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Florida does not get it – Real estate development April 12, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Recession.

Coming soon to the Sunshine state: the sunshine city.

There was a big announcement from sunshine state about a major real estate development. This will be an eighteen thousand (18000) acres development for eight thousand homes along with retail, work space and other amenities. Trying to put lipstick on this pig by announcing a 75 MW solar energy plan by the  Florida Power and light, utility industry for 400 million dollars. You can read more by following the link below.


Real estate development claims that everything will be in walking distance including work, retail, and play. This will be model environment friendly city. A former sports player is involved in this development.

Florida does not seem to get it. Let us see, 18000 acres is about 100 plus sq miles. You can walk to every facility under a hot sun riding a fast horse. How else will you walk 10 miles and feel good about it? Even if you are ready to believe that they will keep half open space, there is probably 4000 acres of golf and park. How much water they will use for rich 8000 families?  They call it socially responsible and sustainable? Let us go ahead and put state of the art electric train system funded by government to make their life comfortable at the expense of Tax dollars. I sure hope they are not using any of the  energy independence dollars to turn their dream into reality. It seems like a scam not a sustainable real estate project.

The history of Florida is littered with spectacular, landscape-changing proposals that never made it past the drawing board. Real estate industry is flooded with so called old business, politicians, and sports star (including gambling). We all know if the project is not feasible on the economic basis, political connections are always there to help.

What they do not understand that world is changing. People are looking for great living experience, affordable, and environment friendly.

Real estate industry has to wake up and change for the new reality of the world.

Bipin Agarwal


Twenty Minute Lifestyle to accelerate Glocalization March 25, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy.

Glocalization is a key to recovery of the world economy.  As I have written before it is not a question of, if it will happen, it is matter of how long will it take to happen. There are lot of global organizations which would like to maintain the status quo of globalization, because it serves their purpose. In addition to above, corruption in the developing, under developed, and poor countries make it hard for glocalization to take root. Most of the government in these countries are not as transparent and people focused as they need to be to support local economy. However it will change because people will demand it.

Lack of infrastructure  is a one of the most common reason that companies are are not able to start there operation. Waiting for government to build infrastructure in the entire country in not feasible and possible in the time frame. Twenty Minute Lifestyle based micro-city development offers a unique opportunity for these countries to develop infrastructure in a focused manner to support local economy. Financial institution supporting these countries can see the result of their funding if the funding is used to develop these micro-cities.

I am here at Skoll Forum for social entrepreneurship at Oxford.  I had an opportunity to interact with people from all over the world and discuss the concept. I got a strong endorsement of the concept and they would like to see their country to adopt this approach. People from Africa, Hungary, Asia, central America, even developed world would like to see the quality of life offered by Twenty Minute Lifestyle to be made available.

One good example of Glocalization is the local restaurant industry in Europe including Rome, Vienna. You will find clean, good local shops owned by local people and running them as a successful business. People often give example of how a Wallmart creates up to 150 jobs and increases tax revenue as a example of the benefit of globalization. What they do not want you to know that actual tax revenue is less or same before Wallmart showed up. While there could be 100 small business and making respectable income, now there are 150 minimum wage jobs, with all the profit shifted to Corporate coffers and china. WAllmart is doing a great job of re-distributing the wealth, take money from local business and people and send it to corporate executives. Wallmart does deliver lower cost goods successfully at the expense of local business. Wallmart could easily be branded as a biggest destroyer of local business. STARBUCK, Mchonnald, Subway, Pizzahut, Domino, are no different. Government should force the chnage of ownership structure. It is OK if back end is centralized, local shops should be owened by local people.

One of the biggest gift of globalization is that it has destroyed the local culture and shopping experience of countries, state and community. You can now travel anywhere in the world and eat same food and buy from the same department store with no passion by the employees who are working for minimum wages.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Incredible Colorado – Destination for Twenty Minute Lifestyle(TM) March 17, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Recession.

Incredible Colorado – We have a time of great crisis. Individual states are competing to sustain and improve their share of GDP and population. At a time like this, political and business leaders have a great opportunity to provide a compelling story for businesses and people across America to stay in or move to Colorado and make it a destination state. Twenty Minute Lifestyle (TM), is that compelling vision. This vision supports the creation of communities where people can work, live, play, and have access to all the amenities for quality life within the community and cuts down the wasted effort expended in commuting. Thank you President Obama to come to Colorado to sign the bill and recognize Colorado as a Energy economy state.

America is going through a transformation. Every transformation in the history has resulted into dis-location of economic activity. Colorado has gone through oil bust, mining bust, and telecommunication bust. These experiences along with focus on infrastructure and education have created an opportunity such that next twenty years belong to Colorado as far as economic development and quality of living is concerned.

Colorado is uniquely positioned to participate in Energy economy, tourism, and technology innovation. That happens to be the focus of Obama administration as well. Great landscape, educated workforce, beautiful mountains, and a diversified population. Colorado has little bit of everything from telecommunication, mining, tourism, defense and now a big force in alternative energy.

There have been several attempts to create a distinct local identity and community experience in Boulder, Greenwood Village, Highlands Ranch, Stapleton, and others. Most of these communities have been designed around a commute based lifestyle and lack the inclusiveness needed to create a fully vibrant, stable, and viable community. The lack of a strategic vision in planning shows up in very fundamental ways – , Boulder (no planned affordable housing for young families), Highlands Ranch (more of residential commute based community only), Greenwood Village (only for upper middle class and rich). They all lacked strategic vision, planning and local government support to build an ecosystem and community that can withstand economic ups and downs and combine a earnings from and global economy with a fully integrated local spending economy.

A Twenty Minute Lifestyle community should comprehend that a vibrant community is created when a diverse community is created that can address the lifestyle requirements of young and old, single and married, rich, middle-class, and younger earners just starting out, and ensures that people will have ample outlets for spending their income in the local community. In order to support the income needs of this diverse, vibrant community the local government should attract big and small businesses which focus on the new economic paradigms of biotechnology, alternate energy as well as the tried and true staple businesses. Local government should ensure that retail areas are integrated into the communities (and not set up as strip malls) with access to pedestrians and cyclists, an ambience that encourages people to get out of their cars and walk and mingle with their neighbors, and creates foot traffic for retailers. In the end Americans will not give up their car based lifestyle unless the alternate is a more attractive and rich lifestyle.

Riverwalk development project near Fort Collins, a brainchild of STONERCO, and Turnky developments is a perfect model project. This 900 acres development will provide an environment for companies to have a walk to work environment, affordable housing for families, access to education, retail, health care, and sustainable living with a focus on environment. Earlier attempts by Stapleton, and Highlands Ranch while successful as real estate development are not in-line with the energy economy, and future reality of sustainability requirements, affordability, quality of living. Riverwalk will be the benchmark; defining how future real estate development (Twenty minute lifestyle micro-cities) will happen in Colorado, and across the world. Riverwalk will be the first model micro-city in Colorado.

Wish you all the best, Riverwalk, and Incredible Colorado!

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Will Glocalization kill Globalization? March 10, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
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April 30, 2009 update

Today Chrysler announced bankruptcy. I think this is a good news for America. Rather then going through the pain every day, this will help the employees and company. Shareholders and debt holders will not get much.

Is GM next? This could a warning to bond holders of GM. Unlike Chrysler, until now no body has been lined up for GM. Nissan had expressed interest.

You should expect that there will more local manufacturing of car, irrespective of the owner. This is a great day for Glocalization.

As I had predicted, Glocalization will accelerate US economic recovery.

Bipin Agarwal

March 10, 2009  update

Discussion about Glocalization is over. It is going to happen. In fact, USA will be the biggest beneficiary of this trend in the short and medium term.Long term picture is not great.

Recent article in Financial Times by Krishna Guha and others called this trend as de-globalization.Thank you for endorsing it, even though they are late in expressing opinion.

Talk is cheap, while everybody including G-20 will talk about the open trade, free trade, etc. The fact that Bank of America (so called global bank) has to withdraw the offer letter from the MBA student studying in US is the real begining of what is coming.

Currently, US will benefit if any manufacturing, or service activity shifts to US.  With government involved in financial services, health care and manufacturing, it is given that activity has to happen in US.  Risk is that US will go too far into it. Recent action by Bank of America to withdraw the job offer to MBA student studying in US, who are not citizen, is alarming. Are we going to destroy our education industry?

Long term implication of  glocalization for US are not great. At the end of the day our behavior will encourage the other countries to follow the same policy. Demographic of the  population is in the favor of China, India, and other countries.

Glocalization will accelerate the decoupling of the rest of the world economy from west.  It will be good for our economic and political leaders to discuss this topic in detail and put the right policies in place as opposed to have the policy of the day with an eye on the next election.

Feb 2009 update

Debate about the Glocalization is over. Now it is a matter of execution. How long will it take for all the countries to put the regulation to make it happen.

It is true that some industry will feel the impact more then the others. International shipping, heavy manufacturing, energy, financial services will be more local. Technology industry will continue to be more global and will not be hit as hard from glocalization.

New budget proposal from the US administration has set the foundation for glocalization war around the world.

  • Government will start taxing the earning of foreign operation of the companies. This will have far reaching effect on the corporate structure and investors sentiment.
  • We should expect that there will be lot of pressure for creating local jobs across the world, meaning more protection centric policies.
  • GM will separate the Europe operation and SABB subsidiary, eventually leading to local government bailing them out. They are going to do this just to benefit US? Not really. There will be increase in import duty for luxury items such as cars, etc.
  • All the emerging countries, African nation, Eastern Europe will start shutting out China for production outsourcing in the future.
  • Banking industry will be much government owned – net result will be local financial services industry. US will create lot of noise, but no body will care.
  • UBS is the wild card. If this financial institution is shut, there will be lot of money that will go back to poor countries. Majority of illegal money belongs to politician and business people of poor or emerging countries.
  • US dollar will de-value significantly over next decade, making much of the out-sourcing irrelevant. US and Europe will continue to prosper because the quality of life is much better there.

Jan 2009 – I had written this before Obama budget was proposed.

World Economic Forum at Davos is in full swing. Politician, executives, policy makers, bankers are busy at Davos worrying about the impact of financial meltdown and how it may change the behavior of the countries to introduce protection, regulation mostly under pressure from the population, politician worried about getting re-elected, and domestic industry.

If governments are being expected to inject substantial amount of resources (tax dollars) to resurrect their economy, their new shareholders (the taxpayers) will demand that the resources are used to create local jobs.

Glocalization will be driven by people

There has been demand in US to force the companies to use local labor and products on stimulus related projects, There are protest across UK by energy workers against TOTAL bringing the foreign labor to build and operate plan in UK, Indonesia is taking the position that if pharma companies want to sell their drugs, they have to make them locally.  China, Russia mostly do not have to worry about this, because not only nobody is allowed to migrate there, but also because of the nature of their government. In any case mostly immigration is more prominent by the people in search of better  life style. Some countries will do more explicitly, some will do it softly and still preach the others that they should not do it depending on the local economic, and political environment.

Glocalization will accelerate the maturity of decoupling

One big lesson for the countries that have benefited in the last few years from the export economy, or commodity boom have learned that while you can generate surplus by sending your stuff to west, the IOU you get in return may not worth it.  Countries need to learn that they need to balance the export and import. Economic growth is not sustainable unless there is domestic consumption.

We all know that basic necessity of life can not be centralized. Is it possible to put all the clothes in a warehouse in China and every body in the world will feel dressed? Can you put all the food in storage in US and there will be no hunger anywhere in the world? Can you put all the cellphone in Nokia headquarter and everybody will be connected? Life demands Glocalization. Does it mean the era of globalization is over and the new era of Glocalization is about to start in a big way. Question is not if it will happen, it is just how long will it take for it to happen.

I sure hope big shots spend considerable time in Davos to discuss this issue rather then just rub shoulders.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal


How will America create 3M job in four years? March 5, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.

Why Did America lost jobs and how the new jobs can be created. Everybody is asking.

America has lost more then  three million jobs in last two years. Everybody is worried about how many more jobs will be lost? What kind of jobs will be created by the Obama administration? Future economy will be energy economy, digital economy, or agriculture economy? Will job be created at all or it will be just political positioning? What effect the glocalization (not globalization) will have on US? Given that about fifty million jobs have been lost in the world and growing young population, is there a possibility of social unrest that will change the landscape of how world will look like in next few years?

Let us first look at  why and what kinds of jobs are being lost in America.

  1. Manufacturing Job Losses
  2. Service Job Losses
  3. Real estate construction
  4. Productivity Improvement
  5. Currency Arbitrage

Manufacturing Job Losses – Seems obivious to everybody. Low tech manufacturing jobs related to clothing, items of daily usage, applicance, what we use in kitchen, all these jobs are gone. Most of them moved to countries that have abundant labor and reasonable or good infrastructure. About a decade ago we started using high tech manufacturing, some of the R&D, etc to emerrging countries because of availability of talent in thouse countries, low cost primarily due to currency arbitrage, our concern for environment.

Service Job Losses – We started loosing service jobs about a decade ago.  It started with talent hortage such as Y2K and then expanded to broder area of Information Technology services, Call Center outsourcing, Business Process outsourcing. Key drivers for these job loss werer the availability of talent at much lower cost (currency arbitrage),  focus by business on bottom line, competition from global companies.

Real Estate Construction – Cheap credit combined with greed by business, home owners, failed regulation caused the real estate boom of unprecendent magnitude in America. Joe the Plumber, could make as much money as a college  graduate. Now that the construction has stopped, real estate (both commercial and residential)  is available for less then the cost of construction. Huge number of jobs have been lost. It will take at least five years to re-start the new construction activity at significant level unless there is dramatic change in the population, living style or some external unknown factures.

Productivity Improvement – There has been a great amount of productivity improvement as a result of technology changes that have occurred in last decade. Automation of supply chain, cell phone, IT applications have automated lot of task that were manual.  It had a big effect on corporate productivity and quality of life improved. Down side is that lot of job became redundant. Financial services company, health care company, retailer eliminated lot of jobs as a result of productivity improvement.

Currency Arbitrage – We in America enjoy the benefit of dollar as a world currency. We are able to afford more toys, electronics, cloths because they are made in the countries where currency is not strong compared to dollars. Corporation had no choice but to move these jobs offshore (read job loss) to give us the luxury.

What kind of Job American Can create? I have identified several different areas that will create the proclaimed 3M jobs in four years.

  1. Changing Family Structure
  2. Alternative Energy – production and maintenance
  3. Housing renovation – Energy efficiency
  4. Manufacturing – Next generation automobile
  5. Small business focus
  6. Real Estate & Infrastructure Development
  7. Information Highway
  8. Rural development – Agriculture economy

Changing Family structure – West pride itself into being a productive society with equal rights. What about responsibility, and duties. Is the purpose of life is just to get a job? what about family. West lot of unemployment is because both parents want a job. We all want to have a house and not home. A  family centric society will make our life experience more full filling, more time for kids, friend, and community. We will need less job.

Alternative Energy (production and maintenance) – renewable energy production based on solar and wind will not only reduce our dependence on imported oil but also create local jobs for creation and maintenance of these facilities.  This coupled with investment in energy infrastructure (smart-grid) will create significant jobs.

Housing renovation – Energy efficiency – Improvement in technology for solar energy combined with government incentives is making it feasible to install solar panel in houses and commercial buildings.  Retrofitting of existing real estate with solar panel and on-going maintenance will create jobs.

Manufacturing – Next generation automobile – Our Automobile industry that has been captive to oil industry and union is going through a much needed transformation. Since the government is investing significant money (tax dollars), we can expect that next generation automobile and associated will be produced in the country. Foreign company also realize this that is why they are setting up plants in America. After the restructuring, it should lead to new job creation.

Small Business Focus – Our capital market structure encourages big business at any cost. recent merger of Pfizer, wall mart, three big banks, are just few example.  We need to create more focus on small and medium business with local ownership. One Wall mart mega store can pretty much give you most of daily needs, is run by twenty to fifty employees earning low wages and busy making money for jet flying executives.  If each of the store is split into different departments and was locally owned with wall mart was just being the back end, that will keep more of the money at local level and create more jobs. What Wallmart has done to local store, Starbuck has done to local coffee shops, Inbev has done to local brewing, Best Buy to local electronic shops. Let America create more small and medium business that creates more local jobs and prosperity.

Real Estate & Infrastructure Development – Obama administration is allocating lot of money for highways and public transportation. People have learned that living in house where you have to pay big maintenance cost irrespective to your income, is not a great idea. We should see lot of interest in community living based on condos and apartment. This will be the next real estate boom. This will create jobs in construction industry.

Information Highway -We all appreciate the impact of highways that connected the different part of the country. People could see each other and caused a boom in travel, tourism, and movement of good. Same is true for information highway. Impact of information highway on our economy is not well understood yet. Productivity improvement, ability of people to think different is huge. Look at what Akamai and iPhone did to entertainment and publishing.  Look at what Ebay did to auction and Amazon did to books. Potential to create lot of new jobs.

Rural development – Agriculture economy – This is one of the area that has received the least attention in the 20th century.  Over crowded cities as a result of pursuing a dream of quick richness and fast lifestyle.  If you have a tractor, solar energy, access to information highway, few acres of land, few cows, opportunity to interact with friends and community. This is how large part of unemployed should be made productive. In the dream of Mahatma Gandhi, this was called village. American need to make rural area attractive and respectful. Creating a rich life using a Rural economy will be key to creating employment.

Conclusion – We need change at individual, community, business, and government level. We can create more jobs and at the same time, change our thinking and family structure so we do not  need so many jobs.  One of the significant reason that both member of the family have to work is because without that you can not pay your house mortgage, car mortgage, insurance (house, car, health care). If we align our needs based on family centric society, we will be much more happy family, community, and country. Sustainable community, sustainable business will create a lasting happiness.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



How Can American Company be successful in world ? February 19, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Recession.
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American company are loosing competitive advantage in the global economy because they are short term focused when it comes to pricing their product. They tend to price the product in dollar as opposed to local currency.

Starbucks will have their latte for 5 dollar in America and for 5 Euro in Europe and for Rs 250 in India. That makes no economic sense. Same is true for Proctor and Gamble(??) and pfizer, and host of other company. We have to learn to price the product for local economy and get the market share otherwise it is a matter of time before party is over. Look at HTC with google phone .vs. iphone form apple. Some of the company such as HP, IBM have done a better job with product pricing. That is reflected in their market share in the world.

America, let us be strategic and long term focused. let us not take our same short term focus (next qtr) to the world. We will be cruhed.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Amrerica could be Super-Power again in 2030 February 9, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
1 comment so far

Vision 2030 – America Super Power again

I am sure lot of us in America may be thinking this is the dumbest statement they have ever heard.  Are not we are already a Super Power ?

Answer is – no we are not. We were a Super Power few years ago until  we got into Iraq, we did not have bankrupt financial services institutions, debt laden US government, and country in recession.

First I will talk about why we do not have the Super Power status in the world irrespective to what Washington may want to think, then I will explain how we could regain the Super Power status by 2030.

Why are we not a Super Power?

Defense Power has lost its relevance. Stock pile of nuclear war heads we have in our control? That is not good enough, several countries have enough nuclear ware head to destroy the entire world several time. We can not use these weapons any way. If we use it once, we are finished for a long time to come.  If we are really so confident of our defense capability, then why would we worry about Iran blowing up a fire cracker in the sky and scaring the world that it is nuclear weapon. Obviously Iran is not worried about our nuclear power, by the way so in no other country in world.

Economic Power – Welcome to real world . I do not have to put all the information that has been well described by press, economic experts, and our brain trust at Wall Street (in-spite of the spin government keep giving to American public and world).  In a real world economic superiority is described based on your asset, and not liability. Would we call Warren Buffet as the Oracle of Omaha or richest person if he did not have 30 billions of asset but liability. You may have read about two of the richest family in Germanu go bust because theie liability were more then asset and they could not re-finance thir debt. That is where lot of household in America and the country is at. America long term liability (including current debt, future deficit, social security, and medicare liability and now broken balance sheet of the fed with all the toxic asset from failed banks and more to come) is about 50 plus trillion, our GDP around 13 trillion, but that does not matter. US government collection of tax is only 5 trillion and they have to service the debt and liability from their income. (GDP is almost irrelevant, that is not the income of the government).  Even a C-grade student of accounting will tell you that we are close to bankruptcy if not already there.  If you do not beleive me, look at Davos reporting, most popular person at Davos, Prof Nouriel Roubini will tell you that we have a failed financial system.

Our Coalition of willing

How many country do you think they are real friend of America now given our bone headed foreign policy of last eight years, our strong desire to play politics in every country, etc. Our Coalition of willing contributed max 10000 troops to Iraq while we sent about 130,000. You can figure out the leverage we have.

The argument such as Intellectual property, brain trust, our free market, human right, freedom of expression are some of the very strong reason to believe that we are still a Super Power. There is saying that King always like to believe that he is a king after loosing the war and evenif he is in prison. I do not think anybody will pay attention. Good news is that there is no Super Power right now. If China thinks they are Super Power, that is just another bone headed thinking meant for consumption by local people in China.

Moral Authority

We have lost the moral authority by engaging in the war on the people who have noting to do with us, protecting and promoting a financial system and regulations that has destroyed the savings of the entire world and made us the biggest debt holder to world.  Our value system is broken, we do not take our responsibility at family, community, business and government level seriously. We are always worried about our rights and not responsibility.

How we will become a super power by 2030.

After all the glowing description of America above what makes me think that America will be a Super Power again in 2030. first of all let me make it clear that 2030 is not a magic number. Point is that it will take at least 20 plus years for us to get there if we do the right things. It is going to be hard but doable if politician, interest group, and lobbies (actually they all are one and the same) start doing the right thing.

Following is the list of major areas of reform. Great news is that all of these are in our control, we do not have to depend on any country to help us make it happen. Those who partner with us will benefit anyway.

  1. Energy Independence
  2. Business Model Changes (Social Entrepreneurship)
  3. Health Care Reform
  4. Infrastructure Spending
  5. Social Security and Medicare
  6. Promoting Medical Tourism in emerging and under-developed countries
  7. Education  and Education institutions (innovation machine)
  8. Family structure and responsibility
  9. Immigration Policy
  10. Defense Policy
  11. Dedication to Humanity by American

I will try to elaborate each one of the focus area and potential impact on US financial and our standing in the world.

Energy Independence

Energy independence is the mother of all initiative to make America energy self sufficient.  It is interesting that Google also has laid out a vision 2030 for clean energy. My forecast is that energy independence will include energy conservation, alternate energy.  This area is likely to have the biggest  impact the US economy.

Potential to reduce the import of oil (our largest import item), ability to create jobs, reducing our future environment cleaning spending. Our energy policy will directly impact our manufacturing activity of automobile (electric, hybrid), our investment in smart grid. Investment in smart grid will make our energy distribution efficient, have the potential to decentralize the energy generation. Our energy policy will free up our defense dollars that we have to spend to protect our energy supply.

If Obama administration has to pick one priority for future growth of America, then this is it.

Business Model Changes (Social Entrepreneurship)

Our free market business model that demands constantly increasing revenue and profitability leads to short term focus.  Executive are focused on nex three monts. and not long term. When they can not grow profit they do mergers and cut cost to shore profitability at enormous cost to society.

Business model (social entrepreneurship) that balances the value of all stakeholders including shareholders, employees, community, government, environment that creates sustainable business is more important then the constant focus on increasing revenue and profitability. A partnership of business, philosophy, politics, and community can create a sustainable business model.  Good news is that it is a big focus of lot of business and educational institutes.

Prof Thomas Neal is leading effort in this direction at Oxford Business School.  There are lot of other initiatives at several universities including Yale, Stanford, DU, etc.

Health Care Reform

We do not have to debate that our health care system is highly inefficient. Only 30 to 40 cents on the dollar is spent on actual care. No different then government and Red Cross. Private sector was supposed to more efficient?

There are four legs to this table, Patient, providers, insurance company, drug and supply companies. Currently the interest of these stake holders are not aligned. 1) Patient want free health care, 2) providers are worried about the legal liability and this is one of those specialty where doctor want to be paid a lot irrespective of his or her capability, and labs want to do maximum test, 3) insurance company make most money when they deny you the care. ideally they would like to collect insurance premium form those people who do not use the health care system, 4) drug and supply company want to sell the most expensive equipment and drugs, irrespective to your needs.

Each stakeholder wants to get the best part of the deal without paying for it. Goal should be to spend the health dollars on needed health care and reduce the overall spending and improve the care.

Good starting point will be make health insurance available to everybody using the giant self funded (not for profit)  insurance pool with life time cap. After the cap is reached, the premium goes up. Insurance company are paid the administration fee for managing the distribution of health dollars based on the number of patients they are managing and also managing the care and drug supply like they do today except their admin dollar will be capped. Providers should be rated and should be paid based on the rating they receive from patients. Patients should be encourage to have a lifestyle (exercise, food quality). Provider should have access to all the electronic record of a patient.

Social Security and Medicare

This is one of most underfunded liability that US government has. Raising taxes to continue this benefit does not make any economic sense. Government need to lower the benefit  and increase the age when people are eligible. Also  government should save the current surplus into a fund that is available for the beneficiary irrespective to the financial status of the country.  Government has not been upfront and almost dis-honest in telling the state of affair to the people who need it most.

Promoting Medical Tourism in emerging and under-developed countries

This is a very emotional issue for lot of people.  We all know that our medical cost is high and large share of that is spent on the people who are above fifity and have retired. Even if they deserve the best care, it does not have to be located in America. What is wrong in building  serveral micro cities in good location in the countries that are not developed. South America, Africa, other coastal areas. Our people will get good care, our health care cost will come down, it will also have positive impact on the economy of these countries.  Our dollar will go long way. Rather then importing nurses and doctors, why do not we send our patient to those countries. Everybody wins.

Education  and  Education institutions (innovation machine)

Everybody will agree that education is a key component for progress of any society.  However most of the government around the world do not demonstrate it through actions. They spend lot of money on defense, infrastructure and a very small percentage on Education.  America has some of the most advanced educational institute both at national and state level. There is lot of brain power sitting in these institutes. It needs to be harvested by making the resources available and making the education as top priority and teaching as a most respected profession.  American can lead the world by making our institutes as the most accessible and wanted place.

Family structure and responsibility

Immigration has made America as a melting point for different culture, faith and back grounds. However, western culture has become synonymous with wealth, pleasure and luxury. Our Family system is broken. We have become a society that is focused on “I” , we need to focus on “US”.  It is not funny that US also means UNITED STATES. We need to become a family centric society.  As we become such a society our dependence on government will reduce. We need to save as opposed to spend the earning of our future generations.

Immigration Policy

American has a population of about only 300 plus million, that is less then 5% of the world population. We have lot of land and less people. We should allow selective immigration of 100 million people (educated and non educated) from all over the world to give us the critical mass. If we do not know how to do, just ask Wall street firms, they do M&A all thye time. We have to change our social program before we can do this.

Defense Policy
America has to change the focus from defense spending to peaceful living. We spend too much money on weapons and military and war hero.  We can cut down our spending by 50% and we will be as safe in world as we are today or we ever have been. We have fought lot of wars to protect our energy supply, However if we become energy independence, we do not need so much defense spending.

Dedication to Humanity by American

Common American has a good heart and is very accommodating. We need to promote our softer side to world and create more Peace hero then War hero.


America has the potential. We have the brain power. We have good people. What is needed is a close integration of values across stakeholders from people, business, politics, and environment. If we leave out any of these stakeholders, ii would not happen. Do we have the will power? Can we do it? YES WE CAN.

Your input will help

I am sure I have not covered everything, you can participate in refining this vision 2030. Put your thinking cap and let me know why these are not right priority or what other priority could be included.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Global Economy will accelerate significantly January 30, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, Politics and economy, Quality of Living, Real Estate Development in Global Economy.

Next Twenty five years for the world will be significantly different from last one hundred years as far as economic growth and quality of life is concerned. There are lot of Think Tank (politically or business interest motivated), economist and so called expert and they like to predict the future based on past experiences related to recession and depression.  That is the path of least resistance, run some mathematical model and come out with the prediction. If you are right, then you are viewed as genious, if you wrong, people ignore. Current economic crisis is different from past, and future opportunity is also much larger because of the liklehood of broader consumer participation.

What is key difference in the past and future? Information flow and closing of the knowledge gap. World has yet to feel the real impact of internet and information flow as as  a result. We are still building the infrastructure and application for internet impact age. Internet infrastructure and associated applications will be in place in next few years. Just remember how car is a common means of transportation only in the developed world after fifty years. Full impact of this mobility around the world still has to be realized.

What are the three basic revolutionary changes in last several hundred years that will affect the masses and result into the economic growth.

  1. Invention of Clock – allowed us to capture the value of labor
  2. Personal/public transport vehicle – helped reduce the distance
  3. Internet – Information flow to masses

Impact of internet on economic growth will be more profound then any of us can imagine. Current global economic issues are just a blip. Here is why next twenty five years will see significant economic growth and improvement in average  Quality of Living of the world population.

  • Significant current economic problem is related to US and UK  credit crisis only because of  bubble in home prices, reckless spending by consumer, mis-management of policy by US government, social program, and wars.
  • Rest of world continues to save.
  • Internet is creating significant business opportunity for telecoms service providers, retailers, media company, manufacturing, and technology companies.
  • Alternative energy focus (wind and solar) will create significant business opportunity for energy companies, manufacture, service providers.
  • Non American world (Asia, central America, South America, Europe, Africa, and others) will have access to technology and infrastructure related to energy, transport, and internet that is available to only 20% of the world population currently.
  • Information availability will inspire people and will create significant need for consumption related to improving the quality of living. This will create significant opportunity for health care, organic farming, travel & tourism, electronics, real estate, etc.
  • World population is growing and will create significant opportunity for real estate and related service company to provide affordable housing.
  • Financial service sector will be core participant to this growth. All the business sectors require financing and financial sector will lead the growth beyond our imagination.

We should not confuse the global economic growth with the performance of stock market such as S&P, Nasdaq.  They are barely co-related. We can keep debating about the de-coupling of America with the rest of the world, the fact is that it has already happened. Just because at the present situation, stock market in Asia go down as the American stock market, it gives a false impression that there is no de-coupling. Just look, largest company market capitalization (China banks) are not even listed here. Not every company that will benefit from this opportunity will be listed on NYSE or NASDAQ.  Not every consumer that will participate in the economic growth is a resident of developed country.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Cornorstone of American recovery – Energy self sufficiency January 23, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Recession.
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Obama in his inaugural speech has clearly demonstrated that it is easy to communicate when you use simple language, no paragraph just few words, know when to stop.

Our president can use same approach to get America excited about the future and people from all walk of life will come together to solve the problem. That is how John F. Kennedy did it, put a vision of getting to moon and America became a different place.

President Obama can declare that “USA will be self sufficient in energy in next eight years”.  Once the vision is articulated all the policy decision for all aspects of the administration including, foreign policy, middle east policy, trade and currency policy with countries, energy policy, bailout of financial institution, manufacturing, public infrastructure, environment, tax of individual and corporate, social security, medicare can be made under the over arching vision.

What Does Energy Self Sufficiency means?  There are serveral major aspects of it:

  1. Energy efficiency – This consists of energy efficient lights, green building, making current home and commercial building  energy efficient
  2. Taxing the gas (renewable energy tax) and  electricity (level of usage) – incentive drives the behavior.
  3. Alternative energy – solar, wind, bio fuel, clean coal, nuclear with the focus that USA will manage with no, or minimum import of technology
  4. Electric car, Hybrid car with production in US
  5. Smart Grid
  6. Public transport infrastructure around Twenty Minute Lifestyle (walk to living, focus on reducing car as a major means of transport)

This will also help keep the interest group and lobby at bay. It is important to mandate that all manufacturing related to this initiative will happen in America.  Supporting this tax credit will go a long way. Remember, government job is to define the priority, create policy to support that, America has enough intellectual capital and hard working people to make it happen.

I wrote this article on Jan 23rd. Here is the good news, our president Obama called for independence from oil on Jan 26th. It is a great step forward for American. Every other country should do that. Go OBAMA. Following is the link to news from BBC.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



How to revive Western Economy? January 19, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Recession.
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Global  economy has a role to play in reviving the economy of countries, but is to change to being a mix of global and local. I call it Glocalization. This is the new mantra for making the western economy vibrant. There are several ways it can be done. I will talk about some of them below. If you have other ideas, let me know.

Business Model

Business model that has been built in the west based on central control, scale the business some how, consolidate, etc. does not work. CitiBank, BOA, RBS, Countrywide, fortis, just some example.  Creating long term business will require some kind of local ownership not just marketing such as HSBC (your local bank). Some sort of franchise model for the front end. Back end efficiency can be consolidated same way as stock exchange does it.  It will create local jobs, loyalty, community involvement, etc. Small to Medium business should dominate the business activity. What if Starbuck had a local owner for each of the store, there will be as many business owners, no union, local connection, brand value, etc.


There has to be local manufacturing. Bottom sixty percent of the population survives on low tech manufacturing and providing services to the other forty percent. Without low tech local manufacturing, it will be tough. Could it lead to increasing the cost of some of goods manufactured locally, yes, but there is no reason for common person to leverage low cost of labor from some other part of the world to have artificial better life like we have been having in Western world.  Western countries have a life time opportunity to keep the next generation of technology local, create local jobs, and eliminate the trade deficit.


We are fortunate that we create lot of intellectual capital because of higher education, then we turn around and send the export the technology for using the cheap labor, makes no long term sense. One area when US can take leadership is green energy (solar). All the electric vehicle should be created here for local consumption.


USA is doing a poor job of managing its immigration policy. Lot of people from all over the world come here for higher eduction, we need to make every effort to keep them here. If  anything we should encourage people from all over the world come here to get educated and make every effort to keep them here.  This is the biggest growth area and biggest competitive advantage for USA in  21st century.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal