Freedom or slavery (FT)

It is early morning in San Jose, California, and Elizabeth Safran, a consultant with a boutique Silicon Valley public relations company, is on her third cup of coffee and her umpteenth e-mail.

The 13-strong company is virtual: everybody works from home and relies on e-mail and instant messaging to stay in touch. Elizabeth worries about her work/life balance and thinks the pendulum has swung too far towards technology: “It makes us more productive but everybody is working all the time – weekends, evenings. It’s almost overkill.”

Over in the UK, it is late on Friday afternoon and Paul Renucci, managing director of the systems integration company, Damovo, switches off his computer. He has spent the day working at home and now it is time to pick up his children: “On Friday I work at home,” he says. “I can work pretty hard but at 5pm exactly I stop working and the weekend starts. In the past, I would have had to brave the M25 (London’s notoriously traffic jam-prone ring road) and I would be lucky to be home by seven.”

Ms Safran and Mr Renucci represent different facets of a very modern phenomenon: the capacity of the latest communications technologies such as e-mail, text, instant messaging and videoconferencing, to blur the distinction between work and leisure and to raise important questions about the nature of “flexible working” where employees have unprecedented freedom to work where and when they choose.

Thanks to devices such as the BlackBerry and the Palm Treo, “smart” mobile phones and Wi-Fi hotspots, e-mail is ubiquitous. And while enthusiasts such as Mr Renucci protest that “there is always an off button” newly developed features such as “presence”, which tell whether an individual is contactable or not, provide new tools with which employees’ activities can be monitored.

There are three issues at stake. First, does the proliferation of portable, networked devices intrude on an individual’s work and life in a burdensome, perhaps damaging, manner? Second, what is the effect of these devices on traditional workplace relationships? And third, how do individuals manage these devices without expiring beneath an avalanche of different, often incompatible systems?

It is an area that is beginning to attract serious research. Prof Lotte Bailyn of MIT’s Sloan School of Management, argues that rules and behavioural norms have yet to be established: “Nobody thinks about these issues when the technology first arrives. It’s hard to think beforehand about norms and expectations but it is much more difficult to change these once they have become established.

“Within an organisation,” she argues, “it is the top people that have to model the right behaviour. If they don’t set the right example, then it’s hopeless.”

Something of a pattern can be discerned from the numerous surveys conducted into the effect of technology on work-life balance. When the technologies are introduced, e-mail and instant messaging seem to produce measurable improvements in efficiency and job satisfaction. One survey carried out by Visto, a US e-mail company, showed that four-fifths of mobile professionals were inclined to think that mobile e-mail would “enable them to work more flexibly by balancing a hectic work environment with the demands of everyday life”.

It is a view shared by many senior executives. Roy Bedlow of Palm, the pocket computer group, claims e-mail enables him to stay in control: “Standing in a long queue to get through passport control at San Francisco airport, I was able to avoid the stress by going through all the e-mails I received during the 11-hour flight,” he said.

But as the novelty wears off, some managers convince themselves that this capability is the same as availability. A recent Microsoft survey for YouGov, the UK market researcher, concluded there was: “The need for companies and individuals to take more active control of technology usage if we are to avoid becoming a 24-hour-a-day working society.”

Nick Barley, a Microsoft executive, said: “There are lots of benefits in technology but for many that means more work, different times, the ability to be always contacted, which can be very intrusive...is this the price of modern living and do we have to accept this?”

If medium-sized UK businesses are a proxy for the rest of the business world, there is no doubt that both pressure to increase productivity and technology are forcing change. Microsoft found that “flexible working” has become a board issue for half of these companies and that only a third still claim to have a nine-to-five culture. The survey found that where flexibility had increased, so too had productivity and employee morale, coupled with lowered stress levels, absenteeism and staff turnover. It found little evidence in companies that espoused flexible working (it calls them “free range”) that managers believed employees abused flexible working arrangements.

This latter finding is contentious. Inter-Tel, the Tucson-based telecoms group, for example, carried out a survey in Europe that found four in 10 employees did not think their employers would trust them to work at home while six in 10 thought that making a request to work more flexibly would damage their career prospects.

Edward Wilding, author of Information Risk and Security argues that these concerns are well-founded. “There is a real danger that the home worker may enter into commitments, contractually binding on his employer, that are unregulated or ill-considered and that are not recorded anywhere within the corporate network.”

He goes on: “There is also the risk that the employee, uninhibited by the presence of colleagues, managers and the internal audit department may enter into collusive arrangements with others, using systems that are not and cannot be policed or monitored by his or her employer. Fraud flourishes in a control vacuum. Psychologically the bedroom, study or garden shed are far less exposed environments than the office desk.” Clear ground rules and accountability are essential for flexible working, Mr Wilding argues.

Individuals can suffer technology-related stress not only as work intrudes into their free time but from the sheer complexity of the gadgets they are expected to master. Mobile phones, for example, are increasingly suffering from “feature creep” as capabilities are added by manufacturers seeking to persuade customers to upgrade more frequently.

Avaya, the US-based telecoms group, found just over half of a group of IT workers it canvassed claimed the proliferation of mobile devices was overwhelming them, and this from a group who could be expected to have a greater understanding of these devices than the public at large!
Accenture, the consultancy, has been working on what Andy Zimmerman, a managing partner, calls “trivergence”: the relationship between a device, the data made accessible through the device and the ability to manage the device. The model for their thinking is Apple’s iPod: Apple’s engineers realised they could create a small, compact player if they put much of the intelligence and controls not in the device itself but in the personal computer.

“We thought that was a very interesting concept that could be generalised,” Mr Zimmerman said. “Increasingly, devices will have a size and capability that will make some things you would like to do with them very difficult – how many people do anything with the photos they take with their cellphones?”

He argued that tomorrow’s devices should have two controls: a few simple keys on the device and a more complete set of “soft” keys that can be displayed as a control panel on the PC screen. He said research with focus groups had confirmed that every useful device should have some form of web-based controls or “soft panel”.

Back in San Jose, Ms Safran is mellowing: “The pendulum will swing back eventually and we will learn how to adopt these technologies which keep us connected a little more effectively,” she says.

Mr Renucci also thinks time will provide the answers: “Kids today are constantly messaging each other about things that have happened to them during the day. As they get into the business community, they are going to expect to be working in those ways.”

Copyright The Financial Times Limited 2006

Waking up to a laptop revolution (FT)

“We are too poor not to invest in information and communications technology.” This is how Meles Zenawi, prime minister of Ethiopia, explains his government’s plan to spend hundreds of millions of dollars on next-generation broadband networks that will bring telephony and internet to nearly every village in Ethiopia within two to three years. “ICT is the fastest way to end our isolation,” he says.

To some, the plan is just another grandiose African infrastructure project that will burn massive amounts of cash – one official said the investment would reach close to 10 per cent of Ethiopia’s annual gross domestic product – while more basic needs are neglected. In Ethiopia, nearly half the population is undernourished and only a quarter has reliable access to clean water.

But Mr Meles is adamant that the investment will bring lasting change: “The first mental block to overcome is that ICT is for the rich. Our development programmes have been among the most pro-poor. This choice is a continuation of that.” He also said that the project was self-funded and did not rely on multilateral loans.

The priorities of Ethiopia’s investment are getting the public sector online and improving access to education.

“It became clear that the quality of education that we could provide would be sub-standard for a long time because of a lack of resources unless a short cut was found. ICT could provide that short cut,” the prime minister said.

Today, students in nearly all of the country’s 600 secondary schools watch e-learning videos broadcast over internet protocol networks to wide plasma televisions. Sometimes these schools lack mains electricity and use a petrol generator to power the system. Mr Meles said that the quality of teaching was improving dramatically as a result.

But besides educational TV and a few IP video conferences between government officials, not much else is travelling over Ethiopia’s multi-gigabit backbone network.

Mr Meles said: “We are simply building good roads and using government vehicles to test the road. The idea is to show people that it is open.” He added that he expected the Ethiopian diaspora to be the leaders in developing the applications that will fill the bandwidth. “We will do whatever it takes to get them to contribute, such as tax breaks,” he said.

Another ambitious development vision based on broadly accessible technology is the One Laptop Per Child initiative, which aims to produce sub-$100 portable computers for the world’s poor children.

The non-profit OLPC organisation, led by MIT Media Lab chairman Nicholas Negroponte, has already raised $24m to design and trial the devices. The group hopes to begin producing 1m units per month for pilot projects in seven emerging markets at the beginning of 2007.

Unlike most education initiatives, OLPC will not seek to teach children but simply provide a tool with which they create and also learn.

Mr Negroponte explained: “OLPC is not about learning something, it is about learning learning. Children make things with their laptops, they explore and communicate. When a child, even in the most remote and poorest part of a developing country, is given an electronic game, the first thing he or she will do is discard the manual. The second is use the machine. The speed with which this child will acquire the knowledge to use the device is so astonishing, you risk thinking it is genetic.”

Which is why Mr Negroponte believes that giving each child an individual computer is better than providing them through shared facilities. “Give each child a pencil and the child then uses it to draw, to write, at school, at home, for play, for study, for making music by beating it, and on and on. Likewise the laptop,” he said.

The key to the OLPC vision will be scale, which is why the group will initially make the computers available only to governments that place bulk orders of more than 1m units. The seven launch countries are expected to order up to 10m units in 2007.

With time, this will change. “After the 2007 launch, as little as eight to 10 months later, we will open this to all non-governmental organisations, countries, states within countries, right down to school districts,” said Mr Negroponte, adding that OLPC’s goal is to bring connected laptops to 500m in five years.

And Mr Negroponte’s vision goes beyond this: “I hope that in 10 years every child on the planet will be connected.”

But some development and aid experts caution against putting too much trust in technology or giving it priority.

Duncan Green, head of research at UK charity Oxfam, said: “There is a good role for IT but I am worried that people are looking for a magic bullet. There are no short cuts in development.”

Gib Bulloch, director of the Accenture Development Partnership, agreed: “It’s not about building an advanced fibre network in Ethiopia and hoping it will end poverty. Technology is an enabler but needs to come with an understanding of the applications.”

But as grand as Mr Negroponte’s laptop plan sounds, it does rest on the fundamental concept that a country’s development occurs at the individual human level. Which is why so many ICT development initiatives focus on education. Change in this manner may be subtle, often even humble, but it can also be powerful.

Hala Gidami, an educator at the Foreign Trade Training Centre in Cairo, is applying a curriculum developed by HP to teach Egyptian entrepreneurs the ICT-based business skills needed to access export markets. She said: “There is often a high resistance to technology, especially from older people. But if approached correctly, they see how it can help them. We have trained people who were not exporting before and then began to do so after the course. The results so far have been marvellous.”

In Kenya, the African Medical and Research Foundation is working with the Accenture Development Partnership to develop an 80-hour e-learning curriculum to bring 2,000 nurses quickly to diploma-level certification. Mr Bulloch said: “Up to now, there has been a real capacity constraint in nurse training. With the usual means, this project would have taken 100 years; e-learning can short circuit that down to five years.”

Many of the Navajo indigenous people also find themselves living in a sort of developing world right in the middle of the US: they face extreme poverty, the unemployment rate on the reservation runs at 50 per cent and many of them lack access to running water and electricity.

To fight this isolation, the Navajo Nation recently connected all of its community Chapter Houses and schools using a combination of broadband satellite and optical fibre. Distance learning is giving some people access to university education while silversmiths and craftspeople are now selling their products online.

Joe Shirley Jr, president of the Navajo Nation, said: “Shops at the border towns were buying our wares at a really minimal price. Now 600 of our artisans sell their crafts online via Overstock.com. They are getting good prices; they’re making a good living.”

And the internet could bring even richer rewards thanks to online gambling services. “There’s the potential to reap hundreds of millions of dollars for the Navajo Nation’s coffers,” he said.

But Mr Shirley also believes that technology can strengthen the Navajo culture.

He said: “We have our kinship, our language, our sacred land to preserve. Our clan grandmothers and medicine people are teaching the young children over the internet from Head Start education centres.

“We’re also using it to reconnect with our people in the metropolitan areas. They can continue to be a Navajo in New York City.”

Yet, despite these ICT success stories, some thinkers feel that the current discussion on technology and development is too narrow.

Jeremy Rifkin, president of Foundation on Economic Trends, the public policy group, said: “The essential technology to help the third world take off is electricity. People talk about a connected world but one third of humans have no electricity. They’re powerless in the global economy, literally.

“This needs to be coupled with environmental priorities such as clean water and access to land, at least for subsistence; everything else is secondary.”

Mr Rifkin sees the world’s dependence on fossil fuels as inherently unfair, condemning poorer countries to increasing exclusion no matter what ICT technologies the west provides them with.

“The energy regime that we set up in the last couple of hundred years is an elite system that takes huge capital investments. Some 89 countries are worse off than they were 15 years ago, largely because they can’t afford the price of oil. What we’re not paying attention to is that as energy prices go up, the marginalised are being left further behind. And we know that the price of oil is never going down again,” said Mr Rifkin.

The answer, he believes, is cheap, distributed, renewable energy. “We need to have a third industrial revolution based on renewable energy from hydrogen fuel cells,” said Mr Rifkin, who has long advised leaders in advanced economies to subsidise research into alternative energy aggressively through large-scale public-private partnerships.

“Hydro cells are an ideal energy base for the third world. They will be the real beneficiaries once these technologies get to scale. This will be the starting-off point for a decent life.”

Globalization's New Underclass (Line56)

"Inequalities of the income distribution have long been the Achilles' heel of economic growth and development; in an era of IT-enabled globalization, that seems more the case than ever"

Body Shop: shrewd sale or sell-out? (FT)

Anita Roddick opened the first Body Shop store between two Brighton funeral parlours in 1976, and built it into a global brand known for its exotic ingredients and social activism.

L’Oréal to take over Body Shop (FT)

L’Oréal is to take over Body Shop International in a deal valuing the UK chain at about £652.3m ($1.14bn), the French cosmetics group said on Friday.

On Friday L’Oréal said it would develop the UK company as a standalone business with Ms Roddick remaining in her current position as consultant and taking a new role as consultant to L’Oréal on community trade.

She maintained that L’Oréal’s ownership would not change the Body Shop’s ethical values. “It’s not deemed in nature that because they’re big and huge that they’re going to diminish our DNA. It can’t be done,” she said, calling the deal “the best safe place” for the business.

Survival of the fittest but scope for co-operation, too (FT)

Capitalism is not just about ruthless and relentless competition says Sandra Dawson of the Judge Business school, University of Cambridge.

Ford Restructuring Means Opportunities for IT Vendors (Gartner)

The success of Ford Motor Company's turnaround strategy will depend heavily on the company's ability to embrace product and process innovation. IT vendors should try to become partners in Ford's ambitious restructuring.

G.M. Reports Big Losses as Its Woes Grow (NYTimes.com)

The General Motors Corporation said today that losses in its North American automotive business topped $5 billion last year as sales of sport utility vehicles continued to fall and advertising and health expenses rose.

Calling it the "one of the most difficult years in G.M.'s history," the company, which is cutting 30,000 jobs and closing all or parts of 12 factories, reported a fourth-quarter loss of $4.8 billion and an annual shortfall for the entire company of $8.6 billion.

G.M. said its total sales and share of the North American market continued to shrink, while the expenses that it has been trying to cut with its restructuring plan remained a significant burden and in some cases increased. The decline in sales of sport utility vehicles was particularly painful, because those vehicles have until recent years been the source of large profit margins that have made up for weaknesses in other areas of G.M.'s operations.

G.M. and its cross-town rival, the Ford Motor Company, find themselves in the middle of two exceedingly powerful forces — intense competition from foreign automakers like Toyota and high labor and supplier costs. Toyota, which has lower labor and health costs, could overtake G.M. as the world's biggest automaker this year with its fleet of popular and fuel-efficient vehicles.

Since 2000, G.M., Ford and the Chrysler Corporation have cut or announced they would eliminate up to 140,000 jobs, or a third of their payrolls. Earlier this week, Ford announced that it would cut 30,000 jobs and close 14 plants over the next six years.

In an interview with The Wall Street Journal published today, President Bush said that G.M. and Ford executives have not asked him for federal aid and that he would not look favorably upon such a request. Mr. Bush said he would instead encourage the automakers to build "a product that's relevant."

"I would hope I wouldn't be asked to make that decision," he told The Journal.

Analysts say G.M. will face enormous challenges in the coming year, because the cuts it is making now will not provide meaningful financial relief until next year, and the new cars and trucks it has said it is working on will not hit the market for a year or two. And even then, the new vehicles may fall short against the competition.

"Our sell rating reflects the risks of successfully implementing a sweeping turnaround in a hypercompetitive market," Jon Rogers, an auto industry analyst at Citigroup, wrote in a note to investors, explaining his firm's view why G.M.'s stock should be avoided. "The benefits of management's plan — health care concessions and lower North American capacity — do not accrue to cash flow until 2007-2008."

Shares of G.M. were trading down $1.35, , or 5.7 percent, to $22.50 early this afternoon on the New York Stock Exchange.

In a conference call with analysts and investors, G.M.'s new chief financial officer, Frederick Henderson, said the company ran into a range of problems last quarter. "There are no highlights," he said. "It was a very, very tough quarter."

G.M. blamed several factors for its deep loss. First, its market share in the United States fell by 2 percentage points, leaving G.M. with only 23.6 percent of the American market. High gasoline prices meant the sold fewer S.U.V.'s, which meant its revenue per vehicle dropped. G.M.'s costs for health care and material costs, including the price it pays for steel, rose during the quarter. It also spent much more on advertising and sales, reflecting its promotion of price cuts on three-quarters of the vehicles it sells in the United States.

"The results are logical but unacceptable," Mr. Henderson said. "The losses are very, very high."

Mr. Henderson said G.M.'s plan to cut its structural costs by $7 billion a year were a "good start." But he said the automaker would be under pressure to improve the "robustness" of its results.

Wall Street agrees with that assessment, but some analysts said the company has not really shown that it is moving aggressively to achieve such an improvement. G.M. did not provide an update on its plans for its credit unit, the General Motors Acceptance Corporation, nor did it comment on proposals by its largest individual investor, Kirk Kerkorian, who has said G.M. should stop paying a dividend, said Shelly Lombard, a bond analyst at Gimme Credit, a research firm.

"The fourth quarter was expected to be lousy and that's exactly what we got," she said. "The main thing that was missing from the call was any indication that the urgency has improved and the company."

G.M.'s 2005 loss of $8.6 billion, or $15.13 a share, was the company's largest since 1992, when it posted a $23.5 billion loss. That compares with a profit of $2.8 billion,, or $4.92 a share, in 2004. Revenue fell nearly $1 billion, to $192.6 billion, last year.

The company's fourth-quarter loss of $4.8 billion, or $8.45 a share, well exceeded its loss of $99 million, or 18 cents a share, in the comparable quarter of 2004. G.M.'s revenue for the quarter was modestly lower, at $51.2 billion, compared with $51.4 billion a year earlier. This was G.M.'s fifth consecutive quarterly loss and it included a $1.3 billion charge for severance, plant closures and other restructuring costs.

SAP CEO: German IT sector needs special treatment (Infoworld Netherlands)

Globalization is a good thing and it's here to stay, according to Henning Kagermann, chief executive officer of SAP AG. But that doesn't stop him from asking for special treatment for Germany's high-tech companies, to help them compete in world markets. High-tech companies need flexible working laws and lower non-wage labor costs, he said in a speech delivered at the German government-sponsored Informatikjahr IT conference earlier this week.
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SAP CEO: German IT sector needs special treatment (InfoWorld)

Kagermann says globalization is good thing but German companies need help competing in world markets

The Future Of The Global Workplace (Forbes)

NEW YORK - global market for labor is changing in unprecedented ways. In developed markets, such as the U.S. and Western Europe, executives face a rapidly aging workforce and high labor costs. Meanwhile, executives in China, India and much of the rest of the developing world increasingly encounter want amid plenty, as a shortage of suitable candidates and the changes associated with the staggering pace of economic growth make it difficult for companies to attract--and retain--enough qualified workers.

Globalisation's strange bedfellows (FT)

Globalisation’s strange bedfellows

It takes a good deal of courage, some would say foolhardiness, for a multinational company operating in impoverished parts of the world to open its internal documents to scrutiny by campaigners for fairer globalisation. read the whole story

Simon London: Responsibility in a market economy (FT)

Corporate social responsibility is one of those topics – like Manchester United and the New York Yankees – that raises passions both for and against. To CSR’s proponents, encouraging companies to do more than the law demands to create a better workplace and society is a powerful force for good. To its opponents, this is dangerous thinking because it distracts companies from their true role in a market economy – maximising profits while staying within the law.