Fun with trends, time-series and stats!

If you love trends and making sense out of statistics, check out Gapminder whose vision is “making sense of the world by having fun with statistics!” [via Google Blogoscoped]. Check out the Human Development Trends 2005 report that they have on their homepage.

They have collaborated with Google Co-op so you can add them to your subscribed links and your future Google results which have relevant keywords will also have a direct link to their charts.

Also worth checking out are Trendalyzer – free software that turns boring time series into attractive moving graphics – and interesting providers in the Google Co-op Directory whom you can subscribe to.

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ATKearney FDI Confidence Index

Key takeaways from the ATKearney FDI Confidence Index 2005:

  • India joins China at the center of the FDI radar screen. It also replaces the US as the 2nd most attractive FDI location.
  • China dwarfs India in FDI, partly because China attracts more capital-intensive functions.
  • Investor enthusiasm for China and India is at an all-time high.
  • FDI prospects dim for Western Europe.
  • Investment confidence soars for Eastern Europe.
  • IT and contact centers remain the highest areas for corporate offshoring.
  • Investors see diminished Macro risks, but growing Micro risks.

Enabling ICT for Rural India

While looking at the proceedings of FIRe (Future in Review), found the web-page for Rafiq Dossani who is doing ground-breaking research on IT as it relates to South Asia, and India in particular. Here is an excerpt from the Executive Summary of the project Enabling ICT for Rural India:

Some findings from the review were expected, such as poor infrastructure, high deployment and maintenance costs and the lack of content for eGovernance. Some less expected findings are that eGovernance services are overwhelmingly the most needed; that content is largely irrelevant to needs (itself indicative of wider problems of user and operator capabilities); but that user interest rises significantly when services can be delivered regularly and efficiently; that NGOs play a key role in understanding user needs and increasing awareness; and, finally, that rural capacity is not being enhanced through ICT.

Some problems exist because the strengths of the different stakeholders are not being used optimally. Thus, NGOs, which are strongest in understanding user needs and in increasing awareness, have diverted considerable resources to accessing bandwidth and paying for kiosk infrastructure. Organizations that are village-focused have missed the opportunity of maximizing coverage through Internet-based provision. All providers must deal with infrastructure problems outside their control, such as power problems. Partnerships in content provision are rare though greatly needed.

Our proposal for a new ICT model is based on separating the infrastructure from content provision and recommending that deployment of the infrastructure upto the block level be provided by technology specialists using universal service obligation (USO) funds. We also recommend the establishment of a data center at the state level in order to use content more efficiently. These approaches recognize the public-good character of the technology infrastructure. The Ministry of Rural Development and Panchayati Raj Institutions should create a framework of rules to enable state management of this process.

Can India Overtake China?

In response to a comment on an earlier post on China vs. India, I was doing some research on this topic. There is no doubt that China outperforms India currently, as visible in the macro-economic indicators in China & India: A visual essay by Deutsche Bank Research.

However check out the Foreign Policy article “Can India Overtake China?” where the authors write:

“… statistics tell only part of the story—the macroeconomic story. At the micro level, things look quite different. There, India displays every bit as much dynamism as China. Indeed, by relying primarily on organic growth, India is making fuller use of its resources and has chosen a path that may well deliver more sustainable progress than China’s FDI-driven approach. “Can India surpass China?” is no longer a silly question, and, if it turns out that India has indeed made the wiser bet, the implications—for China’s future growth and for how policy experts think about economic development generally—could be enormous… In a survey of 25 emerging market economies conducted in 2000 by Credit Lyonnais Securities Asia, India ranked sixth in corporate governance, China 19th.”

Also worthy of attention are some fundamental weaknesses in Chinese policies/actions which will manifest themselves in the longer term, as brought about by Jared Diamond in his book Collapse and summarised by the CIA Factbook:

“One demographic consequence of the “one child” policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment – notably air pollution, soil erosion, and the steady fall of the water table, especially in the north.”

Finally the best approach for both economies would be not to compete but collaborate and gain on each other’s strengths, as aptly pointed out by Stephen S. Roach in Morgan Stanley’s Global Economic Forum:

“Interestingly enough, as both of developing Asia’s largest economies look to the future, they do so with an eye toward emulating the other.

India currently has over 25 world-class companies, well-developed capital markets, a modern banking system, and a deeply entrenched rule of law. China is lacking in all of those key respects, and very much wants to move in those directions.

At the same time, India very much aspires to match China’s progress on the manufacturing front.”

How to play the market in oil and energy?

As a follow-up to my post from yesterday, let us see how we can play the market in light of the new developments in crude and alternative energy. Investing in crude oil futures / options is highly risk-prone because of the vast fluctuations and the global drive to reduce reliance on these energy sources. A better option to play the energy markets is mutual funds that invest in companies that not only mine and process crude oil but also in companies on the frontiers of exploration and that provide related goods and services.

First, we head over to Yahoo Finance’s list of the top performers in the Specialty – Natural Resources category. Our preference is for funds that have consistently shown great performance i.e. funds that show up in as many of the different lists – 3 month, 1 year, 3 year and 5 year – as possible. Here it is easy to see that Jennison Natural Resources has been a consistent top performer since it appears in all 4 lists. The only close competitor is U.S. Global Investors Global Res (PSPFX) which is ranked first in 3 of the 4 lists. Both these funds are rated 4 stars by Morningstar representing an almost similar risk / reward ratio. The 2 significant differences are in the minimum investment amount – $5,000 for US Global and $2,500 for Jennison – and in the expense ratio which is higher for Jennison (1.97%) as compared to US Global (1.30%). So the choice is apparent: if you have 5K or higher to invest and are willing to put it in one basket, go for US Global. If you’re like me and want to put smaller chunks of money in different investments, go for Jennison (PNRCX).

PNRCX also meets the requirements discussed earlier – if you see its holdings it has substantial (lucrative) investments in companies like GlobalSantaFe, Suncor Energy, National-Oilwell, etc. and no great exposures to the big oil majors like Chevron, BP, etc.

Who says there’s an oil shortage?

The Economist says that bio-fuels like ethanol (made from sugarcane and corn) and bio-diesels like “BioWillie” (derived from a blend of vegetable oil) might come to the rescue of consumers and the environment and also help in reducing reliance on foreign oil. Especially of interest:

A recent bioengineering breakthrough means that it should soon be possible to convert plant products far more efficiently to ethanol. This lends promise to cellulosic ethanol—a product that can be made from agricultural “waste”, such as corn cobs or weeds, which is widely available. (Once corn kernels and sugar-cane sap have been taken away for sugar, they leave plenty of stalks and leaves behind.)

This could lead to a revolution in emerging economies where agricultural waste, grass and weeds could be used as a cheap source of indigenous fuel. Also see my earlier post about rural electrification.

As consumers, this is welcome news for us, once again proving that human ingenuity is capable of tackling natural shortages. As an investor, it puts forth questions on where to invest. Tomorrow, we’ll see how we can play the market in light of such developments.

EIU/Accenture suvey on innovation and growth strategies

The Economist Intelligence Unit (EIU) just came out with the results of an Accenture-sponsored survey on innovation and growth strategies. Key findings:

What do you think will be the main drivers of profitable growth at your company over the coming three years?

  • Globalisation – allowing their companies to tap new markets and new sources of materials and talent (54%).
  • Demand from the marketplace for constant innovation (49%).

What do you think will be the two biggest drivers of innovation at your company over the coming three years?

  • Technology advances-including convergence, ERM, biotechnology and automated sales tools (21%).
  • Customer demand for better convenience, improved service and more advanced products (19%).

Importantly, few people (6%) believe that management focus or compensation structures are driving innovation at their companies.

Which of the following do you think are significant barriers to innovation at your company?

  • Lack of collaboration within the organisation (43%)
  • Lack of incentives to find innovative solutions (39%)
  • Lack of end-to-end processes for getting an innovation to the marketplace (36%)

But there are differences in perspective among the top-management and middle-management groups, with the latter seeing more barriers to innovation. In particular, non-C-level executives see a greater need for compensation structures that reward innovation and a greater need for end-to-end processes to bring ideas to market. C-level executives express greater confidence in their companies’ abilities in all three stages of growth and innovation.

Does it mean that C-level execs know more because of their macro perspective or does it mean they are not in touch with the ground realities?