Marketplace - American Public Media

This oil rig count may no longer be relevant

Fri, 2015-02-20 09:22

Today brought another weekly installation of the most closely watched number in the oil patch: the rig count. That’s the measure of how many rigs are currently in operation. The count has fallen 37 percent over last year to 1019 rigs. With oil prices so volatile, Longbow Asset Management analyst Jake Dollarhide says even regular people now watch the rig count.

 But how good of a metric is this? How well does it predict future oil production? Eric Kuhle of Wood MacKenzie has detected a “strong disconnect” between the number of rigs and production. Analysts who see this decoupling says it’s a function of the modern era of extracting oil from shale rock. Kuhle says idled rigs tend to be the less productive ones, leaving the drilling superstars still in operation. Those who see a disconnect suggest the rig count plunge may overstate how bad things are.

Still, Steven Kopits of Princeton Energy Advisors says the rig count has fallen so steeply, production has to fall. It may be a question of how much.

Will Apple put the pedal to the metal?

Fri, 2015-02-20 09:22

Is Apple about to enter the car business? Bloomberg reports the company is working on a plan to produce an electric car by 2020. If the rumors are true, Apple will face major barriers in the auto world. 

"The car industry is a particularly difficult one to break into," says J.P. Gownder of Forrester Research, who is skeptical of the reports. He says it is more likely Apple is trying to figure out technologies that would complement dashboard systems for entertainment and navigation. 

Gownder says one of the most significant barriers to entry for Apple would be distribution.  The company would either have to establish a dealership network, he says, which can be difficult and time-consuming, or it will have to sell cars directly, which not all states allow. 

"The non-auto manufacturers really underestimate what it takes to get product to market and to become profitable," says Dennis Virag, president of the Automotive Consulting Group. Just establishing a supply chain could take years, he says, adding that a typical car has more than 10,000 parts and more than 2,500 suppliers.

Making money would be another challenge. Virag says one of the keys to profitability is scale. The big car makers can achieve that. Newer entrants, like electric car-maker Tesla have not. 

Tesla produces only 35,000 vehicles a year, even though it has been on the road since 2008. It has had trouble opening up dealerships and the company's founder has said he is not expecting to be profitable until 2020.

So why would Apple even bother, considering all the hurdles?

Thilo Koslowski of Gartner research says the maker of iPhones and iPads knows that competing in the mobile space means being part of the most mobile device we own: our cars.

"The car is becoming a very fundamental piece of the puzzle that you need to own, if you indeed want to create experiences for your customers wherever they are," says Koslowski.

Apple may face competition from its neighbors. Google has already developed a self-driving car. Uber is funding research into a world without drivers at all. And not to be left out, several major car-makers have opened up research facilities in Silicon Valley. 

 

How Photoshop changed the way we see everything

Fri, 2015-02-20 09:04

The Oxford English Dictionary added "photoshop" as a verb in 2006, but as the software turns 25 years old this week, the OED's definition seems incomplete. The word doesn't just mean to manipulate an image digitally, using software from Adobe Systems Inc., it's become shorthand for the way beauty industries present distorted and unrealistic images of women

Thomas Knoll, who created the software and still works for parent company Adobe, takes issue with that association.

"That manipulation was nothing new in the market," Knoll says. "What Photoshop did, was make it easier to do."

Possibly, the software's ubiquity — coupled with digital networks — also makes that manipulation easier to see through. Commercial photographer Jesse Rosten sees both sides. He created a parody video about how software helps promote false images of women.

But he thinks maybe the constant leaks of un-retouched photos celebrity photos — Beyonce and Cindy Crawford are two recent examples — increases our awareness that beauty icons don't really look like their iconic images either.

"Back in the day when people were airbrushing negatives, you wouldn't have seen the original negative," Rosten says.

Photoshop has also created whole industries that no one could have foreseen — like Ben Huh's online empire. He's CEO of Cheezburger, a network of blogs devoted to funny cat photos and the like. 

The blog I Can Has Cheezburger? is a leading purveyor of funny cat photos, and one of Photoshop's heirs.

Courtesy of Cheezburger

The proliferation of crowd-sourced images means that the OED's definition of "to photoshop" is out of date as well.

"The vast majority of photoshopping, quote-unquote, that people do today, is actually [on] Instagram," says Huh.

10 things you probably didn't know about the Oscars

Fri, 2015-02-20 09:00

It’s that time of the year, the 87th Academy Awards ceremony will take place at the Dolby Theatre this Sunday. Hollywood’s biggest stars will walk across 500 feet of red carpet in their designer suits and gowns to the industry’s biggest night, in hopes of winning an Oscar, perhaps the most recognized trophy in the world.

Marketplace host Kai Ryssdal spoke to Joseph Petree, the Design Director at R.S. Owens & Company, about manufacturing the golden statuette.

10 fun facts about the Oscars:

  1. The Oscar statuette was originally named the Academy Award of Merit. Although it is unclear where the nickname comes from, the most widely known myth is that the Academy’s librarian saw the statue and said it looked like her Uncle Oscar. The Academy officially adopted the nickname in 1939.
  2. The first Oscar was awarded in 1929 to Emil Jannings, named Best Actor for his performances in “The Last Command” and “The Way of All Flesh.”
  3. About 270 people attended the first official Academy Awards at the Blossom Room of the Hollywood Roosevelt Hotel, and tickets cost $5 each. 
  4. An Oscar statuette stands 13½ inches tall and weighs in at 8½ pounds.
  5. The Oscar statuette was designed by Cedric Gibbons, chief art director at Metro-Goldwyn-Mayer and sculpted by Los Angeles artist George Stanley.
  6. The statuette is a figure of a knight holding a crusader's sword standing on a reel of film with five spokes signifying the five original branches of the Academy: actors, directors, producers, technicians and writers.
  7. The first televised Academy Awards show was on March 19, 1953. 
  8. R. S. Owens & Company in Chicago has manufactured the Oscar statuette since 1983.
  9. Each Oscar takes about 8-10 hours to make. R.S. Owens & Company manufactures about 50-60 Oscar statuettes per year.
  10. The Oscar statuette has more real gold on it than any other trophy.

Quiz: Snacking on standards

Fri, 2015-02-20 07:31

New federal school-nutrition rules took effect this year, but 43 states have their own snack rules, according to a report by the Pew Charitable Trusts.

var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "snacking-on-standards", placeholder: "pd_1424449453" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

PODCAST: Architecture finds its place in Shanghai

Fri, 2015-02-20 03:00

First up, we'll talk about planning for what had been previously unthinkable: if Greece leaves the euro zone. Plus, Shanghai is the financial heart of China, and it has been one of the fastest-growing cities in the world. And over the last couple of decades, real estate developers have been going full bore, building skyscraper after skyscraper. That has been good for architects - including American architects. And with the Oscars on Sunday, it's interesting to watch the nominated feature documentaries through the prism of the business beat. Virunga, one of the nominated documentaries, is about conflict, oil and gorillas in a national park in Congo. We turn to the BBC for more.

The economy of the red carpet

Fri, 2015-02-20 02:00

We all know designers dress stars for free, and the stars thank them by dropping their name on the red carpet. At least that used to be the deal. Now, there’s the mani cam, the clutch cam. And questions like: Who did your hair? Your jewelry?

The red carpet has become an industry unto itself.

It’s a moneymaker. It’s a moneymaker for the actresses, it’s a moneymaker for the networks cause they’re selling the ads,” says R. Couri Hay, a celebrity publicist. “It’s a moneymaker for the designers, because everybody is aspirational and wants to wear Dior.”

The red carpet, says Hay, offers an irresistible combination for advertisers: movie stars, plus tens of millions of TV viewers and millions more on social media.

“In fact, some actress even talked about her underarm deodorant. It was like unbelievable,” he says.

Actress Kat Graham describes her dress and her Degree deodorant to E’s Giuliana Rancic on the red carpet at the Grammys:

Now some actresses are starting to push back against all the promotion.

At the same awards show as Graham, Nicole Kidman refused to tell Ryan Seacrest who she was wearing. And at the Golden Globes, instead of showing off her manicure, Madmen actress Elizabeth Moss flipped E’s mani-cam the bird.

Hay says the problem might have been a lack of cash changing hands between jewelery companies like Chopard, Tiffany & Co., and Bulgari, and the stars that are paid to hawk their brands. But, then again, he says, the problem might literally be in stars’ hands.

“That mani cam. I hate being cynical, I don’t really want to be catty but, the first thing to go on a woman, is her hands.”

The other thing to go, when stars don’t play along, is what’s known as a red carpet credit — when beauty brands pay stylists a fortune to get their products onto actresses, and mentioned in the pages of beauty magazines.

“It means that you get to say, for example, Angelina Jolie used our brand on the red carpet,” says Tyler Williams, a beauty publicist in New York.

A star’s look, says Williams, can pay off for them too. He says look no farther than Lupita Nyong’o, the young actress who won an Oscar for 12 years a Slave, nailed it on the red carpet, and scored a contract with Lancome. Jennifer Lawrence landed a multi-million dollar deal with Dior.

Then there are the mocktresses.

Merle Ginsberg, who covers style for the Hollywood Reporter, came up with the term.

“Someone like Jessica Alba and Kate Bosworth I don't think have been in movies for years,” she says. "People pay them to go to parties wearing great clothes and then they send out press releases.”

And we eat up every bit of it. If you have any doubts about the financial future of the red carpet, Tyler Williams says, just look at the magazines lining the checkout aisle at the grocery store.

Silicon Tally: Let's go to space!

Fri, 2015-02-20 02:00

It's time for Silicon Tally! How well have you kept up with the week in tech news.

This week, we're joined by Janet Vertesi, a sociologist and historian of science and technology at Princeton.

var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-let-s-go-to-space", placeholder: "pd_1424439677" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

The economy of the red carpet

Fri, 2015-02-20 02:00

We all know designers dress stars for free, and the stars thank them by dropping their name on the red carpet. At least that used to be the deal. Now, there’s the mani cam, the clutch cam. And questions like: Who did your hair? Your jewelry?

The red carpet has become an industry unto itself.

It’s a moneymaker. It’s a moneymaker for the actresses, it’s a moneymaker for the networks cause they’re selling the ads,” says R. Couri Hay, a celebrity publicist. “It’s a moneymaker for the designers, because everybody is aspirational and wants to wear Dior.”

The red carpet, says Hay, offers an irresistible combination for advertisers: movie stars, plus tens of millions of TV viewers and millions more on social media.

“In fact, some actress even talked about her underarm deodorant. It was like unbelievable,” he says.

Actress Kat Graham describes her dress and her Degree deodorant to E’s Giuliana Rancic on the red carpet at the Grammys:

Now some actresses are starting to push back against all the promotion.

At the same awards show as Graham, Nicole Kidman refused to tell Ryan Seacrest who she was wearing. And at the Golden Globes, instead of showing off her manicure, Madmen actress Elizabeth Moss flipped E’s mani-cam the bird.

Hay says the problem might have been a lack of cash changing hands between jewelery companies like Chopard, Tiffany & Co., and Bulgari, and the stars that are paid to hawk their brands. But, then again, he says, the problem might literally be in stars’ hands.

“That mani cam. I hate being cynical, I don’t really want to be catty but, the first thing to go on a woman, is her hands.”

The other thing to go, when stars don’t play along, is what’s known as a red carpet credit — when beauty brands pay stylists a fortune to get their products onto actresses, and mentioned in the pages of beauty magazines.

“It means that you get to say, for example, Angelina Jolie used our brand on the red carpet,” says Tyler Williams, a beauty publicist in New York.

A star’s look, says Williams, can pay off for them too. He says look no farther than Lupita Nyong’o, the young actress who won an Oscar for 12 years a Slave, nailed it on the red carpet, and scored a contract with Lancome. Jennifer Lawrence landed a multi-million dollar deal with Dior.

Then there are the mocktresses.

Merle Ginsberg, who covers style for the Hollywood Reporter, came up with the term.

“Someone like Jessica Alba and Kate Bosworth I don't think have been in movies for years,” she says. "People pay them to go to parties wearing great clothes and then they send out press releases.”

And we eat up every bit of it. If you have any doubts about the financial future of the red carpet, Tyler Williams says, just look at the magazines lining the checkout aisle at the grocery store.

American architects find creative freedom in Shanghai

Fri, 2015-02-20 02:00

Shanghai, which is the financial heart of China, has been one of the fastest-growing cities in the world. Its population is around 23 million, and over the last couple of decades, real estate developers have been going full bore, building skyscraper after skyscraper. That has been good for architects – including many American architects.

The Huangpu River curves through Shanghai on its way to the East China Sea, and architect William Paluch is sitting on its western bank, on what is called The Bund. There is a wide promenade and there is “a series of about 28 buildings from the early twentieth century – mostly constructed between 1910 and 1930,” he explains. 

The buildings that line The Bund, across the Huangpu River from Shanghai's modern Pudong district, feature classical-looking columns and gray stone.

David Gura/Marketplace 

The buildings couldn’t look more different from what is across the river, in a part of Shanghai called Pudong. It is “the new city, the new district,” Paluch says. “It is where all the super high-rise buildings are, and where all the intense development has been focused over the last 20 years.”

Paluch left the United States four years ago, to head the architecture firm HOK’s China practice. He says in Shanghai, so much is new, and that appeals to many American architects.

“It is the great place to be on earth, I think,” says Dan Winey, regional managing principal for Gensler’s U.S. Northwest and Asia Pacific offices. He has lived in Shanghai for more than a decade.

At a time when critics lament the sameness of new architecture in the States, China offers opportunities to be bold, Winey says. He and his colleagues designed the Shanghai Tower, which is scheduled to open in a few months. It will be the second-tallest building in the world.

The head of the tower’s design team, Jun Xia, who is a regional design director at Gensler, is eager to point out how innovative the building is. For one, it has this standout curved shape. “Asymmetric,” he says. “That’s very important.” And Xia, who was born in Shanghai, but studied and practiced in the U.S. before he moved back home, says air is cleaned in a giant pocket between the building’s windows and another glass façade that hangs from cables and moves with the wind.

“The glass skin, it’s just like a silk dress,” Xia says. Winey jumps in to say, “It’s more like an Armani suit.”

China’s growth has been slowing recently, but that doesn’t seem to faze American architects, including William Paluch. “Seven percent growth is still a lot of growth,” he notes.

He sees the slowdown as an opportunity to re-focus on architecture that could tackle some of China’s biggest problems, including air pollution and population density. Architects could pioneer solutions in China that they could bring back to the U.S.

Wal-Mart to workers: we'll give you a schedule

Fri, 2015-02-20 02:00

In announcing it's raising wages for its lowest-paid workers, Wal-Mart also said it's offering some employees better scheduling at a time when more retailers are relying on “just-in-time scheduling." 

Scheduling employees for partial shifts, only when needed, saves employers money. But for workers, it’s a huge problem, says Elise Gould, senior economist at the Economic Policy Institute.

“Having their hours be different from one week to the next, from one day to the next, can be very difficult, particularly for working parents who need child-care for their kids at different hours of the day every week,” she says. 

Barry Eidlin, a sociologist at the Rutgers School of Management, says Wal-Mart’s not the only company that’s been criticized for scheduling employees this way. Now, he says, other retailers might follow suit in restoring set schedules.

“If people follow them in one direction, they might follow them back in the other direction,” he says. 

After all, Eidlin says, they are all competing for the same group of employees. 

What do you do when your hit show ends its run?

Fri, 2015-02-20 01:45

The CBS sitcom Two and a Half Men airs it’s 262 and final episode last night, long after its star was pushed in front of a train and its half-man grew up and left. After 12 years and 47 Emmy nominations, the show – by all accounts has enjoyed a spectacular run.

But now for the writers, camera crew, the set designers and hairstylists, the cushiness that comes with being a huge hit gives way to a tougher, busier television world than the one they may remember.

Click the media player above to hear more.

That's the sound of people lining up for an Apple car

Fri, 2015-02-20 01:30
2020

That's the year Apple will begin production on its top-secret car project, Bloomberg reported. That's just three years after Tesla and General Motors are set to release their bids at affordable, practical electric cars. It's a huge project and a big change for the company, but Bloomberg notes Apple has the money to spend. Quartz has a poem lampooning journalists for constantly comparing Apple's war chest to other huge companies – while listing companies Apple is worth more than.

2,073 feet

That's how tall the Shanghai Tower will be when it is completed in a few months, making it the second tallest building in the world. At a time when critics lament the sameness of new architecture in the U.S., many are finding that China, with its need for rapid expansion offers opportunities to be bold.

4

The number of football stadiums being proposed in Los Angeles right now, with three teams weighing a move. The latest comes from both the San Diego Chargers and the Oakland Raiders, who are seeking to share a joint $1.7 billion arena in the LA area after failed attempts to drum up a new stadium in their respective markets, the LA Times reported.

262

That's how many episodes the CBS sitcom Two and a Half Men aired as of its series finale last night. By all accounts, it was a hugely successful run. But those involved with the series behind the scenes are likely to find that starting over in this new hollywood landscape is very different than working on a hit TV show.

46

The median age in the U.S., and the median ages of ABC News, Fox News, CNN and MSNBC are within a couple years, while NBC Nightly News has a median age of 52 and the largest audience. The New York Times' Upshot notes that while network news ratings have declined amid cable and social media's rapid rise, the big three still have a sizable viewership that reflects the public and other platforms haven't, in general, come close to matching yet.

100

That's how many finalists were named this week by MarsOne. If chosen, participants will go on a one-way trip to Mars in 2024. But you already knew that didn't you? So why not head over to Silicon Tally, our quiz on the week in tech news, and prove your prowess.

How a humble stray dog helped launch Instagram

Thu, 2015-02-19 14:49

The first Instagram photograph ever was of a stray dog near a taco stand in Mexico, and is now immortalized on a table in the company's headquarters. 

The company was founded by Kevin Systrom and Mike Krieger back in 2010, and just before they launched, the pair tested their creation on a trip.

"We were on vacation in Mexico and I decided I wanted to learn how to make filters and we took a picture of a dog at a taco stand," Systrom says. "Had I known it was going to be the first photo on Instagram I would've tried a little harder."

Instagram now has more than 300 million worldwide users who now log on to share photos and videos, but that wasn't initially the app's purpose.

"Someone once described entrepreneurship to me as a series of happy accidents," Systrom says. "Initially we wanted to create a game where you checked in at places and shared where you were. You happened to be able to share a photo, but it turns out all people did was share photos. So like any good entrepreneur we spotted an opportunity and as soon as we wrapped our head around that we realized it could be a really powerful platform for expressing yourself or expressing something about a product or a moment.”

Instagram photos have a unique look, not just because of the filters but because of the shape. How did the company arrive at its now-iconic square shape?

“The pictures are square because they were inspired by medium format photography,” Systrom says. “Back in the day I actually studied photography in Florence for a few months and my photography teacher took away my digital camera and said, ‘no, use this, it’s analog and it’s square.’ It was a Holga camera, a very cheap $3 or $4 plastic camera. And that’s what inspired Instagram.”

So what filter does the founder and CEO of Instagram use more than any other?

“Ludwig, it’s one of the new ones we just added and it’s very subtle and beautiful,” he says. “But the real trick is that I use the creative tools. They’re a little more advanced, but I promise you that if you use them your photos will come out better."

Without casting directors, there are no "Best Actors"

Thu, 2015-02-19 14:45

Actors are usually the ones in the spotlight, but it’s someone’s job to put them in their roles.

Terri Taylor cast the Oscar-nominated “Whiplash,” which is up for five awards. As a casting director, Taylor is ineligible for an Academy Award but she was nominated for the Artios Award from the Casting Society of America.

Taylor starts the casting process by reading the script and consulting with the director. After that, she goes into a casting workshop and starts thinking about actors. She says, “I have a lot of ideas of actors I’ve met in the past that I know very well. I’m incredibly familiar with their work, which is a gigantic part of my job… to educate myself on actors and what work they’re doing.” She also speaks with talent agents and auditions actors for each role.

The budget that a film has will greatly affect the casting process. Whiplash was a low-budget film.

“We made it for $3 million dollars, and it absolutely affects the casting process. I think the truth is that we are limited because of our financial resources when you’re making a low budget movie. Not everybody is interested or can work for what we pay,” says Taylor. “So I think it affects our casting process 100 percent.”

Even though she was working with a small budget, Taylor is proud of how the casting of the film turned out.

“I knew going in that it was a special project… not only was the film making wonderful but the acting across the board was so good, even down to the smallest parts,” says Taylor. “It was just pride. Not only for the work that we had done in our craft in assembling people in every role that could get the job done but for all of those actors, I feel a little bit of a kind of maternal feeling for everybody that we assembled and I was just really really proud.”

Whiplash is nominated for five Academy Awards including Best Picture, Best Actor in a Supporting Role, Best Writing Adapted Screenplay, Best Film Editing, and Best Sound Mixing.

Without casting directors, there are no "Best Actors"

Thu, 2015-02-19 14:45

Actors are usually the ones in the spotlight, but it’s someone’s job to put them in their roles.

Terri Taylor cast the Oscar-nominated “Whiplash,” which is up for five awards. As a casting director, Taylor is ineligible for an Academy Award but she was nominated for the Artios Award from the Casting Society of America.

Taylor starts the casting process by reading the script and consulting with the director. After that, she goes into a casting workshop and starts thinking about actors. She says, “I have a lot of ideas of actors I’ve met in the past that I know very well. I’m incredibly familiar with their work, which is a gigantic part of my job… to educate myself on actors and what work they’re doing.” She also speaks with talent agents and auditions actors for each role.

The budget that a film has will greatly affect the casting process. Whiplash was a low-budget film.

“We made it for $3 million dollars, and it absolutely affects the casting process. I think the truth is that we are limited because of our financial resources when you’re making a low budget movie. Not everybody is interested or can work for what we pay,” says Taylor. “So I think it affects our casting process 100 percent.”

Even though she was working with a small budget, Taylor is proud of how the casting of the film turned out.

“I knew going in that it was a special project… not only was the film making wonderful but the acting across the board was so good, even down to the smallest parts,” says Taylor. “It was just pride. Not only for the work that we had done in our craft in assembling people in every role that could get the job done but for all of those actors, I feel a little bit of a kind of maternal feeling for everybody that we assembled and I was just really really proud.”

Whiplash is nominated for five Academy Awards including Best Picture, Best Actor in a Supporting Role, Best Writing Adapted Screenplay, Best Film Editing, and Best Sound Mixing.

The "side business" phenomenon in Nigeria

Thu, 2015-02-19 11:01

"You’re supposed to hold something."

"Hold what?" I reply naively.

"A sample, you're supposed to hold a sample of what you're selling."

Amaka was wondering what a reporter holding a microphone was doing hanging around Onitsha Main Market, neither buying nor selling. She looked at me with pity, as if to say, "if you don't even know about samples, you have a lot learn."  I had been at the market for less than five minutes, and someone was already trying to get the measure of what my business was about.

There's plenty to learn about Nigeria from Onitsha in Anambra State, which sits just on the banks of the River Niger in the southeast. Something like three million people flock here everyday, and some call it the biggest market in the world. They come from across the region, to buy everything from high end mobile phones to low tech plastic containers.

Everything is for sale, every price to be haggled, and everyone is involved. Take the market and replicate the buying and selling across millions of homes and offices across Nigeria.

Every Nigerian is familiar with the concept of the side hustle - a business on the side. This is a country where everyone has a start up in their front room, including my mother. I'll never forget coming home from school to find the entire living and dining area stacked floor to ceiling with cartons of sunflower oil for sale. And it was my grandmother who'd taught my mum that if you were lucky enough to have a salaried job, that was just pocket money. The real money came from your five to nine.

On the surface, Nigeria may not seem like a country that can teach the world much about how to do business. Elections have been postponed because of the insurgency raging in the northeast. Corruption is still a huge problem. Government revenues depend on the oil and gas industry, which benefits the few.

But Onitsha shows that the Nigerian economy is finding other lubricants.

Innocent Chukwuma is a very successful businessman. He owns five different manufacturing companies around the South East, and is very optimistic about Nigeria’s future. And looking out over his sprawling complex just down the road in Enugu, it’s easy to see why. The government gave him land to expand his business; I reckon he's the largest private sector employer in Enugu state. 4300 people work at the plastics plant we visited.

"In Africa today anyone who can invest in manufacturing in a short time you'll make money as you want," says Innocent, who's softly spoken and understated.

 In the time that we talk, he signs more than twenty checks and banks transfer orders worth hundreds of thousands of dollars.

Innocent started small. He was a spare parts trader in his native Nnewi. he had graduated from turning his brother's spare parts side business to establishing his own import venture. As the prices of motorcycles coming in from Japan increased in the 1980s, he noticed something about the way they were shipped. They were coming in by barge in containers. And being a spare parts trader he recognized that a motorcycle is made up of individual parts. And so, he thought, if he imported the motorcycle in pieces it would take up a lot less space in the shipping container. And he was right. At the time importers could fit about 40 pre-assembled motorcycles in a single shipping container. But as individual parts, Innocent could fit more than 200 motorcycles in each container. Innocent now had a significant advantage over his competitors; he could sell his motorcycles for much less.

Another advantage he had over his competitors was the cost of labor in Nigeria being relatively cheap. A factory worker in Nigeria would earn around $500 a month. He explains, "when I brought the first one I called the local people, and gave them small training, they assembled it perfectly and the price was cheaper."

Much cheaper in fact, "When they are selling for about 150,000 [naira] for one motorcycle I sold my own for 80,000."

Innocent's bikes were nearly half the price of his competitors. He sold three containers worth of motorcycles in about three months.

"So I went back and brought about 10 containers, and the 10 containers took me about one month to finish."

By the time he had the process down he was buying 200 containers. But Innocent's advantage didn’t last forever, soon everyone was copying his strategy.

"Back then the price crashed to 60,000 but when I saw that the price had come down and then everybody was doing it. That’s why I build this plastic plant."

Motorcycles were just the beginning for Innocent. He had another realization, that he could manufacture some of the motorcycle parts himself. Specifically the plastic parts.

Innocent now makes all kinds of products. His motorcycle business has expanded to cars and buses. His plastics plants now manufacture tables, chairs, water drums, plates, boxes for electricity meters, and much else. And he believes anyone can follow his lead in Africa, which he refers to as a virgin place for entrepreneurs.

Innocent's optimism is infectious. It's easy to get swept up in the euphoria of success. But business in Nigeria is not easy.

Back in Onitsha market it's also a microcosm of the obstacles entrepreneurs face every day. The day I was there the traders were protesting against a new levy. The trade association decided to charge for a cctv system, which the traders said the state governor had given them for free. It’s the sort of surprise cost that wrecks a business plan.

But corruption is not even the biggest problem in Nigeria. Other countries have thrived despite corruption, and Nigeria shouldn't be different.

The lights go out constantly, and nobody bats an eyelid or feigns surprise. Everyone just carries on. Nigeria may be Africa’s biggest oil exporter. But according to one estimate it generates only enough electricity to power a single toaster for every 44 people.

People make do with diesel generators. Which are costly. And that even applies to big factories. Innocent  showed me his electricity bill for the plastics plant, 40 million naira a month, "I spend 60 million on diesel every month."

He also proudly showed off his collection of secondhand old generators, which he said were built stronger in the past than now.

For Innocent,  the high cost of energy is a necessary part of doing business in Nigeria. But it puts a real brake on what entrepreneurs can achieve. A recent privatization of the national power company offers hope for the future. But for now it takes the shine off Nigeria as a place to do business.

The people I met but they are not put off by these obstacles. If you walk into some shops in Nigeria, there's a sign which reads, "no credit today, come back tomorrow." If you keep waiting for the perfect conditions in which to do business, you'll never make it.

Wal-Mart's wage increase isn't only for good PR

Thu, 2015-02-19 09:04

Wal-Mart announced on Thursday it would give a raise to some 500,000 of its lowest-wage employees. It will make a big difference to those workers, but the company isn't spending $1 billion merely for the PR, or to mollify its labor force.

Michael Noel, associate professor of economics at Texas Tech, says it's a matter of retaining employees in a more competitive job market. "You will see more companies do this, because it is that time," says Noel. "The economy is improving, and when the economy improves, wages improve."

Zeynep Ton, adjunct associate professor of operations management at the MIT Sloan School of Management, says it's also a matter of improving the store experience.

David Schick, managing director of equity research for retail at Stifel, says this is why he suggested in a note last week that Wal-Mart invest more in its stores, even at the cost of lower earnings. 

This kind of trade-off isn't always viewed as a good idea by shareholders, many of whom are focused on short term movements in the company's stock price. "There's a leap of faith that if you raise wages or costs to running your business that there will be an outcome that's better for the business," says Schick.

Employees take on the Wal-Mart wage increase

Thu, 2015-02-19 09:04

If you work at Wal-Mart, today’s news may be encouraging. About half a million employees will get an hourly raise to $9 dollars an hour, and next year, it will go up to $10 an hour. A lot of people are doing the math, wondering what kind of difference that could make.

At a Wal-Mart Supercenter in Dayton, Ohio, a part-time associate in the apparel section makes $8.10 an hour, the minimum wage in Ohio.

“Right now, it’s just pretty much paycheck-to-paycheck,” says Kelly Sallee, who has worked for the company for about eight months. That is barely enough to cover her bills. Sallee is part of a group called OUR Wal-mart, which has been pushing Wal-Mart to raise its wages, and she expects her hourly wage will go up by 90 cents.

Sallee, who is 22 years old, is engaged and eager to start a family, and Sallee says she and her fiancé already know what they would do with more money. “We would save up for a car,” she says. “We would be able to pay car insurance.” Sallee could stop taking the bus to work.

According to Arin Dube, an economist at the University of Massachusetts, Amherst, Wal-Mart’s decision could make a difference – especially to employees who are making the federal minimum wage, $7.25 an hour. “We are talking about a thousand or two thousand dollars, maybe, for some of the more effected workers,” he says.

Dube says there is evidence that when minimum-wage workers see their wages rise, they start saving.

Amy Glasmeier is a professor at the Massachusetts Institute of Technology who has spent a lot of time studying poverty issues and what constitutes a living wage, and she says even a modest increase matters.

“A family member getting sick, a car needing a repair, a dollar is going to add up,” she explains. “A 10 percent increase is a 10 percent increase.”

But for many Wal-Mart workers who live around the federal poverty line – about $12,000 for a single person – that increase is likely to provide only some solace. 

“It’s moving from the bottom to, you know, a shade above the bottom,” says David Neumark, who directs the Center for Economics and Public Policy at the University of California, Irvine.

Now, Wal-Mart says this pay bump is significant, and it is going to cost the company around $1 billion a year.

Visitors bureau in Ithaca wins at marketing

Thu, 2015-02-19 09:04

Earlier this week, the website for the visitors bureau in Ithaca, New York, a city currently buried under several feet of snow, knew enough was enough.

They put a picture of the beaches of the Florida Keys on their homepage with a line that read, "That's it. We surrender. Winter, you win. Key West anyone?".

The site's back to normal now, but the bureau's director said to the Ithaca Journal that it was a way to stay engaged with customers at a time when Upstate New York isn't exactly top of mind.

Due to the cold weather http://t.co/ABNS4ERohz is now encouraging people to visit Key West instead. @VisitIthaca pic.twitter.com/IP15Za9gLV

— Brian Carberry (@CNNBrian) February 16, 2015

Pages