The Pulse: Citizens League Issues Scan
Saturday, October 26, 2002
Public Services: Public Safety -- Report Faults Readiness. A report issued October 25, 2002 by an eminent panel says that the US is still not ready for man terrorist assaults. The article by James Dao in the October 24, 2002 issue of the New York Times previewed the reports recommendations for establishing 24-hour operations centers in every state to link local and federal law enforcement agencies; developing global standards for security at loading centers for containers; strengthening security at oil refineries and power plants; and increasing federal spending to help local governments buy equipment and improve training. According to the report, there is much more and costly work to be done to provide a floor of public security for changed times. The full article may be viewed at: http://www.nytimes.com/2002/10/25/national/25HOME.html. (190)
Friday, October 25, 2002
Demographic Drivers: Minnesota Population to Top 6 Million by 2030. In October 2002 Minnesota Planning issued a report entitled: “Minnesota Population Projections 2000-2030” that covers population and other demographic projections for Minnesota for the next three decades. The state is projected to grow from the current 5 million to 6 million by 2030 and to develop a much older demographic profile. There are many implications of six million people mostly in the metropolitan area for transportation, and housing policy to name only two areas. The full report is available at: http://www.mnplan.state.mn.us/demography/DownloadFiles/00Proj/PopulationProjections02Intro.pdf. (189)
Thursday, October 24, 2002
Metropolitan Regional Growth and Development: More Commercial Vacancies in Suburbs Than Core Cities. Patrick Di Justo writing in the November 2003 issue of Wired magazine reported that commercial vacancies are now higher in suburbs or "edge cities" thank in urban cores by about 8 percent overall nationally. This is a major reversal of fortunes from the prior three decades. The data were drawn from Black's Guide by Cushman, Wakefield and Reis. New office construction has fallen from fifteen million new feet of commercial space in 2002 with projects for 2003 at less than 2 million. (Source: Wired, November 2002, p.55). (188)
Wednesday, October 23, 2002
Healthcare: On Pace for 1.5 Trillion Dollars in US in 2002. Milt Freudenheim wrote an article entitled: "The Healthier Side of Health Care" for the October 23, 2002 New York Times. Spending is on pace for 1.5 trillion dollars with double-digit inflation. The big winners include hospitals, especially those that have assembled networks that dominate local markets, and makers of certain medical devices like advanced heart pacemakers and the latest hip and knee replacements that cost more than the earlier versions. Nurses are getting big raises and better working conditions as short supply drives recruitment and retention efforts. The strongest managed care companies — even though they long ago lost their power to check health care costs — are reporting sharply higher profits, as premiums rise even faster than do underlying costs. But the growth of spending on drugs is slowing, after a decade-long run up of profits for drug companies. As health plans require members to pay a steeper share of drug costs, more consumers are turning to lower-priced generic versions. The full article may be accessed at: http://www.nytimes.com/2002/10/23/business/23CARE.html. (187)
Tuesday, October 22, 2002
Citizen Rights and Responsibilities: California and Minnesota Top Ranked for Privacy Protection of Citizens. A study by Privacy Journal ranked privacy protections of citizens in five tiers across the 50 states. The states in the top tier in terms of privacy protection were California, Minnesota, Connecticut, Florida, Hawaii, Illinois, Massachusetts, New York, Washington and Wisconsin. Both California and Minnesota have a permanent office in state government looking after privacy and both state supreme courts have reaffirmed the right to privacy. The full article may be found online at: http://www.nytimes.com/2002/10/20/national/20PRIV.html. (186)
Monday, October 21, 2002
Technology Drivers: Information Technology -- Ten predictions to shake your world. Dan Farber wrote in the October 15, 2002 issue of ZDNet online about ten predictions on information technology presented at a recent Gartner Symposium IT Expo 2002. Gartner analysts came up with a list of ten predictions that will impact businesses (and government too). The predictions cross over technology, economics, and social boundaries that will morph during the next eight years. Each of these ten is briefly described below.
1. Bandwidth becomes more cost effective than computing. Network capacity will increase faster than computing, memory and storage capacity to produce a significant shift in the relative cost of remote versus local computing. Cheap and plentiful bandwidth will catalyze a move toward more centralized networks services, using grid computing models and thin clients. Gartner bases this prediction on the fact that optical networking improvements are far outpacing growth in computer-related technology. However, the challenges of the last mile--security, quality of service, and grid economics--are barriers that need to be overcome. Remember when application service providers were going to take over the world? With the exception of a few, like Salesforce.com, companies are staying away from moving their computing resources to the cloud. My guess is it will take more than a decade to pry the big hard disks out of people's computers.
2. Most major applications will be between various enterprises.
3. Macroecomonic boost from between business software. If prediction 2 comes to fruition, the overall economy would reflect a boost in productivity and efficiency. The logic suggests that corporations closely aligned through industry segment or some other value chain should actually see increased productivity that would flow to the macro-economy. This makes sense, but clearing the hurdle of prediction 2 will make this effect a major challenge. Imagine how much savings and increased productivity would result if the government adopted that kind of business process and technology architecture. I know, it's difficult to imagine, but the private sector should be able to show the benefits within the timeframe Gartner suggests.
4. Successful firms in strong economy lay off millions. Given that productivity improvement from IT improvements suggested in predictions 2 and 3 come to fruition and healthy profit margins, Gartner envisions a shrinking workforce. The concept is that like the agrarian industry, Technology will reach a point where IT system automation substantially lowers the labor requirements. Gartner's strategic planning assumption is that enterprises transformed by the Internet are 70 percent likely to have 10 percent few workers by 2005 and 60 percent likely to have 30 percent fewer workers by 2010. This prediction suggests that tech workers should look to other job segments for employment. Given the massive layoffs over the last year of economic downturn, I would expect that a rebound would expand the market for IT products and expertise and bring some of those people back into the workforce. It appears the two opposing forces will play out over the next several years. I am skeptical a majority of companies will be able to take friction out of their processes before the latter part of this decade.
5. Continued consolidation of vendors in many segments Gartner predicts that at least one major player from most segments will disappear by 2004 through extinction or consolidation. That's not a risky prediction. More of the dot com companies will evaporate, and the big fish will consume the smaller fish. Claunch said the industry will enter a period of oligopoly, in which a few vendors dominate the enterprise landscape, and that by 2007 the innovation and growth cycle will return.
6. Moore's Law continues to hold true through this decade. Gartner gives Moore's Law, which posits that processor power doubles every 18 months, a 70 percent chance to continue unabated through 2011. Gartner projects that by 2008 the typical desktop computer will have 4 to 8 CPUs running at 40 GHz, 4 to 12 gigabytes of RAM, 1.5 terabytes of storage, and 100Gbit LAN technology. By 2011, processors will clock at 150 GHz and 6 terabytes of storage will be common. And, there are numerous technologies such as nanotube transistors and spintronics that could jump the next hurdle when CMOS reaches the end of its run, Claunch said.
7. Banks become primary provider of presence services by 2007. Presence services can manage your preferences, personal information and experience on the Internet. Gartner consider what it calls "one-click Internet" as essential to bringing convenience and mobility to the Internet. Microsoft (Passport), the Liberty Alliance, AOL, and Yahoo (among others) are vying for a piece of your presence--if not all of it. But Gartner's Claunch said that the future belongs to independent companies or financial service provides, such as the banks. Banks have had to deal with security, privacy and issues of trust for centuries, and that legacy is a particularly relevant in the digital age. Gartner gives the banks a 70 percent chance of succeeding in the presence business by 2007. I am not sure that we will have the standards and politics worked out by that time, but Gartner predicts that the banks will play a major role and adopt something like Liberty or Passport as the underlying framework for the trust broker business.
8. Business activity monitoring is mainstream by 2007BAM (business activity monitoring) is one of hottest buzzwords making the rounds. Think of it as having automated sensors that provide the relevant information and context that leads to more effective, real-time decision-making. Claunch describes BAM as reshaping decision-making in the enterprise: "In the past, when enterprises made complex decisions, the answers were precooked because the information wasn't available at the point of contact between your business and customers. In the future, decision-making will be pushed down because of more real-time data and business processes throughout the enterprise." This concept fits neatly with prediction 2--tighter linkage across enterprises and industry value chains. Without BAM, organizations will fall on their faces trying to do business in real-time, which will be a requirement in many areas of business in the coming decade.
9. Business units, not IT, will make most application decisions. The Gartner take is that business units, rather than a centralized IT department, will make decisions on business applications. By 2007, this trend has a 70 percent probability of governing purchasing in 65 percent of enterprises. The downside is that the overall benefits of IT expenditures will degrade. Accounting and business principles will define whether IT expenditures provide the necessary ROI. Applications will be grouped into three categories, according to Claunch. First, basic utility applications will keep the business functions. Second, enhancement applications will provide some measurable ROI. And third, frontier applications, although more risky, can give a company a significant competitive edge. Claunch said that empowering business units is a good fit with decentralized organizations and delegated authority. Well-organized, decentralized organizations in volatile markets typically have the advantage of faster decision response time, and result in better business outcomes despite inefficiencies resulting from decentralized IT decision-making. The entire process works best if parties from both camps are involved in decisions and collectively understand the business goals.
10. Pendulum swings back from centralized to decentralized. Related to prediction 9, Gartner predicts the focus on more centralized IT during this time of economic contraction will shift by 2004 to a more decentralized model. Business objectives outside of cost containment will drive decision-making to business units, where agility is a highly valued commodity and there is resurgence in economic growth.
The full article may be found at: http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2885192,00.html. (185).
Sunday, October 20, 2002
Health Care: Health Care "Tourism" in Thailand. A story in The Nation from Bangkok, Thailand on January 11, 2002 The Bumrungrad Hospital in Bangkok Thailand has 554 beds and serves 800,000 patients per year. It is the largest hospital in Southeast Asia and has attracted a large regional and international following. The hospital manager Curtis Schroeder is the former director of the University of Southern California hospital. The hospital has the look and feel of a luxury hotel and recently launched an alliance with 12 top restaurants to provide regular and special food for hospital residents and visitors. A guest chef will design a health conscious menu each month. A story on the hospitals' foreign health tourist program may be found at: http://www.nationmultimedia.com/page.arcview.php3?clid=6&id=59013&date=2002-04-26&usrsess=1. (184).