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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The disappearing mid-market

The Economist has a thought-provoking article on the "two most noteworthy trends among the swelling ranks of middle-class consumers around the world—trends that appear to be, at first glance, at odds with each other. These are the tendencies for consumers to be more cost-conscious; but simultaneously more willing to splurge money on luxury items." Key takeaways:

  • Sales both at the top and bottom of the consumer market are rapidly growing while sales are being squeezed hard in the middle, though it is still the largest market segment in rich countries.
  • One reason [for trading down] why this change has taken place is that the discount retailers have raised the quality of their products. A second development is the rapid increase in transparency in consumer markets, thanks not least to the internet.
  • Americans, in particular, “have become addicted to the deal, which is leading them to do irrational things” … One consequence is that people buy lots of stuff they do not need … chiefly because it seems to be a bargain.
  • Companies that get stuck in the mid-market may be doomed. But as businesses trading up clash with those trading down, some of them may end up as losers, too.

Recommended reading on this topic:

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.”

Interesting new additions to Google Labs

Google Notebook [via Free Hogg] attaches to your browser toolbar allowing you to:

  • Clip and collect information as you surf the web.
  • Organize your notes from the web page you’re on.
  • Access your notes from anywhere.
  • Make your notes public.

Google Trends [via orgtheory.net] analyzes a portion of Google web searches to compute how many searches have been done for the term you enter relative to the total number of searches done on Google over time. Also, when it detects a spike in the volume of news stories for that term, it labels the graph and displays the headline of an automatically selected Google News story written near the time of that spike. It also displays the top cities, regions, and languages for the term. Interesting tool for researchers!

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.

Solar power

Read a mention of solar powered battery chargers in Profit Magazine the other day. That got me thinking about the vast potential that such devices hold. Then I saw my local Shopko carrying 8 solar lamps for $30 and I realized that solar energy is making silent but pervasive inroads in our day to day lives. We already have widespread use of solar water heaters back in Bangalore (India) where they are subsidized and cut a big chunk off electicity bills.

Upon further digging, I found this informative write-up of how solar lamps work. The authors write how solar energy was still out of reach for most consumers at the time of writing that article. We seem to have made tremendous progress in a short time – check out this travel solar battery charger that retails for $15 and is convenient enough to tuck into your backpack.

This may ultimaltely lead to the realization of one of my topics of interest – “wireless power”. We have freed the laptop of almost all cords and cables and now the only leash that tethers us to a fixed spot is the need for power. If we were to figure our more efficient ways of tapping solar power and make laptops more economical in their power needs we might find the solution some day soon. Another wild idea for transferring power wirelessly is magnetic fields although I haven’t the slightest idea how that can be made viable.

McKinsey survey on the top business trends

The McKinsey Quarterly has an interesting survey on the executive take on the top business trends facing us now:

What contributes most to the accelerating pace of change in the global business environment today?

  • Innovation in products, services, and business models
  • Greater ease of obtaining information and developing knowledge

What contributes most to the increasing competitive intensity in your industry today?

  • Improved capabilities of their competitors – e.g. better knowledge or better talent
  • More low-cost competitors.

During the next 5 years, what are the most important trends in terms of impact on global business?

  • Growing number of consumers in emerging economies / changing consumer tastes
  • Shift of economic power between and within regions
  • Greater ease of obtaining information, developing knowledge

[In addition to the above] what are the most important trends in terms of impact on the profitability of your business?

Increasing communication and interaction in business and social realms due to technological innovation

It concludes with the feeling that executives tend to underestimate some of the great risks involved in an increasingly competitive business world.