Marketplace - American Public Media
Here’s a market you’ll be likely to hear more of in tech: “The Next Billion.” It's shorthand for the next billion people that will become online consumers, and that makes them the target of tech giants like Google, Facebook and Samsung.
The next billion live in emerging economies like China, India, Brazil and Africa. Jenna Burrell, a professor at UC Berkeley’s School of Information, has been studying one of these markets, namely Ghana, since the early 2000s. She says even back then, it was clear that people who wanted to get online weren’t going to use desktops.
“You know it’s a small number of people who were going to Internet cafés, but almost everyone was either using, or owning or getting possession of a mobile phone,” Burrell says.
While a growing number of people in Ghana have smartphones today, the market is very different from the U.S.
Burrell shows me a phone she bought there. It has an antenna for the built-in transistor radio, and it has a flashlight for when the electricity goes out.
Burrell cracked open the back of her cellphone and points: “Underneath the battery pack where most of us don’t really look, it’s got a slot for your SIM card.”
Like most of the next billion, the majority of people in Ghana don’t have pre-paid mobile plans. Instead, they use SIM cards, which are basically phone cards or prepaid time that you insert into your phone.
“This unit is worth about two minutes of airtime, and that gives you a sense of how it’s a very precious commodity,” she says.
Burrell says that on a continent where most people make about a dollar a day, even a few minutes of airtime is a big expense. That’s where Mozilla, a non-profit organization teaming up with local carriers to make affordable phones, comes in.
Andreas Gal, Mozilla’s chief technology officer, dumps a number of handsets onto a desk in his Silicon Valley office.
“I brought these $25 smart phones,” he says. “These are the devices that launched recently in India.”
Critics of these $25 phones say web pages take forever to load, and you can’t run more than one app at a time.
But forget the quality of the phone, said Rakesh Agrawal, the CEO of reDesign Mobile, which develops products for the next billion. He says in most emerging economies, it's data that's the problem—data plans are prohibitively expensive.
“You have to think about how much people can afford and what kind of services they can use over their smaller data pipes,” said Agrawal.
He says the next billion aren’t going to run apps mindlessly like we do. Which means, in part, tech companies can’t rely on advertising to make money off them.
“If you’re living on a dollar a day, Proctor and Gamble can’t afford to advertise to you, because you can’t afford their products,” Agrawal said.
Despite these odds, tech companies will continue to pursue the next billion. Smart phone ownership — and sales of apps — will inevitably slow in the developed world over the next decades. Tech companies need the next billion to keep growing. So, they're getting ready.
Just two years ago, Hurricane Sandy knocked out power stations and shut down Wall Street.
Now, Scientists say by the middle of this century, low lying areas from Boston to Baltimore will flood frequently due to climate change, with recovery becoming increasingly expensive. A storm on the level of Hurricane Sandy could cost as much as $90 billion in 2050.
These kinds of changes in the weather will put increasing pressure on state and local governments to boost their financial resilience.
Click the media player above to hear more.
It was a case of two people, separated by 243 statute miles, having the same thought at the same time.
I was on the air talking to an expert about the government’s main assessment of inflation, and meanwhile, a listener near Washington, D.C. was getting annoyed. It would turn out that Gregory, from Falls Church, Virginia was thinking the same thing I was: It’s one thing to say that the Consumer Price Index hasn’t moved up much in recent years. But be careful before you conclude that inflation is therefore not a problem.
“Can you please get someone on your show who actually knows that there is real price inflation?” Gregory wrote in a note to us. “Every time I hear one of your guests talk about low inflation, or CPI as reported by the government, I cringe with disbelief!”
I myself wasn’t cringing with disbelief in that shared moment, but I was thinking I’d better do something soon in our ongoing Marketplace Inflation Calculator series on what has been happening to incomes over time. It is one thing to point towards low inflation (low if you leave out the cost of higher education; low if you leave out the cost of health care; low if you leave out the cost of rental apartments in America). Gregory, however, was pointing out that if what we earn is sliding, then our budgets will still be stretched – even when CPI just treads water.
Experts often tell us that our incomes are mostly “stagnant,” but what do the official numbers show? Our inflation series looks at prices over the last 25 years. The government helpfully examines household income over time by breaking down what we earn into five categories (or brackets). These include the bottom 20 percent of earners, the next to the bottom 20 percent, the middle 20 percent and so forth. When I looked through the data and adjusted for inflation, the numbers were there for everyone to see.
The income of the bottom 20 percent of households in America, on average, did not go up in 25 years, once you adjust for inflation. Those incomes didn’t just stagnate, they went down. The next-to-poorest of the five income categories? The average household income for those Americans also fell. Let’s call the middle income category a draw; depending on which inflation assumptions you use, incomes either went up a tad or fell a tad over 25 years. You already know about the top two earning categories; those went sharply up the last quarter century, the top category by a lot.
When hearing statistics like these, it’s common to argue that many families these days have not just one, but two or more earners to consider, and this should be taken into account before claiming that incomes are “stagnant” for many Americans. Even so, the data is already adjusts for that in the case above: It is data for average households, not average individual incomes.
The numbers showing that the bottom 40 percent of Americans make less now than they did a quarter century ago is a core notion for anyone thinking about wealth and poverty in America.
The American Indian College Fund celebrates its 25th anniversary with a fundraiser in New York on Monday. The nonprofit was created to assist the country’s more than 30 tribal colleges and universities. These are federally-funded schools located on or near native lands.
Only about 10 percent of American Indians and Alaska Natives have a bachelor’s degree or higher, compared to about 30 percent of all adults, according to the group.
The big reason is poverty, says president Cheryl Crazy Bull. Tribal colleges cost on average $15,000 a year to attend, she says. The maximum federal Pell grant for low-income students covers only $5,730.
“It’s a very affordable education,” Crazy Bull says. But for students living on reservations with a 60 to 80 percent unemployment rate, “it’s a huge gap.”
The College Fund tries to bridge that gap with scholarships. It’s aiming to raise an extra $25 million this year.
The group recently got a boost from Comcast and NBC Universal: $5 million in ad time for a new public service campaign.
Here are a few numbers from the American Indian College Fund:Up to 95 percent
The unemployment rate on some American Indian reservations. In total, almost 29 percent of American Indians on reservations live below the federal poverty level.$16,777
The per capita income of American Indians and Alaska Natives, according the American Community Survey in 2013. Meanwhile, the average cost of attendance at a tribal college or university is $14,566.10 percent
That's approximate percentage of American Indian and Alaska Natives who have earned a bachelor's degree or higher, compared to about 30 percent of all adults. Natives have the lowest educational attainment rates of all ethnic and racial groups in America.
SolarCity, the country’s biggest installer of home rooftop solar-energy systems, now has a new product: bonds that let consumers invest in thousand-dollar increments. But with billions in capital from big banks as well as the stock market, what's the point of borrowing up to $200 million from consumers?
It's not the cash, says the company's CEO, Lyndon Rive. At least not primarily. "The number one reason is to create more awareness," he says. "For people to participate, get a financial return. Now they tell their friends: 'Hey, have you looked at solar bonds? Have you looked at solar?'"
And have you looked at SolarCity?
In addition to raising money, the campaign could cut down on one of the company's biggest costs: sales. An investor is a hot lead, and a source of referrals.
"Customer acquisition is maddeningly expensive for residential-solar," says Shayle Kann, senior vice-president at GTM Research, which tracks the green-energy sector.
Right now, SolarCity’s business model only works in about 15 states. But the company can sell bonds — and build relationships — in all 50, for the day when, or if, other states open up.
Advocates in those states — for instance, bond-holders — can only help. "They're not exactly customers if they buy bonds," says Kann. "But they're probably advocates, or supporters."
The push to expand into new markets, and to lock up potential customers in those markets, is key to SolarCity’s overall strategy, says Severin Borenstein, an economics professor at Berkeley who studies renewable energy.
SolarCity's competitors are trying the same thing. "Right now, a lot of solar companies have the strategy of trying to get large enough on what is basically a bet on getting out ahead and being the recognized name brand, which could potentially have huge value," says Borenstein.
He compares it to the bet Microsoft made on computer operating systems in the 1980s. SolarCity wants to be the Microsoft of solar.
But what if it’s the AOL instead? Remember all those CDs from the 1990s?
That's not the worst-case scenario, says Borenstein. "It's not just a matter of whether they're going to be the Microsoft of solar or the AOL of solar," he says, "but whether they're going to be the Microsoft of solar or the Microsoft of a product that never takes off at all."
Residential solar isn't a sure bet, says Borenstein, so neither are SolarCity's bonds. "While it's a very exciting company right now, I think it's probably in a more volatile business than most people would invest in."
You've got mail! AOL sent out zillions of these.unknown/PandoDaily.com
Per-student funding is still below pre-recession levels in 30 states, according to a report by the Center on Budget and Policy Priorities.Which state cut per-student funding by the greatest percentage between fiscal 2008 and 2015?
See the report here for information on all the states.
Eustace Conway is a Naturalist who lives in the mountains of Boone, North Carolina. He's been living in the forest there for nearly 40 years.
When Conway was 17 years old, he left the suburbs to live outdoors. He has hiked the entire Appalachian Trail, and has crossed the United States on horseback from the Atlantic to the Pacific.
When it comes to money, Conway says he has little use for it. He is the subject of the book, The Last American Man, by Elizabeth Gilbert.
Or, even Galapagos tortoises:
White spaces basically consist of the channels not being used by traditional TV, and, like the partnership between Google and the London Zoo illustrates, can be used to transmit other types of information.
What's interesting about white space waves is that they travel extremely far; the wi-fi in your office starts to slow down when you're too far from an internet router, but white space waves can travel 6 miles without suffering. It could be used to deliver Internet broadband on the open ocean, or for networks of sensors that can protect cities from natural disasters.
But, the future of white space depends on what the FCC and other regulators decide to do, and whether some of these tests, like the meerkat cameras, prove we can use white spaces without interfering with channels that are already being used.
John Carney with the Wall Street Journal and Linette Lopez from Business Insider join Kai to discuss the week in review.
The President has tapped White House veteran Ron Klain to be the nation’s Ebola Czar.
The appointment comes as fears of the virus spread with a poll this week showing nearly half Americans are either “very concerned” or “somewhat concerned” they will contract Ebola.
So how do companies deal with this? How do they keep workers safe and operations running smoothly? The first thing some businesses did this week was call Arun Sharma.
“A lot of the questions we are getting is how do we control the fear and anxiety in the workplace,” he says.
Sharma works for Control Risks, an international firm that helps Fortune 500 companies around the globe manage risk. Especially for those clients with operations in Ebola hot spots, Sharma says the essential word is "communicate."
“If you have an operation that’s based in Africa and you want to give employees an opportunity to ask question, have a town hall meeting, bring a medical advisor in that can answer those medical related questions,” she says.
Certainly multinational corporations must start learning about Ebola and its risks, but at a time when flight attendants reportedly locked a passenger in a plane lavatory after she threw up; it's clear employers here in the U.S. have their work cut out for them too. That could mean executives dusting off a report already many have on their shelves.
Years ago, the CDC designed pandemic preparation guidelines. Dr. Robert Quigley, with the medical assistance company International SOS, says there’d be a lot less fear if companies routinely practiced using this tool they already have.
“And companies are definitely not doing that. And as a result they are all kind of caught now in a panic mode, and there’s some scrambling going on,” he says.
One way to cut down on the corporate chaos, Quigley says, is for companies to focus on their business and develop what he calls a continuity plan.
“They need to have trigger points that indicate when they need to pull people out of harm’s way, whether or not travel really needs to take place, and whether that’s going to negatively impact their bottom line,” he says.
Sorting that bit out should help sober up the room says Quigley. The doctor says remember the more afraid you and your staff are, the more likely operations will be interrupted.
The antidote: education and preparation.
In caffeine-related news, Starbucks announced today it's going to be running a sweepstakes this coming holiday season. If you use a Starbucks card between December 2 and Christmas you're entered for a chance to win Starbucks for life.
Which, if you read the fine print, the company defines as 30 years.
Not exactly what they're advertising, but still... not bad.
The latest figures from the Center for Responsive Politics in Washington show that Google’s Political Action Committee has just barely overtaken the PAC at Goldman Sachs in campaign spending this election cycle.
Goldman Sachs’ PAC, which has helped the company to wield its impressive lobbying power in Washington, had spent $1.39 million on the 2014 election cycle, as of the end of August. Google’s PAC, named NetPAC, had spent $1.43 million. Company PACs bundle contributions from employees, but don’t include money from the corporation itself.
Google’s political money-play has increased massively in recent election cycles. In 2006, Google’s PAC spent $37,000. By this year, the spending had increased forty-fold.
As an industry, Wall Street still packs a much bigger political warchest than Silicon Valley to support candidates and parties. Investment-industry-related contributors and PACS have spent more than $125 million this year; the computer and internet industry has spent just under $24 million.
Bill Allison, at the campaign finance watchdog group The Sunlight Foundation, says the banking industry may need to spend more to have an impact inside the Beltway on legislation and regulation, because big banks are now disliked and distrusted by many voters. For the most part, he says, that’s not true of big tech companies.
“For Google and Facebook, they have this hip young image,” says Allison.
The big internet players also have a lot of people’s ears and eyeballs, says Mark Jaycox, legislative analyst at the Electronic Frontier Foundation. They use that to leverage their lobbying on Capitol Hill—especially about issues that resonate with the public, like online privacy. “Google and Twitter have massive followings,” said Jaycox, “and they use these outlets and social media to push for email privacy laws and NSA surveillance reform.”
Some of the tech industry’s key legislative priorities, though, aren’t so widely popular, or even well-known to the general public. Those issues include raising the number of visas available for skilled foreign technology workers, said Princeton political historian Julian Zelizer.
“They’re fighting for everything from immigration reform to tax credits, and soon I’m sure, monopoly issues,” said Zelizer. “So they’re going to give a lot of money all over, to both parties.”
Still, Silicon Valley’s general reputation for leaning left comes through in some of the Center for Responsive Politics' data. The industry’s cumulative political contributions this year have split 60-40 — for Democrats.
Our vision of a help-wanted ad for a government czar:
- Level-headed, task-driven communicator. Able to interface with a variety of stakeholders. Must be comfortable translating and explaining government action (or inaction) to the public.
- Willing to be a symbol of governmental concern about a specific crisis. Good at making everyone feel better. Willing to appear before the press as required.
- Must be a model of seriousness, calm and control.
- Must be comfortable operating behind the scenes and juggling the demands of multiple high-level, ego-driven officials inside government.
- Comfortable working in a culture of feedback - knows how to take a punch.
- Willingness to sacrifice sleep and home life.
- Proven record working with "big personalities" a must.
- Ability to cut through red tape also a plus.
Citrus greening was first reported in Asia during the late 1800s, and it has no cure. It isn't a threat to humans or animals, but it has ruined many acres of citrus crops throughout the world, including the United States.
"It’s been problematic and it’s pretty much spread throughout the entire industry now," says Mark Wheeler, a third-generation orange grower and CFO of Wheeler Farms in Lake Placid, Florida.
Wheeler says that although they're seeing elevated fruit prices, the production has been diminished per acre because of the disease.
"It’s all a grower by grower situation and how impacted they are by the disease," says Wheeler. "A grower who is producing 300 to 400 boxes per acre is doing well, but a grower who is producing 200 boxes per acre is struggling to stay in business."
Illinois based-Paragon Marketing Group is working on a deal to bring high school football to a national audience. The group – which brought LeBron James’s high school basketball games to TV – is currently in negotiations with several states and ESPN to bring some type of high school football playoff to television. ESPN wouldn’t comment on the negotiations, with Paragon saying the talks are ongoing and private.
Yet, at least one contract between Paragon and one of the states it’s working with has been made public: Florida officials have agreed to let two state high schools participate in such a playoff each year.
Paragon Marketing Group will pay the Florida High School Athletic Association $10,000 each year for allowing the state’s schools to participate in a national playoff or bowl series. If two or more teams from Florida are picked to participate by Paragon, the Florida High School Athletic Association would receive $40,000.
Meanwhile, Florida high schools participating in a playoff will receive $12,500 for appearing in the game, and another $25,000 in merchandising fees. Paragon Marketing, the group organizing the event has until October 31st to cancel a playoff or high school bowl series this year, according to the contract the team signed with Florida.
“For the next frontier to be high school football is not a surprise,” says Sports Business Analyst Keith Reed. “You’ve already seen some media properties develop to cover high school football…people pay attention to this.”
Meanwhile, officials in Georgia and Texas have declined to participate – for now. Officials in California have suggested the playoff is a non-starter, citing rules that prohibit high school teams to participate in games after their final state playoff games.
The concern among many officials is that high school players may be exploited at a crucial time in their development.
“They’re at a very integral part of their lives, they’re starting to develop who they really are…who their personalities are, what their identity will be for the rest of their lives,” says St. Francis High School Head Football Coach Rich Carroll of Queens, New York.
Still, Carroll says more money for high school football teams through televised games would be beneficial to programs like his.
“Even though there’s a lot of negative press, the fact that it’s so enjoyable to watch…I think it’s promoting activity,” Carroll says. “The bottom line is football’s fun.”
Of all the countries that have pledged money to the UN's $1 billion fund to fight Ebola, only Colombia has paid, the BBC reported, bringing the fund total to $100,000. There has been $20 million pledged to the fund, and $400 million given to other UN-affiliated organizations, but the main UN trust fund is bare.
There was a flurry of other Ebola news Friday morning: President Barack Obama appointed an "Ebola Czar," a Pentagon parking lot was shut down after a woman who had recently traveled to Africa began vomiting and the State Department announced that a healthcare worker who may have come in contact with the virus is on a cruise ship in Belize. We'll have more later today.
Here are some other stories we're reading - and numbers we're watching - Friday.$200 million
The valuation of anonymous messaging app Whisper, which transmits up to 2.6 million posts each day. In an exploration of deeper journalistic partnership with the company, the Guardian reported that Whisper tracks users' location data, even if they had specifically opted out. The company also reportedly zeros in on potentially "newsworthy" users, following their posts closely and tracking their movements.10
That's how many new movies based on DC Comics Warner Bros. announced this week, to be released between 2016 and 2020. That's an insane amount of movies, and a very bold bid to out-Marvel Marvel. Grantland has an informative but scathing breakdown of all the characters Warner will be adapting in pursuit of some sweet, sweet "Avengers" money.120,000 people
That's how many people are currently waiting for an organ transplant—only 8,200 people donated organs between January and July 2014. Bioethicist Sigrid Fry-Revere argues that the current law, which contains strict guidelines about how donors can be compensated for expenses related to their donation, is preventing patients from getting the treatment they need.
A Michigan battery start-up has been garnering lots of attention lately for a breakthrough. It addresses a key question on many people's minds: why do computer chips in our phones improve exponentially – under what is called Moore's Law – but our batteries die by lunchtime?
"You know, there are actually very few technology areas whose key performance index follows Moore's law," says Ann Marie Sastry, founder of the battery start-up Sakti3. "Do your clothes follow Moore's law in terms of how they last? Does interior paint?"
Building the battery of tomorrow is hard. It's up against certain limits of chemistry.
Sastry quit her engineering professor job at the University of Michigan to take it on. The company produces what are called solid-state batteries. There are no liquids inside to hog valuable space and weight. Just the essentials.
"In a liquid system, the liquid in your battery, or the gel in your battery, is only a highway for the ions to move to the active material," Sastry says. "And that is actually penalizing your energy density."
Energy density is the key concept – how much oomph can you pack in a light, tiny battery package. Sakti3's big moment came when it announced it smashed a key technical barrier: packing 1,000 units of energy – or kilowatt hours -- into one liter of volume.
"We were pretty thrilled because today's battery technologies are hovering around 600," Sastry says.
The upshot: a power source that can last almost twice as long, for half the price or less. Or in car terms, it pushes toward the goal of an electric vehicle with no range issues, at a price of about $25,000.
Right now, it's all potential. Sakti3 has to figure out large-scale production, which could take two years to market. Or more.
"Scientific discovery does not respect your timeline," says clean energy investor Matt Nordan, co-founder and managing partner at MNL Partners in Boston.
Nordan has seen many exciting lab announcements end up in the technology graveyard.
"You can sit down and lay out 'I'm going to do these experiments in this order with this many people over this many months, and I'm going to get to this answer,'" says Nordan. "And you know what, you might get it tomorrow morning, you might get it five years from now. You might get it never."
The notion of tomorrow, as in almost there, has been a tease of electric vehicles for decades.
Sakti3 founder Ann Marie SastryScott Tong/Marketplace
"The EV has been the car of tomorrow for 100 years," says business professor David Kirsch of the University of Maryland, author of "The Electric Vehicle and the Burden of History." "It's always been a day away. There have been predictions even in the modern era since the late 1960s about what the coming golden area of electric vehicles."
The key is a more competitive battery, but it's more than that. The incumbent liquid fuel – gasoline – is far more energy dense and some argue always will be. It's a liquid that's easy to transport down a pipeline and pour in your car. For all the carbon pollution minuses, gasoline has lots of everyday pluses.
Still, the challenge is not insurmountable, Sastry argues. She reads history more optimistically.
"When better technology becomes available, it can be adopted with breathtaking speed," Sastry says. "If you just look at the computing revolution, that's clear. Now we're in the cloud and that is revolutionary, and that's clear. Does portable high energy density power change everything? Yes. It changes everything."Scott Tong/Marketplace
She says her breakthrough battery may first show up in consumer electronics and wearable devices like smart watches.
But automaker GM has already invested in her ideas. And there are whispers Sakti3 is testing a "next-next-generation" product: a new material with even better properties than today's lithium.
The director of the FBI, James Comey, is criticizing the planned use of sophisticated encryption technology by companies such as Apple and Google. The technology would make data on phones inaccessible to any third party, so the companies couldn’t turn it over to law enforcement even if they wanted to or were served with a warrant.
Speaking at the Brookings Institution, Comey referred to the problem as “going dark”—where a target becomes invisible to law enforcement. “Those charged with protecting our people aren’t always able to access the evidence we need to prosecute crime and prevent terrorism, even with lawful authority,” he said. With unbreakable encryption, “we have the legal authority to intercept and access information pursuant to a court order, but we lack the technical ability to do that.”
In the past, Google’s CEO Eric Schmidt has implied the government has itself to blame, and that government surveillance excesses could cost U.S. companies their customers.
“It’s clear that the global community of internet users doesn’t like being caught up in the U.S. surveillance dragnet,” he said.
Revelations stemming from Edward Snowden’s leaking of classified information on government surveillance could cost companies like Google and Apple their bottom line. “Surveillance related consumer concerns could cost U.S. cloud service providers up to one-fifth of their foreign market share...this is going to cost America jobs,” said Schmidt.
Government intrusion is not the only customer concern about tech companies such as Apple and Google. Hackers have already demonstrated they can breach security at banks and department stores as well as at tech companies including Microsoft and Google.
“Any back door that the NSA or law enforcement builds into an encryption mechanism can also be exploited by hackers in the U.S. and abroad,” says Ginger McCall, Associate Director of the Electronic Privacy Information Center.
Comey argues that such security risks should not outweigh law enforcement’s need to protect the public.
Reflecting the current constellation of mistrust and concerns over privacy and security, McCall makes a similar argument: it doesn’t make sense to say we can’t eliminate all crime, therefore exposure of the public is desirable. “One or two outlier criminal cases are not a justification to subvert the privacy and security of the data of the entire nation.”