The Ford Fiesta will be forever linked to my early driving experience. I started learning to drive in the 1990s. Back then leasing agreements and car finance weren’t really a thing due to high interest rates. (There is a whole other blog post that I should write at some point about the risk of sub prime car loans, but not today.)
Car insurance was cripplingly expensive. It was even more expensive when you had no no claims and three points on my licence for an accident that I still claim wasn’t my fault.
I also have a Dad who is a time-served mechanical fitter and all-round engineering wizard. At the time we had access to a garage with a vehicle pit, welding equipment and an engine hoist on the evenings and from Saturday afternoon on during the weekend. My Dad had good personal relationships with a number of people who ran scrapyards. You went in, tore the parts you wanted off the cars and took them to the owner and negotiated a deal.
One salvage yard took things a step further by tearing cars down themselves and selling the parts alongside the basics that you’d need for servicing and usually buy from a motor factors. They’re still going strong and still only do business in-person or over the phone. No fax machine, email or website.
My Dad had been servicing and repairing cars since the mid-1960s and worked repairing a wide range of tracked and wheeled vehicles for the likes of Bord na Mona and Massey Ferguson.
Driving bangers
The vehicles that I owned were nothing to brag about, but they were really, really cheap and at least one of them was really, really dangerous. The most dangerous car was a Fiat 126. It cost £150 and I bought it off a former colleague who I met working one summer repairing tools and equipment rented out for use on construction sites. Even in the early 1990s that was a ludicrously cheap car.
The engine was terrible, as were the drum brakes. The body work crumbled in a way that one would expect for a Fiat made in the 1970s. Drum brakes ‘fade’ with repeated use (like going through a set of turns), they don’t work particularly well in the wet and they were prone to locking up on occasion.
Because of the noise, dangerous brakes, exceptionally poor build quality and Russian roulette-like standing starts it was tiresome to drive anywhere for anything more than an hour. The lights were pathetic the wipers were ineffective and the all the rubber seals leaked.
But it also put a smile on my face more times than any other car that I have owned. It handled really well. You could go sideways around corners and still stay in lane. You had a ludicrously low seating position and an exceptionally direct gear change. As a young man with a complete lack of appreciation for risk, it taught me that small cars can be fun.
Also as a cash-strapped young man, I appreciated that paying less to run a car was a good idea, so I aspired to own a diesel.
Building a Ford Fiesta
Eventually, through my Dad’s contacts I managed to get the diesel engine from a Ford Escort van that had been rear-ended and a Ford Fiesta delivery van with a blown petrol engine. At the time a friend that I knew through scuba diving had done a diesel engine swap into a mark two Ford Fiesta XR2. My vehicle was much rattier.
A mark two XR2 very similar looking to the car my friend transplanted with a diesel engine. The only difference being that his had the ‘pepper pot’ alloy wheels. Picture by Kieran White on Flickr (creative commons licence)
We used the beefier Escort springs to handle the increased engine weight, but kept the Fiesta braking system and gearbox. So I had a diesel Ford Fiesta van. Over a weekend, we used a Makita jigsaw to remove the van panels were the windows should be. New window gaskets and rear side windows from a totalled Ford Fiesta mark one. In went the mark one seats and rear seat belts and I had a car.
The van was old enough that I didn’t need to pay VAT after converting it to a car according to the DVLA at the time.
The gearbox was less direct than my previous cars, the steering lacked the go-kart feel of the Fiat and there was more body roll, but the Fiesta was a good car to drive. It had enough power for confident standing starts at junctions and motorway driving was comfortable. The best part was the fuel economy, I typically got 70 miles to the gallon (over 29 kilometres per litre).
I read that Ford was getting rid of the Fiesta and I was reminded of my old car and the role that it played in taking me around the country and allowing me to earn a living before I had moved to London.
Why are Ford Motor Company likely to be binning the Ford Fiesta?
I suspect that it is down to a number of factors:
Consumers want the higher driving position of a crossover or SUV, super mini vehicles like the Ford Fiesta have fallen out of favour
Small vans no longer share the same body shape as their car equivalents. Ford has its Transit Courier small van with a body better designed to cope with large objects or small pallets. So there are less common tooling that they can use to mitigate for lower production volumes
Germany is an expensive place to built a small car, even in a highly automated factory
It makes sense to prioritise scarce components in crunched supply chains to vehicles that produce the highest profit margin
An electric version of the Fiesta would give only a limited range between recharges. Electric battery carrying capacity is directly proportion to the size of the vehicle floorpan and Fiestas are very small. BMW couldn’t get its I3 to work from a business and consumer offering perspective
The price point of an electric Ford Fiesta would represent poor value for money for consumers
Goodbye to the Fiesta
Ford of Europe put together a farewell video to announce the end of Ford Fiesta production.
https://youtu.be/UYcoJ5cU-v4
Ford of Europe
YouTube channel Big Car did a great history of the Fiesta that is worth watching. Until I watched this video I had no idea that the impetus to develop the Ford Fiesta didn’t come from within Ford of Europe, but from American executive Henry Ford II. Henry Ford II is most famous amongst gear heads now as being the executive who drove support for the Ford GT40 after talks had collapsed with Ferrari.
Hank Deuce as he was known was portrayed by Tracy Letts who acted opposite Matt Damon and Christian Slater in the movie Ford vs. Ferrari.
Ernest Shackleton, the Irish explorer and the heroic age of antarctic exploration are evoked in Apple’s ads for its Apple Watch Ultra – a rival to Casio’s G-ShockMaster of G range and the Protrek range, Seiko’s similarly named Prospex range and Citizen’s Promaster range of watches.
https://youtu.be/tidgsqAf_tI
The underlying dialogue uses the text to a newspaper advert attributed to Shackleton when he was looking to recruit crew members for his ship the Endeavour. The Endeavour expedition competed with the rival Roald Amundsen’s expedition to reach the South Pole.
The monologue also reaches back to the way Apple did its Think Different brand campaign rather than the kinetic iPhone, iPod and iWatch ads of the past.
Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honour and recognition in event of success.
The reality is that the ad didn’t become widely known until decades after Shackleton had died. There is no evidence to suggest that he ever wrote the words (stirring though they are in nature), or that the advert was ever published by Shackleton.
Instead of Shackleton, who then wrote the words attributed to him? We’ll probably never know. What we do know is that they were first published in a book published in 1959. The 100 Greatest Advertisements: 1852-1958 written by Julian Lewis Watkins and was first published by first published by Dover Publications, Inc. Whether it was Shackleton who wrote them or not, they went into popular culture and sparked additional interest in the Irish explorer. Shackleton died in 1921 when returned to the Antarctic with the Shackleton–Rowett Expedition, he suffered a fatal heart attack while his ship was moored in South Georgia. We don’t know whether Ernest Shackleton would have appreciated the Apple Watch Ultra as a technical marvel concocted by wondrous boffins, or a pointless exercise in frippery for the serious explorer.
Rolex Deepsea Challenge – a watch even more worthy of Shackleton?
I know a watch is special when my Dad is telling me about it as soon as it’s launched. Rolex has upgraded its Rolex Sea-Dweller Deepsea to create the Rolex Deepsea Challenge. Out goes the largely useless date window, in comes an an all titanium grade 5 alloy case that’s 50mm across. This means that the watch moves from being waterproof of a depth of 3,900 meters to 11,000 meters (or just over 6.8 miles) with the new Deepsea Challenge.
The Deepsea Challenge watch follows on from the years of experience that Rolex has had making titanium watches under its secondary Tudor brand using a similar (if not the same) grade 5 titanium.
Titanium Grade 5 is the most widely used titanium alloy. It has (relatively) good hot formability and weldability. It is resistant to salt water, marine atmosphere and a variety of corrosive media temperatures below 300 ° C. Grade 5 titanium alloy is most likely to be accepted by the human body – its hypoallergenic and ideal for medical transplant components like hip joints.
It is made up of 88.74-91.0 percent titanium, 5.5-6.75 percent aluminium, 3.5-4.5 percent vanadium and no more than 0.015 percent hydrogen.
There is obviously osmosis between the two brands in terms of innovation, materials, process and technologies. This also explains why Tudor tries to do innovative designs in its range rather than just digging into the rich seam of ‘heritage looking’ watches with the Black Bay, Ranger and Heritage Chrono models.
The watch community has already started spoofing the watch, which is another sign of it having become an icon. Whether it’s a famous icon, or infamous icon remains to be seen.
35th Tokyo Girl’s Collection
I talked years ago on this blog about the innovative approach to retailing behind the Tokyo Girl’s Collection. I came across their 2022 autumn and winter collection opening stage event, which I am sharing here.
https://youtu.be/vx4AzkAtD3o
USB-C
Apple on the EU regulating connectors to standardise on USB-C. The reason why Apple went to detachable cables on chargers is very interesting. Apple are reluctantly complying over USB-C. The discussion around innovation is really interesting, particularly the way in which Apple executives duck the question.
For senior marketers who came up with a Jack Welsh influenced shareholder value focus, brand purpose was a seductive concept for otherwise empty and meaningless careers that could even be considered ‘bullshit jobs‘. Brand purpose campaigns are not coming from the need of consumers mostly but from the desire of marketeers to do something good of their day, of achieving something more than just selling a humdrum product.
In essence it is the same drive that motivated the apochrical question from Steve Jobs to future Apple CEO John Sculley
Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?
John Sculley recalling Steve Jobs pitch on a documentary profile of Jobs that was part of the Bloomberg Game Changers series.
In recent years over 90 percent of Cannes Lions winners were found to focus on brand purpose. In 2016, the Singapore office of advertising agency Grey created a fake brand purpose campaign for Migrant Offshore Aid Station (MOAS) designed to dupe consumers and award judges. The I Sea app was supposed to crowdsource help to spot refugees, but it was built on fake data.
Brand promise
Historically the focus has been on the brand promise – the idea of what a consumer can expect from the product or service. An example of this would be First Direct – a branchless bank providing its services by telephone and internet instead. It is a retail bank division of HSBC that was founded back in 1989.
Brand purpose, goes way beyond brand promise and is is the brand’s reason for being beyond making money, sales or profit – it’s a framework that guides business decisions and thought processes. A brand purpose is supposed to connect with consumers at a more emotional level. It is why the brand exists and should guide the brand’s mission that differentiates it from others.
By 2014 you had marketing royalty like David Aaker endorsing brand purpose, or as he called it Higher Purpose. It was further popularised in management by the 2017 publication of The Guiding Purpose Strategy: A Navigational Code for Growth is a book by Markus Kramer and Tofig Huseynzade. Kramer and Huseynzade looked at purpose at an organisational level and how it should be brought to life through brand management.
Corporate and social responsibility (CSR) is not brand purpose
It is distinct from earlier concepts like CSR or corporate responsibility as US organisations often prefer to say. The easiest way to demonstrate this is by example. One of my first clients was Verizon Wireless the US mobile carrier. They used to donate pre-used cellphones, together with free services to charitable organisations like women’s shelters in the New Jersey area where they were headquartered. While they meant well, this clearly wasn’t the key focus of their business, but did make use of edge effects brought about by customers upgrading their phones.
I helped them template this activity in markets were they had an international presence at the time:
Czech Republic
Greece
Indonesia
Italy
Mexico
Slovakia
The role of CSR can be for many reasons:
Being a good corporate citizen
Being closer to the community to better understand the environment
The act as a counterweight to negate negative effects of having the business in the area. A classic example of this would be education and health clinics for communities where there is oil drilling
Is brand purpose effective?
We know that purpose lead marketing is 30% less effective than non purpose campaigns according to Peter Field, so purpose shouldn’t be seen as a money making decision. In fact, being prepared to forgo money if necessary is a hygiene factor in a brad purpose. Ethical behaviour won’t necessarily generate revenue.
Brand purpose is most likely to demonstrate effectiveness internally, where it can get people to do more for a company they believe in and matches a set of internalised values. Internal altruism and work life are aligned – they aren’t working in a bullshit job.
Risk management
Business risk management has a number of challenges with brand purpose. The moral challenges and perceived required speed of reaction poses problems for brand purpose risk.
Glocal nature of purpose
There have been a procession of (foreign) multinational companies that have committed costly perceived slights in China. Western businesses such as Nike have generally erred on the side of a Chinese brand purpose for profit and a perceived lower risk of reaction from western customers. For example Nike Withdraws Products After Brand Partner Vexed China for Supporting HK | Jing Daily or how western brands responded to China’s Xinjiang boycotts including concealing past corporate statements or flip-flopping like Fila, H&M and Hugo Boss.
TL;DR – brands are most afraid of offending: Chinese consumers > western consumers > developing world consumers – though this may change with de-globalisation.
Bringing a knife to a gun flight
The Unilever board have been pummelled by shareholder reactions to its brand purpose driven approach
Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business. The most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank. However, we think there are far more ludicrous examples which illustrate the problem. A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).
Fundsmith is one of the top ten largest shareholders in Unilever at the time. This then set the tone for activist investor Nelson Peltz to secure a seat on the company board
Having a position
Having a position is a risk in itself. Some brands notably Dunkin Donuts Refuses to Get Woke: ‘We Are Not Starbucks’ just focus on their brand promise. They keep consumer expectations realistically low. Contrast this with Unilever’s Ben & Jerry’s who took a position on the Palestine question and the invasion of Ukraine. In the case of Israel, Ben & Jerry’s independent board has taken Unilever to court over an attempt to stop sales inside Israel.
Purposeful consumer behaviour
Consumers generally have good intentions. They mostly consider themselves charitable, an example of the Lake Wobegon effect named after the fictional town featured on the US radio show A Prairie Home Companion. In reality, only 20-25 percent of consumers donate to charity. Consumers green tendencies seem to vary with the state of economy according to longitudinal research conducted by Gallup, regardless of their generation. Price is still the key consideration for consumers, but brand purpose can increased the perceived benefit for a consumer when considering similarly priced products.
Welcome to Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average.
Garrison Keillor
Purpose is perceived as being of key importance to consumers because of misinterpretation of of market research and poor research design such as making a false association between the correlation of successful brands and assuming purpose as the causality.
Consumers don’t think every issue have the same weight, they are likely to feel more personally connected to health, economic and societal issues. Political, business or legal issues of brand companies are considered to be ‘hygiene’ factors.
Purpose-washing
One of the key challenges with brand purpose is that many brands have approached in a superficial manner at best. Superficiality might be one of perspective, for instance, Nike supported Colin Kaepernick and other progressive causes, but also funded right-wing Republican Party politicians. Progressive leaning consumers may feel betrayed or gaslit.
Les Binet of Adam and Eve outlined a good test of brand purpose
Purpose bullshit detector. Ok, you have a brilliant new purpose drive marketing initiative.
1) Would you still do it if you couldn’t publicise it?
2) Would you still do it if reduced your long term profits?
If the answer to either question is no, then it’s not purpose driven.
Purpose-washing isn’t new and can see its roots in the ‘greenwashing’ of the mid-1980s where companies claimed ‘green behaviours’ that were designed to cut costs, or create the illusion of caring for the environment.
Brand purpose examples
Brand purpose examples become difficult. Patagonia would be amongst the first brands that would be used as an example. It’s an unusual company that inspired other brands like Warby Parker and Toms. Things start to fall down when you look at large corporates.
PepsiCo tried to pivot towards nutrition as a brand strategy and purpose focus in the early 2010s under then CEO Indra Nooyi, yet still relies on sugar filled drinks for its business.
I worked at Unilever on Family Brands, what people in the UK would know as Flora margarine, when the company mandated that every brand had to ‘find its brand purpose’. Dove’s ‘Real Beauty’ success sparked a change over at Unilever.
Dove’s brand vision / purpose is interesting because it came out of a consumer insight. After surveying 3,000 women across 10 countries the brand team found only 4% considered themselves beautiful. Further research found that a majority of girls had anxiety about how they looked.
We believe beauty should be a source of confidence, and not anxiety. That’s why we are here to help women everywhere develop a positive relationship with the way they look, helping them raise their self-esteem and realise their full potential.
Note that while Dove has a successful men’s range of products, men and boys self esteem or confidence isn’t a concern of Dove’s brand purpose despite academic research suggesting similar issues.
Then CEO Paul Polman focused Unilever on its Sustainable Living Plan and brand purpose was at the centre of it.
Those that didn’t have one were to be sold off. We focused the flora relaunch around being ‘Powered by Plants’. The reality is that I was working on a product known by different brands in much of the 23 or so countries that it was sold in. In the UK, there was the health aspects of Flora versus butter and the vegan credentials. In Kenya and other parts of Africa it was about nutrition for children in the family and the superior shelf life compared to butter. Despite its brand purpose, yellow fats were perceived to be a lower growth sector and the business spun off to Upfield. Money trumped purpose, although Polman has continued to advocate for a change in business practices with his book Net Positive.
Unilever has stumbled with its brand purpose focus, being too focused on it for active investors and insufficiently focused on it in the eyes of other stakeholders, including company insiders.
The pharmaceutical industry is beset with conflicting views regarding brand purpose. The companies will view their products has having a live changing or life saving brand purpose, where as external views will be more concerned about predatory pricing and the non-inclusive access that is a side effect. For instance, one in five people with diabetes in the US have rationed their insulin usage due to high costs.
Secondly you had lifestyle medicines, notably Pfizer’s Viagra, but still no breakthrough AIDS vaccine. Finally there was the exploitative nature of Purdue Pharma and Johnson & Johnson providing opioids for pain relief that drove a crisis in addiction.
Many commentators would cite Nike but the examples are problematic:
Their FlyEase design approach that enables disabled people to participate in sports, is a great example of accessible design. But disabled customers have found them hard to obtain as they flew off the shelf. Accessible design benefits able-bodied consumers too
Plus size activewear could be just about capitalising on the obesity epidemic, rather than truly inclusive sports participation
Supporting Colin Kaepernick and taking the knee for racial justice is at odds with other Nike behaviours including the nature of their supply chain. While anti-sweatshop campaign dented Nike’s reputation in the 1990s, it still has appalling labour conditions today.
Brand purpose thinking from academia and the advertising industry
Articles like this one in AdAge have helped to drive the brand purpose movement: Gen Z doesn’t want to buy your brand, they want to join it | AdAge – This group isn’t waiting for brands to lead on issues. Instead, they’re leading. Since movements rarely come with a business case or cost-benefit analysis, marketers must consider how they can partner with Gen Z to become more involved and deliver on the promise of purpose (paywall)
Brands take note: The purpose of purpose is purpose – Most of the data used to support the case for brand purpose is verbal, spoken data which lays itself open to the ‘intention-action gap’ that exists between what people say they will do and what actually transpires. That gap is particularly large with topics like brand purpose because social desirability bias leads respondents to, knowingly or unknowingly, overclaim the importance of purpose in their purchase decisions in order to look less like a wanker. But there is a bigger, more pressing question now being asked of brand purpose. As we enter a recession, we know – from bitter past experience – that customers will change their behaviour in the tricky months ahead. In May, Kantar was already showing a significant proportion of the market (albeit, again, with spoken rather than derived data) switching to lower priced options. Such moves are not a uniform downgrade of every brand for a cheaper alternative. In order to justify the continued purchase of some premium brands that are deemed different and meaningful enough to retain their place, customers trade down on weaker, less essential fare – Mark Ritson takes a pragmatic view on brand purpose in this Marketing Week op-ed. Meanwhile Byron Sharp over at the Ehrensberg-Bass Institute of Marketing Science has even greater concern about brand purpose: Purpose could be ‘the death of brands’, warns Byron Sharp
The Future of Purpose – TrendWatching – Trendwatching’s take fits in with Richard Shotton’s view …in 2020, consumers will embrace businesses that BREAK the CODE of the brand DNA or their entire industry in the name of a more ethical or sustainable consumerism.
Think a superband that doesn’t tour, a fashion magazine with no photoshoots, or an airline that tells passengers to fly less (see innovation examples below).
Yes, this is a highly actionable trend, and a tactical chance to prove to consumers that you really get the scale of the challenge ahead. But it’s being driven by deep shifts in the nature of status, innovation and transparency…
Unconsumed Status. Status has always been a key driver of consumption behaviors. But via rising awareness of social and environmental damages, the nature of consumer status is changing radically. That means rising numbers fulfilling their status quest by seeking out new brands and new modes of consumption that reimagine, or even invert, old attitudes and priorities.
Clean Slate Mindset. Today, purpose-driven insurgents can become mega-brands that shake the mainstream faster than ever. Tesla is rewriting the rules of automotive; Impossible Burger those of meat. That’s driving expectations across all industries that legacy codes can and must be rewritten in the name of a better consumerism.
State capitalism has been created in various forms in China since opening up. Some of the new forms have aspects that impacts the relative attractiveness of doing business in or with Chinese companies.
Opening up
Historically since opening up China has been a mixed market model. There were small private businesses including many farmers. There was the state owned enterprises, a direct descendent of Mao’s work units and businesses that the government wanted to keep a strategic hold on.
Taken at an exhibition that was part of the Shenzhen Biennial, when I was there back in 2010
Grey zone and hybrid companies
Grey zone companies
A classic example of a grey zone company would be Huawei. In their 2019 paper Who Owns Huawei, Balding & Clarke make a convincing argument that Huawei is a state controlled company, if not state owned in the conventional sense. This view is supported by:
The state hacking of Nortel which Huawei disproportionately benefited from in their subsequent telecoms carrier contracts and 5G technology
State bank vendor financing on behalf of Huawei at negative interest rates that telecoms providers like BT and Vodafone were given
Zichen Wang translated a Chinese academic paper that pointed out an alternative view. Yes the ownership structure was a shit show, was pretty much the one point of agreement between the two papers.
But that much of this was down to domestic practice influenced by classic state capitalism and modern business law that China brought in and still doesn’t square up with what was happening on the ground in terms of business laws.
You can make up your own mind if this is an element of state capitalism.
Hybrid companies
An example of this would be the Stellantis | Guangzhou Auto Company joint venture that made Jeep branded SUVs for China. These joint ventures were basically the way the Chinese government coerced technology transfer from western firms to local firms. The Stellantis JV has gone into bankruptcy and GAC seems to have its own range of capable SUVs based on Stellantis expertise gained over the years.
Huawei’s joint venture with 3Com allowed the telecoms giant to build a large enterprise networking business to compete with the likes of Cisco Systems. At the time that China first rolled out its Golden Shieldinternet censorship platform, it relied on Cisco technology, and China would want to remedy this under its state capitalism system. Huawei now supports internet censorship around the world. This form of state capitalism has been common in a number of developing countries over the years, but China was particularly successful in using it in a coercive manner to enhance state capitalism rather than just driving economic growth.
Rise of the hybrid firm – Gavekal Research – Today, 48% of onshore listed companies, representing 67% of market capitalization, have a mixed bag of major shareholders from the private and state sectors. While many of those companies are still clearly controlled by either state or private shareholders, a large and significant group of firms occupies an intermediate position that is harder to characterize. – on China’s state capitalism system
How China’s communist officials became venture capitalists – Times of India – The US and other Western governments have long been wary of the economic power of China’s “state capitalism,” fueled by giant state-owned companies and an industrial policy driven by subsidies and government mandates. But policymakers need to pay more attention to what’s really propelling China’s growth: private firms with minority government-linked investments. “The distinction between state-owned and private has been important for policymakers outside China and for analyzing the Chinese economy,” says Meg Rithmire, a professor at Harvard Business School who specializes in comparative political development in Asia and China. “That boundary is eroding.” – see also Chinese banks vendor financing deals which is the real reason behind Huawei’s growth (alongside stealing IP and other proprietary elements: Nortel cough, cough)
Influenced firms
Influenced firms are a particularly pernicious part of the Chinese state capitalism system. The Chinese economy has always relied on relationships and even patronage of government power brokers similar to Malaysia, Thailand and Korea. But the state has looked to move personal bonds to state bonds. Much of this comes from National Intelligence Law 2017; that puts demands on Chinese citizens, Chinese companies and anyone connected to China.
Like the more widely reported Cybersecurity Law (which went into effect on June 1) and a raft of other recent statutes, the Intelligence Law places ill-defined and open-ended new security obligations and risks not only on U.S. and other foreign citizens doing business or studying in China, but in particular on their Chinese partners and co-workers.
Of special concern are signs that the Intelligence Law’s drafters are trying to shift the balance of these legal obligations from intelligence “defense” to “offense”—that is, by creating affirmative legal responsibilities for Chinese and, in some cases, foreign citizens, companies, or organizations operating in China to provide access, cooperation, or support for Beijing’s intelligence-gathering activities.
The new law is the latest in an interrelated package of national security, cyberspace, and law enforcement legislation drafted under Xi Jinping. These laws and regulations are aimed at strengthening the legal basis for China’s security activities and requiring Chinese and foreign citizens, enterprises, and organizations to cooperate with them. They include the laws on Counterespionage (2014), National Security (2015), Counterterrorism (2015), Cybersecurity (2016), and Foreign NGO Management (2016), as well as the Ninth Amendment to the PRC Criminal Law (2015), the Management Methods for Lawyers and Law Firms (both 2016), and the pending draft Encryption Law and draft Standardization Law.
For Young Chinese, Even State Sector Jobs Are No Longer a Safe Bet – the public sector hasn’t lived up to its reputation of being a safe haven. Nearly three years into the pandemic, many of China’s local governments are facing eye-watering fiscal deficits and implementing austerity measures. And those cuts are hitting civil servants hard. Wang had originally expected to earn at least 250,000 yuan ($34,600) per year at his new job. In reality, he estimates he’s being paid just 160,000 yuan. His basic salary has been cut by 30%; his social insurance payments haven’t risen as promised; part of his annual bonus has never been paid. Instead, Wang finds himself forced to work regular unpaid overtime shifts, helping to implement the town’s virus-control policies, and trying to cut back spending at home. His plans to trade in his boring SUV have been put on hold indefinitely.
Chinese ‘police stations’ in Canada under investigation | Hong Kong Free Press – there is a definite turning point around the illegal Chinese police operations against its diaspora. I expect United Front activities to be the next point of focus and you could see triad organisations treated less like organised crime and more like the paramiilitary or terrorist arm of the United Front
How the U.K. Became One of the Poorest Countries in Western Europe – The Atlantic – “Between 2003 and 2018, the number of automatic-roller car washes (that is, robots washing your car) declined by 50 percent, while the number of hand car washes (that is, men with buckets) increased by 50 percent,” the economist commentator Duncan Weldon told me in an interview for my podcast, Plain English. “It’s more like the people are taking the robots’ jobs.” That might sound like a quirky example, because the British economy is obviously more complex than blokes rubbing cars with soap. But it’s an illustrative case. According to the International Federation of Robotics, the U.K. manufacturing industry has less technological automation than just about any other similarly rich country. With barely 100 installed robots per 10,000 manufacturing workers in 2020, its average robot density was below that of Slovenia and Slovakia. One analysis of the U.K.’s infamous “productivity puzzle” concluded that outside of London and finance, almost every British sector has lower productivity than its Western European peers. Read alongside – What British politics looks like to the rest of the world – The Face TL;DR a joke that makes their country look good by comparison.
Japan cannot survive without Russian oil, warns trading house chief | Financial Times – Some analysts have expressed concern about Itochu’s heavy exposure to China through its 10 per cent stake in Citic, but Okafuji stressed that its risks were lower since its investment was in a government-owned company. “Currently, what they are doing in China is to move private assets from private companies to government-owned companies to reduce the gap between the rich and poor,” he said. “Our objective is to contribute to providing a prosperous lifestyle to the Chinese people, so I think the Chinese government welcomes that.” – I expect that the Chinese government and CITIC will tear the face off Itochu
Concerns mount over German Chancellor Scholz’s upcoming trip to China | Axios – it looks like there is a battle royale brewing between the German public and their large corporates. Add to this: Ports in a storm: Chinese investments in Europe spark fear of malign influence | South China Morning Post and Watching China in Europe with Noah Barkin – 55 percent of Germans believe he (Scholz) is out of his depth), deepens divisions in his government, and undermines its quest for a common European policy toward Beijing, a goal that was spelled out in black and white in the three-party coalition agreement. More worryingly, it shows that Scholz and his advisers still have a steep learning curve on China. Germany’s sway with Beijing depends on a united front in Berlin, in Europe, and across the G7. Scholz has managed to torpedo them all in the span of a few weeks. To be clear, the problem is not that Scholz is meeting with Xi. The party congress showed that Xi may be the only member of China’s leadership who is worth talking to these days. And it is normal for Scholz, who has been chancellor for nearly a year but unable to meet with Xi in person because of China’s restrictive COVID-19 rules, to want to sit down for a face-to-face with the country’s newly anointed leader for life. But the when, where, and how of this first meeting are important. And Scholz has whiffed on all three. The situation is reminiscent of his predecessor Angela Merkel’s decision, two years ago, to hurry through the EU-China Comprehensive Agreement on Investment (CAI) weeks before Joe Biden entered the White House. Like Merkel, Scholz is gifting Xi a geopolitical victory without much in return. And he is voluntarily sacrificing whatever leverage his government might have had with China. He may not realize that but members of his own government—some of whom have been working diligently for months on a new, tougher China strategy—are furious. “As long as the German chancellor doesn’t buy into his own government’s China strategy, then it is worthless,” one German official fumed. “The Chinese can see the divide in Berlin and Europe, and believe me, they will find a way to exploit it. It is absolutely fatal. And what is so stunning is that Scholz has done all of this of his own free will.”
Hong Kong
America’s Biggest Financial Firms Are Still Collaborating with the Sanctioned Hong Kong Government – After an increasing number of critics began to pile on, including the co-chairs of the Congressional Executive Commission on China Representative Jim McGovern and Senator Jeff Merkeley, a coalition of 20 U.S.-based Hong Kong activist groups, and the Wall Street Journal editorial board, Citibank’s Jane Fraser claimed that she had tested positive for Covid-19 and will pull out of the summit. The rest of these executives have only a couple of days to come down with similar illnesses or unexpected family commitments, but I’m not holding my breath and Hong Kong Summit Surrounded by Drama Before It Even Begins – Bloomberg – Top executives pull out after getting Covid; storm approaches. Event aimed at showing city is back in business after pandemic
9 in 10 marketers spend time in making global marketing locally relevant: report | Advertising | Campaign Asia – Marketers say local requirements are kept in mind by headquarters when making decisions, however, the majority (82%) feel they spend too much time educating HQ on Singaporean nuances and needs. 47% of marketing decision-makers in Singapore say that senior leadership in regional or global offices are misaligned with local marketing teams, there is a lack of local understanding of effective channels, and in some cases, there’s an assumption that a global approach will work across countries. Over a third (36%) of marketers believe in localising content for maximum ROI, however, the local tone, diversity and humour in campaigns is often not well understood by global offices teams.
– The departures mean Apple is losing at least three vice presidents — the highest manager level below Chief Executive Officer Tim Cook’s executive team — in recent weeks. Evans Hankey, Apple’s vice president in charge of industrial design, is also leaving the company, Bloomberg News reported earlier this month. Chief Privacy Officer Jane Horvath has departed Apple in recent weeks as well, taking a position at a law firm
Trio conduct 6G reconfigurable intelligent surfaces trials … – Reconfigurable intelligent surfaces can be programmed to modulate the phase of electromagnetic waves and reflect signals into blind spots, enhancing coverage and improving user experience. The low cost, low energy consumption and easy deployment, of RIS have attracted broad interest in 6G research and made it a popular candidate technology. The technical trial mainly evaluated the deployment effects and performance of sub6 GHz RIS and mmWave RIS in different indoor and outdoor scenarios. The tests modelled deployment conditions with and without RIS, different incidence and reflection angles, different deployment distances, etc. Recorded performance index parameters included RSRP, throughput and others. The trial participants worked together to carry out several RIS test projects yielding hard data that makes a strong argument in favor of continued RIS technology development.
This post on AI and creativity was inspired by experiments being done at work by a member of our design department. They had been using Midjourney to create images within a minute of receiving an initial set of words as creative prompts.
For example we created this surreal image which fits somewhere between Christian kitsch familiar to catholic households around the world and a touch of Syd Mead‘s visual futurism. This comes from the prompt.
Jesus fighting alongside the US Air Force
https://flic.kr/p/2nSGwLB
Other efforts weren’t successful, we had faces featuring eyes with two pupils and when it tried to render round shapes, it didn’t know when to stop. The hands would go on and on as a twisted mass of flesh. This could be resolved by creating a human character in a service like MetaHuman and uploading that to Midjourney as a base model instead.
How neural networks drive AI and creativity?
Midjourney works using two neural networks. The first works to render an image. The second compares the processing image to exemplars from a data bank of images. There is a back and forth exchange between the two networks until a number of variants are rendered. At this point the human operator is given a choice, or they can choose to have other variations created if the originals don’t meet their requirements.
These images can be rendered in high resolution allowing for an amazing level of detail.
Dystopian vibes
The dystopian feel of the use of AI and creativity is down to a few different factors.
The first reason is that dystopia is at the centre of our cultural zeitgiest in the west. Documentary maker Adam Curtis covers it really well in this discussion with with the Joe Politics channel on YouTube. This zeitgeist affects the type of imagery that the AI has available to draw upon and the kind of prompts that people use to create AI images.
Secondly, the use of AI to ‘create’ something lacks the feeling and collective emotional experiences of a real person. Those elements can’t be captured in prompts which is why images land with the sensation of a dead fish.
What does AI and creativity mean for agencies?
Concepting
The most immediate impact could be in rapid concepting, analogous to how rapid prototyping for manufacturing design. Creative teams would still need to conceive of ideas but concepts could then be brought to live in minutes.
It’s as far away from the black marker and pad that creative directors traditionally used; as paste up graphic design techniques from the use of desktop publishing software that started to impact the design world in the mid to late 1980s.
News illustrations and graphic novels show the way
One of the first areas that is really shaken up by AI and creativity has been the world of the political cartoonist and news illustrator. At the moment newspapers and news magazines pay skilled artists to develop and conceptual designs that convey a political concept.
A good example of this is the covers of The Economist magazine. However things are starting to change. US political publication The Bulwark has already started using AI generated illustrations processed by Midjourney. Midjourney has also been used to create graphic novels.
One could easily see how this might be extended into business-to-business marketing for intangible products like software and services.
Production
The hyper-realistic effects that AI can produce is likely to inspire a desire in clients to use them more often for cost effective production costs. At the moment however, the results can be very hit and miss. There is a problem with hands, faces, interlocking round shapes and a ‘dead’ look to the work.
Social implications
At first we had a discussion about what happens to designers? Were they doomed? Should there be a universal income for them or should they march in the streets to ? How could the technology be stopped?
I wasn’t exactly a ray of sunshine in this discussion. I pointed out that over the past few centuries, capital won out over labour every time. So people only kept their jobs if they cost less than the process to automate their tasks.
Globalisation versus automation
London like a few other cities have ad agency work done that is designed for global audiences. At the moment I work on campaigns designed for markets including: the UK and Ireland, Spain, Italy, the US, Vietnam and Japan. Globalisation seems to have benefited hub cities rather than moved the work to cheaper locales.
This in sharp contrast to what happened to British manufacturing. Whole sectors largely disappeared:
Steel making
Textile mills
Shipbuilding
Car manufacturing
Chemical industry
Pharmaceutical manufacturing
Engineering and fabrication
Where capacity was spared, it was largely down to the UK being a good point of entry into the European Union. As the number of countries expanded new manufacturing jobs moved east; and workers moved west to fill workforce needs in established UK factories depressing salaries.
Research shows that globalization only accounts for 13 percent of job loss in US manufacturing while 88 percent of losses were from automation including robotic manufacturing. In fact, availability of ever-cheaper automation options combined with uncertainty in the global supply chain has led to a resurgence in “onshoring” manufacturing.
Automation has been the quiet destructor of roles. During the 1960s businesses had typing pools and secretaries. Many of these roles disappeared due to desktop computers, office productivity software and the democratisation of touch typing as a skill.
The Technium
Even if labour won out over capital in the UK, there is no guarantee that they would be able to stop the march of technology. Kevin Kelly in his book What Technology Wants shares the idea of ‘The Technium’. The idea behind The Technium is that technology has a momentum of its own building on previous progress. Kelly goes as far to describe it as a super organism of technology. He believes that it exerts a force that is partly cultural with technology influencing and being in turn being influenced by technology. All of which means adaption and accommodation are likely to be the way forward for now.
Adaptation
While people don’t realise it, you’ve been using what could be termed AI for decades:
Autofocus on a camera
Losing ‘shake’ in camcorder and smartphone video
Programmes in a microwave the attempt to cook a casserole or baked potato
Predictive text (although it seems to have become more stupid over time)
Siri, Alexa and Google’s various search functions
In the case of a designer it would also include tools like the ‘lasso’ function in Photoshop that automatically cuts around objects including frizzy hair on a model. So it’s a bit late in the day for people to get squeamish about AI and creativity. Dominant creative software company Adobe sees the place of AI and creativity more as a technology to augment designers in their work rather than replace them. Much of the current Adobe focus seems to be on lowering the on-ramp for new users of their software packages.
There will be more of a challenge for supporting professions like photographers. Fashion brand Hugo Boss is looking to 3D AI powered design to aid in product design and 3D rendering threatening product photography for websites, look books and catalogues.
Limitations of AI and Creativity
One of the things that my colleagues said which really struck with me was ‘if an AI told the world’s funniest joke’ would it know that it was funny? Software is being used to track emotional response, but it wouldn’t necessarily know why something was funny.
The AI can’t be coded with a summation of life experiences, it can analyse emotions, but as far as we know doesn’t experience them yet. This probably explains why Studio Ghibli and Disney animation feels like it has much more life in it than the best AI renders.
Is it art?
Auction houses have sold works generated using AI, but is the art in the creation of the work, or in the decision to use an AI to do the work and thinking of the artist behind that idea? AI can produce works as they have existed before and mash-up genres and ideas, but it wouldn’t be able (at the moment) to create something completely novel through a leap of abstraction, such as a concept like Marcel Duchamp’s sculpture ‘Fountain‘.
AI images can be nice, but do they involve an illusion of creativity? Everything that appears in an AI image is depended on the inputs that the AI receives and the content in image banks that it uses as a reference – which is the reason why AIs often sign works with an indecipherable script.
Do artist styles have to be better protected as part of their IP as well as their works?
IP issues goes beyond artists. We created an artistic rendering of Pokemon character ‘Pikachu’ on Midjourney using the prompt
Definitely not a pikachu
In conclusion
If you’re a creative we eventually managed to get to four thoughts from the discussion:
In the grand scheme of things, change is the only constant
AI has been changing things and will continue to do so
It is inevitable that there willl be some automation and augmentation happening in the creative professions such as design
In the words of Douglas Adams book Hitchhiker’s Guide To The Galaxy ‘Don’t Panic’ – but be prepared to adapt and learn new skills and develop new areas of expertise
