Global Viewpoint in the Information Age

Lecture at ICU, Jan. 2007

Cat: MIS
Pub: 2008
#: 1299b

Kanzo Kobayashi

up 12y30

Global Viewpoint in the Information Age

情報化時代のグローバルな視点

0. Index:
1. What is Global-1?:
2. What is Global-2?:
3. Management Resources:
4. SWOT of ICU Students::
5. Vision of the Universe:
6. Historical Viewpoint:
7. Building Wealth:
8. Synchronic Viewpoint:
9. Power Law Distribution:
10. Why power law appears?:
11. The Long Tail Business Model:

12. Scale-free Network:
13. Value of Networ:
14. Distorted Map:
15. The World is Flat:
16. Direction of Web Evolution:
17. Uneven Distribution:
18. BRIC's: Strength & Weakness:
19. Global Adaptability:
20. Personal Experiences:
21. Development & Import:
22. Ghawar Oil Field:

• The sources of the theme of 'Globalism' was obtained through various lectures and discussion at Glocom (Center for Global Communications, International Univ. of Japan, as well as various reference books recommended to read to understand the background of IT technology and recent trend of globalism.
• Also it has enlightened me that various overseas experiences and association with foreign friends and partners in Itochu Corp, and study at Harvard Business School in 1990.
• Frankly speaking, I hesitated to give a lecture in English for 150-numbered young earnest bilingual students of International Christian University, but anyway I tried to transmit messages about "Globalism in the Information Age", whose theme has been always coming across in my mind since 1986.

Summary

Remarks

>Top 0. Mythology of Genya Nagashaki: (1927- ?)

• The concept of globalism is expanding in the Information age, just like the expansion of the cosmos.
• It is worth to review how unique there had been various view of the world from the very beginning of human written history to the latest development of astronomy.
• Nowadays there are nobody who doesn't believe we are living on the surface of a small sphere of the third planet of the solar system.
• But it is another reality that we are living on a distorted world: distorted or imbalance of natural resources, wreath, military power, or knowledge, etc.
• Recently there appeared a book named "The world is flat," which has become a best seller describing the world has become more and more borderless, being economically depending each other.
• Is there any tips how to become 'Being global?'

>Top 1. What is 'global'?:

1. Chīguo fàn le ma?:

• This is the quadrant of ‘what is global.’:
• Cf: “Mind Map” describes many factors related to what is global.
• The first approach is a relationship with foreign countries. National border plays very important role in exchange of people, goods & services, finance, and even information. Because a nation is the only legal body, or entity which can establish any kind of laws enforcing people to comply with.
• The second approach is our stance or mindset which pursues either intimate and neighboring, and various values (Local), or unified, common, prevailing, and single value (Universal).

>Top 2. What is Global-2?:

• These are the definition of this quadrant.
• Historically speaking, people have lived in local communities. During the process of battles and negotiations, people discovered that the nation would be effective ways of organization to compete with surrounding other groups of people. That was the origin of establishment of a nation.
• One the other hand, the root of localism seems more natural. People made various local groups to survive, having common ideas and customs, then religion and language, etc.
• Universalism Is the opposite concept of localism. People wanted to pursue the only absolute value. I think this requirement may be related to the foundation of monotheistic religion.
• By the way, It Is interesting that some computer jargons and the names of high-tech companies have derived from historical or religious terms: such as ‘icon’, ‘ubiquitous’, ‘Genesis’, ‘Oracle’, ‘evangelist’, etc.

>Top 3. Management resources:

• There are four management resources, which have been People, Goods, and Money: Now we must expand these resources. Goods should be expanded goods and services. Because services are important output of peoples’ activities which are produced and consumed locally and concurrently in most of cases.
  • E.g.: In order to have your hair cut, you need to go to barber or hairdresser and buy their services. Those services are basically produced and consumed locally and concurrently or in a short time. If you ask someone to make some research and to write a report, the payment will occur when the output was delivered. In order to circulate such professional services, patent or copyright became necessary.
• Money began as a local exchange of goods and services, instead of barter of exchange. Money can be stored, and be spent later on. Money itself can be circulated; can be sold or bought. The cost of money is expressed in the name of ‘interest.’ Money became a kind of goods which represent of a certain value, which was made precious things like gold or silver.
  • Gold standard system had been the traces of such history. But in 1971 Richard Nixon unilaterally cancelled the Bretton Woods system and stopped the direct convertibility of US dollars to gold. Now we are using the real paper money in reliance on global monetary system, or I’d say, the reasonable speed of printing machine of dollar, euro, yen, etc.
• Information Is lastly appeared and recognized as a management resource. Know-how, knowledge, education and training, database, literacy - all these invisible things have be recognized as important as other visible values.

>Top 4. SWOT of ICU students:

• When the company makes some business plan, either establishing a project or making investment, we usually make this SWOT table and compares various pros & cons factors.
• I think It is useful and Interesting to make such SWOT table for yourself; how to plan the college life, or how to make boy or girl friend, or how to get some qualifications, etc.
• I made this as a sample of index of SWOT table for the students of ICU. Actually you need to write in your own more concrete descriptions, and I recommend you to paste it to the first page of a new years diary.
• Strength and Weakness are description of the present situations. These should be expressed in indicative mood: I am strong in xxx, or I am weak at or in xxx.
• Opportunity and Threat are the future possibilities, which should be written in subjunctive mood: If I challenged this, I could attain something, or if I selected this idea, I would be successful in doing this.

>Top 5. Visions of the Universe:

• Goddess Nut in ancient Egypt
  
• 

• Vision of the universe is always changeable according to the culture, or development of science.
  We cannot laugh the childishness of ancient visions of Egypt, India, and Greece.
  In ancient Egypt, the vault of heaven is supported by Goddess Nut.
  In ancient India, the highest mountain (Sumeru, or Shumisen in Japanese)is supported by three big elephants, which are supported by a gigantic tortoise. A big snake blankets all of this cosmos.
  Ancient Greek’s cosmos considered the flat world surrounding Mediterranean Sea lay motionless at the center of rigidly rotating celestial sphere.
  1600/2/17 Thusday morning, 51-year Giordano Bruno was burned at the stake.
  Copernicus (heliocentric model) thought the stars were merely part of the firmament, But Bruno proclaimed that they we actually distant SUNs scattered throughout a universe. And around these Suns, planets circle.
  Only Physics teaches to the freshmen in a university the fact known until 1900. It is only in 20C when we could understand how living things are constructed from the same atoms that make rocks and stars.
  Hubble Space Telescope take the photo of the most distant galaxies (observable universe) The big bang occurred about 13.7 billion years ago, readjusted in 2004 (from former 14.7 billion years)

>Top 6. Historical Viewpoint:

• This historical viewpoint represented by a series of S-curves (Sigmoid) is described by S. Kumon, Representative of Glocom, IUJ in 2001.
• The biggest wave of Modernization occurred around 1550, spending 200 years for its Advent phase, then another 200 years for Breakthrough, then after overshoot attaining Maturity phase. But just before its overshoot, another new wave begins.
• Inside the big wave of Modernization, there are three smaller waves with the span of 200 years; the first small wave was Militarization, where the modern state emphasized the power of militarization. After the industrial revolution, the Industrialization has become the most important target for a state. This situation still continues even now. GDP or GNP is the typical measurement of a nation which attained economical success or not.
• This nested structure looks like a ‘fractal’ The overlapped portion shows concurrent period of mature stage of former S-curve and advent phase of the next one.
• But around 1950, the computer was discovered. The ENIAC was invented in 1946 by John Eckert and John Mauchly of Pennsylvania University, which used about 20,000 vacuum bulbs, weighting 30 tons. Since then, the CPU has developed double every 18 months, (Moore’s Law) and still continues this trend even now.

>Top 7. Building Walth:

• Lester C. Thurow described the human history by three stages of Industrial Revolution using metaphor of 'building wealth of pyramid.'
• The building block of the Pre-Industrial Revolution was land: land-owners were rich and powerful, and the king or empire fought for expanding land, because wider land produced more wealth.
• The first Industrial Revolution occurred in 17C starting from Britain. The building block was coal, which was used as a fuel of steam engine of then epoch-making invention.
• The second Industrial Revolution occurred, particularly in US, collecting world capitals as the building block. The back of US one dollar describes the building wealth of pyramid is still unfinished. The design was made at the time of the New Deal age of Franklin Delano Roosevelt (1933-45).

>Top 8. Synchoronic Viewpoint:

• Bell-shaped Normal distribution has been long assumed as common and natural distribution. But it has not been notice until recent that various social phenomena show Power Distribution very often beyond our expectations.
• There may be some interrelation between change of phases shown in S-curves and Power distribution:
  Advent phase showing emergence of a new industry tends to show lower concentration,
  but Breakthrough phase showing rapid growth in S-curve means more concentration, due to screening out competitors.
  Mature phase showing stable growth means more oligopolistic situation.
  Thus degree of concentration in power distribution changes with time.
• Vilfredo Pareto, 19C Italian economist already discovered Power-law distribution seen between an amount of individual income and number of the individuals of the income in Europe. (Pareto’s Law)
• 80% - 20% relationship can be frequently observed; as 20% salesmen earn 80% of the total income of the company.
• Other examples: Number of people who own scarcity value (jewels, classic cars, etc.); Population of cities in Japan; Popular cities people want to spend in holiday season.

>Top 9. Power Law Disribution:

• Bell-shaped Normal distribution has been long assumed as common and natural distribution. But it has not been notice until recent that various social phenomena show Power Distribution very often beyond our expectations.
  
• There may be some interrelation between change of phases shown in S-curves and Power distribution:
  Advent phase showing emergence of a new industry tends to show lower concentration,
  but Breakthrough phase showing rapid growth in S-curve means more concentration, due to screening out competitors.
  Mature phase showing stable growth means more oligopolistic situation.
  Thus degree of concentration in power distribution changes with time.
  
• Vilfredo Pareto, 19C Italian economist already discovered Power-law distribution seen between an amount of individual income and number of the individuals of the income in Europe. (Pareto’s Law)
  
• 80% - 20% relationship can be frequently observed; as 20% salesmen earn 80% of the total income of the company.
  
• Other examples: # of people who own scarcity value (jewels, classic cars, etc.); Population of cities in Japan; Popular cities people want to spend in holiday season.

>Top 10. Why Power Law appears?:

• Survival strategy by Long Tail business mode; considering to make business handling goods & services below than the average.
• It was discovered since 1995 when discovered that phenomena of social network often follow the Power Law
• For example:
  • CD hit charts
  • Hot-selling line of package software
  • traffic among cities
  • number of audience of movies
  • frequency of appearance of English words
  • number of medallists of Olympic games
  • frequency of updating Home Pages of elementary school
  • number of access traffic of blogs
  • number of human connection; who are hubs or connectors
• But the Power Law distribution has been adjusted by the public policy; such as reducing the gap, or raising the level of middle class.
• Power Law is universal in the cosmic space, while Standard Deviation has been a kind of intelligent bias of modern ideology of egalitarian.
• Why differentiation occurs in the Power Law?: not because of the system itself, but because of how to utilize the system, quality of data input into the system, utilization of management information obtained from the system and agile response recognizing the change.

>Top 11. The Long Tail Business Model:

• Apatosaurs (formerly called Brontosaurs) lived 150 M years ago, Jurassic period. 4.5m tall, 21m length, and 25 tons; herbivorous dinosaur.
• The Long Tail: first coined by Chris Anderson in 2004 in Wired, to describe business models such as Amazon.com or Netflix (online DVD rental service in US.)
  portion which had been neglected became marketable due to usage of Web marketing.
• Wikipedia vs. Encyclopedia Britannica: Wikipedia has many los popularity articles that collectively create a higher quantity of demand than a limited number of mainstream articles.
• Supply side factor: Centralized warehousing can decrease cost of inventory storage and utilize nationwide lower cost distribution. Netflix finds that in aggregate unpopular movies are rented more than popular movies.
• On the demand side, search engines and recommender software allows customers to find products on the Internet.

>Top 12. Scale-fre Network:

• This is a famous network theory "Linked" written by A. Barabasi, 2002.
• Six degrees of separation:
  by Stanley Milgram, 1967;
  found that "distance" between any two people in US. The question driving the experiment was, how many acquaintance would it take to connect two randomly selected individuals?
  The experiment shows it is not 100, but 5.5 or 6 at most!
• A party for 100 guests: invited people do not know a single other person. Soon you will see 30 to 40 groups of two or three. It would take only 30 minutes to forma a single invisible social web.

>Top 13. Value of Network:

• Bob Metcalfe, inventor of the Ethernet, points out that the value of communication network grow with square of the number of people who connect it. ($N^2$)
• Some networks which support construction of communicating groups create value that scales exponentially with network size. That is much more rapidly than Metcalfe’s square law. David Reed called such networks GFN (Group Forming Networks).
• Mailing lists, chat rooms, discussion groups, user groups, market makers, and auction hosts: they allow small or large groups of network users to organize their communications around a common interest, issue, or goal.
• The exponential, $2^N$, is a sneaky function. Though it may be very small initially, it grows much faster than $N^2$.
• Merger and partnership of networked companies: $(M+N)^2=M^2+N^2+2MN$; where 2MN is bonus.
  With GFN law creates more bonus: $2^{(M+N)}=2^M･2^N$
  (Here Mth power of two will become bonus.)
• Where Metcalfe’s law dominates, transactions become central; such as email, money, securities, services. Where GFN law dominates, the central role is filled by jointly constructed value; such as specialized newsgroups, joint responses to RFPs, gossip, etc.

>Top 14. Distorted Map:

• The brochure of ARAMCO (around 1979) describes a distorted world map in proportion to the oil reserves, where Saudi Arabia shares 26% and all gulf countries share 47%. There is no Japanese islands here on this map. There is a huge Arabian Continent in the center. (1980)
• (Latest Oil & Gas Journal) Saudi Arabia contains 262 gigabarrels of proven oil reserves, around one-fourth of proven, conventional world oil reserves. Although Saudi Arabia has around 80 oil and gas fields, more than half of its oil reserves are contained in only eight fields, and more than half its production comes from one field, the Ghawar field.

>Top 15. ''The World is Flat":

• Thomas L. Friedman also wrote “The Lexus and the Olive Tree”, in 2000., where Lexus is the symbol of development, and the Olive Tree is tradition.
  • Globalization 1.0: 1492-1800 The driving force was countries.
  • Globalization 2.0: 1800-2000 The driving force was companies.
  • Globalization 3.0: 2000- We entered a whole new era. The dynamic force is newfound power for individual to collaborate and compete globally. It was Western countries and companies who were doing most of the globalizing the system. But Globalization 3.0 is going to be more and more driven not only individuals but also by non-Western group of individuals. (Empowerment of individuals)
  • Impact of Web. 2.0:
    Admitting unspecified individuals as active persons of expression, not as passive service jouisance (receiver) Anyone can freely participate the development of services of Web, without getting any permission.

>Top 16. Direction of Web Evolution:

• The idea of Web 2.0 proliferated in Japan in 2006 by the book of "Theory of Web Evolution" written Mochio Umeda, 2006., including the left chart.
• Thomas L. Friedman also wrote “The Lexus and the Olive Tree", in 2000., where Lexus is the symbol of development, and the Olive Tree is tradition.
  
• Globalization 1.0: 1492-1800 The driving force was countries.
  
• Globalization 2.0: 1800-2000 The driving force was companies.
  
• Globalization 3.0: 2000- We entered a whole new era. The dynamic force is newfound power for individual to collaborate and compete globally. It was Western countries and companies who were doing most of the globalizing the system. But Globalization 3.0 is going to be more and more driven not only individuals but also by non-Western group of individuals. (Empowerment of individuals)
  
• Impact of Web. 2.0:
  Admitting unspecified individuals as active persons of expression, not as passive service jouisance (receiver) Anyone can freely participate the development of services of Web, without getting any permission.

>Top 17. Unveven Distribution:

• Iron Ore: Australia
• Non-ferrous metal: Chile
• Crude Oil: Saudi Arabia
• LNG: Indonesia
• Coal: Australia
• Wheat: US
• Soybean: US
• Maize: US
• Wood: Canada
• Marine products: Chile
  • Source: "Foregin Trade 2006" of Japan Foreign Trade Council, Inc.

>Top 18. BRIC:

• Potential powers of BRIC's:
  • All BRIC's countries are big countries of area, population, resources, and high economic growth.
  • But I think the most strength is their challenging spirit against old dominant counties of US, Europe and Japan.
  • Such aggressive attitude had been existed just after the WWII in Japan, and its DNA is disappearing now within a few years. (2007 problem in japan - most of baby-boomers are retiring)
    
• Member of WTO (150 countries) is key to BRIC's:
  • Saudi Arabia (2005), Iran, Iraq, Vietnam (2007.1), …(member): Brazil, India, China, and ( could be member) Russia (middle of 2007).

>Top 19. Global Adaptability:

• The left chart is famous Maslow's hierarchy of needs.
• The right chart is expanded hierarchy of how to be adapted to global environment. This hierarchy was derived from my own experience as an expatriate of Saudi Arabia office of Itochu Corp.
• First of all, we must try Arabic food, Arabic odor, Arabic strength, Arabic hot climate, and also learn elementary Arabic language.
• Arabic organization seem flexible and dynamic. Association with Arabic people is challengeable. Debate with Arab people is worth trying.
• And we must know more about Arabic society and history, and then you feels the dream of Arabic world.

>Top 20. Personal Experiences:

• I have learned by my personal experiences during Itochu Corp and NEC Soft Ltd.
• Among the above, I visited various places: such as Egypt, China, Korea, Hong Kong, Singapore, Philippines, Indonesia, New Zealand, Panama, Mexico, Guatemala, Colombia, Canada, Alaska, Germany, France, Switzerland, Netherlands, etc.
• In US, I have visited at Boston, New York, San Francisco, Los Angeles, and Hawaii.

>Top 21. Development & Import:

• Various topics about Australia was written at:
  http://www1.ocn.ne.jp/~kobakan/contents/kimberley.html

>Top 22. Ghawar Oil field, Saudi Arabia:

• Travelogue of visiting Ghawar Oil Field in Saudi Arabia was written at:
  http://www1.ocn.ne.jp/~kobakan/contents/ghawaroil.html
• Also travelogue of Damman-Riyadh Railway in Saudi Arabia was:
  http://www1.ocn.ne.jp/~kobakan/contents/saudi_railway.html

Comment

• Presentation and communication with younger students are very attractive and challenging to me. It is just like a time travel for me. Because I recalled various experiences and some knowledge retrieving from my old memories and tried to display to the present audience. It is a kind of communication among present students, myself and the past memories; it is communication across decades of time travel!