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6 February 2008  “What? I can’t go to the grocery store! My bank’s automated teller machine refuses to dispense cash, and I’m planning a big cook-out tonight!” What’s an avatar to do?
It turns out that an inworld bank failure this summer cost residents about $750,000 USD and led to a run on Second Life banks, which eventually precipitated intervention by the highest authority available, the virtual world’s creator, Linden Labs. But the root cause may well have been LL’s earlier intervention in the economy by banning gambling on the site.
Continue reading Noodle III: Bank Panic in Second Life Prompts Battlefield Promotion of Regulators
13 January 2008
U.S. Economy Due for Sideways Year—Special Effects by Presidential Election—Uncomfortable Long-term Questions Waiting in Wings
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 The Executives’ Club of Chicago assembled an all-star panel to give Midwest business leaders their guidance for various aspects of the U.S. economy in 2008. Diane Swonk, Chief Economist of Mesirow Financial and Robert “Bob” Froehlich, Chairman of the Investment Strategy Committee, Deutsche Asset Management returned, and the mystery panelist was Jack Ablin, Chief Investment Officer, Harris Private Bank. They broke out their respective crystal balls for 2008, along with comedic effects. The session was brilliantly moderated by Terry Savage, Financial Columnist of the Chicago Sun-Times who didn’t miss a beat and extracted specific predictions from panelists.
Panelists agreed that the U.S. economy would struggle in 2008, but it would move mostly sideways, probably eking out a 1-2% gain for the year after an unsatisfying first half. All panelists predicted that the Dow would touch 14,000 sometime during the year. Froehlich again emphasized the importance of looking beyond the U.S. for investments. Swonk and Ablin were less outspoken but had high non-U.S. allocations in their recommended investments for 2008.
After reportage on the panelists conversation, I will add my analysis and points to ponder, about the economy, opportunities and the election.
Continue reading Economic Outlook for 2008—Executives’ Club of Chicago
30 December 2007 The automobile is a personal manifestation of the ultimate promise of the Industrial Economy—that physical power is essentially free—because it enables people to move quickly and easily. People just love cars because it is immensely satisfying to glide effortlessly (traffic notwithstanding ,^) from one place to another with a high degree of individual freedom.
However, as 2007 draws to a close, autos’ current reliance on fossil fuels makes it increasingly obvious that we need to change the rules. First, new wealth in emerging markets is dramatically increasing auto ownership and its concomitant demand for oil. Increased demand and uncertain supply will undoubtedly prove unsustainable in the medium term. Second, and even more daunting, is the carbon/climate change problem, which is far more life-changing in the long term. Petroleum and coal are the largest contributors to man-made carbon emissions.
Continue reading Noodle II: Tackling the Intractable Delight of the Automobile
31 January 2007
Media Reflects Power Shift away from Producers to Consumers—Glimpses of Consumer Empowerment
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 The Executives’ Club of Chicago assembled a visionary panel to give Midwest business leaders their advice for media communications in the (“new” ,^) digital age. Rishad Tobaccowala, CEO, Denuo Group and Chief Innovation Officer, Publicis; Dr. Jim Taylor, Vice Chairman, The Harrison Group and Emily L. Barr, President & General Manager, ABC 7 Chicago were panelists, and Susan D. Whiting, Chairman, Nielsen Media Research moderated the breakfast, which took place 30 January 2007 at Chicago’s Mid-America Club.
Ours is rapidly becoming a P2P world in which individuals communicate with individuals digitally, and this represents a profound shift for media companies, their clients and everyone’s customers. The focus of the morning discussion was “media”—television, print, radio—which are still largely organized to deliver one message to an audience of many. Of course, the “mass” has always been comprised of individuals, but their alternatives to mass media have been few until fairly recently. Now they are tuning out mass messaging in favor of more relevant communications, which increasingly come from—other individuals. Meantime, people are increasingly connected via the Internet (whether through mobile phones, computers, cable, VoIP), and the scale of consumer communications is beginning to approach that of the mass media.
What global enterprises and their media advisors want to know is, “How do we evolve and ensure that we remain relevant in light of this emerging consumer empowerment?”
23 January 2007
2007 Pockets of Opportunity Revealed—Plus Political Handicapping
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 The Executives’ Club of Chicago assembled an all-star panel to give Midwest business leaders their guidance for various aspects of the U.S. economy in 2007. Diane Swonk, Chief Economist of Mesirow Financial, Alan Murray, Assistant Managing Editor of The Wall Street Journal and Robert “Bob” Froehlich, Chairman of the Investment Strategy Committee, Deutsche Asset Management broke out their respective crystal balls for 2007, and the audience was not disappointed for lack of insight or wit. The session was scintillatingly moderated by Terry Savage, Financial Columnist of the Chicago Sun-Times.
The consensus was that the U.S. economy would have a relatively benign year in 2007. All panelists predicted a higher Dow, and their predictions concurred with Wall Street’s most accurate ,^) indicator, the Super Bowl Predictor. Little of import will happen on the political front, the U.S. economy will grow at a slower pace, and investment returns will be generally highest outside the U.S. Elsewhere, consumer empowerment reared its head in the executive pay issue, Apple will remain an enigma for investors who don’t understand customer experience, and the U.S. will have to get over itself in order to realize its potential in the Knowledge Economy.
17 January 2007
Economic Insight Behind the Global Knowledge Market
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 The Strategic Management Association, the Harvard Business School and the CDMA sponsored the 2007 Economic Forecast featuring David Hale, Chairman of Prince Street Capital Management and Lyric Hughes-Hale, Founder China Online. David has international renown as an international economist, and he presented his encyclopedic knowledge and perspective on global economic trends in Chicago on 9 January 2007. Afterward, Lyric shared her insights on China in Part II of the evening. The Global Human Capital Journal also covered the 2006 Economic Forecast.
David’s forecast was global in scope but adapted to his U.S. audience. It reflected many of the numbers behind the global shift to the Knowledge Economy, and how this is driving global prosperity:
Continue reading SMA 22nd Annual Economic Forecast 2007
25 November 2006
Welcome to the Post-Industrial World
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 The Knowledge Economy is a post-industrial economy characterized by a highly developed information technology industry along with overproduction and commoditization in industrial and agricultural sectors. Widespread information technology (IT) adoption among producers and consumers enables all market participants to create and share information about all aspects of economic transactions. The creation, packaging and sharing of information is termed “knowledge.” In the Knowledge Economy, information about an underlying good creates most of the good’s differentiated value.
Consumer mobilization and engagement in the Knowledge Economy renders many of the Industrial Economy’s rules invalid. In the Industrial Economy, consumers had little information relative to producers, they were isolated from each other, and they had no collective voice. They were at a disadvantage as market participants. The “second stage” of the Internet, “Web 2.0,” facilitates P2P (peer to peer) information sharing, and its tools are free to use and accessible to anyone with an Internet connection. Producers have been accustomed to controlling information about their companies, products and services, but they will increasingly have to share this influence with Web 2.0-enabled consumers.
24 November 2006
Talking with the Ambassadors of the World’s Largest Trading Relationship—and the CEOs of Four Global Enterprises
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 Three eminent diplomatic leaders and CEOs from Baxter, Financial Dynamics, ITW and Philips briefed Midwest executives on the current status and future directions of the world’s largest trading relationship at the Executives’ Club of Chicago’s International Conference November 15. The half-day program featured several presentations, a CEO panel and a media round table. All speakers sought to impress upon the audience the pivotal importance of the transatlantic alliance for the United States and Europe, and most warned chief executives neither to take it for granted nor to be passive in the face of rising protectionism.
The fact that the importance of the E.U.—U.S. alliance had to be emphasized brought into sharp relief the relatively sudden rise of Asia as well as the shift from the Industrial Economy to the Knowledge Economy. Both megatrends pose opportunities and threats for the world’s largest economies and enterprises, and the concomitant uncertainty emanated from the assembly hall. I will summarize speakers’ remarks and question and answer sessions before adding conclusions.
18 March 2006 The Strategic Management Association and The Harvard Club jointly sponsored the 2006 Economic Forecast featuring David Hale and Lyric Hughes-Hale. David presented his encyclopedic knowledge and perspective on global economic trends, while Lyric shared her insights on China in Part II of the evening (she was the founder of China Online and has focused on China for several years.). As usual, I present my notes, followed by my insights. Here are my notes from David’s presentation (Part I of the meeting):
24 January 2006 Last night I attended TiE Chicago’s “The Great Chicago Tech Debate,” which turned out to be a rousing panel discussion (no, that’s not necessarily an oxymoron ;-) replete with insights. As it was my first TiE (The Indus Entrepreneur) event, I enjoyed taking an informal survey of members afterwards, and everyone I spoke with found it extremely valuable (not awfully surprising, but still..). TiE, which was founded in The Valley and has chapters globally, is a network to support entrepreneurs. As its name suggests, many of its leaders originally hail from India, and many have founded, led or helped to launch successful start-ups that have leveraged offshore partners in India.
Although the setting of this tale is Chicago, its lessons will apply to many other cities, provinces or countries that find themselves in a global knowledge economy, with the need to form a vision to galvanize their citizens to make changes in order to succeed in the new environment. Two of the main challenges are: making the shift from the industrial economy to the knowledge economy and the need to differentiate to compete. “Technology” plays a supporting role, which we’ll discuss more in a minute. After some observations on the debate, I will offer what I think we have to do differently and how Chicago, and other industrial economy regions, will blossom again.
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