September 26th, 2006

Trip report - Dubai

Posted by Esther Dyson @ 9:26 am

Categories: Emerging markets, Policy, Politics, geopolitics

Tags:

Just to set the scene, Dubai is one of seven emirates comprising the United Arab Emirates, a sovereign state; the UAE is a federation of jurisdictions with some local laws and economic regulations, and some central ones.  As everyone I met stressed, the UAE is not Saudi Arabia is not Egypt is not Syria is not Iraq is not Iran…and so forth. Although they may look the same from a Western distance, they are very different places. They have some common problems – most notably a regional political situation that spills over everything – and quite different demographics and local politics internally. 

 
The overwhelming impression is not just cranes everywhere, but that most of what is being built is luxury apartments, hotels or shopping malls.  The Emirates have about 2.7 million residents…and 8 million tourists a year.  The tourists cycle through a modern airport that is itself a huge shopping mall.  (The airport has solved the duty-free liquor problem – i.e. that liquids are forbidden on board - by checking it in for you so you can pick it up at your destination’s baggage claim.) 

 

There’s a feeling of commercial ebullience in the air: Real estate prices are going up, stock prices are going up, building are going up… and it’s all paid for by oil prices that are going up.

 

 

Yet there’s unease, too. Dubai is not just a casino-less Las Vegas on the beach; it’s also a capitalist edifice plopped into a culture that considers interest payments immoral. 

 

 

What will happen when all the buildings under construction are finished and a couple of those hundreds of cranes stand idle?  People talk of “Dubai fatigue,” and to the west Qatar (capital city: Doha) is positioning itself as the “new Dubai.”

 

 

Then there’s all the political turmoil, visible most recently in the destruction of 14 years of progress in Lebanon, the region’s most liberal, open country (which I visited in 2004).

 

 

And when will the oil run out? That’s a good question, even though I believe that will take longer than people expect because it will stretch further, and generate more revenues per barrel, as it becomes scarcer.  (More troubling – or promising, if you’re an investor - is the discovery/development of alternate sources.)

 

 

Those tensions are ever-present, and they may account for a bit of the pervasive materialism and the get-rich-quick mentality, which contrast with traditional Islamic values and much of the official story about the place.  That story includes a determination that the Gulf does not want to fritter away its money the way it did during the last oil boom.  This time around, the leaders want to build economies that will be healthy and sustainable even when the oil wealth goes away.  Yes, Dubai Holding is building hotels, but it is also investing in schools and hospitals. Then there’s Media City and Internet City, economic zones devoted to the development of Dubai’s new economy, with special affordances for start-ups.

 

 

Yet I still felt that the Dubai establishment - like so many establishments around the world - pays way too much attention to money and official structures and not enough to people issues.  The population of the UAE – very different from most other Gulf and Middle Eastern countries – is mostly foreign.  There’s a thin upper crust – about 7 percent – of locals, or “Emiratis.”  The rest is foreigners – large numbers of migrant/immigrant workers, mostly in service and construction jobs, from India, Pakistan and other countries, many of whom send money “home.”  (None of the employees of the Royal Mirage where we stayed was a native, but they came from more than 20 different countries altogether.)  Higher up the scale are expats: managers and knowledge workers who ply their trades and live in booming housing complexes: They can rent but generally (until just recently?) cannot buy.  They are the brains of the new economy, while the Emiratis are the owners and foreigners provide capital.  Foreigners can invest, but in most cases they need a local partner with at least a 51-percent interest. Of course, over time things will change, and foreign ownership is permitted within the Free Economic Zones, but you can imagine the distortions these rules must engender…

 

And then there are the real people issues: In South Africa (see previous post), there is affirmative action for a large, underprivileged majority, and the result is that the few well-trained people are leaving government for business posts.  In Dubai, there’s affirmative action for a small, overprivileged minority, who in the past simply played a role as owners or mostly silent partners.  Most of the locals who work, work in government… but the government now wants to push them into more productive private-sector jobs.  The challenges are well described in an excellent Financial Times article I read in the plane on the way home.

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And in case you were wondering about IT: It’s still early.  Businesses are using the Internet, as are higher-income people, but overall penetration is low.

[CORRECTION :  According to this study, Internet use in Dubai is higher than I realized, at 40 percent some years ago. (Thanks, Juri Kaljundi!)  That's much higher than in the surrounding region - but it's still not seen as a mass channel by advertisers.  Maybe they are missing something.  For a more recent view, see this article.]

It didn’t seem worth asking about reselling WiFi to one’s neighbors.  As for VOIP, it’s banned in the Emirates, though it was available in Internet City. It is now banned even in Internet City, but the ban may be rescinded. Stay tuned. 

 

August 10th, 2006

Glad to be here! a long tail for politics?

Posted by Esther Dyson @ 8:20 am

Categories: Long-tail, Politics, Start-up

Tags:

This is my first post under the ZDNet banner. I’m looking forward to the shift from Release 1.0, a newsletter that came out every month (or recently, every three months) to something that’s more timely and less polished… and shorter!

I’ll be covering whatever interests me. My goal is to cover "release 0.9" - things that aren’t quite done yet, whether they are ideas, companies or technologies.  I like things *before* they are finished or perfect or well understood. And I plan to write a lot about things outside… not just outside Silicon Valley, but outside the US. (Amazing, eh?)  

Right now, I find it hard to get excited about Web 2.0 in general.  There seems to be a multitude of start-ups promising video, virality, user-generated content, reputation systems and more….  And I can’t tell any of them apart.

But there are also lots of examples of people starting really wonderful services that transcend the buzzwords in order to do things in particular. 

Here’s one that I have been in touch with lately, which provides a pretty good example of the kind of thing I like:

 It’s not ready yet.  It’s not Release 1.1 of something that exists already. And it’s clever.

In this case, it’ss Voter.com (but note, the site isn’t ready yet; this is still pre-alpha).  Voter.com (an old name now being applied to this new start-up) was founded by Rick Cowen, a serial *non*-Web entrepreneur with most of his experience in advertising and music (i.e. Los Angeles).  With the smarts of a novice, he has designed a system that is essentially a campaign tool in a box. He calls it a "political appliance."  It is distinctly not  yet another discussion board for earnest liberals or conservatives, or even an earnest discussion board for both liberals and conservatives. 

Instead, it’s a tool for a politician or a non-profit leader who wants to amass and communicate with an audience of voters or donors, but with more discussion and position papers and content than your typical nonprofit CRM system. It includes tools for "message development," market research, advertising, contact management and fundraising - basically, the essence of a  campaign cycle. 

To be candid, when Rick Cowen first showed up in my inbox (and then persisted through the months despite my neglect), I was expecting a sincere, passionate but awkward techy with a mission.  Instead, he’s a sharp-talking ad guy who wants to make money offering a useful service to an underserved long tail – people running for dogcatcher, public advocate, school-board president.  (Joe Lieberman could have used it, for example, to get a sense of how his message was being received - and perhaps to listen better to messages from voters…. But it is really designed to help  someone who wants to become the next Joe Lieberman to get a start.)

For $19.95 a month the would-be candidate gets the tools to solicit voters, explain his positions, raise money and so forth - just as an eBay seller can get his own store, either as a main base or to supplement an existing business. One-time-use mailing lists, fundraising and money-management tools and the like are extra.  The precise charging model is different from eBay, but the overall impact is the same: more little guys can enter the market and compete effectively with established, bigger incumbents.

That’s for "candidates." For regular (free) users (called "voters"), there are tools for creating one’s profile and stating one’s views, tagging interesting posts from candidates and other voters, and (over time) all the usual social-network widgets.  The voters can go online and compare the various candidates, find out who in their area is running for what, communicate with other voters, ask the candidate questions. The candidate’s answers get posted for all to see. The candidate can also upload and promote podcasts of news interviews with himself, or make his own statements on whatever issues he cares about. 

If you think we need better politicians, this may be part of the answer: Making it easier for people who are not professionals to try their hand.  And if we don’t like the new entrants we don’t need to vote for them, but I find it hard to believe that a broader selection couldn’t help.

Like Spotrunner for small cable-TV (for now) advertisers and Google ads for bloggers and small advertisers, it’s giving the little guy capabilities that were previously available only to big guys – or incumbents.  The question is, will more politicians and more diverse politicians lead to better politicians? the quick and easy answer is that it’s up to the voters - but they have to pay attention.