Replicating Taiwan’s Success

I’m always a fan of stories/articles highlighting the importance of Taiwan in the technology industry, so I was especially pleased that one of my favorite publications recently put out an article highlighting the very key Computex industry conference, the role of the Taiwanese government’s ITRI R&D organization in cultivating Taiwan’s technology sector, and the rise of Taiwan’s technology company stars (Acer, HTC, Mediatek, and TSMC).

Some of the more interesting insights are around two of the causes the article attributes to Taiwan’s disproportionate prominence in the global technology supply chain:

Much of the credit for the growth of Taiwan’s information technology (IT) industry goes to the state, notably the Industrial Technology Research Institute (ITRI). Founded in 1973, ITRI did not just import technology and invest in R&D, but also trained engineers and spawned start-ups: thus Taiwan Semiconductor Manufacturing Company (TSMC), now the world’s biggest chip “foundry”, was born. ITRI also developed prototypes of computers and handed the blueprints to private firms.

Taiwan’s history also helps make it the “best place in the world to turn ideas into physical form,” says Derek Lidow of iSuppli, a market-research firm. Japan colonised the island for half a century, leaving a good education system. Amid the turmoil of the Kuomintang’s retreat to Taiwan from mainland China, engineering was encouraged as a useful and politically uncontroversial discipline. Meanwhile, strong geopolitical ties with America helped foster educational and commercial links too. Western tech firms set up shop in Taiwan in the 1960s, increasing the pool of skilled workers and suppliers.

It also provides some interesting lessons for countries like Russia who are struggling to gain their own foothold in the lucrative technology industry:

• Facilitate the building of industrial parks with strong ties to R&D centers of excellence. Taiwan’s ITRI helped build the technical expertise Taiwan needed early on to gain ground in the highly competitive and sophisticated technology market by seeding it with resources and equipment. The government’s cooperation in the creation of Hsinchu Science and Industrial Park near ITRI headquarters and two major universities helped erect the community of technologists, engineers, and businessmen that’s needed to achieve a self-sustaining Silicon Valley.
• Make strategic bets on critical industries and segments of the value chain. Early on, ITRI recognized the strategic importance of the semiconductor industry and went out of its way to seed the creation of Taiwan’s foundries. This was uniquely far-sighted, as it not only allowed Taiwan to participate in a vital industry but it also helped create the “support network” that Taiwan needed for its own technology industry to flourish. While semiconductor giants like Intel and Samsung can afford the factories to build their own chips, small local companies are hard-pressed to (see my discussion of the foundry industry as a disruptive business model). Having foundries like TSMC nearby lets smaller local companies compete on a more even footing with larger companies, and these local companies in turn will not only grow but also provide the support basis for still other companies.
• Build a culture which encourages talent (domestic and foreign) to participate in strategic industries. This is one example where it’d be best not to imitate Taiwan. But, as the Economist points out, the political turmoil in Taiwan until the mid-80s made politically neutral careers such as engineering more attractive. In the same way that “culture” drove a big boom in technology in Taiwan, the environment which fostered smart and entrepreneurial engineers helped bring about the rise of the Silicon Valley as a global technology center (with the defense industry playing a similar role as Taiwan’s ITRI). Countries wishing to replicate this will need to go beyond just throwing money at speculative industries, but find their own way to encourage workers to develop the right set of skills and talents and to openly make use of them in simultaneously collaborative and entrepreneurial/business-like ventures. No amount of government subsidies or industrial park development could replace that.
• Learn as you go. To stay relevant, you need to be an old dog who learns new tricks. The Taiwanese technology industry, for example, is in a state of transition. Like Japan before it, it is learning to adapt to a world in which its cost position is not supreme and where its historical lack of focus on branding and intellectual property-backed R&D is a detriment rather than a cost-saving/customer-enticing play. But, the industry is not standing still. In conjunction with ITRI, the industry is learning to focus on design and IP and branding. ITRI itself has (rightfully) taken a less heavy-handed approach in shepherding its large and flourishing industry, now encouraging investment in the new strategic areas of wireless communications and LEDs.

Jury’s still out on lesson #5 (which is why I didn’t mention it) – have some sort of relation to me – after all, I was born in Taiwan and currently live in the Silicon Valley…

Tails of the TV

A few months ago, I posted on why the Long Tail hypothesis that technology would reduce the importance of general “hits” in favor of the “long tail” of niche products was wrong and how businesses should respond. In the Economist’s recent coverage of the television industry, they note how this has played out when it comes to how American studios have done overseas:

A few years ago there was much talk of localising television shows. Stung by charges of cultural imperialism, which were particularly loud in France, the big media conglomerates encouraged their foreign subsidiaries to develop their own programming. Although some still do so, it is no longer the rule. MTV India, for example, is dominated by local acts but MTV Poland is a vehicle for international music.

These days MTV International is run “more like a global multinational”, says Bob Bakish, its president. It produces local content where there is demand for the stuff. But it is also a co-ordinated distribution engine for American programming. Series like “Jersey Shore”, an oddly compelling show that trails Italian-American youths around beaches and bars, are now released simultaneously outside America. When Michael Jackson died, MTV quickly assembled a reel of the singer’s performances and dispatched it around the world.

How could American hits possibly outcompete localized content? In my last post, I discussed some of the consumer-oriented reasons why this was true. First, an abundance of choices encourages consumers to make sure they watch the same content as the others in their social circles. Secondly, the same technology which makes it easier for people to access the “long tail” also makes it easier  to access and engage with hits through websites, chatrooms, online “webisodes”, in-show music, related graphic novels/magazines, smartphone apps, games, social media, etc. This sort of multi-platform content strategy even has a Hollywood buzzword to go with it: transmedia.

But, consumer-oriented reasons aside, there is also a fundamental business reason for the dominance of Western television overseas: those studios with the biggest hits are also likely to have the wallets needed to pay for better directors, better cameras, better editing, and better special effects. Combine that with the impact of Moore’s Law on television quality and you have an enviable virtuous cycle which most businesses dream of getting:

Get hold of a copy of a drama made by Hollywood for American broadcast TV—“CSI”, “Glee” or “Heroes” will do fine—and, at a random moment, press the pause button. What do you see? Handsome actors, no doubt. But also a well-composed shot that resembles a photograph, with the actors well positioned within the frame. The shot will be well lit, too. Now do the same for a show made by a foreign broadcaster. The result? Probably less impressive.

Finely crafted television like this is expensive. It costs more than $3m for an hour of drama that is good enough to pass muster on an American broadcast network. The visual acuity of Hollywood’s best shows is a big reason why they can compete against home-grown products that are more culturally relevant. Their advantage is growing as households across the world invest in bigger, sharper televisions.

I don’t think this changes any of the lessons I discussed in my previous post (build a strong PR machine, find ways to cross-sell/bundle, build an efficient and repeatable content creation engine which can survive a few failures but capitalize on a hit); it only raises the stakes – if you don’t have the PR, the bundle, and the repeatable formula: your hits won’t be nearly as big and your failures will be all the more painful.

(Image credit – transmedia diagram)

Just a bad situation

The recent Economist piece on the situation in North Korea is simultaneously a good read and also incredibly depressing. From my read, the following chart is pretty much the “million dollar slide” which explains why the situation in North Korea is so grim:

The figure highlights the bind that the US, South Korea, Japan, China, and Russia find themselves in:

• Massive human suffering demands some sort of action. To quote the Economist: “[Missionaries allowed in the country] say they can see with their own eyes that the level of hunger has become considerably worse in the past few years—in a country where famine led to the deaths of some 1m people, or nearly 5% of the population, in the 1990s. For instance, one man who works there says the number of orphans has surged recently as hunger has claimed their parents’ lives.”
• North Korea may be on the verge of collapse/civil war. If the collapsing economy weren’t enough, North Korea watchers suspect that the dictator Kim Jong Il’s recent health problems and an uncertain succession means there could be significant internal turmoil once Kim dies. Worse, that turmoil could spill outwards as demagogues finally decide to attack the pretend “South Korean threat” the North Korean government has used for years to justify their power.
• It is almost inconceivable how much it will cost/how long it will take to “rehabilitate” North Korea. The economic gap is so enormous that its been estimated the cost of “absorbing” North Korea into South Korea would run near $1 trillion for over 40 years. Not to mention, neither China nor South Korea seem willing (let alone able) to take on the waves of North Korean refugees that a collapse in the North Korean regime would bring about.
• There are no real plans on what to do if/when North Korea fails. How would you handle refugees? How would you handle which military forces are to preserve law and security? How would you handle which parts of the North Korean state to preserve, which to abolish, and which to reform? How would you handle the nuclear materials and huge amounts of arms that are there? If you thought the post-war planning in Iraq was bad, you ain’t seen nothing yet – and this problem touches not just South Korea and the US, but China, Japan, and Russia as well.

You can’t possibly want the current regime to continue, but the alternative seems just as bad. One hopes the international community figures out a way to safely navigate the two extremes.

(Graph credit – Economist)

Firefly

In addition to seeing the Grounds for Sculpture museum on my whirlwind vacation to the East Coast, I had the pleasure of finally sitting down and watching Joss Whedon’s short-lived Firefly TV series and the Serenity movie which tied up the series’ loose ends that letters from fans of the canceled series helped make possible.

Three thoughts immediately come to mind:

• I can’t believe they canceled this show. Despite Fox airing the episodes out of order, Firefly was able to:
  • Win an Emmy, two Saturns, and a Visual Effects award
  • Generate a fanbase strong enough to buy an ad in Variety magazine to encourage Fox to keep airing the show
  • Generate a fanbase strong enough to convince Universal Studios to create Serenity

  Honestly, how does canceling a show like this make any sense?

• I finally understand a lot of webcomics. So strong was the Firefly fandom that Firefly has been entrenched in the “geek” subculture resulting in myriad cameos/mentions in webcomics, including XKCD, one of my personal favorites (e.g. here and here). Now, I finally get all those jokes and references!
• Nathan Fillion’s character, Malcolm Reynolds, is oddly compelling. He’s a hypocrite with inconsistent morals. He is a bitter man who can’t seem to get over the disappointments of his life. He is quick to anger. He can be somewhat abusive to the people around him. He is readily jealous and can be very condescending. And, he doesn’t plan anything — and when he does, the plans almost always fail. These are not characteristics of great protagonists. Yet, his odd but very strong sense of loyalty (to his crew and to some higher moral purpose he would deny existed if you asked him straight up), his peculiarly libertarian morality, and his “I go the way the wind blows” mentality combined with the nuances of Reynold’s personality that Fillion’s portrayal brings out make those flaws oddly endearing qualities which makes Reynolds seem more real. This isn’t a perfect man – he’s an interesting one.
• Joss Whedon’s vision of the future is very fascinating. I think I’m particularly tickled by two pieces of it
  • In the future, the two leading superpowers (the US and China) sort of merge and take over humanity, resulting in everybody, even random “white trash” as Joss Whedon put it in his DVD commentary, being able to speak Chinese the way many Americans today can throw in words like “amigo” and “ciao”. It made for some half-painful-half-funny (at least to the ears of this humble semi-native speaker) dialogue at times, but its an interesting vision which I find oddly compelling.
  • As the human race expands, the outermost “frontier” colonies will end up looking/behaving very similar to the “Wild West”; its a bit outlandish (and probably done more for thematic shock value – cowboys riding on horses while shooting laser weapons at spaceships), but there is a certain truth to it

If you haven’t seen it, I can say I’d strongly recommend it – it’s fun, stars some wonderful actors playing to excellent writing, has some great action scenes, and is full of irreverent humor. Check it out!

(Image credit – Firefly) (Image credit – Serenity) (Image credit – Fillion)

QR^2?

When I was in Japan a few years ago, I was astounded by the abundance of square blocks of black dots (see below) on advertising and print which I later found out were called QR codes. The concept is actually quite ingenious. A standard barcode can only store so much information in the thickness and positioning of the barcode lines because its a one-dimensional code. But a two-dimensional QR code can store a ton more data. This makes it possible to store long web addresses, include error detection/correction methods, and even embed text information in more sophisticated languages (like Japanese).

QR codes have slowly been increasing in adoption in the US and Europe as phone camera/image recognition technology has improved to meet their Japanese counterparts. But, Microsoft decided to take the technology one step further: instead of just being black and white blobs, why not introduce greater customization, tracking ability, and a little color?

Behold, Microsoft Tag (HT: Register). The main visual difference you’ll see are the availability of color and custom designs:

Underneath the surface lies a bunch of other enhancements, including:

• Support across most major phone brands
• Tag manager to provide analytics information on how people are reading your tags
• API to allow developers access to the tag manager
• Allows you to change Tag behavior based on a user’s previous tag viewing history or even the user’s location
• New error correction/color allow for smaller tags and better translation

The question is, will businesses use it? On a basic execution level, the Register brings up the potential problem of recognition. As ugly and clunky as “vanilla” QR codes are, they are very distinctive. Will it still be easy to identify Microsoft’s smaller, customized in-color boxes as codes to scan?

On a business-level, the biggest problem is that “Vanilla” QR codes do quite well in terms of functionality already. Microsoft will need to provide significant value-add in their tag manager/API/customization features to get businesses to switch to a format that Redmond has control over. Given Microsoft’s strengths in software, I’m also astonished they didn’t build in more functionality to make it an easier sell (such as the ability to embed more sophisticated instructions in the codes, or to run specific software/pass specific information when used in a certain context) – a future enhancement, perhaps?

With that said, those who rely on advertising to make a living may find it pretty easy to hand over the reins to a well-put-together Microsoft project as a hedge on their increasing dependence on Google and Apple for their livelihoods. In any event, there’s probably no harm in downloading the reader on your phone or checking out the Microsoft Tag website.

(Image credits – Microsoft Tag website)

Smallville wishes

As anyone who knows me or has read this blog knows, I’m a big fan of the CW’s Smallville. This Fall, it will be going into its 10th and final season. About a week ago, the writers went back to work, and given my love for the show, I can’t help but chip in my two cents on what I’d like to see in Season 10 and hope somewhere, somehow they listen.

When I think back on the past couple of seasons, I think my favorite two have been Season 6 and Season 8. While this is probably just “armchair pontificating”, I think I can attribute the success of those seasons to five things, of which I hope to see more of in Season 10:

• Epic scope of heroism – Season 6 gave Tom Welling’s Clark Kent a purpose far beyond the little sandbox which the show had traditionally confined the characters to. It wasn’t just a question of defending his friends from “the freak of the week”, it was about Clark expanding the scope of his activities, teaming up with other budding heroes to save the world from enemies from the Phantom Zone and the machinations of an increasingly power-hungry Lex Luthor. Season 10 needs to have something just as epic, to allow Clark to truly flex his heroic muscles. He has to turn into Superman, after all…
• A real challenge – Season 6 and Season 8 gave Clark something he never truly experienced in seasons before that: the very palpable chance that Clark wouldn’t win out in the end. Season 6, in particular, was good at this. Not only was Clark getting pounded into submission by villains from the Phantom Zone, he was being chewed out by recurring guest star Green Arrow/Oliver Queen for not truly realizing his full potential as a hero, and he could only watch as his archenemy Lex Luthor won the heart of his love, Lana Lang. Season 8 saw Clark face Doomsday, a creature potentially more powerful than he is, a 31st century terrorist, and a tricky heroic quandary about whether or not its ok to kill one person to save many. It takes a great challenge to make a great hero – lets hope Season 10 delivers on that.
• Green Arrow/Oliver Queen as a badass – Season 6 introduced Justin Hartley as Smallville’s rendition of the Green Arrow. A billionaire who had decided to use his talents for hand-to-hand combat and archery to help people, he not only gave Clark a much-needed kick in the pants to more actively pursue his heroic destiny (saving Clark’s butt on occasion), but introduced to Clark the idea that he didn’t have to be alone in his quest to “save the world.”  In Season 8, the Green Arrow returned, this time as a full-time cast member, and provided an interesting “dark” counterpart to Clark, not only challenging Clark’s own moral code but, in one memorable episode, saving Clark by single-handedly taking out two super-powered villains. This past season of Smallville has seen Oliver’s character go from rock-bottom to his old wise-cracking self, but I can’t help but miss the days when he was full of heroic badassery. I think Season 10 is about time the writers fully restore Oliver to his original, awesome state.
• Awesome guest stars – I think some of the highest rated episodes of Smallville have been the ones which prominently feature the show’s rich set of guest stars. I would imagine this has to do with the type of shows that are written when there are guest stars: they tend to splurge on the special effects/action sequences and they tend to present Clark as he should be: a hero taking on challenges which require the cooperation of multiple heroes. Please, writers, for Season 10, bring back The Legion and the Justice League (and Society)!
• Lex Luthor – I think Callum Blue (Major Zod), Sam Witwer (Doomsday), and Cassidy Freeman (Tess Mercer) have done admirably as villains after Michael Rosenbaum’s Lex Luthor departed from the series. But, let’s face it. You can’t tell the story of Superman without his archnemesis Lex Luthor. Season 6 worked so well because we saw Lex’s ambitions finally manifest themselves as a project to create an army of super-powered soldiers. Season 8 worked well, in part, because the shadow of Lex Luthor was cast over much of the season. It’s the last season, writers. BRING. BACK. LEX. LUTHOR!

I’m looking forward to an awesome Season 10 – but let it be known: Smallville writers, if you need more ideas, feel free to give me a ring .

(Image credit) (Image credit) (Image credit) (Image credit)

Life without Oxygen

No, that’s not a reference to a Jordin Sparks/Chris Brown song, its the theme for the paper of the month.

This month, in expression of my gratitude to the kind folks at Open Access publisher BioMedCentral for sending me a “clone” of their very adorable mascot Gulliver (picture left), I have decided to do a post spotlighting a very interesting BMC Biology paper on the discovery of metazoans (creatures in the Animal Kingdom) which live in environments completely devoid of oxygen.

The researchers began their quest by looking at the L’Atalante basin (see below), a so-called deep hypersaline anoxic basin (DHAB) in the Mediterranean Sea. The area in question is over 3 km deep, and is rich in hydrogen sulfide and nearly saturated with salt, the result of which prevents oxygen from less salty waters from mixing into the anoxic (without oxygen) zone.

Now, scientists have known about single-celled bacteria and protozoans capable of living without oxygen for quite some time – and so they were expecting to find tons of those in the anoxic sediments in L’Atalante. What they were hoping to find, however, were multicellular animals capable of living permanently there as well. And find them they did. The researchers, in sifting through the sediment, were able to find three species of living, microscopic (~1 millimeter in size, see below) Loriciferans (themselves a newly discovered, but highly diverse set of creatures).

After verifying that they were alive (and not just dead Loriciferans who sank from another layer of water) and able to do basic things like metabolism without air (and not just air-breathers who were “visiting” the anoxic sediments), the researchers set out to try to determine how these Loriciferans were able to survive:

• without oxygen
• in such a toxic environment (Hydrogen Sulfides are strong reducing agents)
• in an environment as salty as the DHAB

Although the researchers didn’t answer these questions with the level of rigor I would have liked to see, they did make two interesting observations which suggest the sorts of adaptations these creatures evolved to cope:

• Chemical composition of their bodies: The researchers were able to show (see table below) that Loriciferans from the L’Atalante DHAB had higher levels of Magnesium, Silicon, Iron, and Bromine then their non-anoxic cousins, but lower levels of Calcium, Copper, and Zinc. While this wasn’t completely explained, one might hazard a guess that to survive the harsh environment, these Loriciferans evolved new body structure which used different elements to help cope with/shield themselves from the harsh exterior.
  
• No mitochondria, only hydrogenosomes: Almost all oxygen-breathing cells have little organelles in them called mitochondria. Mitochondria are responsible for using oxygen to help convert metabolic products into energy cells can consume. When the researchers applied an electron microscope to the cells of these oxygen-free Loriciferans, they were unable to find any mitochondria. Instead, they found an abundance of hydrogenosome-like structures (below, see all the “H”’s). Hydrogenosomes have previously been found in single-celled creatures which live without oxygen. They use hydrogen, instead of oxygen, to help a cell get energy. This is the first time hydrogenosome-like structures have been found in a multi-cellular creature and probably are a vital adaptation for the Loriciferans in order to let them survive in the DHABs.
  

Found 3 new species of animal life capable of surviving without oxygen? Sounds like a naturalist’s dream come true. But where does one go from here? From my perspective, I’m most interested in two things.

The first is an extension of the studies the researchers conducted on how these creatures have been able to survive. Identifying “hydrogenosome-like organelles” and high-level “chemical/structural adaptations” is cool, but unsatisfying for anyone trained in basic biology. I want to understand how similar those hydrogenosome-like structures are to hydrogenosomes from single-celled creatures. I want to know what genes are responsible for the hydrogenosome-like structures. I want to understand what the different chemical and structural adaptations do!

The second area of investigation is ecological in nature. What exactly does the food web look like down there? Its great that we’ve found single-celled and multi-cellular creatures, but how do they interact?

Paper: Danovaro, Roberto et al. “The first metazoa living in permanently anoxic conditions.” BMC Biology 8:30 (6 Apr 2010) – doi:10.1186/1741-7007-8-30

(Image credit – Gulliver’s Facebook page) (Figures from Additional File 1, Figure 1, Additional File 4, Figure 4 of paper)