Trawling through the March 2013 edition of Inc. magazine just before throwing the switch on another day at the MacBook, Mediolana’s CSO and Creative Director Asad Yawar was struck by a Will Bourne (Fast Company, The Village Voice) piece detailing the rise and rise of GitHub, a coding portal valued at a 1999-esque US$750m. A little like Wikipedia, GitHub is a collaborative platform for software programmers to either (i) build open-source software for free; or (ii) develop proprietary software behind a paywall. With its clean interface and burgeoning community – GitHub is attracting 10,000 new users every single weekday – the California-based company with working practices reminiscent of the dotcom glory days (employees set their own hours inside a giant loft replete with ping-pong table and XBox 360) represents a new generation of tech companies with rock-solid balance sheets.
But can companies such as GitHub turn around the United States economy? After some contemplation, we at Mediolana think that this is possible, but not necessarily probable:
1. Working For Free? The GitHub model seems at least partially dependent on the contributions of countless software engineers to its open-source component. With a single GitHub project possibly entailing months if not years of ‘hypergranular’ labour, members of the GitHub community will have to feel it is worth their while to allocate their time to the portal if its initial success is to be sustained. Of course, these engineers may be rationally calculating that the benefits of using the portal, including access to other entities’ open-source code, makes it all worthwhile. But we would be interested to ascertain the average ROI per hour spent coding on GitHub.
2. Education, Education, Education. To even understand what GitHub is all about, let alone comprehend what might be possible with it (and we are not claiming any special insight in this regard) is no cheap thrill. The end user will need to possess strong mathematical and symbolic analysis skills, two areas where the United States is in seemingly terminal decline. Of course, part of the beauty of GitHub is that it is not restricted by borders, but repatriating profits produced elsewhere is presently not an attractive option owing to the Byzantine irrationalities of certain parts of the US tax code.
3. Broader Economy? The really profitable bits of GitHub are the big corporate clients lurking behind the paywall. Many of these seem to be American – some of them in rude health, others contemplating a much less spectacular future. The internationalisation of GitHub’s commercial clientele seems inevitable – but again, the contribution to the local economy is likely to be minimised.
Filed under Uncategorized
Mediolana’s CSO has a schedule that’s probably as spoken for as most, but even he made time for a recent episode of The Keiser Report (‘TKR’), RT’s flagship economics and finance current affairs programme presently going out thrice-weekly. The title of TKR episode 264 – Guns vs Gadgets – sees the fabled former Wall Street broker and New York University alumnus Max Keiser riff (in the presence of the consistently excellent Stacy Herbert) on two differing visions of the future. The first is defined by the iPad, a magical device that symbolises an economy and society defined by near-immediate access to copious amounts of worldly knowledge; the second is the humble yet ultimately lethal gun, often placed great faith in by those who have less faith in the ability of contemporary society to live up to its promise.
Keiser, who brilliantly and memorably forecast the collapse of the Icelandic asset bubble of the mid 2000s in his Al Jazeera English film Money Geyser, states that these two models of the future are essentially mutually exclusive: the existence of a knowledge utopia cannot exist at the same time as a Hobbesian state of nature. It is this claim which set us thinking:
1. The Keiser-Fukuyama Parallel. In his epic The End of History and the Last Man, Francis Fukuyama posited a similar position insofar as he saw the coexistence of a feudal-style social structure and a high-technology economy as virtually impossible. Yet there is a strong argument that can be made for the opposite: as long as the basic informational infrastructure of the knowledge economy (electricity, telephone lines and cellular towers) remains intact, the potential for any kind of society at all, including those profoundly lacking in social capital, remains. The penetration of the Internet into some of the world’s most dangerous, impoverished and unstable countries amply illustrates this point.
2. The New Knowledge Society. Only a few years ago, the Internet was so defined by its predominantly American users that in www terms, Athens, Georgia mattered more than Athens, Greece; the Web of the 1990s and early 2000s very much reflected the values of the United States at that time, in which consumerism and voyeurism ranked highly. However, with America’s rapid globalisation and the worldwide spread of both the Internet and the research university, the acquisition of knowledge has become a pillar of the Web: electronic encyclopaedia Wikipedia, lest we forget, has an Alexa ranking of 6. Countries and cultures which prize education, particularly those in emerging markets, are using the Internet to propel themselves up the value chain in ways we have barely begun to understand; we can’t even say we know what the New Knowledge Society will end up producing nor resembling.
Filed under Culture, Economic Development, Education
The similarities between Spain and Saudi Arabia may prima facie be scarce, but there is at least one thing that both states share : structural youth unemployment that is off the scale. But while the troubled eurozone member’s 18-25 unemployment rate of around 50% is increasingly well-recognised, few are aware of the fact that despite an era of stellar oil prices, Saudi Arabia’s demographic of the young and jobless is almost as large: an official jobless rate of 10.6% veils the fact that the KSA has the highest number of unemployed youth in North Africa and the Middle East.
And this matters not merely as what King Abdullah bin Abdul-Aziz Al Saud has defined – presumably with one eye on the Arab Spring – as the nation’s ‘number one national security problem’; with a significant percentage of its known oil reserves already exploited, Saudi Arabia is going to have to build a conventional economy if it is not going to be relegated to the margins of the international community.
Enter the King Abdullah University of Science and Technology or KAUST, an acronym reminiscent of the classic nineteenth century opera Faust yet symbolising an even more profound cultural shift: the transition of an austerely radical Wahhabi state into the knowledge economy. A US$10bn endowment from no less a figure than the present ruler of Saudi Arabia himself, a university which was established as recently as 2009 increasingly looks set to feature as a viable choice for international graduate students: inside a campus of world-class laboratories and information networks is nothing less than another society: the religious police are notable by their absence, and the virtually unique gender segregation and clothing requirements that are the hallmark of Saudi society do not apply.
However, can KAUST and other similar projects resolve the Saudi unemployment conundrum? We at Mediolana are uncertain. As countless other commentators have noted, there is no lack of jobs in the KSA: what is missing is the willingness of anyone other than foreigners – whether they be from the Indian subcontinent, South-East Asia, or Europe and North America – to do them. In employment patterns seemingly deriving inspiration from Blade Runner, entry-level jobs are dominated by those hailing from largely poor Asian nations, while Westerners living in gated compounds generally enjoy unusually favourable remuneration; those Arabs thirsty for employment are often Egyptian or Sudanese.
And a cursory look at KAUST shows this institution exemplifying this pattern: the university is headed by Professor Shih Choon Fong, a Singaporean national who has been credited with catapulting his home nation’s National University (‘NUS’) into the global educational elite; meanwhile, despite KAUST’s location on Saudi Arabia’s Red Sea coast, KSA nationals are placed only third in terms of overall enrolment, being numerically eclipsed by those students bearing passports from China and Mexico. Evidently, it will take much more than exemplary facilities and good intentions to stop the King Abdullah University of Science and Technology from becoming an international institution which does little to assist Saudi Arabia’s potentially troubled transition from oil exporter to knowledge creator.
Filed under Culture, Economics, Education, Technology
The United Arab Emirates (‘UAE’) – a federation of seven sand-suffused monarchies located between Saudi Arabia and Oman – is perhaps not the most obvious place to look to for inspiration; like many countries in south-west Asia, prima facie it conforms to the regional model of hydrocarbon-based political economy. Yet recent developments suggest that the UAE – whether consciously or not – has built an economic model which, while difficult to replicate, is at the very least paradigmatic in its combination of qualities, an amalgamation that echoes global trends:
1. Depletion. The United Arab Emirates – despite possessing the gargantuan oil and gas reserves of Abu Dhabi – has taken significant strides in recent years to diversify its economy away from dependence on the export of finite natural resources. These measures include the transition to a knowledge-based economy represented by the incorporation of Dubai Knowledge Village (‘KV’), an educational hub including branches of the University of Wollongong and Middlesex University.
2. Deregulation. The UAE is jammed full of ‘free zones’, areas which act as tax-free, highly-deregulated clusters for various economic sectors. These include Masdar City, a clean technology zone located just 17 kilometres from central Abu Dhabi, and Dubai Internet City, an IT hub with tenants such as Microsoft, Dell and Canon.
3. Transience. This modality is exemplified by Dubai, which has given new meaning to the concept of the temporary: the hottest of capital flows, the fastest lifestyles, the emptiest of brand new office blocks mean that the United Arab Emirates proffers the last word in ephemera.
4. Feudalism. With the acquisition of citizenship for foreign nationals a virtual impossibility and its economic miracle at least partially contingent on the fantastical exploitation of manual labourers from South Asia, the UAE represents a return to feudalistic capitalism of the starkest kind; sex slaves – particularly those from impoverished regions of the CIS and China – toil at the bottom of the pyramid, while emirs reign unfettered at the top.
5. Insecurity. As the New York Times reported on 14th May 2011, those in charge of the United Arab Emirates have commissioned the formation of a mercenary army – to be trained by retired military veterans from the United States, Germany, France and the United Kingdom – at an initial cost of US$529m. Not only is this a model of unparalleled outsourcing, but it illustrates the extent to which key actors in certain sovereign states are recognising that the mix of autocracy, inequality, rapid change and opacity over which they preside is a potentially unstable compound.
Filed under Economic Development, Political Science
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