The Advent of Artificial Intelligence: Ask Stephen Hawking about it.

A receptionist robot performs during a demonstration for the media at the new hotel, aptly called Henn na Hotel or Weird Hotel, in Sasebo, southwestern Japan, Wednesday, July 15, 2015. From the receptionist that does the check-in and check-out to the porter that’s a stand-on-wheels taking luggage up to the room, the hotel, that is run as part of Huis Ten Bosch amusement park, is “manned” almost totally by robots to save labor costs. (AP Photo/Shizuo Kambayashi)

A receptionist robot performs during a demonstration for the media at the new hotel, aptly called Henn na Hotel or Weird Hotel, in Sasebo, southwestern Japan, Wednesday, July 15, 2015. From the receptionist that does the check-in and check-out to the porter that’s a stand-on-wheels taking luggage up to the room, the hotel, that is run as part of Huis Ten Bosch amusement park, is “manned” almost totally by robots to save labor costs. (AP Photo/Shizuo Kambayashi)

Renowned astrophysicist Stephen Hawking is set to do his first AMA (Ask Me Anything) forum on Reddit today, from Monday July 27 at 8AM Eastern Time through Tuesday, August 4. He plans to discuss his concerns that artificial intelligence could one day outsmart mankind if we are not careful.

You can find the details about it in the article linked below.

With driverless car possibly becoming a reality within our lifetime, the exponential rate of innovation have made us rethink what we can and can’t achieve. The topic of sentient AI is ever pervasive in the media with numerous illustrations across all mediums. The question that is on everyone’s mind is, can we seriously hope to create a “friendly AI”?

Elon Musk, founder of Tesla Motors and SpaceX has likened the development of AI to “summoning of the devil.” I suppose it is the sign of the times indicative of how far we have come and how close we actually are to Artificial Intelligence having an impact on our daily lives.

The notion of artificial intelligence in relation to human civilization is not a new phenomenon. It has existed as early as 1920s when Czech science fiction writer Karel Čapek coined the term “robot” in his play R.U.R. Few decades later, the three laws of robotics was developed by famous science fiction writer Isaac Asimov in his 1942 short story “Runaround”.

The 3 laws being:

  1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
  2. A robot must obey the orders given it by human beings, except where such orders would conflict with the First Law.
  3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.

Although these laws have its roots in science fiction, they have gained some traction in genuine AI research. The popular culture is abundant with depictions of artificial intelligence both benevolent and malevolent coexisting with humans. And as we near this monumental paradigm shift, the hard question we must ask ourselves is, can we trust artificial being that may well evolve and deem us obsolete?

In any case, the best thing we can do is educate ourselves so we can ask better questions. Below is an infographic that will hopefully will shed some light on what is at stake.


Science of Climate Change Denial: Wilful Ignorance vs Economic Self Interest

globalwarmingdenier-flickr-credit bvcphoto-thumb-480xauto-1902

As the popular saying goes, “a lie that is repeated enough eventually becomes the truth“. This quote is most often attributed to Joseph Goebbels, the Propaganda Minister of the National Socialist German Worker’s Party or the Nazi Party. Whether the validity of the attribution is true, this observation demonstrates the tendency of the masses to believe whole heartedly in postulations that involve them emotionally, regardless of scientific evidence.

The Scientific Consensus

At this point in time, the consensus among scientists points to the fact that we are indeed affecting the planet’s temperature through man made carbon emission. The exponential industrialization the civilizations of the world have experienced over the last century have also exponentially increased the amount of carbon dioxide that we release onto the atmosphere.

NASA Goddard Institute for Space Studies

NASA Goddard Institute for Space Studies

According to the latest United Nations backed Assessment Report from the Intergovernmental Panel on Climate Change, “most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic (resulting from human activity) greenhouse gas concentrations”. The delicate nature of the amount of carbon dioxide in the atmosphere can influence Earth’s climate due to the “greenhouse effect”.

The greenhouse effect is a process by which thermal radiation from a planetary surface is absorbed by atmospheric greenhouse gases, and is re-radiated in all directions. Since part of this re-radiation is back towards the surface and the lower atmosphere, it results in an elevation of the average surface temperature above what it would be in the absence of the gases. This in turn leads to positive feedback loops of the melting polar ice caps and thawing-out of the permafrost to perpetuate the already increasing carbon dioxide levels.

CO2 is produced by fossil fuel (oil,coal and gas) burning and other activities such as cement production and tropical deforestation. Measurements of CO2 from the Mauna Loa observatory show that concentrations have increased from about 313ppm (parts per million) in 1960 to about 389 ppm in 2010. It reached the 400ppm milestone on May 9, 2013.

Willful Ignorance vs Economic Self Interest

To some segment of the population, the idea of man made climate change is utterly preposterous.  This small but loud minority are the first to condemn any environmental regulation proposal citing various pseudo-scientific research and of course going with that “good ole’ gut feeling”.

If we take a step back and examine the majority of the scientific research that the climate change denier’s cite, we find that most of them are authored and produced by special interest groups that benefit directly from more lax environmental regulation.

Irrefutably, one of the champions of climate change denial are the Koch brothers. Charles and David Koch are the majority shareholders of the Koch Industries, a massive conglomerate ranked as the second largest, privately owned company in America. The brothers whose individual net worth is $40 billion each, built their fortune in fossil fuels and industrial chemicals.

It might come as no surprise then that the Koch brothers allocate a considerable portion of their enormous income to funding a political campaign against every kind of environmental or other regulation that might get in the way of their often lucrative profits. In fact the Koch brothers have used their money and influence to create an extensive network of think tanks, foundations, lobbyists and tame politicians to push their agenda.

10300798_764582836920438_5986114371444755666_nAs it stands currently, the Koch brothers are firmly at the center of the Republican power base with their far reaching money and influence being responsible for the lobbying of the far right political rhetoric.

The list of right wing and free market groups they have used their vast fortune to support is many but it includes the Cato Institute which Charles cofounded in 1977, the American Enterprise Institute, the George C Marshall Institute, the Reason Foundation, the Heritage Foundation, the Manhattan Institute and Americans for Prosperity, founded by David Koch himself and which spent $40million for the 2010 Congressional elections alone. Also, one of their front groups, Americans for Progress have played a critical role in instigating the funding for the Tea Party movement.

It is almost morbidly fascinating how the Koch brothers have managed to persuade the people that are most harmed by their agenda that, in fact, it is actually beneficial to them. Now that is a propaganda that even Joseph Goebbels would be proud of.


When asked about global warming and ardent climate change denial stance taken by the many in the position of power, the renowned astro-physicist Neil DeGrase Tyson said “Everyone is entitled to a personal opinion, but those in a position of power have a responsibility to rely on something more than faith.

The fact of the matter is that climate change is real and it is happening. Unless we curb our reliance on fossil fuels significantly over the next few decades, the likelihood of catastrophic event is all but guaranteed.

So what can we do?

We must explore and proliferate all form of sustainable method of harvesting energy, whether that be nuclear, solar, wind or geothermal. I believe that each source has its place in the energy matrix of tomorrow.

So are we completely screwed? 

At the moment, the prospects seem bleak but I believe in the ingenuity and science of human ebings. As H.G Wells said in his iconic novel published in 1914, World Set Free; “The history of mankind is the history of the attainment of external power. Man is the tool-using, fire-making animal. . . . Always down a lengthening record, save for a set-back ever and again, he is doing more.


Protectionism in a Globalized World: Is Free Trade Really Free?

"John Bull Kicking Away the Ladder" Canadian caricature poking fun at the hypocritical relationship United Kingdom had with her colonies in regards to economic self development. 18 June 1870,

“John Bull Kicking Away the Ladder” Canadian caricature poking fun at the hypocritical relationship United Kingdom had with her colonies in regards to economic self development. 18 June 1870,


If you look throughout human history, we have been motivated to innovate by variety of different factors. Over our 10,000 year journey we have established ourselves at the top of the food chain and we never looked back since. Upon closer inspection, three main motivators particularly stand out.

Firstly, motivation for appeasement of a deity or royalty have induced us to build countless wonders such as the pyramids and the churches and castles of Europe. Not so much relevant in the modern world. Secondly, humans have been motivated to modernize at the prospect of war. Through recognition of war, we have built the Great Wall or commence the Manhattan Project. Thirdly, we have been spurred to advance at an expectation of economic returns. For the promise of profit humans have been driven to innovate. The silk road or the “New World” were founded upon such provocations.

Based on above, we can see how all the great feats we have accomplished have been motivated by one or all three factors. By the dawn of 18th century, extensive world trade and colonization, the histories of most civilizations had become substantially converged giving rise to what we know as globalization. In the last quarter-millennium, the rate of growth in population, knowledge, technology, commerce, weapons destructiveness and environmental degradation has exponentially accelerated, creating opportunities and perils that now confront the planet’s human societies.


These instrumental last two century has been shaped by the Anglo-American sphere of influence due to the innovation and expansion they have achieved in pursuit of the latter two of the three motivators. Through its influence, the Anglo-American sphere has spread its culture and its ideologies and have fashioned the world’s move to globalization according to their interests.

The geo-political landscape has essentially remained static until the recent phenomenon, ‘the rise of the rest’. Out of this rise, China has been the only one to elbow themselves into the world power structure due to their industrial capacity and its economic volume.

According to the popular narrative, besides the key exports of ‘democracy and capitalism’, the Anglo-American sphere’s greatest gift to world is the economic policy of ‘free trade’. In the name of ‘free trade’, its opposite ‘protectionism’ has been demonized by most developed nations.

In this paper, I will closely examine the cultural history of the dichotomy between protectionism and free trade and how its utilization have shaped the developed world. More specifically, I will focus my report on is the current rise of renewables, specifically photovoltaic or solar energy as a fledgling industry and the clash of cultures that have been occurring as a result. And finally, I will analyze the current backdrop of the geo-political and socio-economic scene where the future history will be written.

With that being said, I want to analyze the trends of protectionism that can be seen in European and American markets in response to the influx of cheaply manufactured Chinese solar panels. Moreover, I want to critically look at the roots of this political and economic reality through the lens of culture and identify the middle ground where nations and economies can coexist and compete without driving each other into the ground.

Race for Renewables

Over the last few years, economies across the world, especially developed nations, have looked to expand the use of renewable energy sources. As it becomes more apparent that our exponential growth is having a negative effects on our environment, the need and call for sustainable sources of energy has been becoming more vocal. Across the globe, players have been jockeying for the position of prominence in this developing sector. According to data compiled by the Renewable Energy Policy Network, the “total investment in renewable energy reached $257 billion in 2011, up from $211 billion in 2010.”

The top countries for investment in 2011 were China, Germany, Spain, the United States, Italy, and Brazil. Continued growth for the renewable energy sector and promotional policies helped the industry weather the 2009 economic crisis better than many other sectors. Out of the lot, two economies that have persevered to become a major players in the renewable energy sector are United States and China. Besides the fact that both governments highly subsidize and protect their domestic renewable sectors, each country traveled a different road to this summit. United States have achieved this position due to their bleeding edge R & D sector and its investment environment. On the other hand, China using its industrial capacity and the intellectual properties of others to establish a vast solar panel manufacturing industry.

History of Protectionism

According to Encyclopaedia Britannica, protectionism by definition is a “policy of protecting domestic industries against foreign competition by means of tariffs, subsidies, import quotas, or other restrictions or handicaps placed on the imports of foreign competitors.” In contrast, “free trade, also called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).

In the industrial era, (usually dated starting in the 1800s) protectionism as an economic instrument have been utilized by various nations across the globe. With the onset of “Industrial Revolution”, Great Britain catapulted itself as the first true global power. With assets in all five continents and the navy to enforce their rule on the high sea, Great Britain’s ascent to prominence is well documented. With that being said, it is easy to assume that Great Britain reached this zenith by employing free trade policies. However, upon closer inspection of the country’s history and economic policies, it is clear that Great Britain participated variety of initiatives to protect their infant-industries whether that be through import tariffs or export subsidies.

According to Ha-Joon Chang, an economics professor at Cambridge University “Britain entered its post-feudal age (thirteenth to fourteenth centuries) as a relatively backward economy. It relied on exports of raw wool and, to a lesser extent, of low-value-added wool cloth to the then more advanced Low Countries. Edward III (1312–1377) is believed to have been the first king who deliberately tried to develop local wool cloth manufacturing. He only wore English cloth to set an example, brought in the Flemish weavers, centralized trade in raw wool, and banned the import of woollen cloth.”

These policies had continuation under the Tudor monarchs. Daniel Defoe, the world famous merchant, politician and the author of the novel, Robinson Crusoe was contemporary of these events. He recounted in his book A Plan of the English Commerce about the numerous measures the Tudors took to elevate England from a raw-wool exporter into the most prominent wool manufacturing nation in the world.

According to Defoe “from 1489, Henry VII implemented schemes to promote wool manufacturing, which included sending royal missions to identify locations suited to wool manufacturing; poaching skilled workers from the Low Countries ; increasing duties on the export of raw wool; and even temporarily banning the export of raw wool.”

Despite its widening technological lead over other countries, Britain continued its policies of industrial promotion until the mid-nineteenth century. It was only after 1860 that most tariffs were abolished. However, the era of free trade did not last very long. It ended when Britain finally acknowledged that it had lost its manufacturing eminence and re-introduced tariffs on a large scale in 1932.

Friedrich List, the nineteenth-century German economist succinctly put his observation in his famous quote:

“It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him. In this lies the secret of the cosmopolitical doctrine of Adam Smith, and of the cosmopolitical tendencies of his great contemporary William Pitt, and of all his successors in the British Government administrations. Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth”

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BC Elections 2013: Vote for our Future


BC Election 2013 is tomorrow. Regardless of who you are supporting, I urge you guys to exercise your democratic right and go out there and VOTE.

I know right now it is real popular to hate Christy Clarke but populism is not always the right answer. Case in point, the last Presidential Elections in France. The people wanted change despite that change being not necessarily right for society. The people wanted to punish UMP’s Nikolas Sarkozy for not doing enough (even though the strategies and policies he implemented would take time to kick in) by propping up The Socialist Party’s Francois Hollande.

One year after the elections and look where France is. Hollande promised to restore French competitiveness by reversing job losses and ending austerity. Instead, they have even higher unemployment rate, stagnating economic growth, disappearing investments and fringe radicals getting more attention.

I am a pragmatist and I want to live in a province that encourages innovation and nurtures entrepreneurial spirit not curb it by pandering to special interests groups. Will the NDP policies of higher income/business/investment taxes, bigger government, and fatter public sector help the private sector create jobs and attract investment?

I know most people are disenchanted and jaded by the provincial politics but change for the sake of change is not the answer.

This is why I am voting for BC Liberals.

Studying Abroad: Is it Really Worth it?


Is studying abroad really worth it? Are all the costs associated with living in an another country for a certain period of time worth its value in education and experience?

Well that was the question our professor, Claire Booth asked our Market Research class for our end semester project. As a student who have participated in a student mobility program, the answer was simple, YES. The four months that I spent in Vienna, Austria for schooling at FH-Wien was perhaps the best decision I have made in my life. I managed to visit 10 different countries, 13 different cities in the span of 4 months all the while completing 12 credits or 4 classes worth of credits. Along the way, I got to experience the rich history that dates back thousands of years and see the actual authentic culture that has characterized western development for years, with my own eyes. En voyage, I got to try the local cuisines of many different places and closely inspected all the local favourite drinks as I explored the European nightlife. But most importantly, I was fortunate enough to meet and share stories with people from all walks of life from all across the globe. Now I can proudly say that I have friends from Auckland, New Zealand out to Oakland, U.S.A, from Paris, France to Accra, Ghana. And if need be, I have couch to crash on should I decide to travel. So was it worth it to me? Absolutely. But do other students feel the same way?

Thats what we set to find out.

For the purposes of this project, we conducted both qualitative and quantitative research. For the qualitative portion, we administered a ‘focus group’ with four students who have paritcipated in student mobility programs. And for the quantitative portion of our research, we programmed a survey through and fielded it for a week. When we closed the survey, we had 49 respondents from a list of 100 students that have participated in student mobility program beforehand. Our class was provided all the resources we required to conduct this research by the University.

You can take a look at our findings right here:



And upon analysis of our findings, it is apparent that the Study Abroad Program is a hit. There was a significant increase in the awareness of students, regarding the host country’s politics and economy and a better understanding of the cultural context.

The most common outcome (although there were others) was that each participant gained significant self-confidence. Many expressed that they now felt able to seek out challenges, because if they could study abroad and cope in a foreign language environment away from their support network, they felt they could do almost anything. Many of the other themes had more of a chicken/egg effect. Did the students with a wider perspective choose to go on exchange or did they gain that from their experience abroad?

Few undergraduate experiences inspire more fervent advocacy than study abroad. These arguments seem increasingly compelling today as a growing list of economic, environmental, and technological challenges underscore our need for a more globally savvy and culturally interconnected populace.

But beneath the appealing allure lies a perplexing reality: Despite annual press releases touting another “record” number of students abroad, the actual proportion of college students overseas has remained virtually unchanged. And as higher-education enrollments have grown more diverse, the demographic profile of those studying abroad continues to be mostly “white and female”.

If study abroad is critical to the future success of our students and our society, why hasn’t it become more common among undergraduates? Maybe, despite increased investment in study abroad, other obstacles continue to severely limit participation. Or maybe current marketing messages about the value of study abroad work more like a dog whistle audible to those tuned to an internationalist frequency than like a megaphone that can be heard by everyone. Even worse, what if we’ve oversold the benefits of study abroad, and everyone sees it but us?

North American study abroad programs usually portray language and culture skills as the end goal. I think our students don’t neccesarily share that goal, so they either can’t be bothered or they go along for the entertainment value or the status upgrade that study abroad brings. Upon return, their war stories and personal enrichment persuade few of their peers to follow.

If we want to turn the personal enrichments that study abroad brings into a more general social good, we should do 2 things:

1) Start programs in relevant foreign languages early while the process is still natural and fun, before languages become one more source of confusion in construction of a social identity.  Evidence seems to show such early experience often sticks, even if students later switch languages.

2) Promote bilingualism as a skill available to all and a tool for EVERY career, not as a goal on its own.  As Europe’s Erasmus study abroad program shows, students in business, STEM (science, technology, engineering, mathematics), social science, and humanities all benefit from studying and working in the language with it’s native speakers, not just on “language and culture.”

Green Future in Mongolia, Real and Substantial Prospect.

Salkhit will use GE 1.6MW wind turbines

I am sure, if you have been reading my blog, you realize that I talk about Mongolia quite often. Well, half of this can attributed to the fact that I was born and raised in Mongolia and I most certainly take pride in my heritage. The other half, is the fact that I see tremendous potential in the country’s future. Besides the more obvious opportunities in the natural resource sector, there are vast potential in other sectors of the economy. It is imperative for the economy of Mongolia to not fall under the “Dutch Curse”, an economic condition whereby the growth is mainly influenced by the natural resource sector. The economy’s over reliance on natural resources can lead to other sectors of the economy to be uncompetitive and stagnant.

Therefore, it is very important for public and the private sector to diversify their portfolio. After all, Mongolia has become ‘the fastest growing economy’ and the potential for other business development ventures, much needed urban planning and clean technology is as the Mongolians say, ‘blue as the sky’.

Here is a very intriguing interview with President of Mongolia, Elbegdorj with CNN’s Christiane Amanpour.


According to Chisake Watanabe of Bloomberg,


  • SoftBank Corp, Japanese mobile phone company planning to invest $20 billion in Sprint Nextel Corp, plans to develop wind power projects in Mongolia.
  • Newcom is Mongolian telecommunications company with investments in clean tech.
  • This follows recent deal involving EBRD (European Bank for Reconstruction and Development)FMO (Netherlands Development Finance Company) and Mongolia.


  • Sites in the Gobi desert which may have a capacity of as much as 300 megawatts of wind power.
  • Should Softbank and Newcom decide to build there, operations may start in 2014.


  • SoftBank President Masayoshi Son has been investing in renewable energy after the Fukushima nuclear disaster.
  • “Asia Super Grid” plan to connect power grids from India to Tokyo to allow for stable power supply and boost the use of renewable energy in the region.

“This venture is the first step for the Asia Super Grid plan as Mongolia has the potential to become an energy supply station,”

Masayoshi Son

Although ambitious, the plan for the “Asia Super Grid” could lay down the blueprint for nations to move away from polluting finite energy source to renewable energy sources.


The mechanisms of the deal between ERBD (European Bank for Reconstruction and Development)FMO (Netherlands Development Finance Company), Government of Mongolia and the private sector has already been set in motion. The first wind turbine generator(WTG) on Salkhit wind farm was completed on October 2nd, 2012. They expect to have 20 WTG by the end of the year. The Salkhit Windfarm shall provide for energy needs of 100,000 households and save 190,000 tons of coal and 1.6 million tons of water. It shall prevent emission of 200,000 tons of CO2. Potentially, this development effort can supply 20% of energy needs of Mongolia. 

Moreover, the energy harvesting potential in the Gobi desert is vast as well.

Gobi Desert

The Gobi Desert is estimated to be the third largest potential source of solar energy in the world and also experiences steady, strong wind speeds making it ideal for both technologies. It is however, hugely isolated. Desert solar energy could be powering homes in Russia, Japan, and China under plans by Desertec and backed by the Japanese Renewable Energy Foundation

None of this will be done over night, however the potential for Mongolia to be “trailblazer” in the renewable and sustainable clean technology sector is very real.

Work Cited:

Watanabe, C (2012, 10 23) Softbank Plans to Develop Wind Power in Mongolia with Newcom, Bloomberg. Retrieved from

Yeah the U.S. is Losing but Why Exactly?

As American citizens are set to take to the polls on November 6th, 2012 for the 57th Presidential Election, the policies of both parties are still clear as mud and equally polarizing as ever. However, if you can look past the political rhetoric and character assassination, it is quite evident that U.S. is in decline. Prior to the second presidential debate, I was given two different Harvard Business Review article written by Michael E. Porter and Jan W. Virkin as part of the preparation for my International Business: Advanced Topics class midterm. Many people assume that U.S. has been in decline since the Great Recession, circa 2008. However, lot of the causes of the structural problems that U.S. faces has been brewing for over two decades now. I knew that U.S. economy was doing bad with high unemployment, high debt levels and other symptoms but now I think I have a much better understanding of the forces at play that has led to the loss of prestige by U.S.A.

First of all, the authors of the article Micahel E. Porter and Jan W. Rivkin are very credible sources that have made monumental contributions to the study of business. One example being “Porter’s FIve Forces”.

Secondly, Reading through these two articles brings a terrific scene from a riveting television series that I have been watching to the forefront of my mind. In the HBO show, The Newsroom, character of Will McAvoy, a proud Republican news anchor played by Jeff Daniels is asked to answer the question, “why would you consider America to be the greatest country on Earth?”

His response to the question was:

Ever since the conclusion of the second World War, America has been the de facto superpower in the world. The influence and supremacy of U.S. was constituted by much more than just its military might through its leadership in science, technology and it’s economy.  However, lot of things have changed since then. As the authors coined it, “the rise of the rest” have changed the business environment of the world. Now the position of U.S. as the superpower is under attack as the rest of the world is starting to catch up with U.S.A. With that being said, U.S. now faces a fundamental challenges of addressing it’s structural problems to increase it’s competitiveness in the global business environment.

Essentially, the authors theorize that due to variety of different factors like complexity of the tax code, ineffectiveness of the politicians and policy makers, weak public education, poor macroeconomic policies as well as deteriorating infrastructure and decreasingly skilled labour force that have contributed to the current position that U.S. is in. Lot of this has to do with the “culture of outsourcing” that have become a common business activity for managers within the last two decade.

For companies around the globe, the location decision is one of the most vital one. Location decision can have the potential of creating more jobs, more investment, more tax revenues and have immense implications for economic development of the region. Before companies used to ask themselves the question “Where should we locate?” However, now due to advancement in technology and communication infrastructure, business have become increasingly mobile. Moreover, back in the day a dilemma for companies was “Which countries do we want to serve?”. Thanks to technological advancements, now the question is “Where to locate each value chain?”. Because of this, the culture of relocation and outsourcing have become prominent in the minds of many policy makers and managers. That is not to say, outsourcing is a bad business decision because in lot instances moving certain low-end, labour intensive jobs to countries with cheap labour is actually the most economical decision. However, what is going to happen to the people who have lost their jobs to these relocation decisions? Well, the reading suggest that U.S. must create high-end jobs that raise the living standards of its citizens. However, in the meantime, as countries around the world develop and progress, they can vie for high-end activities from the U.S. and not just the low-end activities that offer cheap labour. It is these transfer of high-end business activities to overseas that is hurting the competitiveness of U.S. High-end business activities like research and development, sophisticated manufacturing and skill intensive are important to a countries economy because these activities bring the highest value per worker. Moreover these activities lead to more follow-on investments and technology and skill spillover for rest of the economy.

According to the authors, lot of businesses are relocating outside of the U.S. because of two main reason. Firstly, poor policies that don’t tackle innate and unnecessary weaknesses in the American business environment is driving lot of businesses out of U.S. Secondly, lot of companies are overlooking the current and latent advantages that U.S business environment. They see the situation in U.S. as more or less “fixed” and cannot be improved upon. Moreover, they underestimate the hidden costs of relocating.

In any business environment, the profitability of operation is dictated by several important factors like wage levels, skill availability, utility rates, taxes, shipping costs, subsidies, local productivity and supervision costs. However, as the rest of the world progress many emerging economies around the world are starting to see rising wages, increasing transportation and logistical costs and shortening product lifecycle. So in essence the characteristics that made China attractive in the past are starting to deteriorate. This presents a opportunity for U.S. to attract and retain high-end business activities back to America. According to study conducted by Deloitte in 2011, “83% percent of all R&D sites opened in China or India from 2004 to 2007.” The multinationals that were surveyed above cited that they made these decisions based on better availability of skilled labour, strong government support instead of more obvious reason of lower cost.When the authors surveyed Harvard Business School Alumni about their experiences with location decisions, they indicated that most commonly considered alternatives were China, India, Brazil, Mexico and Singapore as well other less obvious choices like Turkmenistan and Suriname. They cited that the most common reason for these location decision was low wages.

However, lot of these companies have underestimated the hidden costs of offshoring. In fact, according to research done by AMR Research, “56% of companies experienced increase in total landed costs.” The above statistic make sense as common savings like lower wages, lower benefits and lower energy costs are immediately visible. However, other hidden costs that is associated with lower skilled labor force such need for more supervision, higher scrap rate or lower productivity will not be immediately visible during operation. Moreover, other factors like obsolescence cost affect the company’s ability to react to changing trends in the business environment. And especially for a country built on entrepreneurial culture like U.S. protection of intellectual property presents a tough challenge for companies outsourcing activities overseas.

So how can U.S fix this situation? Well, the first step is realizing that there is a problem in the first place. Lot of multinationals that shift locations often overlook the fact as the authors succinctly puts it “Productivity improvements are often rooted in investments in individuals, innovation teams and infrastructure as well as in long term relationships with local suppliers and supporting institutions.” In essence as companies have become more global, their connection to the local communities have weakened over time. Therefore, in an effort to address this managers and policy makers must take proactive roles in finding solution.

Fact of the matter is is that U.S. is still the world’s most productive large economy and it’s largest market for sophisticated goods and services, which stimulates innovation and  acts as a magnet for investment all across the globe. To maintain its position of a leader in the world, U.S. must firstly address its weaknesses in the business environment. Complexities like U.S.’s overtly complicated tax code and lack of cooperation between government and business raise the cost of doing business in America significantly. Secondly, U.S must protect its core strengths like the entrepreneurial culture of creation and commercialization of new ideas by streamlining regulations that hold up innovation. Thirdly, policy makers and managers must address and eliminate trade and investment distortions that disadvantage U.S. And lastly, government and businesses must work collaboratively to enhance it’s competitiveness by offering compelling value proposition of talent, tech-know-how, and supporting institutions. In the long run, decreasing influence of U.S will hurt the world economy. Therefore, politicians must drop the political rhetoric and get things done instead of just being concerned with their next election.

So do I believe America is still the greatest nation in the world? Yes because I still believe it is the land of opportunity and diversity but then again I am an optimist just like Michael E. Porter and Jan W. Rivkin.

 Works Cited:

Sorkin, A. [HBO: Newsroom]. (2012, June 24). Newsroom [Video file]. Retrieved from

Porter, M. & Rivkin, J. (2012) Choosing the United States: In contests to attract high-value business activities, the U.S. is losing out more than it should. Harvard Business Review.

Porter, M. & Rivkin, J. (2012) The Looming Challenges to U.S. Competitiveness. Harvard Business Review.