economy

The End of Cheap Labor in China

Slashdot links to this article, that goes inline with this recent forecast.

In what is supposed to be a land of unlimited cheap labor — a nation of 1.3 billion people, whose extraordinary 20-year economic rise has been built first and foremost on the backs of low-priced workers — the game has changed. In the past decade, according to Helen Qiao, chief economist for Goldman Sachs in Hong Kong, real wages for manufacturing workers in China have grown nearly 12% per year. That’s the result of an economy that’s been growing by double digits annually for two decades, fueled domestically by a frenzied infrastructure and housing build-out — one that, for now anyway, continues apace — combined with what was for a time an almost unquenchable thirst for Chinese exports in the developed world. Add to that the fact that in the five largest manufacturing provinces, the Chinese government — worried about an ever widening gap between rich and poor — has raised the minimum wage 14% to 21% in the past year. To Harley Seyedin, president of the American Chamber of Commerce in South China, the conclusion is inescapable: “The era of cheap labor in China is over.”

The end of currency

TechChrunch has a nice post covering the developments and ideas in the area of digital money. Even though most of the discussed is far from being practical today, the ideas and the progress are still fascinating.

Virtual currencies are in the news again with all the discussion aroundBitcoins, which is limited in supply and can be exchanged anonymously. Our own long experience with another digital currency, Ven, has made us think about the logical conclusion of these activities, and what it means for money at large. And what it means is the end of money as we know it.

Police or economy? Police.

Cyprus Updates reports:

According to an article in Phileleftheros newspaper almost four thousands of aliens who were illegally in Cyprus last year left on their own, while many others were deported by decree of the Ministry of Interior.
According to Immigration Department figures from the last year 669 illegal immigrants presented themselves voluntarily at airports in Cyprus and asked to return to their countries. All of them had come to the free areas though illegally occupied North and nobody knew about their presence here. The majority were mainly Syrians and Moldavian, while the rest were from Sri Lanka, Bangladesh, India and China. Another 3,332 illegal aliens who either came to Cyprus through legal channels but their residence permits expired, or were asylum seekers, but their request was rejected and remained illegally on the island, also left voluntarily.

The phenomenon of voluntary departures large wave of illegal immigration is mainly attributed to lack of employment and increase unemployment, but also the fear that sooner or later be arrested by the Police.

I am somewhat familiar with illegal alien situation in Cyprus. And in my personal opinion, police has not much to do with it. Police was never effective enough to scare people off the island. I think pretty much the only factor that is involved here is economy. When people from poorer countries could get in here, get a job, and earn enough money in summer season to take them through winter, when jobs are less, or enough money to survive in Cyprus and support their families back home – that was a good enough reason to break the law. After all, what’s going to happen in the worst case? They’ll put you in jail for a few days until they figure out where you are from and arrange the deportation, and then they will send you back home. Oh, boy, that’s scary. Right.

In the last few years the situation in Cyprus changed quite a bit. Tourism is down. Businesses are closing. Jobs are less. And life is getting more expensive. These are the factors that make people leave. Not the police.

Yaroslavl Roadmap 10-15-20

There were plenty of news recently about Russia in general and its president Dmitry Medvedev in particular taking steps towards building up some technology innovation in the country. Medvedev visited a number of technology companies in the Silicon Valley. And there were a few announcements about some sort of technology center being built in Skolkovo, next to Moscow. Most Russians that I’ve talked to about this are very skeptical (me included).

In fact, I’m not even interested on how this project goes now and who is involved with it. At least, not in Russia. But there are some interesting developments internationally. One example in particular that I want to mention is Yaroslavl Roadmap 10-15-20.

As part of the Skolkovo project, Russian government requested some expert help on figuring out the best approach and course of action. One source of such expert advise came from the New York Academy of Science. In fact, I think they have done some spectacular research and managed to summarize it in a very concise report. They titled it “Yaroslavl Roadmap 10-15-20: 10 Years to Implement, 15 Steps to Take, 20 Pitfalls to Avoid—International Experience and the Path Forward for Russian Innovation Policy” (PDF, 3.7 MB, 128 pages).

In essence, it is a very compact review of how technological innovation was formed and grown in Israel, Finland, Taiwan, India, and USA. It summarizes they key points, successes and failure. It also briefly describes the specifics of each country and how those specifics affected the chosen path. It then describes the key specifics of Russia. Once all that is done, a roadmap is presented, with both generic bullet points and a time table of steps that have to be taken.

And even if my feeling is that this whole work will be completely ignored in Russia, I still think that the report has plenty of interesting information for a lot of other people. If you work in, with, or near technology, you should download the PDF and at least scroll through it. If you ever were interested in Silicon Valley, how it came to be, and if or how it can be created somewhere else, then you should definitely download the report.

I downloaded it a few days ago and barely looked through it, but even that alone gave me plenty to think about. But there is way more than that. It needs careful reading and studying, which I will do the soonest. Brilliant stuff!

Bill Gates, Warren Buffett : Give away half your money!

This is one of those things where nothing that I might say will make it anymore believable. Heck, even the quote from The Wall Street Journal seems like a hoax:

Bill Gates and Warren Buffett announced today that 40 signers, including at least 30 billionaires and other wealthy families, had officially made the Giving Pledge–a promise to give away more than half their fortunes.

I think they are just trying to prove Chris Rock wrong (from 1:28 and further):

[youtube=http://www.youtube.com/watch?v=4m37JkkGjAY]