by Dana Blankenhorn
  Volume VI, No. LII

Next Year's Clue: The Century of China

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Next Year's Clue: The Century of China
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
Next Year's Clue: The Century of China (Part II)
Second Prediction: A New Paradigm
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2003 a better year for yourself, your business, and your family.


For the Week of December 30, 2002

When I started trying to cover the Internet, 20 years ago, it was a complete backwater. I had the story all to myself.

But I had a hard time getting my arms around it. It was hard to even get an Internet account. I didn't know who the leaders were, what the purpose might be, and where this might all be heading.

I was as blind about the Internet as Americans are today about China.

When I look at the world I fast-forward a bit and seek out winners. They're hard to find right now. We're bogged down in an interminable war, and have yet to face the sacrifices needed to win it. South America is destroying itself. Europe has turned inward. Muslims may not have expected the Spanish Inquisition but that's what they're living in. Japan is rapidly aging. India looks good, but it faces the challenge of an implacable enemy to its north, and its own Hindu religious intolerance.

The only clear winner is China. China's economy is growing at 8% per year - it will double in size before the end of the decade. It turns out 250,000 electrical engineers each year. China is becoming the dominant player in manufacturing, including high-tech manufacturing. China has one of the largest, and certainly fastest-growing, middle classes in the world. China has political stability.

Next year China will dam its biggest river. Next year China will probably send people into space. By this time next year we will be writing about the "year of China," but we might have seen nothing yet.

Yes, China has big, big problems, mostly of its own making. Its aging autocracy mixes the worst aspects of the Vatican, the CIA, and the old Kremlin. Its civil authority is hopelessly corrupt. It remains the most Imperialist nation this side of the United States, with designs on Taiwan, with its jackboot on Tibet, and with its crushing of democracy and liberty in Hong Kong.

China, in other words, is a mass of contradictions, on a massive scale. It's a lot like America itself was in the 1870s, the America of Boss Tweed, the Gilded Age, and the Indian Wars. China is destroying its own environment, destroying its heritage, threatening its neighbors, and getting rich, all at the same time.

What China lacks today is software expertise and vision. Its rise is still too much like Japan's was, built as it is on manufacturing, on low wages, and on export-driven policies that are also like America's were in the 1870s. (We didn't start weaning ourselves from the import tariff as a government finance mechanism until the 20th century.)

What America got at a comparable stage in its development was a wealth of invention and inventors. Thomas Edison, Alexander Graham Bell, and Nikola Tesla were just the vanguard. America had a host of entrepreneurial inventors, and capitalists willing to back them.

Will China de-centralize enough to nurture these kinds of people, or will it first demand political obeisance? Right now it's doing everything it can to bring its "lost engineers" back home from the United States. The incentives there could be an indication that it's willing to do what it takes to succeed.


SSP (Shameless Self-Promotion)

The book is here . You may now buy it.

I've gotten my first big new gig in years, at MediaPost commenting on, of all things, the off-line media. (What fun!) This goes alongside new orders from BtoB and Mobile Radio Technology . Things are indeed looking up. Boardwatch was bought last week by Light Reading , which plans to close the print edition (which I don't write for) and emphasize the online component (which I do write for). We'll see.

You can follow the continuing story of The Blankenhorn Effect on my "Moore's Lore" blog . I still write for Boardwatch , Boardroom , Marketing Profs and Thom Reece's eComProfits . I still produce I-Strategy for Adventive

Tell your friends, clients, partners, and Congressperson about You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know .

Remember: it's journalism that keeps the Clues coming...


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Takes on the News

Next Year's Clue: The Century of China (Part II)

What does China have? It has a lot of chip plants. It has a lot of inventive engineers. It has, mainly, a lot of potential.

Of course China also has many of the ingredients that slow the changes Moore's Law invites. Censoring the Internet and jailing people for e-mail causes self-censorship among the masses of people, turns your best and brightest into enemies of the state, and slows innovation across the board. Stifling dissent on behalf of a corrupt Mandarin class, along with the reporting needed to ferret it out and stop it, also slows innovation.

The way in which China hopes to harness idealism and deflect innovation away from areas that might threaten the state is through its space program . Current estimates are that it will launch manned space flights in 2005, and reach the Moon in 2010. I think that's wrong. I strongly suspect China is far ahead of that pace , and an Australian article in May predicted China could have a permanent space station in a few years .

China's program is already the envy of many Americans . It gets more done with less money than even the Russians. Its program has immense military implications which may be why, before China does put people in orbit, it wants to have all its ducks in a row.

A space program can do many things for a nation. It spurs innovation. It concentrates the minds and imagination of young people on solving problems. It turns engineers into heroes, increasing demand for technology education. America's Apollo program was once described as "the best investment in technology since Leonardo Da Vinci bought a drawing tablet," and I happen to agree.

Of course, China's entry into the space race can't be a secret, the way so many things there can be kept quiet. It will be a political thunderclap the likes of which haven't been seen here since September 11, 2001.

And that's a good thing. Because the societal attributes needed to beat China, primarily liberty and economic flexibility, are precisely the opposite of those we think are needed to beat Al Qaeda. If we become more like China, with our TIPS programs, our vast military budgets, and our quest to control everyone all the time, we will lose to China. China can do control better, and China has four times our population.

So space is a card the Chinese may be reluctant to play. So long as they don't play it, they keep coming in under our radar. They will play it when they have to, when the internal contradictions between chained minds and an open economy become overwhelming.

And that day, not September 11, 2001, is when the 21st century really starts.


Second Prediction: A New Paradigm

It's easy to predict what will happen with China. It's not so easy to predict a new paradigm of computing.

But I've predicted it before, and I'm predicting now it will appear in 2003.

It starts with a "home server," something that connects the incoming broadband networks of wealthy homeowners to their internal networks. Basic features include security, anti-viral software, privacy protection, anti-spam software and a firewall.

The extra slots in the server will support wireless networking applications yet to be developed. Single-chip computers acting as sensors and cameras are linked via the wireless network to the base station. Among these will be "interface chips," DSPs that can "hear" a short list of spoken commands and respond with actions.

Each application has its own commands, such as "I'm home" and "I'm leaving" for a basic security application, to "watch baby" for a child protection application (turn on close-in monitors against SIDS and colic, turn-on cameras to keep an eye on the kid during the day).

I'm not going to describe all these applications - use your imagination - but appliances, lighting, heating and home electronics devices all need interfaces. Many of the sales will be of the b2b variety - there are lots of possibilities for surveillance on a building, development, and even city level here. (Voters and courts will, in time, decide how far to go.)

This won't happen all at once. Demand is a hockey stick, growing slowly at first, then exploding (probably in about three years) before becoming a standard feature. I'm only expecting some basic product introductions next year, and a relatively small, savvy audience. In terms of the PC revolution, it will be the mid-70s all over again. Watch for hobbyists.

But it will happen. You can rely on it.


Clued-in, Clueless

Clued-in is Intel's move to start spending $150 million it has for Wi-Fi start-ups despite delays in its own delivery of the necessary hardware. The first recipients are STSN of Salt Lake City, which is installing Wi-Fi access for Marriott Hotels (an important link for the Cometa Network) and Telesym of Bellevue, Washington, which makes a cell-phone add-in for Windows-based PDAs .

Clueless is the award of a patent on "Buddy Lists" to AOL . The idea of "prior art" apparently is lost on the Patent Office these days, because the idea of a "Buddy List" (the technology, not the marketing hype) has been around since MIT wrote Zephyr in the 1980s.


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