission has gathered pace this year, with soldiers going into poor parts of Caracas to spruce up dilapidated houses with a fresh coat of paint, new roofs and other repairs.

Critics deride the initiative as a cheap, vote-winning tactic limited to areas widely seen from highways, and literally painting over communities’ deeper problems. But for the thousands of residents whose houses are now bedecked in bright Caribbean colours, the gratitude is genuine.

“No other president bothered to do anything for the poor. Chavez is the only one,” said 60-year-old Clemencia Linares, as soldiers in T-shirts emblazoned with Chavez’s face hammered away at her new roof in a Caracas shanty-town.
“This is nothing short of a miracle.”

Lost generation

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Japanese college student Hiroki was keen to graduate last month and start his first full-time job, but despite applying to 40 firms, from IT ventures to big media companies, nary an offer was in sight. “If you’re a ‘freeter’, there’s no security,” said the slender, 23-year-old Hiroki, who declined to give his full name, referring to youth who flit from part-time job to part-time job after leaving school.

Japan already has one “Lost Generation” of youth stuck in insecure jobs as part-timers, contract workers and temps after failing to find steady employment when they graduated from high school or college during a hiring “Ice Age” from 1994 to 2004.

Now the country’s leaders worry that a still-fragile recovery from Japan’s worst recession in 60 years and cautious corporate hiring plans are putting a second batch of youth at risk, raising prospects of a further waste of human resources the country can ill afford as it struggles with an ageing, shrinking population.

Experts share the concern, but critics charge that efforts by Prime Minister Yukio Hatoyama’s government to
fix the problem, including planned new limits on employing temporary workers, fall short at best, or, at worst, aggravate the problem.

“What they should be doing is redressing the protection and security of the permanent workers, making it easier to change jobs, improving pension mobility, and making the differences (between regular and non-regular workers) narrower,” said Richard Jerram, chief economist at Macquarie Securities (Japan) Limited.

“If you do the opposite, all that happens is that you reduce overall enthusiasm to hire. They are going about it in exactly the wrong way.”

“One chance in a lifetime”
That an economic downturn and sluggish recovery spell a tough job market is hardly surprising and indeed, at 4.9 percent, Japan’s jobless rate is still the envy of many other countries.

Even at the depth of Japan’s employment “Ice Age”, some 90 percent of university graduates had jobs when they left school.

But a system in which companies hire masses of new graduates each April, often after making offers a year earlier, means the chances of stable, career track jobs narrow sharply for those left out.

“There are some people who become regular employees after working as temps, but not many,” said Shin Hasegawa, vice president of Tokyo’s Aoyama Gakuin University, where students can now opt for a fifth year for half tuition. “You could say it’s one chance in a lifetime.”

The system, cemented during Japan’s era of rapid economic growth after World War Two, provided a steady source of cheap and malleable workers for companies’ life-time employment systems, where firms provided training and salaries rose steadily with age.

While life-time employment has unravelled during decades of economic stagnation, the recruitment system remains much the same. That means the burden falls mainly on new graduates and non-regular workers, now about one-third of Japan’s labour force, when companies cut back on hiring to save costs.

“To protect the high wages of senior workers, they are sacrificing opportunities for youth,” said Naohiro Yashiro, an economics professor at the International Christian University (ICU) in Tokyo. “Companies put all the adjustment onto non-regular workers and new graduates, who are the weakest.”

Government efforts to address the problem are focusing on career counselling, job training and urging companies to hire more full-timers, on the one hand, while putting new limits on employing temps on the other.

“If students don’t get job offers before they graduate, they often become ‘freeters’ or other non-regular workers with low salaries and no benefits, so we want to help them as much as possible to find stable employment before they graduate,” said Masayo Murayama at the Tokyo Metropolitan Government, which has set up a special counselling service for unemployed new grads.

Labour market adjustment
Hatoyama’s cabinet approved a bill that would prohibit worker dispatch firms from sending short∞term temps to manufacturers, with the ban to take effect in three years.

The move by the Democratic Party-led government, which took power last year pledging to pay more heed to worker and consumer rights than companies, would reverse deregulation implemented by the business∞friendly Liberal Democratic Party in 2004.

Experts say counselling and training may help at the edges, in part by getting students to widen their job search beyond the “brand name” firms that many target in hopes of job security.

But critics argue restrictions on temporary workers will make the situation worse longer∞term by forcing companies to flee abroad in search of cheaper, more flexible sources of labour. “The labour market needs to be more flexible, accepting a variety of workers including temporary workers,” said Yashiro, who advocates revamping the seniority-based wage system, for example by adopting equal pay for equal work.

“It’s a choice between being unemployed and having an unstable job. But the government attitude is, stable or nothing.” Such changes, however, would be tough for the Democratic Party-led ruling coalition to push at present, given the importance of labour unions to the party’s electoral base and a slide in government voter ratings due to doubts about Hatoyama’s ability to make tough policy decisions.

“It’s very difficult for a left of centre government to have a growth plan that involves lots of labour market adjustment. They have a lot of labour money,” said Macquarie’s Jerram. “It’s too difficult if there is no political leadership to push the things that are necessary, but unpopular.”

In the meantime, for students like Hiroki, who has applied to about 10 firms this time round, prospects are murky. “Fewer of the places where I want to work are hiring this year,” he said. “I don’t really know what my chances are.”

Money for old (Eu)rope

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During the second weekend of May 2010, EU Finance Ministers met in Brussels to discuss the impact of the Greek debt crisis within the eurozone. Early on Monday 10th May, it was announced that after 11 hours of discussion, an agreement had been reached on a package to defend the euro and eurozone economies.

The 16 countries that use the Euro will have access to the newly created European Financial Stability Mechanism – 440bn euro of loan guarantees, with the European Commission offering 60bn euro to support member states experiencing “difficulties caused by exceptional circumstances beyond their control”. In addition, the IMF has agreed to contribute a further sum of at least half the EU’s contribution – expected to be around 250bn euro. These huge amounts of money are separate to the 110bn euro loan package to be given to Greece, agreed on Friday 7th May, and backed by the EU and IMF.

As is the nature of these things, the exact details of the talks are not known. But having watched various updates on TV, the world noted that the Finance Ministers were in each other’s company all weekend. This was deemed necessary by the plunge in European, US and Asian stock markets during the second week of May, based on fears that a debt default by Greece could paralyse the world’s financial system – just like the collapse of Lehman Brothers in 2008. The race against time was to allow the world’s financial markets to bounce back on Monday morning, with Europe providing a united fiscal front. Bounce back they did; at midday in London, the FTSE 100 share index was trading up 255.5 points since opening, at 5,314. Yet the calm brought to the world’s stock markets is a sideshow; the more pressing concern of the loan guarantees is to prevent the crisis in Greece spreading to other eurozone countries with high public debts and low economic growth, most notably Portugal, Spain and Ireland.

Toward the end of May, market reaction to these defensive actions can best be described as ‘not too negative’, although currency markets have remained uncertain. Only time will tell what will become of them, as indeed what will become of the Euro itself. But in the coming years, it’s pretty certain that the European Community will have to confront another financial crisis, and this is a crisis that dwarves these current loan figures – its OAPs and the impact this has on each country’s economy.

Perfect demographic storm
Europe has a rapidly aging population, yet its birth rates are low. The baby∞boomers post∞Word War II are now considering retirement, meaning a large number of elderly people to care for, but with less revenue to pay for state pensions. Take Italy for example; one in five Italians is a pensioner, and by 2024, the country is projected to have a million over the age of 90. By 2030, its workforce will be 16 percent smaller than it was in 2005. Europe wide, at the moment, there are four people of working age to support every pensioner. In the coming decades, this will decrease to only two. Add the fact that life expectancy throughout the eurozone is expected to increase by more than six years for men and over five years for women until 2050, and it’s not difficult to see that these impacts on household incomes in old age (so too the increased amount that governments will have to pay in pension and care costs) are largely understated and under-stressed. As a final blow, in many European countries, people are not saving enough for their retirement.

Most European Member States have a three pillar pension model in place. However, due to the diversity of different retirement systems, there is no common model of EU pension structure. For an area that operates with one currency, allows its citizens to cross to other member states freely, and has common business and political goals, to me, this seems short-sighted on a policy level.

That is not to say that various economic and demographic research bodies within Europe, including member state pension fund bodies, are not trying to highlight the problems that different structures, and indeed the overall aging population, could have. Yet the simple fact is that in the short term, pension reforms often have a negative effect on the government budget, and the benefits of such reforms only become visible years after the government implementing them has been voted out of power. The long-term improvement of structural debt will never really be a political priority until it has to be, and for pensions, that always means a difficult battle-plan to put in place.

The austerity measures to be implemented in Greece demonstrate this situation perfectly. After borrowing heavily and spending without worry, the Greek government now plans to freeze public sector worker’s pay (a public sector which has doubled in size during the boom years), cut civil servant’s benefits and increase its sales tax and fuel duty. The country’s pension gap currently stands at ¤4bn for 2010, while its budget deficit is 13.7 percent of GDP – more than four times higher than eurozone rules allow. This resulted in swift pension cuts to try and save the country’s ailing retirement system from collapsing. The reforms include cuts to pension benefits, the introduction of penalties for early retirement (six percent of their pension for every year taken early) and a reduction in the formula to calculate pensions. Hard pills to swallow, but completely necessary. Ireland, Portugal and Spain will take note.

Member States who reformed their pension systems in the 1990s serve as good examples (most notably Sweden after their banking crisis of the early 90s); there were short term negative impacts on State budgets due to less inflow and constant outflow of pension payments; but this sacrifice was for long∞term sustainable state pensions and reductions in government debt burdens.

Now I’m not writing to say that EU Finance Ministers should have their pensioners as their main priority at the moment. The current stability of the eurozone is paramount. Yet sooner or later, the aging population and Europe’s pension dynamic will need to be addressed. President Sarkozy has made some tough decisions in the French pension arena, whilst Belgium has innovated its regulations and industry in order to allow itself to be used as a pan-European pension hub for multi-national companies. Although the UK’s pension stability reverses every 10 years from positive to negative and back again, calls for a permanent Pensions Commission, committed to rebuild confidence in all matters retirement related, are gathering pace.

On a UK level, a specialist advisory unit with industry experts can only be a good thing. To widen this thought, when considering how closely eurozone countries interact, surely to build one advisory board, akin to the European Central Bank, which can review and advise on the reform of pensions for all (as well as advising on specific country problems) will go a long way to ensuring that despite current potential concerns, longer term worries can be left to the experts for the benefit of individual societies. How can a government forced to make difficult decisions now for immediate impact make decisions with planned impacts in at least ten to twenty years time?

Unless current policies change in the medium term for longer term benefit, commentators will not just be talking about the lost generation of young workers who currently can’t get jobs; they’ll be talking about the lost generation who can’t afford to stop working. This may be because the State retirement age is at least 10 years higher than what it currently is, or they just can’t afford to stop working until infirmity makes that decision for them. The sooner politicians communicate this message, the faster Europe can understand the changes needed.

The new green world north of Stockholm

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Every year Sweden attracts some 300,000 environmentally astute people – scientists, manufacturers, industrial designers, politicians and the merely interested. They all come to study why this nation of just over nine million people is in the forefront of planet-protecting solutions in living, transport, waste-recycling and power generation among numerous other sectors.

Ever since the early nineties, the nation has run an aggressive campaign to reduce the damage caused by climate change, and its adoption of green technologies is considered exemplary. Among other things Sweden can claim one of the largest ethanol-powered bus fleets in the world. It’s a world-leader in the conversion of waste into power – dozens of municipalities now produce biogas from sewage. And rather than wringing their hands over pollution from road vehicles, successive governments have set an example to ordinary motorists by mandating that nearly all publicly-owned vehicles are “flexible-fuelled” and insisting that petrol stations offer at least one type of biofuel.

Oil-free offices
However, too few of this army of environmentally astute visitors venture past the capital of Stockholm. Big mistake, insists Lars Ling, chief executive of CleanTech Region, the representative company for green technology further north of the capital – in fact, much further north. Ling’s brief is to develop the sustainable technology for the area known as Mid Sweden, which is roughly 350km further north of Stockholm.

Although southern Sweden gets most of the plaudits for its environmentally friendly policies, Mid Sweden – or Norrland – has long considered itself to the uncrowned leader of green technology in the nation. The region has an abundance of renewable materials – wind, water and forest – and its inhabitants have generations of experience in learning how to exploit them, but without destroying the hand that feeds.

How many council offices in cold climates around the world, for instance, are able to stay warm and cosy without using a drop of oil, as do many in Norrland? And how many hospitals employ a home∞developed, third∞generation solar heating system to deliver electricity, hot water and air∞conditioning? A breakthrough in sun∞using technology, the roof∞mounted system absorbs sunlight through high∞tech panels and then concentrates it into high∞powered, sustainable energy. And this in a nation not exactly famous for its days of sunshine.

Thus, although little-known to the wider world, the region boasts environmentally advanced intellectual knowledge that is only now becoming recognised as vital for today’s world of dwindling natural resources.

In Mid Sweden are found world-leading companies in energy efficiency, bioenergy, renewables, transportation, recycling and waste, air and environment, materials and manufacturing. Giant projects are in the pipeline such as the ¤1.73bn joint venture between package and paper company Svenska Cellulosa Aktiebolaget and Norwegian power company Statkraft. The scheme will create a 400-turbine wind farm in the Jämtland and Västernoorland counties that eventually delivers between two or three percent of the entire nation’s electricity production.

Sweden’s Silicon Valley
The cluster principle lies behind CleanTech Region’s ambitions. Based on a congregation of like-minded companies operating in the same sector, similar to California’s Silicon Valley, Norrland is home to a surprising array of commercial talent that has been decades in the making.

Officially, CleanTech Region was only launched in 2008. However, it is already exploring a range of significant projects particularly in newer member countries of the EU such as Estonia, Poland and Czech Republic. Like many former eastern bloc nations, they lag longer-standing EU members in environmentally compatible infrastructure and are spending heavily, often with EU financial assistance, to get up to speed as fast as they can.

Just one example can be found in the town of Valga, southern Estonia, where engineers, architects, tradesmen, suppliers and members of the public will soon be able to view an eco house showcasing the CleanTech Region’s green knowledge. If the house, which offers huge improvements in terms of energy-saving and other costs over existing stock, is deemed to meet the region’s requirements, it will lead to the construction of a house-building plant in the town. Thus Valga would be the first major beneficiary of Mid Sweden’s push into the wider world. Feasability studies are in progress for the plant which would deliver pre-fabricated, energy-efficient houses.

For Norrland this would represent a landmark – the first major offshore sale of the know-how that has so far been mainly confined within its own borders.

Even better, discussions have reportedly been positive for the construction of a power and heating plant in the town of Pilzen in the Czech Republic. Although perhaps better known for its Pilsener beer, Pilzen is the fourth-most populous city in the country and the project will mark another step forward for Norrland’s latent expertise. Crucible for this project is the knowledge gained from the power and heating station at Korstaverken in the Sundsvall region of Norrland. Europe’s most modern plant of its kind, the plant produces both heat and electricity entirely out of waste products. As such, it is seen as a model for the former eastern bloc countries.

Cool snow
CleanTech Region is the brainchild of the councils of two provinces – Jämtland and Västernoorland. In a practical example of local government assisting private enterprise, the municipalities have combined to support the global expansion of the region’s hitherto under- rated intellectual property. CleanTech Region not only involves the commercial community but taps the ground-breaking research conducted at Mid Sweden University, a nursery for industrial designers, engineers, scientists and green-minded entrepreneurs.

Practical as the research is, much of it is only now filtering through to the wider commercial world. Heard of snow-cooling? Simple in concept, it’s a technology that utilises the stuff that has for centuries been left to melt away. Basically, snow-cooling science saves snow for another, warmer day. The winter snow is stored, generally in ponds or underground, and recycled in the warmer months for, among other uses, freezers. Electricity savings of up to 95 percent can be achieved by snow-cooling. Even dirty city snow can be turned to good use in this way.

Backed by his region’s long-established and fast-developing technology, Lars Ling has embarked on a global mission to spread the gospel and Norrland’s ability to make it happen. Yet CleanTech is a highly commercial proposition based on a two-way transfer of technology. It aims to build up a global basket of partnerships that will develop a powerhouse of shared green technology that, the chief executive expects, will underpin the roll∞out of planet∞friendly infrastructure.

That’s why he has recently undertaken a tour of international cities to float the concept and to seek participating interests. Among the cities visited were Singapore, China, Tokyo, Sao Paulo and five US cities. He reports considerable interest in what Norrland has to offer.

A house is more than a house
Although he’s a visionary for sustainable solutions who predicts a “paradigm shift from the old industrial economy to the new economy,” Ling bases his vision on hard numbers. To provide houses for the predicted increase in global population, he points out that it will require the construction of 350,000 new homes every single day. If those homes waste energy or are built with non∞renewable materials or pollute the environment with their waste, the results will be catastrophic. “We have to change. It’s inevitable,” he warns. “We cannot keep using up the planet like this.”

When Ling describes one of the EcoCycle houses developed within the CleanTeach region, it does indeed sound like a vision. “A house is not just a house,” he says. “It’s much more. It must meet many practical requirements such as good ventilation and heating, non- polluting flows of grey water and human waste. It must have a long life of at least 50 years. It must be good to live in. It must fulfil an economic function. And it must have a longer life cycle than its materials – every single item down to the last nut and bolt should be recyclable.”

And as he adds for good measure, a house embodies a broad range of expertise from architecture and engineering to plumbing and information technology. By his reckoning, an EcoCycle house is the sum total of between 50-70 different forms of intellectual property. And while many countries – even cold-climate ones – continue to throw up energy-wasteful houses by the millions every year, Sweden proved long ago that green houses make economic sense.

For instance, explains Ling, although a one-level, three-bedroom family home will cost about 10-15 percent more to build than a conventional one, the saving in running costs is substantial and instant. In normal circumstances home∞owners should recoup the extra capital outlay within the first ten years, if not before. Thereafter it’s all profit.

Rather than just talk about the virtues of environmentally responsible houses, Norrland has shown how it can be done. In mid-2009, interested parties including skiers have been able to see the real thing in the high mountains of Duved where an EcoCycle home redefines the word “green”. Based on a high-tech foundation, it’s a wooden house boasting cellulose insulation, heat pellets that are powered by solar collectors, dry separating toilets and filtration of grey water.

In principle, CleanTech has the backing of president Obama who has budgeted billions of dollars for so-called “smart grid” housing that achieves considerable savings in its consumption of energy and power through the electronic monitoring of its heating and other operating systems. Like Lars Ling, the American president’s advisers believe that the economy of the new paradigm will see many more people working from home and as a result demanding much greater efficiencies from their real estate.

A heritage of know-how
In exporting Swedish manufacturing technology and intellectual know-how, CleanTech Region is treading a well-worn path. The country boasts several global brands as varied as car maker Volvo (although now sold to China), truck manufacturer Scania and Skype, the internet-based phone service. And mobile phone producer Ericsson, as Ling reminds us, sold its first telephone equipment to Colombia well over a century ago.

In Sweden, sustainability has a long heritage. Out of necessity Sweden was one of the first countries in the world to develop solutions that were environmentally kindly. “Sweden has cleaned up its poisoned earth,” explains Ling. “We had a lot of heavy industry like forestry and metals, especially aluminium. We had to change, and that change dates from the fifties and sixties, especially in forestry.”

Sweden has indeed undergone a transformation in ecological attitudes. Measured per million of the population, Sweden today boasts more companies that are certified environmentally friendly than any other nation, in fact nearly twice as many as second-placed Spain. Furthermore about 5000 Swedish companies meet the stringent ISO 14001 standards. Companies in the ecological forefront include such industrial giants as Akzo Nobel which produces biodegradable paint for sea-going freighters.

Industry’s clean-up of its environmental damage has spilled over into everyday life, in part because of the climate. “Our very cold winters triggered the development of green houses and buildings,” recalls Ling. “That experience has proved extremely valuable for us.” Just one result is that there are architects in the region with 40 years experience in the design of green buildings.

For a company barely 18 months old, CleanTech has quickly gotten into its stride. Lars Ling is quietly confident that his recent world tour will produce developments that should serve to provide a showcase for a technology that harnesses, but not abuses, the power of wind, water and forest.

Further information: www.cleantechregion.com

Leading the charge

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Energy companies must be responsible for designing updated, cleaner technology for generating energy, transporting and distributing it to consumers, and automating the controls of its end devices – all to achieve the greatest possible energy efficiency and ensure quality, safety, and reliability that enables the technology’s use on a mass scale.

Energy generation
Fossil fuel power plants are gradually being replaced by a higher number of smaller, distributed renewable energy sources, many of which are owned by private investors or commercial investors from outside the utilities industry. This shift gives consumers more choices around the source of their energy, and the options will only continue to expand.

Transportation and distribution
Utility companies are enhancing the current infrastructure for transporting and distributing energy to form a fail-safe Smart Grid with optimal load balancing.

With a Smart Grid, energy companies can more easily see where energy is going and influence how it is being used, while also giving consumers greater control over their own energy consumption.

The Smart Grid’s “nervous system” would be an IT network that monitors and controls the power grid. An advanced metering infrastructure (AMI) is a crucial piece of this Smart Grid technology. The AMI connects Smart Meters, via concentrators, across the grid to central data hubs – known as meter data management systems. This enables bi∞directional, real-time communication within the Smart Grid and high-speed communication with the utility companies’ application systems, such as SAP’s customer relationship management, billing, or enterprise asset management solutions.

End devices and customer installations
Many consumers’ energy-intensive devices, such as air conditioning units, are being replaced with more energy-efficient versions that can be controlled remotely by the utility provider. The provider can then use central commands that are sent via the Smart Grid and the local Smart Meter to the programmable thermostat of an individual air conditioning unit.

The road to energy efficiency
The path to increased energy efficiency requires a shift in attitude for both energy consumers and providers. Many of today’s consumers only know that their electricity comes from a socket. They know little about the origins of that energy, or the many processes involved in bringing it to their home or business. And when it comes to adopting new, greener technology, the cost of such an initiative often scares customers away.

To help customers embrace a shift toward energy efficiency, the utility industry must be able to show consumers that the time and money they invest in the new technologies will be worthwhile. And although consumers certainly care about protecting the environment by helping reduce carbon emissions, the deciding factor will likely be the hard cost savings that reduced energy consumption generates. In other words, you’ll need to show customers just how these changes will save them money.

The Smart Grid initiative
Enabling energy efficiency through Smart Grid technology requires an investment by energy companies and a shift in how they have traditionally done business. Cooperation and co-innovation among energy providers, energy distributors, and all those who touch the energy sales process have become more important than ever.

With this in mind, SAP — which provides software that many utilities companies currently use, is working to ensure that its applications and tools will integrate with energy infrastructures to enable the Smart Grid. SAP formed the AMI Lighthouse Council – made up of companies that use SAP for Utilities for customer management, energy data management, and billing – as a forum of co-innovation for the integration of AMI systems with SAP for Utilities.

The council’s main goal was to determine and define the functional enhancements required within SAP for Utilities so the solution could support Smart Grid technology. To do so, council members came up with specific, standard use cases of common business processes required for energy efficiency. Here are examples of use cases that companies looking to enable Smart Grid technology will need to perform:

On-demand meter read: This refers to a utility call centre’s ability to read consumption data from Smart Meters online, or a consumer’s ability to access this information using a utility self-service.

Utility reconnects customer: This refers to energy companies’ ability to use a software transaction to reconnect the electricity or gas supply of an unoccupied premise after being notified that a customer is moving in or has paid outstanding bills.

Price signal: This refers to a utility company’s ability to use the AMI system to send pricing information to a location’s Smart Meter, enabling the consumer or a local energy management system to optimise electricity consumption.

Introducing the MDUS concept
For each use case, the AMI Lighthouse Council developed a model for how SAP for Utilities would cooperate with a meter data management system. To support these use cases, the council created the ideal vision of how a meter data management system should work: the MDUS (Meter Data, Unification and Synchronisation) concept. In this concept, the meter data management software acts as a gateway to the AMI systems (and all of the Smart Meters installed within them) and connects to SAP for Utilities, which acts as the cockpit for all commercial and administrative transactions related to the consumers’ use of Smart Grid technology.

Simplifying system collaboration
A very strict, preferably non-redundant definition of responsibilities for both systems is needed to ensure that the architecture for system collaboration is kept as simple as possible. Unnecessary complexity would hinder cooperation between back∞end systems and the millions of Smart Meters to which they connect. Such complexity could also result in inconsistent data, system downtime, poor performance, and high maintenance costs.

To enable simplicity, MDUS systems encompass the following areas:

Meter data: The MDUS is the system of record for consumption values, meter readings, and event values. It receives this information directly from AMI data collection systems.

Unification: The MDUS integrates with AMI systems from various manufacturers and different releases and makes the characteristics of these different systems transparent to back∞end systems like SAP for Utilities.

Synchronisation: The MDUS requires additional data than what the AMI system delivers, including meter and device master data, the unique point of delivery (PoD) number of each premise in a deregulated market, energy product and rate information, and status information for Smart Meters. It will obtain this data from back∞end systems, such as SAP for Utilities, that act as the system of record. The MDUS will then synchronise itself and the AMI systems to which it is connected, and each AMI system will synchronise the meters it controls. The more stringently this synchronisation is organised and the less data each system needs to synchronise, the lower the risk of delays, or even errors, if the synchronisation fails.

Designing SAP AMI integration
After defining the use cases mentioned above, the council identified all of the functional enhancements required in SAP for Utilities to support Smart Grid technology, including electronic meter readings, efficient distribution of detailed consumption measurements to the applications that need them, automatic connections and disconnections, service changes, direct notification of local disruptions, sending text messages to customers or control signals to local end devices, and much more.

The council also realised that SAP solutions’ marketing, sales, and billing functionality must support new energy products and services that encourage consumers to save energy.

These conclusions led SAP, the AMI Lighthouse Council, and SAP partners to embark on an extensive development project, the result of which is the new SAP AMI Integration for Utilities software. This software has been available since November 2008 and is based on SAP ERP, enhancement package 4, and SAP Customer Relationship Management (SAP CRM) 7.0.

In addition, since our partners’ MDUS systems require further development to execute the use cases outlined above in collaboration with SAP for Utilities, each MDUS system communicates with SAP for Utilities based on services. Providing these services in SAP for Utilities makes it easier for the AMI/MDUS partners to carry out the developments needed for the integration.

One of the members of the AMI Lighthouse Council, US utility company Consumers Energy, headquartered in Jackson, Michigan, provided a prototype infrastructure that contains all relevant components covering the spectrum of Smart Grid technology: Smart Meters from several manufacturers, various data communication methods, systems from various AMI and MDM manufacturers (including AMI Lighthouse Council members eMeter, Itron, and OSIsoft), Landis & Gyr and the current release of SAP for Utilities.

This prototype provides an excellent framework for comprehensive test and pilot operation, in which the AMI Lighthouse Council members are involved.

Conclusion: An energy-efficient future
The AMI Lighthouse Council will continue its work in the coming years. The council’s success has led the Advisory Customer Council Utilities (ACCU), the SAP for Utilities user group, to form an AMI/Smart Grids working group and even open it up to non-member SAP customers. The ACCU represents 20 international and market∞leading utility companies that work with SAP to define future requirements for SAP for Utilities.

Both customer groups are very keen on cooperating with SAP and its partners to improve their solutions and prepare to take part in the Smart Grid initiative. We look forward to cooperating with customers and partners to help millions of companies and hundreds of millions of private consumers improve their long∞term energy efficiency, reduce their carbon footprint and save energy costs.

The innovation 40

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1. Apple
Apple’s design values – clean, minimal, user-friendly industrial design – have given it massive appeal and catapulted the brand to heights unimagined 10 years ago. Many mistakenly think Apple’s comeback is down to inspirational (and he is an inspirational figure) boss Steve Jobs. Actually, much of the credit is also down to Brit designer Jonathan Ive, senior vice president of design, whose stunning hardware – iMac, iPhone, iPod, iPad – have been the backbone of this rebellious company’s success in the last seven years. These products have also redefined the markets that they sell in. Very simply, they’re the gold standard, no question. But Apple has competition. Google is increasingly making in-roads to Android developers (Google’s open-source approach has been a big hit with many). However Google only decided recently to design its own mobile devices, buying much of the hardware from outside. In contrast, Apple has learnt from its past mistakes and has got much better in rewarding developers these days than before. But developers do not want to continue writing two pieces of code. Unquestionably, Apple remains in a commanding position as master of mobile devices, which is where the action is. It has successfully distanced itself from reliance on PCs. Apple also knows that the Internet is not just a platform but an operating system. Apple has a consistent story to tell consumers and its product pipeline commands demand, loyalty and even lust. When, exactly, did a tool simply become something rather more than a tool? Jonathan Ives and Steve Jobs plainly have a lot to answer for. Meanwhile, it’s rumoured Apple is now building its own alternative to Adobe’s Flash software. Any downsides? Apple has made a lot of enemies – like Adobe – on its journey to the top. It is a company with a lot of (deserved) pride. But it has to take some knocks at some point. But when?

2. Amazon
Bookshop, DVDs, video games. From underwear to garden spades and toys. Increasingly Amazon is selling book titles through its new Kindle, an e-book launched in 2007 that downloads content through the Internet. Although Kindle has been a considerable success, it now faces massive competition from Apple’s new iPod (which sold one million units within 30 days of launch). Other devices will also give Kindle tough competition in future. But Amazon have been clever: like Apple with iTunes, it has managed to integrate its e-book directly into its website. A neat move. The move towards a paperless world continues. But Google is soon to launch its own e-book store this summer (though there are also big issues around publishing digitized content). Currently Amazon controls around 60 percent of the e-book market, but expect this share to slip markedly in future. Just how Amazon intends to fight back is unclear. The big drawback with Kindle is that – in its current format – it remains just an e-book. An iPad, in comparison, is rather more – games, movies, browsing. So Jeff Bezos and his team need to up their game soon. But it would be dangerous to underestimate Team Amazon. It’s possible that they could even re-design Kindle from scratch, looking again at how the consumer experience could be improved and changed. Kindle meanwhile has its stalwart fans and admirers. It’s slimmer and smaller and, some claim, easier to read. You can also bung it in your pocket. Not so with Steve Jobs’ creation. Whatever, these devices are going mainstream, and in a big way. Can Amazon keep up the commercial pressure? Don’t bet against it. However the recent news that Bezos recently sold two million shares worth $267m may unnerve investors. No reason was given for Bezos’ sell.

3. Adobe
Software giant Adobe Systems’ roots go back to the start of the early 1980s when two techies, John Warnock and Charles Geschke, left their employers Xerox Parc to develop their own technology, PostScript page description language. The company got a huge boost a few years later when Apple licensed their Photoshop technology for their own laser printers. Another breakthrough came in December 2005 when it snapped up ex-competitor Macromedia. A load of new products like Flash and Dreamweaver were then added to Adobe’s product range. In 2008 they released Adobe Media player, which included tutorials and videos for training and entertainment purposes. Lately, Adobe has been in the news for several reasons: its Creative Suite 4 sales have disappointed and last November it had to lay off more than 650 employees. Yet it’s a company with extraordinary breadth and talent, encompassing mobile software and services used by an almost bewildering range of clients: developers, consumers, designers, IT knowledge workers. Its operations are also truly global, from the Americas, Europe and Asia. However, it’s also been in the news recently because of its nasty spat with Apple. Apple Inc.’s recent competitive behaviour is similar to that of a 19th-century railroad company, a top Adobe Systems technology recently complained, alluding to the iconic computer company’s stance against Adobe’s Flash media player. The problem for Adobe though is that the mobile era is about open web standards, low power appliances and new touch interfaces – all areas where Flash struggles to maintain a presence. Adobe has got quite a fight on its hands. But it’s used to fighting, and hard.

4. Google
Chrome. You couldn’t get away from Google’s operating system this year. Although hardly bulging in features, Chrome makes web browsing quick, clever and convenient. Its more basic, organic experience, Google hopes, will encourage more people to use computers, particularly at the low-end where Chrome’s comparative simplicity and speed should build loyalty. Chrome is also clever: many chip makers and other vendors have agreed to build devices that will run alongside it. It also encourages everyone else who uses it to become that more dependable on the Internet for their business – which has to prop up Google’s own bottom line. Just as seriously, it also means Microsoft doesn’t have it all its own way, given its history of favouring its own applications within its own browsers (browser development traditionally has moved at a glacial pace). Chrome should also fire the starting gun for a new range of more heavyweight industrial apps requiring a nimble, fuss free open platform. Google has experienced stupendous growth, but some investors are worried that moving into market areas like browsers could slam the brakes on growth. There are huge pressures from investors used to fairly heady share price rises, too. What is Google’s strategy long term? There’s a certain lack of detail. Meanwhile, it’s more maps, mobile phones, wind farms, even. When Yahoo was piling on the clutter on its websites, Google was going in the other direction. But Yahoo is becoming a more focused operation these days, as well as getting better at differentiating itself from its arch rival. Interesting times ahead.

5. Glaxosmithkline
Glaxo might seem an odd choice alongside its techy neighbours. But the pharmacy giant is a technologically highly innovative player. It needs to be. The pharma industry faces unprecedented competition from Asia – particularly the generic drug makers. Which means Glaxo is under huge pressure to differentiate itself. Returns from R&D investment is riven with risk. However its biopharmaceuticals business has an increasingly strong pipeline. A rash of potentially high-growth potential products include Ratarix, the rota-viral diarrhea vaccine. Tykerb is a breast cancer drug and Cervarix, the first vaccine with the potential to prevent select strains of cervical cancer, could all bring home the bacon for investors. New drugs like its autoimmune disease drug Benlysta should also help. Glaxo recently published forecast-beating earnings for the first quarter of 2010 thanks to sales of its top-selling asthma treatment Advair. Operating margins were also better than expected. However there is worry about how much headwind the company will have from Obama’s new healthcare proposals. Swine flu too is also winding down. Concern about possible side-effects from diabetes drug Avandia is another issue. Also, the hammering of Greece and the wider European economy is also taking its toll on the company’s fortunes. Glaxo is a company reliant on government state spending. Yet its ‘open innovation’ strategy to bring better medicine and drugs to the world’s poor has also attracted much praise. “We want to be a company that is truly a partner in addressing the healthcare challenges in the world’s poorest countries, no matter how difficult they are,” says Glaxo boss Andrew Witty. “A restless company, never satisfied with what it has achieved, but always looking for ways of doing more.” More is the word though. And if Witty can add ‘more’ innovation to the mix, then investors will feel more reassured.

6. A123 Systems
If you had to boil it down, A123 Systems would probably be classed as a green energy company. It’s a battery maker deep into powering the alternative energy scene. It was one of the first US companies to invest heavily in high-power lithium ion design. Its staff comprises of high-level scientists and industry veterans but its manufacturing base is in China, where it has the physical and economic scale to build millions of battery packs per year. It had a blockbuster IPO last year but its stock price has however taken a few punches since.

7. Aero Vodochody
Although Aero Vodochody celebrates 90 years in business this year, it remains a highly dynamic aerospace company based in the Czech Republic. Much of its bread and butter work focuses on engineering, tool design and fabrication. Its own in-house team includes 100-plus engineers plus a substantial airframe assembly and aircraft painting side. Its production side is immense – it’s produced 11,000 aircraft and supplies governments worldwide with a range of civil and military aerospace technology. It’s also formidably competitive thanks to its Czech manufacturing base. Oh, and it’s the largest jet training aircraft producer in the world.

8. Alnylam
Another pharma operator, Alnylam has been throwing resources for some time on a breakthrough discovery, tagged RNA interference, or RNAi. Much of it is about controlling gene expression and being able to devise treatments for liver cancer, high cholesterol and Huntingdon’s disease. RNAi is about silencing, claims Alnylam, “disease-causing genes upstream of today’s medicine”. There are exclusive rights to patents on RNA interference and alliances have been formed with Medtronic, Novartis, Biogen Idec, Roche, and Glaxo, amongst others. This is genuinely big business. These deals have generated more than $600m in funding so far and Novartis recently announced it was increasing its stake in RNAi, buying more than 55,000 shares.

9. Nanosphere
This gene-testing products maker recently reported a larger than expected first quarter loss, but long-term investors won’t be too concerned. This company makes diagnostic tests that are up to three times as sensitive as conventional testing equipment. They’re also quick to undergo. Key to its technology is gold nano particles that are mixed with chemicals that can help analyse blood samples. Last year the company’s Verigene instrument got approved by the US Food and Drug Administration for pharmacogenomic testing. Fascinating technology. Despite recent losses, its shares have risen sharply after a year of high volatility.

10. American Superconductor
Massachusetts-based American Superconductor has made much news recently. This electrical controls systems and wind energy company is set to benefit from an increase in Chinese wind power investment – and Deutsche Bank promptly advised investors to pile in as a consequence. American Superconductor is heavily focused on advanced cabling that can transmit as much electricity as 10 sets of conventional copper cables. These cables can be buried underground and can be used to reduce the risk of power cuts. Potentially the market for this kind of technology is massive. Expect it to take advantage of President Obama’s opening- up of green and renewable technology. Utility technology is moving at a fast pace – especially in Asia – and American Superconductor is at the heart of green-tech change and, just as importantly, legislation change.

11. Amyris
Another company mixing deep science and innovation is Ayres Biotechnologies. This biofuel company is currently making plans to raise $100m through an IPO. There are certainly risks to this business, like the considerable expense to building expensive biorefineries. However its big advantage is that Amyris’ technology fits right into the existing fuel framework: producing hydrocarbons from sugar easily replaces existing fuels. No surprise that it is spending a lot of time investing in Brazil where it has a plentiful supply of sugar supported by a country with extensive experience in the ethanol industry. The technology to do all this is expensive, but the number of green-tech companies planning significant IPOs to pilot similar business paths is exciting and a confidence-builder.

12. Serious Materials
This company develops sustainable green building materials. Its won a rash of awards for innovation, including winning the first Aspen Institute award for innovation in Corporate Energy Conservation. Its products include high-performance insulated windows and glass, reducing energy costs by up to 40%. Its EcoRock product is a “green” alternative to standard drywall which boasts very low emissions in its production. It recently won a contract to re-fit the 6.500 windows of the Empire State Building.

13. First Solar
Shortly before going to press, First Solar shares soared to a six-month high after it posted better than expected quarterly profits and bumped up its full year forecast. Good news for investors in this thin-film solar energy company. First Solar produced photovoltaic solar modules using a material called cadmium telluride. This absorbs light well, better than silicon does, in fact. Large-scale industry is taking an interest and costs for the technology have dramatically lowered recently: in 2008 it broke through the $1-per-watt barrier. A milestone.

14. Applied materials
A global leader in Nanomanufacturing technology, Applied Materials produces solutions for a broad range of service and software products in the semiconductor, flexible electronics and solar photovoltaic cell industry. What is crucial to much of its technology is that it has the potential to vastly reduce the cost of solar power. It now benefits from an R&D centre in Xi’an, China where green technology is powering ahead at a massive clip. It recently bought one of its rivals, Semitool Inc, at the end of 2009. The company is growing fast and has now split into several divisions, Silicon Systems Group, Display, Energy and Environmental Solutions (EES) and Service.

15. Coskata
Biofuels company Coskata is another company that has seen heavy slugs of equity financing recently, including a tranche from French oil company Total. Total takes this company so seriously that it has taken a seat on the board. Coskata is heavily focused on cellulosic ethanol, which is increasingly moving to full-scale production. US car market GM also has a sizeable stake on Coskata which utilises microorganisms and bioreactors in its conversion process to produce cellulosic ethanol. New product technologies are also promised from this innovative company. It recently announced the start-up of their new flex-ethanol facility in Madison, PA which produces ethanol from feedstocks such as wood biomass as well as construction waste.

16. Complete Genomics
DNA sequencing is a huge business opportunity. Being able to track human genomes enables scientists to explore human biological structures and processes. Although cause and effect relationships between illnesses and genes are often vague, genomics can help pinpoint concerns quickly. The problem is that this technology is still in its infancy and still expensive. But Complete Genomics claims they will in future be able to offer a genome sequencing for $5,000. For future generations, DNA sequencing will be come as routine as a regular vaccine shot. Currently Complete Genomics offers sequencing services to academic labs and pharma operators. Currently it’s building the world’s biggest sequencing facility and a huge data centre to manage the information.

17. Asia Paper & Pulp
From modest beginnings – it originally started life as a small caustic soda plant on the outskirts of Surabaya – APP is now a major international paper player. The global paper industry has seen more massive change packed into the last 10 years than probably the last 100 years. Fast-changing technology and a growing awareness of the finite resources of planet earth means paper players like APP have to demonstrate a sustainable environmental approach. The vast majority of APP-Indonesia’s fiber supply comes from sustainable plantation forestry – so trees are planted expressly for the purpose of pulp production. Its client base is fairly evenly balanced with South East Asia and Japan taking about 50 percent of the existing market.

18. Athenahealth
AthenaHealth provides Internet-based billing and other services to the medical industry. It was founded in 1997, just when the Internet was really starting to be treated seriously as a business tool. Two main products include athenaCollector, which is a physician billing service backed by award-winning software and athenaClinicals that integrates medical records with clinical and payer data. Much of the technology relies now on so-called cloud technology. That’s a huge advantage as it means it’s easy to update programs remotely as government legislation changes. Many of its clients are fairly small, physician-operated businesses. However it’s recently been under pressure from two brokerages slashing their price targets on the stock following weaker-than-expected quarterly profits.

19. Bind Biosciences
Nano-medicine company Bind Biosciences develops therapeutic targeted nano technology for a wide variety of treatments including cardiovascular problems, cancer and infectious diseases. The Cambridge Massachusetts-based company recently completed a new round of funding, raising almost $11m and attracted a new CEO, Scott Mimic, who has a lot of experience in winning FDA approval and launching new drugs. The company was founded by MIT’s Robert Langer and Omid Farokhzad from Harvard Medical School, both stars in their own professional field. The company has managed to raise almost $30m since 2006.

20. Cleantech Region
Not a company but a region in mid-Sweden. Sounds unpromising? The CleanTech region lies in the municipalities of Östersund and Sundsvall, Jämtland and is one of the most innovative green-tech areas in Scandinavia, devoted to supporting a massive range of “green” solutions: energy efficiency, construction, materials, recycling and waste plus water and waste water. Sweden has been at the forefront of eco-technology and there is huge (and building) interest in many of the sustainable technologies it pioneered – eco-homes are a good example – from the rest of Europe. But the Cleantech Region encompasses many more green ideas too. A fascinating part of Sweden.

21. Dupont
It’s not all about small start-ups. American chemical giant DuPont has a long history of technical innovation and recently partnered with BP produce transportation fuel butanol, extracted from agricultural feedstocks. Butanol is in fact an alcohol and can be used in many unmodified petrol engines. It also can be produced from a range of cereal crops including sugar cane. In November last year, both BP and DuPont agreed on the setting up of Kingston Research Ltd and a £25m biofuels research centre in Hull where the advantage of biobutanol technology is shown off. The first commercial-scale biobutanol facility will being operating in 2013. Expect Du Pont to license much of the technology to other producers. It’s also looking at developing butanol from ceullulosic sources like switchgrass.

22. Joule Biotechnologies
Yet another company based in Cambridge, Massachusetts. This biotech start-up recently announced plans to make diesel at its solar fuels plant. It’s a company deep into ethanol production but has also genetically engineered a photosynthetic micro-organism that, so it’s thought, can excrete hydrocarbons. But currently the company’s focus is on producing a non-fossil fuel for petrol and diesel engines. A huge break from existing processes.

23. eSolar
eSolar is just one of a bunch of recently-selected companies chosen by the US Department of Energy to benefit from a new round of funding for solar power in an effort for US industry to kick the coal habit. eSolar develops solar power systems. Heat from the sun is reflected from small flat mirrors to a receiver – usually tower-mounted – which then boils water to create steam. This steam can then power a turbine. Very clever. It recently licensed its technology To Chinese electrical power kit maker Penglai Electrical. Product licensing operations are now in full swing.

24. Fate Therapeutics
Fate Therapeutics recently celebrated the appointment of ex-Roche and Wyeth Dr Tom Novak who will help this biotech company develop more stem cell therapeutic technology. Fate has recruited top stem cell scientists together to focus on adult stem cell and iPS Cell research. Fate’s scientific founders have already identified and characterised key stem cell pathways known to regulate cell fate and play key roles in tissue repair and regeneration. Despite the global recession, Fate anticipates that a combination of experienced management, promising technology and increasingly successful access to capital will spur strong progress.

25. Fluidigm
This life science systems company is at the forefront of proprietary integrated fluidic circuits. This technology enables scientists to experiment with gene expression in single cells. The technology is used in biomedical labs; the longer∞term hope is that the technology could spur disposable diagnostic techniques in clinical applications like cancer diagnostics, not to mention other diseases. Because the technology is new – the chips are a flexible polymer that will adapt to many uses – it could in the long term promote a wide range of new applications, expanding the market in micro fluidics.

26. HTC
Taiwanese Smartphone company has made a dramatic splash in recent years with a range of sophisticated, user-friendly ‘phones that even comes close to rivalling Apple’s mighty iPhone. Last year heralded a dramatic change for the company when it switched to using devices deploying the Google-based Android operating system. Smartphones are certainly where the action is. While overall mobile phone sales have begun to plateau globally, the smartphone market is buoyant, and the market is still growing. By partnering directly with Google, HTC have stolen a march on its competitors.

27. IBM
Is IBM really a legitimate high-tech player? If you asked the question 30 years ago then the answer would have been a certain Yes. But IBM’s star dimmed over the years, bloated by costs and bureaucracy. Not any more. A new cloud-computing operation and a growing focus on analytics has sent the company grow in confidence again. The name ‘IBM’ still carries a great deal of clout with corporations and the company has put a lot of work into making its technological offerings as simple to use as possible. A lot of work has also gone into the security of IBM’s cloud computing operation and the cost savings for corporate clients can be significant.

28. Illumina
Another company whose share prices has been boosted – after quite a volatile year – is Illumina. It focuses on genomics technology and recently launched a sequencing machine that can read entire genomes. The technology is used by a wide variety of research centres and pharma operators, but the market for this technology is expanding fast. It’s also getting into the personal-genomics market that can even be ordered online – but for a substantial cost.

29. Infinera
Revenues have recently climbed for this California communications equipment company and losses have narrowed. Encouraging. It’s a company that produces high-tech optical transmission equipment for a wide range of clients and services. Much of Infinera’s work relies on digital optical network technology. Its unique Bandwidth Virtualisation technology has helped create a digital optical network supplying considerable cost savings in large-scale photonic integration.

30. Intel
Even if you know very little about computer semiconductor chips, you now this company’s name – probably why Intel was ranked last year as one of the world’s top 100 brands. Although it’s still deeply invested in semiconductor work, Intel is increasingly looking at electrical transmission and generation technology. It still remains the dominant supplier of PC chips and its brand recognition continues to rise. It recently raised its long-term margin outlook on the back of plans to diversify. Interestingly, despite the rash of new mobile products from Apple, the tablet PC market is predicted to still grow strongly for the next four years. Oh, and that slightly annoying Intel jingle? Blame it on Austrian 1980s sampling band Edelweiss.

31. Luxtera
Luxtera is about a new breed of monolithic opto-electronic devices. The crux of the company’s philosophy is to offer economic optical connectivity, be it network level to intra-system level and even chip-to-chip. Recently it produced an optical trans-receiver making it possible to send data between chips at 10 gigabits per second, yet using a minimum of power. That’s hugely advanced technology and will interest any operator with a need to send and receive data quickly. Ultimately photonic networking will replace copper wires – copper has a stranglehold on this market, but this will lessen as technology increases. Luxtera is well-positioned.

32. Medtronic
Medtronic is well known for its technology that encourages deep brain stimulation. The technology is still advancing and last year the US Food and Drug Administration approved its technology for treating obsessive-compulsive disorder. Up to 60,000 people have now received Medtronic’s therapy technology in a range of disorders, including Parkinson’s disease and dystonia. Increasingly it’s looking at the epilepsy and depression market and is likely to take advantage of the advances in optogenetics where increasing light is used to simulate brain cells rather than electricity.

33. Novomer
This is a high-performance materials company utilising plastics, polymers and other chemicals, all made from renewable feedstocks such as carbon dioxide. Novomer has inherently deep green characteristics compared to most companies, sequestering greenhouse gases in making plastic. But it’s also competing with producers of conventional industrial polymers made from petroleum. It’s right to emphasise the green aspect of its products and capitalise on consumer concerns. However the primary advantage of making polymers from carbon gases is, says the company, that it’s cheaper, “which may help grab market share.”

34. Pacific Biosciences
The race is really on for companies racing to improve gene sequencing. Pacific is hoping to put its machines on sale in the second half of 2010. The sheer range of applications that Pacific thinks will fit its technology is massive – from examining cancer genes to crop breeding. However, what makes Pacific’s technology different is that it claims to read longer strands of DNA molecules. It has developed a disruptive technology platform for the real-time detection of biological events at single molecule resolution. Impressive. It has raised $266m in funding so far.

35. Streambase
A developer of complex event processing software, StreamBase recently pulled in more financing ($5.5m) through a new funding round. Founded in 2003, StreamBase’s offering is focused on creating databases that are structured so that the same information gets processed while being collected – useful for handling large volumes of real-time information. Most of this Lexington, Massachusetts-based company’s clients remain in the financial sector but it’s also selling its technology to government agencies. Even gaming sites. Clearly a very wide client base. It recently opened an office in New York City, as well as Washington and London.

36. Suntech
A recent stock market rally supplied Suntech with a rash of positive news headlines. The Chinese-based company is all about making solar power as affordable as it can; so no surprise it’s also the worlds’ biggest crystalline-silicon solar panel producer. Their products can suit both residential and commercial use. Based in Wuxi, China, Suntech is about to construct a 30-megawatt-capacity factory in Phoenix, Arizona – its first US manufacturing plant. Suntech’s listed on the NYSE and employs 8,000 worldwide. It recently projected first-quarter revenues of $580m to $590m. Analysts however had estimated $542m.

37. Synthetic Genomics
This biotech company began with biofuels, then branched into a range of agricultural biotech sectors such as disease control and vaccines. It remains a privately held company and still focuses on advanced biofuel technology. It’s also deeply involved in harnessing photosynthetic organisms to produce products directly from sunlight and carbon dioxide. Practical solutions to real problems – like cost-effective ways to create clean drinking water – major heavily. Synthetic was founded by J. Craig Venter who’s previous company, Celera Genomics, was instrumental in the race to sequence the human genome.

38. iRobot
Founded in 1990 by a group of boffins working in MIT’s Artificial Intelligence Lab, iRobot is best known for its
home robot the Roomba. Automated vacuum products followed including Scooba, a floor washing product. Although the company has pioneered domestics products, the military market is now an important segment for iRobot – it has sold more than 3,000 PackBot tactical robots to militaries worldwide; iRobot is also working with the US army to develop unmanned military vehicles. Revenues from overseas sales are also increasingly becoming important for this company.

39. 1366 Technologies
1366 is about making solar power as cost-effective as coal. The company harnesses veteran scientists, engineers and entrepreneurs to create silicon – a known, safe and abundant material – but processing it at low cost while also increasing cell efficiency. Upshot? 1366 produces solar manufacturing techniques that are less expensive and time-consuming. One of the ways to take on the formidable economies of scale from China-based companies. Oh, and the name? It relates to the watts of radiation that hit the atmosphere.

40. Tilera
This Boston chip start-up is about processors, software and platforms. Its processing technology can be found in many applications such as networking and cloud computing. Tilera’s technology is based on what its tagged “intelligent mesh architecture”, providing huge scalability, it claims. It’s a good example of huge innovation in the semiconductor marketplace where strong data sharing – speed and flexibility – carries massive interest. A lot of power comes in small packages. Intel, watch out. It has raised more than $64m in funding so far and revenues from cloud computing and
other areas should see the company break even very soon.

Organic farming

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Aproject run by Leeds’ Faculty of Biological Science found that the benefits to wildlife and increases in biodiversity from organic farming are much lower than previously thought.

And they aren’t big enough to compensate for the lower crop yields achieved using organic rather than conventional agricultural techniques.

Organic farms have, until now, come out well in research into biodiversity and wildlife. But these farms tend to be found in areas with smaller fields, more hedges and woodland, which means they have an inbuilt advantage.

The Leeds team looked to see how well organic farming did once these benefits were screened out.

They looked at 32 organic and regular farms in two areas of England, taking into account over 30 variables covering climate, topography, socio-economic conditions, land use and soil type. They also compared 192 individual fields. The team noted crop yields and looked for birds, insects, earthworms and plants.

Their conclusions raise serious questions about how we can use agricultural land to maximise food production and still protect our wildlife.

Crop yields on the organic farms were around half what they were on regular farms, while biodiversity was only 12 percent higher.

“Over the next forty years, we’re going to have to double food production worldwide to keep pace with population increases,” says Professor Tim Benton, who led the project.

“Our results show that to produce the same amount of food in the UK using organic rather than conventional means, we’d need to use twice the amount of land for agriculture.”

Because the biodiversity benefits of organic farming are small, “the lower yield may be a luxury we can’t afford, particularly in the more productive areas of the UK.”

Benton says we shouldn’t promote organic farming as the best or only method of agriculture; such a strategy simply wouldn’t be sustainable.

“To meet future demands of food production, we will need to keep farming our most productive areas in the most intensive way we can,” he says. “And potentially offset that by managing some of our remaining land exclusively as wildlife reserves.”