Brands will shape Global Labor Standards: Apple-Foxconn Company

Posted on October 30, 2012 by Nigel Cameron

Tim Cook, Apple (Photo credit: Wikipedia)

When Apple signed on to Fair Labor I wrote a column in which suggested that the logic of their decision – a big shift in approach post-Jobs – would be to bring about alignment between western and Chinese labor standards. Nothing that has happened since has changed my view. Not that this will happen overnight, of course. But it’s the result of several potent forces that are shaping, not least, this company’s effort: branding and global communications. Whereas these forces twisted the unwilling arm of Nike what seems a long time ago, the superlative quality of the Apple brand and the explosion of social media are together pouring gas on the flames.

While it has been traditional to label western brand efforts to ensure decent manufacture conditions for their products as “corporate social responsibility,” the logic of the Apple case demonstrates that it is naive to see CSR as an adjunct effort, or a marketing ploy, or as anything other than central to value. It’s a case where the values-value connection (another theme of mine) is especially glaring.

The harrowing case of the Foxconn worker with severe brain damage, whose family is now going to the Chinese courts to seek to maintain full company support of their son, drives the point neatly (if tragically) home. This man is, as all can see, a de facto Apple employee, whose conditions of service are so far removed from those of the guys at HQ as to be hard to compare. As his family struggles to ensure that he has long-term care after an undenied industrial injury, they have a bullhorn to the world, and that includes the fashionistas for whom the latest Apple gadget is a must, and who have helped drive up its astronomical share price and stack up a mountain of dollars that could buy Facebook twice over for cash (or buy everyone on the planet a half-decent bottle of wine). As the technological gap, and the design gap, between Apple products and those of its rivals narrow, the brand magic is going to be even more key – and therefore even more exposed.

It was a smart move for Tim Cook to jump into Fair Labor, and then arm-twist Foxconn into big wage increases. It would be even smarter for them to leapfrog the moral/CSR competition and drive excellence in Chinese manufacturing and labor practice without needing to be pressured further.

http://bclc.uschamber.com/blog/2012-02-03/csr-and-burden-outsourcing-apple-opens-door

Foxconn goes to court over severely injured worker | Business Tech – CNET News.

I’m Voting for the Long View

Posted on August 22, 2012 by Nigel Cameron

USGS satellite image of Washington, D.C. (Photo credit: Wikipedia)

Seal of the United States Office of Science an...

Office of Science and Technology Policy. (Photo credit: Wikipedia)

I’m in my favored place for writing, which isn’t even a coffee house (my second choice) but an airplane. Just enough room to type, zero distractions (United Airlines has yet to discover wifi), and as often happens stimulating company. This time, bumped into an old friend. He’s in the space sector, which after nearly half a century of hibernation has suddenly awakened. SpaceX Dragon. NASA’s Mars Curiosity. Suddenly after all that clunky Shuttle stuff (which was also vastly expensive), and the bakolite Space Station, America seems to be moving again.

There are big issues at stake in November, and we take sides. Some of us are highly partisan and fiercely loyal. Others are more nuanced – or more cynical. But through all the electioneering, a striking fact bridges the parties. Washington is too little interested in the one thing that is most in its interests, and ours: The Long View.

What’s even more striking, I confess, is how little engaged corporate America is in pressing The Long View on Washington. Of course, at one level, public corporations operate year-to-year and quarter-by-quarter. But successful corporate leaders are smart at aligning short-term market accountability with long-term growth. How is it that these smarts don’t survive crossing the Beltway?

Before you say I am making this up, here are some recent conversations I have had. Not naming names, though if you doubt me I will supply them in confidence.

I chatted with the CEO of one of the largest tech corporations. Why don’t you guys press for the Long View in DC, I asked? “I really hadn’t thought about it quite like that,” he said. He then introduced me to his top lobbyist in DC.
“Why did he send you to see me?” asked the lobbyist. “That’s not what I’m paid to do. We work with the electoral cycle.”
Then, meeting with the CTO of another tech giant and several of his execs, I put it this way: “You have a strategy unit in your Chairman’s office with a 10-year time horizon. You have R and D people all over the world thinking 7-8 years ahead. Why do you tell your Government Relations guys the horizon is 18 months? Why don’t you align these units in your own company?” ( His lobbyist was in the room and said didn’t disagree with me.)
Then, in a roomful of lobbyists tearing out their hair as the federal budget’s haircutting undermined their efforts (and in some cases I suspect their bonuses), I stated: “There are other groups who can guarantee long-term a vote in the House, whoever wins the election, such as the major pro-Israel lobby, and the NRA, and National Right to Life.” I wasn’t being tactful. “Why haven’t you taken The Long View and worked district by district like they have to get Washington to take it? You have far more money.” Silence.
Then, chatting at length with a former senior exec of another of the biggest tech companies, I make the same point. “Oh we had big disagreements about that. There are now four people assigned to think long-term about policy; with everyone else it’s 18 months. Only one of the four is in Washington.”

I’m not here to challenge the wisdom of the Founders in setting a two-yearly cycle for the House, or the ultra-short-termism of the market. But both of these seem to me crazy ways to do business in a Moore’s-Law-driven world. As I go around saying to business leaders and any pols who will listen, the faster change is taking place the more vital it is to scope the future. It’s counter-intuitive, because the faster things change the more difficult it is. But it’s a core principle of good decision-making. You can’t make today’s choices without Asking Tomorrow’s Questions. The further you go from “political” Washington, the more people get the point. They get it in the strategy and R and D units of these self-same corporations who insist that their hugely-influential representatives in Washington focus simply on the short term. They get it in the less political reaches of the federal government. Few years back I was privileged to be a non-federal participant in Project Horizon, a large-scale strategic planning project led by the Department of State with other agencies – looking 20 years ahead.

But it’s “political” Washington, the democratic driver of every big decision, that is locked into a suicide pact with the “political” levers of corporate America. How could anyone make this stuff up?

I once sat in the office of one of our top VCs out in Silicon Valley to ask for his help in turning all this around. Before politely showing me the door, he said a number of things I shall not easily forget. One was this (it’s close to the exact wording): “When I look out of my window, I see China. We regard Washington as a European city. Why should we be interested?” I mildly offered two points in response. One was the argument I have just been making, that his investment time horizon was out of kilter with Washington’s policy horizon. Another was that every single day inter-governmental organizations (WIPO, WTO, ITU, ILO, G-whatever) have more influence over the outcomes of every dollar he was investing than they had the day before; and the only access point he would ever have to them would be through Washington.

Of course, there are many reasons why we have arrived at this situation. The old-time, regulated tech sector, driven by telecoms but with pharma and others in the vicinity, has a (generally proper) symbiotic relationship with the regulatory agencies and a forward position in ensuring that the legislative environment is favorable (note that I have avoided using the pejorative term rent-seeking . . .). Even moreso, the defense sector – on both the government and corporate sides – work closely on long-term procurement and R and D issues. As a result, these major slices of the tech economy are preoccupied with their own interests in Washington. And while they collaborate in trade groups and coalition settings, their chief DC interests are narrowly defined.

It’s worth noting several sectors for which this approach is especially inappropriate. One is energy. Another is space. Another is infrastructure, but old-style transportation emerging tech-related. Another is the group of industries with high environmental impact. And back of every sector lies the need for policies favorable to innovation. This is not an argument for the feds to get more into regulating or funding new technologies. It certainly is an argument for the long-term impacts of technology, the special needs and opportunities of its innovators and manufacturers, the values concerns that ultimately shape markets and thereby drive value – for these and other considerations to rise up the policy agenda. And if you are seeking metrics: Would it not be interesting if the House Science, Space and Technology Committee were the one on which every top legislator aspired to serve. If the White House Office of Science and Technology Policy (OSTP) had the clout of the Office of Management and Budget (OMB). If every policy choice in the legislative and executive branches were rigorously assessed in light of its impacts over 10 years and its integration with anticipated developments in science and technology. For example.

So, how about it, America? I want to vote for The Long View.

Decision-Making In Gordon Moore’s Land (futureofbiz.org)

5 stories that make me worry about whether the future has jobs

Posted on July 23, 2012 by Nigel Cameron

The seal of the United States Department of Labor (Photo credit: Wikipedia)

Kurzweil, Krulwich and Ptolemy (Photo credit: Daniel Williams)

English: PR2 Robot at Willow Garage in Menlo Park (Photo credit: Wikipedia)

Five quick stories

1. I sat down for lunch a few months back on a sunny Silicon Valley day in Menlo Park with two partners from a global law firm who work with clients in the Valley. There were various things on my mind – Washington/Valley issues, potential collaborators for my nonprofit, the weather and the wine. But that was not the conversation. What they wanted to talk about was, as one put it, When are we going to come up with innovations that create jobs rather than destroy them? You could have knocked me down with a chip.

2. Fast rewind to one of those excellent Singularity Institute conferences that the Kurzweil-inspired network hosts. They are usually on the west coast; I think the one I am recalling was in San Jose. Early on the program was Marshall Brain, founder of famed website How Stuff Works. He threw up on the screen that Department of Labor job classification form we all know, and went down the list. In his view, around 50% of the jobs in the U.S. economy could be destroyed by robots. He was heckled.

3. Fast sideways to a visit a year or so later to the OECD in Paris, where I sat down with one of their top S and T officials and discovered he had just returned from a visit to Japan. Japan, where the plan is for retirees to get a pension – and a humanoid robot, as nursing aid and companion.

4. Then, in this journey through space and time, to Washington, DC, which as some of you will know is the U.S. federal capital where allegedly responsibility is taken for key dimensions of our future well-being. A top official of the Dept of Labor assured me there was no-one on the team focused on the AI/human robotics/employment issue.

5. Some time later I was on the phone to AFL/CIO. Same there. In the case of the labor unions, I suggested everyone consider stopping whatever else they were doing and work on this issue instead . . ..

Five stories. They do not amount to an argument, and if anyone has just loaded with “Luddite” please sit down.

I know that disruptions have happened before, though the nature of our Moore’s Law experience is that they are now getting very fast and disruptive at increasingly fundamental levels (reflect on the rapidity with which such smart enterprises as RIM and Nokia have come close to collapse). I do not know how fast our economy can innovate its way into the development of huge slews of jobs which have been taken out, class by class, through the advance of digital into the higher echelons of AI and robotics.

What I do know are three things: This issue is huge. Almost entirely unexamined. And urgent.

Here’s a neat piece from Vivek @wadhwa, one of our most provocative and smart thought-leaders, arguing that in China robotics is set to destroy manufacturing and enable us to repatriate what we have outsourced. Yet to the extent that this is true, what follows for this nation? Just asking . . ..

My convo with Vivek about innovation: http://c-pet.org/?q=node/93

My Napa panel with Vivek and others on U.S. competitiveness: http://www.techpolicysummit.com/2012/06/looking-ahead-investing-in-americas-competitiveness.html

The End of Chinese Manufacturing and Rebirth of U.S. Industry – Forbes.

Stunning Progress in Technology Brings The Death of Unskilled Labor (singularityhub.com)
The Future of Manufacturing Is in America, Not China – By Vivek Wadhwa (foreignpolicy.com)
Technology, the Future, and the Great Divide – #TPS2012 in Napa (futureofbiz.org)
#Innovate #Education, for real? #edu #Thiel #Wadhwa (futureofbiz.org)

The University of the United States: Please can we get on with it?

Posted on July 20, 2012 by Nigel Cameron

education online (Photo credit: Sean MacEntee)

Another smart piece from the ubersmart @cathyndavidson on the future of higher ed has me mulling yet again . . .. She has a way of generating mull.

It’s perhaps been no surprise that “distance education” (in its many modalities) has lingered outside the mainstream for a score of years longer than one might have expected. There are, of course, reasons. Substantively, a deep unease that the secret sauce of higher ed is related to campuses and classrooms and realtime connectedness between professors and students. OK, large state universities do not exactly fit that norm, but we shall leave it for now. The presence of tacky, usually for-profit, operators with (on a good day) marginal accreditation. The commitment of our better educators to the avoidance of, essentially, school by scantron.

But the real barriers have been formal. Higher education is the most conservatively-organized enterprise on the planet. Back in the day when I worked in one of its outposts (early 90s), I watched a multi-year reform process designed by one of the nation’s leading educators encompass at least two PhDs and four vast volumes of materials, and achieve, exactly, zero. My observation: the system was designed to resist nuclear attack, and we were watching the faculty clamber out of their bunkers, blinking but unbowed.

My view is that in the next 10-12 years higher education will undergo creative destruction on the scale that publishing has been experiencing of late and travel agencies (remember them?) a quinquennium earlier. The online/free experiments that somewhat self-consciously a cluster of major schools has initiated (and that seems to have been a cause of the wonderful free public entertainment afforded of late by the lunatic managers of UVa) are extraordinarily late in the day. But they are with us.

Back to point: Here is what we need. OK, I have said this before, but since you didn’t listen, world, let me say it again. And note the strategic context. It could hardly be bigger.

The major opportunity for the United States to influence global culture and secure lasting relationships in the flux of C21 lies precisely here: In the initiation of a United States open university offering full degree programs worldwide to all comers. We have perhaps an 8-10 years branding advantage against certain rival institutions, chiefly in China, who will otherwise take on this task with abandon. While much could have been achieved a decade ago, key factors from 2012 out are the explosive adoption of mobile, mobile’s shift even in developing nations to feature phones and smartphones, and very large improvements (even if not quite to the levels Ray Kurzweil keeps expecting) in the AIs that enable language interpretation and the increasingly post-clunky experience of distance teaching.

A dozen major issues are raised, but they can all be answered. What we need is for the school to open its doors. Within a decade effectively every one of planet earth’s denizens will have access to smartphone mobile connectedness. And that’s all we need.

Then let the chips fall. Yes, US-based students may join in. Yes, this will destroy large swathes of the higher-end global education infrastructure as we know it. And, oh yes, dumping tenure (one of my favored targets) will certainly help us get there from here (all we need, seems to me, is an appropriations rider in Congress).

But blending the vast educational nous of the UK’s visionary Open University with our latest tech delivery methods, the Department of Education‘s savvy, the global cultural outreach of USAID – together with our vital partnerships in UNESCO and the World Bank . . . the question is not whether but how, and when.

Can We Replace Professors With Computer Screens? | Co.Exist: World changing ideas and innovation.

Top universities join free online teaching platform (guardian.co.uk)
When courses are free online, what’s left for universities to sell? (theconversation.edu.au)
New Study: Online Classes Just as Good (blogs.the-american-interest.com)
China and India producing larger share of global college graduates (insidehighered.com)

VALUES AND THE VALUE CHAIN: APPLE, FOXCONN, AND THE NEW CSR?

Posted on February 21, 2012 by Nigel Cameron

Image via Wikipedia

http://mashable.com/2012/02/21/inside-foxconn/

VALUES AND THE VALUE CHAIN

Apple, Foxconn – and a new day for American consumers, Chinese manufacturers, and more besides.

Nigel M. de S. Cameron

The opening of Foxconn to an American TV crew marks, to use an old term apt here, an epoch in the several histories of CSR, outsourcing, Asian labor practices, the role of the consumer in the digital age – and, just perhaps, a seismic move toward the reshaping of the idea of value in western capitalism. Oh yes, and in the history of Apple post-Jobs. In brief: Post-Jobs Asian jobs; value, meet values.

And just this week, wage were raised by 25%. . . .

We all know what makes Asian nations so interesting to innovative western manufacturers. 1. Highly skilled labor that is relatively cheap (though slowly equalizing with the developed world); and 2. Highly questionable labor practices. That’s why Apple Computer’s decision to sign on to the Fair Labor Association is both smart and risky. They work closely with Taiwanese giant Foxconn and the others in their supply chain, and the more innovative their products become, the faster models and devices change, the more wedded they will be. China, especially, has shown an extraordinary capacity to provide fast, reliable, manufacturing and assembly of the quality needed by the highest-quality consumer enterprise on the planet. The ridiculous levels of profit being reaped at the moment are drawing ever greater attention to its source, which is substantially the slice of the Chinese economy that assembles high skill, high quality, and low pay.

While Apple’s sign-on to Fair Labor may have been motivated entirely by moral conviction (Tim Cook just told his employees that he “cares about every worker in the supply chain”) and a generally eleemosynary disposition, it’s unlikely that was all it took to get to yes. According to a lengthy and important article in the New York Times, there are actually big disagreements among Apple execs on these issues (the Times piece is required reading). That suggests that the Fair Labor decision – and the release of a list of suppliers that preceded it – was the result of the classic alignment of interests that has tended to be necessary before major CSR-related choices are made by major corporations. That is, the do-gooders and the profit-maximizers sat down with the risk-managers and discovered that they all had reason to vote for the same motion. Yet this is very far from over. The Times quotes one inside as follows: “You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards,” said a current Apple executive. . . .And right now, customers care more about a new iPhone than working conditions in China.” In a recent survey, only 2% of consumers mentioned concern about overseas labor conditions. Apple has yet to face the kind of consumer-interest tipping point faced by Nike, for example. Yet Nikes are worn by runners. Apple users are the most social-media conscious, connected beings of all. We can imagine the risk party pointing this out rather forcibly.

As the quote above suggests, not everyone is convinced. And the release of the list of suppliers (who account for 97% of Apple’s payments) is just a start. Back to the Times: “However, the company has not revealed the names of hundreds of other companies that do not directly contract with Apple, but supply the suppliers. The company’s supplier list does not disclose where factories are, and many are hard to find. And independent monitoring organizations say when they have tried to inspect Apple’s suppliers, they have been barred from entry — on Apple’s orders, they have been told.” Looks like Apple has opened the door just wide enough to need to discover they have to open it wide. Soon.

There’s a broader point here, which is why this is potentially very good news, both for Chinese labor (in developing and applying under public scrutiny model labor practices) and American business. The commitment to quality that has been core to Apple’s success is exactly the commitment needed to revolutionize the “wild west” of labor practice in a nation such as China. It will spread to other Chinese manufacturers who wish to be seen as working at the top end, and competing for western contracts; and also to other western companies – indeed, signing on to Fair Labor is now the industry standard.

It remains to be seen of course whether Apple will bring to this new, higher, and more public level of commitment to supervise the execution of its contracts the same diligence that has characterized its engagement with manufacturers in China and elsewhere, which has itself been a key to its remarkable success. Our brands are always on the line, but now our leading brand has chose to focus the super-trouper on the techno-sweatshops of the People’s Republic, and in especial of Foxconn. The kind of price squeeze that Walmart are famous for (which as we know has led to some sad supplier stories) is now entailed as a quality squeeze on hundreds of thousands of Chinese workers. I hope Apple has the people in place to make this work. And that fresh forces from the reserves of Chinese bloggers and western investigative journalists are rising to the challenge.

But the point is broader still. While many of us hope for a revival of American manufacturing as a component in our development of the next generation of innovative products, there’s no doubt that the next 10 years will see growing use of outsourced manufacturing a la Foxconn; perhaps, on some scenarios, a huge increase of it, if the United States continues to be chief global innovator.

And there are yet other benefits. Enlightened labor practices that are built into the pricing of outsourced products will both help U.S. and other western manufactures compete. And they will build a bridge of goodwill among the Chinese people.

(Revised version of a column originally written for the U.S. Chamber of Commerce BCLC)

Intestinal Fortitude, please! Reporters without Borders to Twitter with Borders

Posted on January 28, 2012 by Nigel Cameron

Letter to Twitter Executive Chairman Jack Dorsey urging him not to cooperate with censors – Reporters Without Borders.

Well, here you have it: a full court press, as it were, on behalf not of twitterati but those who have been there, done that, and are doing it – and representing their colleagues unable to do it.

At one level, I am straddling this discussion. I certainly see how Twitter needs to protect its local staff and traveling execs from nations free and less so with local laws. And the public procedure outlined is estimable; the country-specific technology a smart way to limit censorship. So, if Twitter wants an office in Paris and the French ban Nazi chat (and, soon, Armenian genocide denial), there’s an issue. I would be mightily happier if it were being addressed after @Jack got arrested at CDG. The problem with introducing a general rule ahead of time is, as a general rule, twofold. First, general rules to apply to France and Bahrain and North Korea and the PRC need to recognize huge distinctions. Second, the political world is a world of politics, in which statements – even neat and tidy ones drafted at the urging of a general counsel (as I suspect this was) – have significance that has little connection with the intent or narrow purposes of those who issue them.

So: how does this statement sound, say, in Bahrain, where a slow-burning but sometimes very violent version of the Arab spring is in process? Both to bloggers and tweeters trying to get out the message, and to authorities being paid to stop them? Or Egypt, of course, where there both has and hasn’t been a revolution.

Point is that in the dynamic world of speech yearning to breathe free an essentially bureaucratic, anticipatory announcement that will save Jack at CDG if the French Nazis begin to let loose on his service has already depressed and made anxious many thousands of brave freedom fighters, emboldened authorities in places he will never go anyway, and set a terrible example as other speech services feel free to follow suit.

The plain answer is for U.S. speech companies (that’s the category we should be using here, forget social media and microblogging and the rest; this is about speech) – U.S. speech companies need to adopt four principles.

1. The gold standard is U.S.speech norms.

2. Only in specific and dire situations will they operate as censors. These situations are dynamic. Google’s concessions in China and then move to Hong Kong illustrate this well.

3. They need to work together. There is already a network in place focused precisely on this issue, or there was, but plainly it has failed. We need co-operation at the top level round a table with free speech advocates like the ACLU and Reporters without Borders and the chief executives of our major speech companies and, say, a leading senator from both sides of the aisle. They should set the tone.

4. We need above all some intestinal fortitude. Perhaps speech network staff will go to jail from time to time as the dynamic of freedom works its way out, and western governments and publics will weigh in in their defense. Tolerances need to be probed and tested. And leadership needs not to come from the general counsel’s office.