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Tuesday
Mar142017

From special report: Sexual Dealing: Today's Sex Toys Are Credit Cards & Cash: A Report on the Sex-for-Money Revolution

Porn Again: More Ways to Get Off, But Should We Regulate the Sex Industry?

By David South

Id Magazine (Canada), October 3-16, 1996

Meet Steven Wang. The young Toronto distributor of porn magazines and videos is jerking his arm up and down as he describes what sells adult videos.

“Explicit boxes – dick in the mouth, cum in the face makes it sell,” says Wang as he tells me about packaging the videos he distributes.

Wang doesn’t fit the stereotype of a smut dealer. He is wiry, well-groomed and fits in easily amid Toronto’s army of yuppies. Despite the topic of our conversation, he isn’t shy about being graphic in a public place.

Wang admits his parents aren’t too keen about his success as a smut dealer, but he proudly tells me about his latest project, Cybercafe (located on Toronto’s main goodtime drag, Yonge Street). Banks of computers line the walls of the cafe, and a few customers bang away on keyboards and swivel mouses. Blinders on video terminals are quickly jerked forward by shy internet users as each new customer walks by.

Wang thinks the internet is the way forward for porn distribution.

“It’s heading more to bondage, violence – anything that is weird. Haven’t seen it, want to see it. You can only find penetration on VHS (video), though fisting is allowed.” continues Wang, who prides himself on foreseeing trends. “Now that people have seen these things, they want to go to the next step. Because you can only get these things on the internet, 80 per cent of the people are there for the adult material. Internet is the future, period.”

Wang got into distributing porn videos in 1990, just as the Ontario government began to relax the restrictions on hardcore porn movies, as long as they didn’t contain sex involving violence, coercion, bondage, sado-masochism, degradation, incest, animals, or minors under the age of 18.

Wang says he has made some good money, but it’s time to start looking to the next trend. He says those who consume his products have an insatiable appetite for sex in all its forms.

Money-for-sex revolution

The 90s have seen a quiet revolution in the sale of sex. While paying for sex is nothing new, never before has such a plethora of choices been so openly peddled in Ontario’s newspapers and magazines, mostly at a male audience. There are escort services, so-called massage parlours, phone sex, adult videos, sadism and masochism shops and clubs, strip clubs and swingers’ clubs. On the internet, 127 sex news groups compete with over 200 sex services on the World Wide Web, many charging for the privilege to peek at sex photos. And the sex trade comes at a price, with evidence showing lack of regulation means youths continue to be drawn into the business, while users search for bigger and better thrills.

Toronto weekly Now Magazine has been a pioneer in sex advertising. In September 1989 the magazine’s back pages of classified ads contained around 130 “business personals,” ads placed by the city’s working prostitutes.

In the September 26, 1996 issue of Now, in seven pages of telephone personals and phone sex ads, there were 514 “Adult Classified” ads, a cornucopia of “massage” parlours, prostitutes, and escort agencies offering shemales, “hot Asian” and “Swedish” beauties.

While there isn’t any one source for accurate information on the size of Ontario’s sex industry, it is obvious it has not only grown in visibility, but in size.

“There definitely seems to be more of everything,” says Detective-Constable Austin Ferguson of the Metro Toronto Police’s vice section. “Look at how pornography video stores have blossomed – the spas, whatever you want to call them. Look through the yellow pages for strip bars, escort agencies.

“You got Now, Eye, pink pages, green pages, you can pick up the Toronto Star, The Sun. The phone lines are everywhere you look. I love it, it’s a great business,” says Ferguson sarcastically.

“Even five years ago, there were only a few massage parlours. Now there are 400 to 500 massage parlours in Toronto alone. It has quadrupled since 1990.”

“It’s an underground revolution,” says Sue McGarvie, a sex therapist and Ottawa talk-radio personality. “You go out on the street and see how many prostitutes there are, and how much more open it is, how many more night clubs there are that are gender neutral, that are fetish.”

McGarvie doesn’t think it necessarily means more people are turning to commercial sex.

“We are having as much sex as we ever had, we have as much sexual desire as we ever had,” says McGarvie. “I think the outlets are changing, so that we are going to have to be flexible about that.”

Steven Wang estimates 3,000 out of 5,000 Metro Toronto video stores carry adult videos. Another 1,250 exclusively carry adult videos. A manager at Toronto’s Adult Video Superstore says, “Sales and rentals have gone up in the last three years.” The Adults Only Video chain, founded by Kitchener-Waterloo resident Randy Jorgensen, now spans Canada with 51 stores, 12 in Toronto. And what internet user hasen’t taken a few minutes (or hours) to play voyeur on the many adult web sites or chat lines?

An Adults Only Video survey found, out of 2,000 customers, 56 per cent watch adult videos with a partner. It also claims 20 per cent of renters are women. Many are skeptical about these claims.

Barking through what sounds like a speaker phone, Larry Gayne, president of sex toy mail-order company Lady Calston, says “It’s all men who look at the back of Now. Some claim as much as 50 per cent of adult video watchers are women. I don’t know if I believe that figure.

“Sex is a US $40-billion business in North America alone. In 1992, more sex aids were sold than breakfast cereal.”

The businesses manufacturing sex try to distance themselves from the more visibly seedy porn stores.

“The explosion in triple X video stores is the only seedy end,” continues Gayne. “The sad part is you take away those triple X stores, there is no seedy part to this industry. Not behind the scenes, not in front. It doesn’t exist. There is nobody seedy at our level. Those people don’t exist, they are just normal businesses. There is in fact a downside to the triple X stores.”

Sue McGarvie is an enthusiastic supporter of greater sexual liberation, even if its expression is through the sex industry.

Speaking between clients from her Ottawa office, she says 36 new adult video stores have opened in Ottawa in the past five years.

“Some are small sections of regular video stores,” says McGarvie. “I’m a big believer, I’m still under 30, my generation is one of the first generations that is no longer attending church as a regular part of what we do. Sex is no longer a moral issue. But people are saying ‘wait a minute, because of STDs I’m going to be stuck with my partner for the rest of my life? I better make it the best damn sex we possibly can have.’ Vibrators are outselling any other appliance.

“I’m poised on the industry of the next decade, the next millennium. Sexuality as an expression is the second most powerful drive after food.”

McGarvie doesn’t think that what is in the adult video stores is unhealthy. “Porn as a term is not right, either. Porn is illegal, but the stuff in the video stores is not illegal.”

McGarvie also doubts adult videos are contributing to an atomised world, similar to Aldous Huxley’s Brave New World, where the government controls a population anaesthetized by the buzz of orgasms and drugs.

“I don’t necessarily think it is causing people to be less intimate. The industry needs to stop being in the shadows. Our lives are busy. People are having a hard time connecting with others, but I think that is a separate issue. I think there is a new sexual revolution going on, and if our reality checks catch up with our sex drive, we’ll be okay. We don’t have socially acceptable ways of meeting people that isn’t in a bar when people are drinking.”

Toronto swinger and strip club DJ Ron Michaels thinks the tables are turning on the money-for-sex industry.

“A lot of adult video stores are closing. A lot of strip clubs are on the verge of going under,” says Michaels. “It is like a ghost town in there. I don’t see it is a growing trend. Perhaps it is more front page, more visible. I don’t think it’s any larger than is has been before. I think our society in general is far more sexually liberated than we were 50 years ago. Certainly more than 100 years ago.

“A lot of people thought they could make a fast buck off of it. The market can’t support that number,” according to Michaels.

Child porn

But is this really just good fun? Unfortunately, there is too much evidence showing a direct connection between a robust sex industry, and the sexual exploitation of minors and demand for degrading sex. A booming sex industry just can’t be disconnected from the exploitation of youths and an absorption in degrading, freaky sex, like defacation or bestiality. The industry may not be directly connected to the much-publicized paedophile rings in the news, but the mainstream sex industry is not adverse to exploiting youths and an appetite for sex with minors to sell videos and magazines.

“We have laid charges on people who were initially operating a reputable business,” says Ferguson, “until they found there was a demand for the seedier stuff.”

Sue Miner, the head of Toronto’s Street Outreach Services, says high unemployment rates amongst youth feeds the sex industry with a steady supply of desperate teens.

“It’s indicative of people needing to survive and not having jobs. I’ve heard enough young people saying they needed some money to pay the rent. A lot of young people do it to survive – survival sex.”

“I have yet to come across an escort agency that uses minors,” claims Ferguson, admitting that because he hasn’t, doesn’t mean it isn’t happening. “It’s usually a bit more classier than that. You don’t get your Parkdale hooker types. Pimps don’t run escort agencies.”

A 1984 government study on prostitution, the Badgley Committee on Sexual Offences Against Children and Youth, found one-half of prostitutes had entered the sex trade under the age of 16, 96 per cent had become prostitutes before the age of 18.

The overwhelming majority of prostitutes have run away from home at least once. Street prostitutes leave home at an earlier age than other children, at an average age of 13.7 years, compared to 17.3 years.

The most difficult porn to regulate, as most governments know, is on the internet.

Detective-Constable Ferguson says having photos of bestiality and paedophilia, for a few seconds on a harddrive, is considered by the law to be possession. He also admits because of the ethereal nature of computers, the law is totally unenforceable.

“You would have to get online with that person. Get to know them, chat with them.”

He does warn any internet cafes to stay clear of the stuff. “They are totally nuts to have obscene or child pornography available because somebody would spill the beans pretty quick.”

Escorts

As for prostitution, the police have a harder time controlling escort agencies because they are careful to never make a deal on the phone, says Ferguson.

“They are only going out for dinner and dance, eh?,” chuckles Ferguson. “Somebody sees a business opportunity to run prostitutes. They are harder to crack. It’s a long, long process to take one of these places down because of all the undercover work involved. What you can, can’t do. It’s no easy task.

“They won’t make a deal over the phone. They might say ‘you can have my service for $150/$200 an hour,’ as soon as you say ‘what do you get for that?’…click.”

McGarvie says she wouldn’t be too happy if her husband went to a prostitute to cope with sexual stress if they were too busy to have sex. On the other hand, she thinks the escort industry would decline if there were more healthy outlets for sexual release.

Toronto feminist and author Susan G. Cole, in her book Power Surge: Sex, Violence and Pornography, and ironically a Now Magazine editor, has called for greater regulation of pornography, arguing the industry really has no claim on freedom of expression. The public, Cole says, can accept a regulatory role for government when it comes to other industries, so why the exception for the smut trade?

This should be extended to the rest of the sex trade, she argues. Body-rub parlours, escort services, street prostitutes, strip clubs and phone sex, should not be allowed to remain in regulatory limbo, only subject to police attention when community groups kick up a storm.

Back at the Cybercafe, Steven Wang is trying to be heard over the Pet Shop Boys’ pounding dance beats.

If anybody wants to protest outside one of Wang’s two Toronto stores, or any other adult stores his videos are distributed in, he would probably make the placards. “Business goes up when we get pickets, negative reviews are always positive for the business – automatically sales go up that day,” says Wang smiling.

Swing Shift: Sexual liberation is back in style

By David South

Id Magazine (Canada), October 3-16, 1996

Deep in the bedrooms (and livingrooms) of the home-owning classes, the sexual liberation movement marches on: swingers’ parties are back. Those libidinous libertines many thought were lost in a 70s disco haze, according to a Toronto swinger, are back in greater numbers than in those polyester days. 

In contrast to the many people (mostly men) looking for the anonymous and on-demand buzz of escort agencies, porn videos and sex toys, it seems to me swinging is the most idealistic camp in the army of sexual liberation. There isn’t any sneaking around behind your spouse’s back - in fact, you bring them along for the good times. 

Swingers were usually the subject of the porn movies I watched at the base cinema during my army days. They weren’t real people, but some sort of myth from more electric times. 

Ron Michaels, 41, is an unabashed proselytizer for swinging. A strip-club DJ and erotic and commerical photographer, he’s also co-owner, along with his wife, of swingers’ club Eros. A confident and articulate spokesperson, he has been swinging since he was 17. 

“We believe honesty is the cornerstone of our lifestyle - that makes it work,” he says. “The people engaging in back-alley sex are being dishonest. It’s the same with having an affair - wanting your cake but not being able to share it with the rest of us. 

“Swinging is a moral alternative to having affairs.” 

The divorce rate among swingers, Michaels maintains, is only five per cent, compared to 51 per cent for the general population. The one wrinkle in this impressive “fact” is Michaels’ other admission that many swingers are on their second “married relationship”.

Interviewing Michaels, I feel like I’m talking to a Rotary Club member or a boy scout leader, not a swinger. The talk is about clubs, memberships ($69 a year per couple), trips. It’s a hobby, sport and lifestyle to many swingers, claims Michaels. 

“We have regular weekly functions throughout the year. Some of them are organized by the members. We organize trips and holidays. Weekends in the Caribbean. Like any other social club.”

That can’t be wife/husband swapping he’s talking about, can it?

Michaels’ Toronto Beaches home leaves no doubt as to its occupant’s lifestyle choices: “If you don’t swing, don’t ring,” says a brass plaque nailed to the door. 

Michaels is very proud of swinging’s growth in the 90s. His group has grown from 300 member-couples 14 years ago to 1,800 today. Michaels ambitiously estimates that between 100,000 and 200,000 Southern Ontarians are into swinging, between 20 and 25 million across North America. 

So, how does swinging in the 90s work?

Michaels says most clubs operate more as matchmaking parties than full-out orgies. Couples get to know each other and make the arrangements to meet away from the club’s party. Michaels is quick to disassociate his club from drop-in style swingers parties. 

“Canadians are much more conservative than Americans. In New York they are more hardcore, less selective of their partners. When they get there they are more like, ‘let’s find the first available body and get to it,’ whereas people at social clubs want to get to know you. We are talking about four-way compatability here.”

According to Michaels, the big victory for Canadian swingers took place in 1992. “Our Mississauga club was raided back in ’92 and we took it through the courts for a year. We were acquitted and set a legal precedent, making swingers’ clubs legal.”

To many men, the whole swinging thing seems like the best of both worlds: you keep your wife and get to taste the fruits of other trees at the same time. But Michaels says this male teenage fantasy doesn’t pan out in reality. 

“That wears off pretty quickly. Let’s face it, men have a much lower capacity for sex than women do. Men need a longer recovery period and don’t have as many orgasms in a night. Women can just go and go. Guys can’t compete with that. After a while the fantasy wears thin, and it’s the guy that wants to drop out of the lifestyle.” 

And what about that oher most-asked-question: what’s it like to see your spouse having the time of their life with your neighbour?

“They don’t get into those kinds of comparisons. How can I describe this? It’s not a competitive thing where you try to outperform each other. Most swingers appreciate each other as being unique and different, rather than this is bigger, this is harder, this is faster, this is better. Each new experience is taken at face value, ‘Hey, it’s a good time’. You move on to the next one or you go back to your regular partner.”

“Cock Tales” too much for Hamilton

By David South

Id Magazine (Canada), October 3-16, 1996

Steeltown is a little less hot now that View, Hamilton’s alternative weekly, has dropped a controversial sex columnist in the face of complaints from distributors. The fracas has raised a thorny issue: to what extent should a newspaper stand behind a controversial writer?

My Messy Bedroom, a weekly column by Montreal journalist Josey Vogels, mixes graphic language and humour in its look at sexuality. The dispute erupted over a column in the August 22 issue entitled Cock Tales 1 (Cock Tales 2 will not run in View). 

A surprised and angry Vogels says she only found out her column had been dropped when id called her in September. Vogels believes the problem was with the frank discussion by men of their sexual tastes. “Maybe it was the opening line. ‘Mouth on my cock, finger in my butt, looking me in the eyes,’ then a joke: ‘Would you like fries with that?’”

Vogels maintains View knew what it was getting into when it picked up the syndicated column in June, 1995. “You can’t say you want a column because of its nature, then say you don’t like it.”

Vogels says she co-operated in the past when the magazine asked her to tone down a column. “But there is a line where my integrity is at stake.”

Tucked away among five pages of classified ads, My Messy Bedroom was the only piece of journalism with a sexual theme in View

Editor Veronica Magee says View received complaints that children were reading the column, and some distributors refused to carry the paper. In a rambling editorial in the September 5 issue, Magee defends the decision to drop the column, saying it was time the paper made some changes. 

Magee writes that Vogels’ column taught “sexuality is something clean, not dirty,” but admits some urban weeklies aren’t so urban, and must cater to a more conservative, suburban readership. “Hamilton is a conservative city,” she claims. 

In an interview with id, Magee admitted View’s attitude towards the column was “what can we get away with - let’s push the limit.

“Some people argue she should have known better. Although I’m sure people will believe we are making the writer suffer for a decision we made, that is not the intent.”

But the publisher and editor of View offer conflicting explanations of who actually pulled the column. “It was a collective decision,” says Magee. 

Sean Rosen, one of View’s two publishers, told id the magazine had been considering dropping the column for some time. But Rosen says the decision was solely Magee’s. “The editor decided it had run its course, trying to be sensational for the sake of being sensational.” 

Other stories from the special feature: 

“Barely Legal”: Scummy New Generation of Mags Evades Anti-paedophilia Laws by Nate Hendley

Randy for the People: Conservative Ontario City Home to Porn Empire by Nate Hendley

Is Stripping Worth It? by Cynthia Tetley

Those Old Crusaders: Pornography and the Right by Eric Volmers

Feminists for Porn by Nate Hendley

The Sex Trade Down the Ages by Fiona Heath

Id was published in Guelph, Ontario, Canada in the 1990s.

Read more here: From Special Report: NMM (New Media Markets) Spotlight On The Emergence Of Satellite Porn Channels In The UK

Update: It is over 20 years since this Special Report was published. It forecast the significant role the Internet was to play in the growth of sex content and the sex industry and vice versa. Here is an interesting overview on the situation in 2020. The Internet is for Porn – It always was, it always will be.

“One of the biggest and most interesting things happening in the consumer web right now is running almost completely under the radar. It has virtually zero Silicon Valley involvement. There are no boastful VCs getting rich. It is utterly absent from tech’s plethora of twitters, fora and media (at least, as they say, “on main”). Indeed, the true extent of its incredible success has gone almost completely unnoticed, even by its many, many, many customers.

I’m talking, of course, about OnlyFans.”

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021

Tuesday
Feb142017

Continental Drift And Military Complexities

By David South

The Canadian Peace Report, Summer 1993

A cornerstone of the Conservative government since 1984 has been the Free Trade Agreement (FTA) between the United States and Canada, soon to be followed by a North American version (NAFTA), which adds Mexico. 

Peace researchers differ over how much the deals could further militarize Canada’s economy. 

Under the Canada-US deal, articles 907, 1308 and 2003 immunize trade that fosters “national security” from charges of unfair subsidies. A free trade tribunal could deem subsidies to farmers or toilet-seat manufacturers as unfair competition - but not subsidies to weapons manufacturers. Articles 1018 and 2102 of NAFTA maintain the exemptions. 

CPA membership coordinator Gary Kaye argues that FTA, and NAFTA even more so, bind Canadian governments at all levels to military regional development. The United States has relied on investment in military industries as a regional development tool more than any other Western country, he says. 

“The Canadian government can invest in any military-related pursuit without fearing the U.S. or Mexico will say it is an unfair subsidy,” Kaye says. 

Ken Epps, a researcher with Project Ploughshares in Waterloo, Ont., agrees one reason the government insists on buying $5.8 billion helicopters in the face of overwhelming public opposition is that it’s a regional development program protected under the FTA. 

“Any other [subsidy] program of that size could well be protested by the Americans. The whole thing has been set up with new plants being built in different parts of Canada to build parts for the helicopters.”

But Epps disagrees that the trade agreements will integrate Canada much further into the U.S. war machine. De facto free trade in arms has existed since Canada and the U.S. signed the Defence Production Sharing Agreement in 1959, he points out, following the scrapping of Canada’s Avro Arrow jet plane. There-after Canada specialized in making military components rather than complete systems.

Epps and others say Ottawa’s high-tech hardware binge - including the 50 high-ticket EH-101 helicopters - and the Canadian military industries’ desire to sell to booming Pacific Rim and Middle East markets would exist even without the trade agreements. Epps sees the U.S. favouring its own defence industry at the expense of Canadian suppliers, which will increase Canadian businesses’ desire for foreign sales. 

Retired U.S. admiral Eugene Carroll, director of the Washington-based Center for Defense Information, says every nation is interested in boosting its own national prestige throught the military, and Western industrialized countries are looking to sustain exports by selling weapons to the Third World. 

“That’s just plain old profit-driven commercial activity,” says Carroll. “I don’t think trade agreements extend control onto military-related activities.”

Kaye, however, stresses that NAFTA will ensure the bilaterial agreements between Canada and the United States on military trade will continue untouched. “Under those agreements, we are committed to balance military imports and exports with the United States. 1992 figures show a $4-billion deficit; therefore we will be buying much more in the way of arms than anyone could imagine would be needed for Canada’s direct security.”

Many peace groups are worried about the implications. 

“NAFTA reveals an agenda for the military and the transnational corporations that binds the Canadian economy more to the U.S. military machine,” Marion Frank wrote for the Peace Alliance in Action Canada Network’s Action Dossier (Dec. 1992), drawing on a position reached by the CPA Steering Committee last fall.

“Under NAFTA, as under FTA, the only areas where government subsidies are allowed are in the military and energy sectors … Wide-ranging expansion of ‘intellectual property rights’ in NAFTA increases monopoly product protection for the transnationals here in Canada, and aids in the privatization of high-tech capacity, all of which ties us more closely to the U.S. military-industrial complex …

“In the U.S., trade strategy is linked to security strategy,” Frank adds, “The military tells U.S. industry what equipment to plan for and buy in order to meet U.S. strategic objectives. As we become more integrated into the North American [trading] bloc, our ability to develop our own strategies will disappear.”

Recommendations from the Peace Alliance-facilitated Citizens’ Inquiry into Peace and Security would be difficult to implement under NAFTA, contends Darrell Rankin of the Ottawa Disarmament Coalition. “Canada could no longer help developing countries by giving them better access to the Canadian market through preferrential tariffs.” Assisting military factories to produce civilian goods would be prohibited - but grants to develop weapons would not.

Last February, Science for Peace brought together labour, peace and other activist groups to make the connection between free trade and defence production and the weapons trade. “Both agreements are bound to cause in Canada what exists in the U.S.: a poweful military-industrial complex,” says S4P’s Terry Gardner. “It represents the loss of control of the institutions of government.”

Then prime minister Mulroney’s “unquestioning support” of the U.S. in the Gulf War “removed political roadblocks to Canada’s involvement” in U.S.-Mexico talks, recalls John Dillon of the Ecumenical Coalition for Economic Justice. Despite widespread Mexican opposition to the war, he adds, President Salinas increased oil production and exports to the U.S. during the build-up to it. 

The Ottawa Disarmament Coalition calls NAFTA “a vehicle for militarism without brakes.” It would create legal inducements for companies seeking government contracts to couch their bids in national security terms, a coalition brief to an Ontario cabinet committee on NAFTA argues. 

NAFTA would also hinder conversion of military to civilian industries and environmental protection above “generally agreed” standards, the coalition said.

The Ontario committee on NAFTA, which held public hearings in the spring, received briefs from: Northwatch (Brennain Lloyd, Sudbury), Voice of Women for Peace (Ann Emmett and Elizabeth Davies, Oshawa), Oshawa Peace Council (Doug Wilson), Ottawa Disarmament Coalition (Rankin), the CPA (Kaye), Science for Peace (David Parnas), Michael Polanyi, Allan MacIssac (Toronto Disarmament Network) and Veterans Against Nuclear Arms (Toronto). 

While recommending that Ontario oppose NAFTA, the committee’s report did not directly mention peace concerns. 

Abuse of resources

“The U.S. needs our resources and us to put together components for their military,” says J.J. Verigin of the Doukhobour peace and disarmament committee in B.C. He criticizes “any agreement that locks us more into a country wired to massive consumption and abuse of resources at the expense of Canadians and other countries.”

In the United States, the Women’s International League for Peace and Freedom opposes NAFTA as a stage in “the neoliberal economics of intervention” that particularly victimize women (Peace and Freedom, July/August 1992). 

At CUSO’s national office, Marc Allain wants to end the notion that NAFTA is about improving the living standards of people in developing countries. “What we’re seeing is quite the contrary,” says Allain. “Low wages, no health and safety - we’re already seeing in Mexico job losses as they move to the maquiladoras (Mexico’s free trade industrial zones).”

(In a trade advisory, Ottawa tells Canadian companies that the defence market in Mexico, a notorious human rights violator, “is not readily identified … Commercial/industrial security, however, is an expanding market.”)

Allain says CUSO is working with the Ecumenical Coalition for Economic Justice to produce education kits on NAFTA and distribute them to unions and community groups. 

 

 

 

Saturday
Mar052016

Innovator Stories and Profiles | 2012 to 2014

 

Southern Innovator was initially launched in 2011 with the goal of - hopefully - inspiring others (just as we had been so inspired by the innovators we contacted and met). The magazine seeks to profile stories, trends, ideas, innovations and innovators overlooked by other media. The magazine grew from the monthly e-newsletter Development Challenges, South-South Solutions published by the United Nations Office for South-South Cooperation (UNOSSC) since 2006.

Thursday
Jul022015

India 2.0: Can the Country Make the Move to the Next Level?

New UNOSSC banner Dev Cha 2013

With the global economic crisis threatening to cause turmoil in the emerging markets of the global South, it is becoming clear that what worked for the past two decades may not work for the next two.

For India, the legacy issues of poverty still need to be addressed, and the country’s impressive information technology (IT) industry – which has driven so much of India’s growth – will face stiff competition from other countries in the global South. Some argue that if the IT industry hopes to keep growing and contributing to India’s wealth, things will need to change.

Unlike China, where heavy investment in infrastructure and a strong link between government and the private sector has driven the impressive manufacturing boom in the country, in India the government has de-regulated and taken a back seat, leaving the private sector and entrepreneurs to drive the change and do the innovation.

Many believe various areas need urgent attention if India is to continue to enjoy good growth rates in the coming years. Areas in need of attention include infrastructure, healthcare and education (thesmartceo.in), in particular the knowledge to work in the information technology industry of the 21st century.

One of the founders of Indian outsourcing success Infosys (infosys.com), executive co-chairman Senapathy Gopalakrishnan, told Britain’s Telegraph newspaper, “So many people’s lives have been changed by IT in India.

“People from the middle class and lower middle class have become global employees and have the opportunity to work with some of the best companies in the world. But the challenge for India is that this industry can only create so many jobs. IT is not going to solve the unemployment problem in India.”

But the coming next wave of change in information technology is an opportunity to be seized to reduce unemployment if enough people are educated to handle it.

According to Gopalakrishnan: “I strongly believe, and it’s backed up by data, that there is a shortage of computer professionals everywhere in the world, including India. The application of computers is growing dramatically and will continue to grow dramatically over the next 20 to 30 years. We have to train and create the workforce necessary to grow this industry.”

Various media stories have called this next phase India 2.0. If India 1.0 was the highly successful information technology outsourcing industry developed in the late 1980s, through the 1990s and 2000s, then India 2.0 is the next wave of IT innovation being driven by Big Data, automation, robotics, smart technologies and the so-called “Internet of things.”

Big Data is defined as the large amounts of digital data continually generated by the global population. The speed and frequency with which data is produced and collected – by an increasing number of sources – is responsible for today’s data deluge (UN Global Pulse). It is estimated that available digital data will increase by 40 per cent every year. Just think of all those mobile phones people have, constantly gathering data.

Processing this data and finding innovative ways to use it will create many of the new IT jobs of the future.

“We are living in a world which is boundary-less when it comes to information, and where there is nowhere to hide,” continues Gopalakrishnan, “If you have a cellphone, somebody can find out exactly where you are. Through social networks you’re sharing everything about yourself. You are leaving trails every single moment of your life. Theoretically, in the future you’ll only have to walk through the door at Infosys and we’ll know who you are and everything about you.”

Unlike in the late 1980s, when India was the pioneer in IT outsourcing for large multinational companies and governments, competition is fierce across the global South. The mobile-phone revolution and the spread of the Internet have exponentially increased the number of well-educated people in the global South who could potentially work in IT. China, the Philippines, Kenya, Nigeria and Ghana are just some of the countries heavily involved in this area.

If India fails to meet the India 2.0 challenge, it risks seeing its successful companies and entrepreneurs leaving to work their magic elsewhere in Asia and the new frontiers of Africa, just as many of its best and brightest of the recent past became pioneers and innovators in California’s Silicon Valley.

India’s IT sector contributed 1.2 per cent to the country’s gross domestic product (GDP) in 1998; by 2012, this was 7.5 per cent (Telegraph). The IT industry employs 2.5 million people in India, and a further 6.5 million people indirectly. IT makes up 20 per cent of India’s exports and, according to the National Association of Software and Services Companies (nasscom.in), the industry has revenue of US $100 billion.

India is now the IT and outsourcing hub for more than 120 of the Fortune 500 companies in the United States.

Out of India’s 3.5 million graduates every year, 500,000 are in engineering – a large pool of educated potential IT workers. India produces the world’s third largest group of engineers and scientists, and the second largest group of doctors.

IT has become a route that catapults bright Indian youth into 21st-century businesses and science parks and to the corporations of the world.

One visible example of the prosperity brought by IT services in India is the booming technology sector based in the city of Bangalore (also called Bengaluru) (http://en.wikipedia.org/wiki/Bangalore).

Reflective of the contradictions of India, Bangalore has 10 per cent of its workforce now working in IT, but also 20 per cent of its population living in urban slums.

The nearby Electronics City (elcia.in) is considered “India’s own silicon valley and home to some of the best known global companies.”

To date, aspects of India 2.0 are already taking shape.

One company is called Crayon Data (crayondata.com). It uses Big Data and analytics to help companies better understand their customers and increase sales and deliver more personal choices.
Edubridge (http://acumen.org/investment/edubridge/) is helping to bridge the gap for rural youth with varied education backgrounds and long-term jobs. Edubridge trains youth for the real needs of employers to increase the chances they will get a job. This includes jobs in the IT business process outsourcing sector and banking and financial services.

Infosys is working on innovations for the so-called “Internet of things,” in which smart technologies connect everyday items to the grid and allow for intelligent management of resources and energy use. Infosys is developing sophisticated software using something called semantic analytics – which analyses web content (http://en.wikipedia.org/wiki/Semantic_analytics) – to sort through social media and the Internet to track customer responses to products.

Elsewhere, former Infosys Chief Executive Nanden Nilekani is involved in a Big Data innovation to address the problem of social and economic exclusion of India’s poor. Called Aadhaar (http://uidai.gov.in/), the government-run scheme is gathering biometric data on every Indian to build the world’s largest biometric database. After being enrolled and having fingerprints and iris scans taken, each individual is given a 12-digit identification number. So far 340 million people have been registered with the scheme, and it is hoped 600 million will be registered by the end of 2014.

The idea is to use a combination of access to mobile phones and these unique ID numbers to widen access to all sorts of products and services to poor Indians, including bank accounts for the millions who do not have one. Many people, lacking any identity or official acknowledgment they exist, were prevented from engaging with the formal economy and formal institutions. Being able to save money is a crucial first step for getting out of poverty and it is hoped information technology will play an important role in achieving this.

By David South, Development Challenges, South-South Solutions

Published: March 2014

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Wednesday
Jul012015

China Sets Sights on Dominating Global Smartphone Market

New UNOSSC banner Dev Cha 2013

The rise of smartphones – mobile phones capable of Internet access and able to run ‘apps’ or applications – is the latest wave of the global connectivity revolution. Mobile phones rapidly made their way around the world to become almost ubiquitous – the most successful take-up of a piece of communications technology in history – and now smartphones are set to do the same. The number of mobile phone subscriptions in the world surpassed 6 billion in 2012 (out of a population of 7 billion) and, according to the International Telecommunications Union (ITU), the number of mobile phones will exceed the world’s population by 2014.

Over the last five years, with the increasing popularity of smartphones, the focus of the mobile industry has shifted from voice and messaging to apps and data services.

Smartphones are complex pieces of technology and any country that can develop the capability to make them and innovate is set to make a lot of money.

The high export value potential of designing and making “computer equipment, office equipment, telecommunication equipment, electric circuit equipment, and valves and transistors” was flagged up as a priority for developing nations back in 2005 at a UN meeting looking for “New and Dynamic Sectors of World Trade” (UNCTAD).

At present, smartphones have a long way to go to surpass old-style mobile phones: by the end of 2016, according to Portio Research (portioresearch.com), the number of non-smartphones in the Asia-Pacific region alone will still be bigger than the entire worldwide number of all smartphones. Even so, it’s predicted that by 2016, there will be 555 million active smartphones in China alone, as well as half a billion smartphones in Europe by the end of 2014. By 2013, North America’s smartphones will make up 50 per cent of all mobile phones. All in all, a lucrative market.

The main factor holding back the rise of smartphones is price. Smartphones tend to cost more than a basic mobile phone. But as China gets more heavily involved in the smartphone marketplace with its own smartphone and mobile phone brands, low income consumers will find themselves with a wider choice of affordable and powerful smartphones, each one a mini-computer.

Out of the 10 largest global manufacturers of smartphones, four are Chinese: Lenovo, Yulong, Huawei and ZTE (Gartner).

Huawei (http://www.huawei.com/en/), the world’s biggest smartphone seller (according to research firm Canalys) (canalys.com), has started to move some of its design team to London in the United Kingdom, to better tailor its products for foreign markets. It has revenues each year of US $35 billion.

China’s mobile phone market is vast, accounting for a third of all smartphones sold in the world. Getting a foothold in this marketplace places a company in a very strong position to build the expertise and capital to push into the wider global marketplace. And that is what Chinese brands are starting to do. So far, Chinese exports of branded smartphones make up a fifth of those sold around the world (Canalys).

The big global competitors to date have been South Korea’s Samsung (samsung.com) and the American Apple brand (apple.com). Other large competitors are Canada’s troubled Blackberry and Finland’s Nokia.

To compete with them, popular and successful Chinese brands include Xiaomi (xiaomi.cn), which sells more mobile phones in China than does the American Apple brand, and ZTE (http://wwwen.zte.com.cn/en/).

For years, many of the top global brands have had their phones and the components manufactured in China. This meant Chinese manufacturers were assembling the phones but not benefiting from the high value that can be extracted from being the owner of the brand name and the originator of the innovation and holder of the copyrights and trademarks.

But now China’s Lenovo brand (http://www.lenovo.com/uk/en/), for example, has successfully pulled past U.S. electronics maker Hewlett-Packard (www.hp.com) to become the largest seller of personal computers in the world. It is also selling more mobile phones and tablet computers than personal computers.

Lenovo Chief Executive Yang Yuanqing espouses a two-part strategy to defend market share at home in China while going hard at overseas markets. Lenovo started with so-called emerging markets in Russia, India and Indonesia.

“We have very aggressive plans to explore overseas markets,” Lenovo’s mobile phone division head Liu Jun told China Daily. “We hope the overseas market will contribute more than half of Lenovo’s total smartphone revenue in the long run.”

Xiaomi founder Lei Jun is considered part of a new generation of dynamic Chinese technology leaders. His casual clothing and charismatic public presentations have had some equate him to the late Apple founder Steve Jobs. But Jun is not happy with selling smartphones and instead sees the company’s future in software and that the phones are just a tool to access the software. Xiaomi hopes to make even more money from selling games, running online marketplaces and offering social media.

The Chinese-made smartphone brand Coolpad (http://coolpadamericas.com/) – made by Yulong Computer Telecommunication Scientific Co. – is the third best-selling in the Chinese marketplace, surpassing Huawei and Apple and has global annual revenue of US $1.8 billion, according to Forbes magazine. Sino Market Research found 10.2 per cent of China’s smartphone users own a Coolpad, behind Korean brand Samsung and China’s Lenovo.

Coolpad has succeeded by investing heavily in research and development (R&D) and innovation to make the phones cheap but also powerful.

Innovations include technology that lets users have more than one phone number for the same phone by being able to connect to two different network technologies. The phones also include security and privacy protections that make them popular with businesspeople and government officials.

The Coolpad brand has also been frenetic in launching different models of the phones to appeal to its customers. In 2012, it launched 48 different models, selling for between US $50 and US $500.

Coolpad was launched in 2012 in the US as part of the company’s global expansion plans.

China has placed innovation at the core of its economic development policies. China increased its R&D spending in 2009 to US $25.7 billion, a 25.6 per cent rise over 2008, according to Du Zhanyuan, vice minister of the Ministry of Science and Technology. In 2011, China surpassed South Korea and Europe in total patents filed and was in a neck-and-neck race with Japan and the United States.

China now boasts twice as many Internet users as the United States, and is the main global maker of computers and consumer electronics, from toys to games consoles to digital everything.

China is also on course to become the world’s largest market for Internet commerce and computing.

The drive to change and transform China’s global economic role was promoted in 2011’s Beijing International Design Week (http://www.bjdw.org/en/), with its theme of transforming “Made in China to Designed in China.”

By David South, Development Challenges, South-South Solutions

Published: September 2013

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=bfhcAwAAQBAJ&dq=development+challenges+september+2013&source=gbs_navlinks_s

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Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Update: Huawei Loses Millions Of Users As Serious New Threat From China Gets Real

"Make no mistake—Xiaomi intends to entice Huawei consumers with upgraded phones such as the recent Mi 10 Pro, better able to compete with Huawei’s flagships in overseas markets. The company is also making a feature of its “easy access to Google,” as its marketing goes head to head with its larger Chinese rival. Right now, Xiaomi has a unique opportunity to strip away market share with Huawei helpless on the Google front. And it seems that millions of Huawei users outside China who want to maintain Google on their phones are already voting with their wallets."