Grafene - the new wonder substance for the 21st Century

Grafene - winner of Nobel Prize in 2010

Graphene is one of the finest, most flexible, strongest materials with very high conductivity that exists. It won the Nobel Prize in 2010 and it looks set to revolutionize the future, from major changes in telecommunications, chip manufacturing  and pharmaceuticals. Watch the videos below to get some idea of what Graphene could mean for the 21st Century:

Chinese renminbi 中国人民币 – the new currency of the 21st Century

Chinese renminbi 中国人民币

The Internationalisaltion of the 中国人民币

Before the 2013 Spring Festival 春节, the People's Bank of China named the Singapore branch of the Industrial and Commercial Bank of China the clearing bank for yuan in Singapore. China sees Singapore as its regional partner for the extension of yuan internationalisation. The aim is that the emergence of new offshore centers will expand the existing regime instead of creating competing systems.

So far, Hong Kong has had a good eight-year head start and remains the dominant offshore center of the Chinese currency, handling around 80pc of offshore trading.

Once the clearing mechanism is set up in Singapore, there will be greater transparency in the movement of yuan funds. Singapore will be the gateway for China in the Southeast Asia, which provides a platform for Beijing to facilitate wider use of yuan in trading with Southeast Asian nations.

London and the Chinese renminbi 中国人民币

At present, a cross-border trade settlement scheme is driving liquidity into 人民币 offshore markets. The size of the offshore 人民币 liquidity pool a financial centre can generate, therefore, largely rests on bilateral trading volume. Compared with Hong Kong, which had $283.5bn of bilateral trade with mainland China in 2011, the UK’s trade with China was only worth $58.7bn. Further, the 人民币 is barely used as a trade settlement currency in UK-China trade. 

London is therefore limited by liquidity concerns, even though it hosts deposits of 人民币109bn. This issue will remain a challenge until the 人民币 becomes fully convertible as an international currency. The City could perhaps attract a significant volume of 人民币 resources through its advantage in global foreign exchange trading. But, for as long as the cross-border trade settlement scheme remains the major pillar in China’s 人民币 strategy, the City will not be a become a big player. 

A second stumbling block is the technical difficulty caused by the 人民币 clearing system. In the offshore 人民币 market, up until now only Hong Kong has been thoroughly equipped with both the 人民币 real-time gross settlement system, which allows swift, large fund transactions, and with a人民币 clearing bank, Bank of China (Hong Kong). 

London is lacking this critical 人民币 settlement system. It also doesn’t have a local人民币 clearing bank. Even if the City is in a good position to gear up global demand, the majority of those offshore 人民币 transactions still have to be conducted via Hong Kong. As a result, market practitioners see less benefit in concentrating their 人民币 businesses in London. Multinational corporations can simply shift 人民币 deals to Hong Kong branches (or perhaps to Singapore). In other words, until London has the requisite financial infrastructure, it will struggle to be more competitive. 

Thirdly, and perhaps of most concern, is the differing understanding of Beijing’s 人民币 internationalisation strategy in the Bank of England and the UK Treasury. China’s 人民币 strategy is a policy-driven process, with deep public sector involvement. The most evident example is the role of bilateral currency swap agreements. In Beijing’s view, a bilateral agreement between central banks has profound implications beyond the intrinsic value of the swap itself. It represents a will to jointly develop 人民币 offshore business at the level of officialdom.

However, the Bank of England sees limited value in establishing a line in currency swaps. The 人民币 is not yet fully convertible, and the size of its global offshore market is neither large or liquid. The Bank insists that the private sector should take the initiative. It therefore remains reluctant to get involved in the swap issue. The UK Treasury, on the other hand, is making great efforts to initiate policy dialogue with Beijing and Hong Kong. It wants to push the City towards the front tier of the 人民币 offshore business, and thereby boost the economy through a closer relationship between China and the UK.

While the development of the offshore 人民币 market remains contingent upon China’s financial reform process, whether the Bank of England and the UK Treasury can take collective action will ultimately determine the City’s future in the 人民币 internationalisation game. The Geo-Trade Blog will continue to follow closely new developments on the internationalisaltion of the Chinese renminbi  中国人民币.

China and US Shipping in the Inland Riverways in 21st Century

Yangtze River 长江, one of China's most important riverways

China has just expanded Yangtze River 长江 shipping capacity 

The shipping capacity of the Yangtze River 长江, China's longest river, has just been vastly expanded as a result of a decade-long effort to dredge and deepen the river. The river's main course whose shipping volume has just reached 1.78 billion tonnes in 2012,  four times the amount of 2003, has had an average annual growth rate of 10pc. 

Map of China's main riverways with Yangtze River 长江 below 
and Yellow River 黄河 above 

 

The revamped riverway now allows heavier ships to reach the upstream city of Chongqing 重庆, even during periods of dry weather. Furthermore, the depth of the river's 370-km Chongqing-Yibin stretch has been increased to 2.7 meters from the original 1.8 meters. Heavier ships will now be able to sail on the middle reaches of the river located between the cities of Yichang 宜昌 and Wuhan 武汉 in central China's Hubei Province. Heavy vessels will also be able to cruise on a downstream section of the river located in east China's Jiangsu Province.

But in the US...  

In New Orleans, the industrial Canal Lock connects two of America’s highest-tonnage waterways: the Mississippi River which handles more than 6,000 ocean vessels, 150,000 barges and 500m tonnes of cargo each year, as well as much of its grain, corn and soyabean production and the Gulf Intra-coastal Riverway, which runs from refinery-rich south-eastern Texas to Florida. Ships pass from one to the other via a lock that was built in 1921. Its replacement was authorised in 1956. Construction on the replacement was authorised in 1998, and then stalled by lawsuits. The most optimistic predictions of the Army Corps of Engineers, which maintains America’s inland riverways, see the new lock being completed in 2030.

Map of the inland Riverways in the Mississippi River Basin

As shipping to and from the US increases, so too will the use of these inland riverways, which are in most cases desperately in need of an upgrade.The American Society of Civil Engineers estimates that underinvestment in the US' inland waterways cost American businesses $33 billion in 2010, and that without significantly increased investment those costs could rise to $49 billion (in constant dollars) by 2020.

Geography and Demography are Destiny

Geographical view of the Américas

Geography is the backdrop of human history. The position of a country on a map is the first element that truely defines it, so much more than its government is able to. Geographical distortions can be as revealing of the long-range intentions of governments, for example, the melting of the Arctic, allows a glimpse of the possible future shipping routes between Asia and Europe and the geo-trade options that this could bring about.

Demography is destiny

The US is in the midst of a new demographic, cultural and political moment. Interestingly the extension of the US border southwards in the early 19th Century to incorporate newly won land from México into the US is now facing a seismic demographic change in the 21st century - in coming decades hispanos from the wider Américas will become more than a quarter of the US electorate. 

Hispanos currently represent 17pc of the US population, and hispanic population growth is set to turn the US into a country where fewer than half the population will be non-Hispanic whites within 20 years. This shift will create a new demographic reality in the US. This point was heavily illustrated in the messages of Obama's recent presidential inauguration speech. A Cuban-American became the first hispano to recite the official inaugural poem. Rev Luis León delivered an inaugural benediction with phrases spoken in Spanish. And Justice Sonia Sotomayor, the first hispanic on the Supreme Court, administered the oath of office to Vice President Joe Biden.

Geography and Economic Growth

The notion that Mexico offers only cheap labour no longer rings true in the 21st Century. México produces around 115,000 engineering students every year, almost three times as many as the US on an annual basis. Hence machine specialists are usually easier to find in Tijuana than in many big US cities. As are, accountants experienced in production economics and other highly skilled workers.

Today, in the 21st century, Tijuana is becoming to San Diego what Shenzhen is to Hong Kong. Travel between San Diego and Tijuana is around 20 minutes, with no passport required. Although a passport is needed to come back, but there are fast-track lanes for business people. Many employees commute across the border each day, good doctors are cheaper and easier to find in Tijuana, as are private schools. In some ways, the border feels more like the  borders between the members of the EU than a divide between two countries.

And it’s not just Tijuana. To the east, in Juárez, Dell computers are built by Foxconn, the company that manufactures more than 40pc of the world’s electronics (including Apple’s iPhone and iPad). To the south, in Querétaro, a factory builds the transmissions that General Motors installs in its Corvettes. The design of General Electric’s GEnx turbine jet engine and the production of interior elements of Boeing’s 787 Dreamliner also happen in México. In fact, manufactured goods are the country’s chief export, with private investment in this sector among the highest in the world.

Once again geography is destiny too, the shorter and more nimble a supply chain is, the better. Hence México is benefiting from its proximity to the US to feed the demand for just-in-time manufacturing. And the demographics of producing the right mix of highly-skilled workers have combined with it to create growth and prosperity in the 21st Century. 

Values in the 21st Century - Europe, US and China

围棋 based on encircling your opponent on the Board provides an insight into Chinese values

Max Weber and Karl Marx, the founders of modern sociology, underestimated the importance of the way people in power think, behave and persuade others of the supremacy of their values. 

The Soldier, the Merchant and the Sage

Throughout most of history three groups, the soldier, the merchant and the sage, have struggled to gain predominance over a fourth group, the greater populous. When one of these groups achieves unchallenged control over the others the result has culminated in an imbalance of values leading to war, economic disaster or revolution.

Interestingly, most societies are based on an informal alliance between two of these three groups. For example, early agrarian societies were often led by aristocrats with warrior and landowner values (soldiers) in close alliance with priests (sages), who provided a spiritual justification for their rule. The merchant was usually tolerated for bringing wealth through trade, but was also resented for being cleverer and often richer than traditional elites.

During the 17th century, the merchant's power increased and decreased always dependent on protection from the soldier group. But it was not until the late 17th century that merchants first began to emerge as the dominant group in Europe. 

 

During the 19th century the rise of “soft" merchant values really took off. The British used their growing empire as a force for promoting free trade and globalisation in the so called interests of all. Nevertheless their competitors regarded these imperial projects as less benign. By the mid-19th century, the world of merchants was becoming one of competing business cartels, increasingly backed by the might of Nation States. But no country adopted the values of the “warrior-hard merchant” with more vigour than Bismarckian Germany, where repression at home and brutal zero-sum commercial competition with other rising industrial powers became the order of the day. The first world war was largely a consequence of the limits of allowing  merchant values to become the dominant group of values.

After the first world war, the US emerged as the wealthiest nation and dominant exporter of capital. This led to the spread of a new form of merchant power across much of the developed world in the form of debt-fuelled consumer capitalism. Yet the massive financial and trade imbalances that resulted again brought the dominance of merchant values to an end with the  Depression in the early 1930s.

The second world war ultimately inspired a new alliance of “sagely technocrats” and “soft merchants”. They were determined to learn the lessons of the past, this partnership worked to create a new world order of prosperity and social harmony. The early fruit of the combination of these values was the Bretton Woods monetary system, which established the rules governing commercial relations between the developed industrial nations.

 

Interestingly, the collapse of the Bretton Woods System in 1971, heralded a new renaissance of the dominance of hard merchant values. This period was led by the Anglosphere and was characterised by the so-called Washington consensus and "Davos Man". It launched a renewed age of the dominance of merchant values without the sagely values to reign it in. This age still continues today. To understand the banking and sovereign-debt crisis that has taken hold since 2007/08, the Geo-Trade Blog believes the US and Europe are paying the price for succumbing to the values of merchants, who believe in the justice of the market, and prize the pursuit of short-term profit fuelled by credit and risk. 

 

But perhaps there is a much broader problem. Modern democratic governments in the US and Europe play a much larger role in the economy than any governments in the ancient Greek democracies could ever have imagined, therefore, this in turn makes political leaders a huge source of patronage, in the form of business contracts, social benefits, jobs and tax breaks.

What are China's中国 values ?

Perhaps a more interesting question in the 21st century is, which of these three groups, the soldier, the merchant and the sage will gain dominance in a China led world? China owes its re-emergence to its embrace of the contemporary US and European model of modernisation – to a large extent driven by hard merchant values that put the country on its current path more than three decades ago. But the question of values remains unanswered.

It is interesting to note that Chinese traditional values are being replaced by what researchers have identified as an emphasis on material values - making money has become a major concern for most Chinese people. The new material values are expressed by a desire to buy apartments, cars and fashionable clothes. Showing external signs of wealth has become a basic social requirement.

The Chinese do not play chess, a game with a rather adversarial objective to eliminate your opponent from the board. Instead the Chinese invented 围棋 where the object of the game is to encircle your opponent and gain control of a larger total area of the board (see above picture). To some extent, this provides an insight into the different ways of thinking in Europe and the US compared with China 中国. 

In traditional Chinese culture, righteousness, or justice are perceived to be an important value. If democracy can protect an individual's political rights, it would seem the Chinese are sceptical as to whether it can ensure that people use their power to do the right thing. In Chinese culture, the legality and morality of procedure as well as the result are both just as important. Here in lies the eternal challenge that all democracies are forced to grapple with - what if the laws and democratic processes do produce “immoral” results, for example, an extreme-right wing party is able to win power in democratic elections or what of wars fought by a country that are not supported by its citizens.

In conclusion, it would seem that there is some commonality of horizon but the ways of thinking and framing problems remain different. It is still too soon to tell what combination of the Soldier, Sage and Merchant values will emerge in China 中国 as dominant but the Geo-Trade blog will continue to follow closely the new thinking on values emanating from China 中国 in the 21st Century.

A new Regional Comprehensive Economic Partnership (RCEP) for the Asia Pacific Region

Map of the new Regional Comprehensive Economic Partnership

The Regional Comprehensive Economic Partnership

China is set to commence negotiations to create a 16-nation trade bloc, known as the Regional Comprehensive Economic Partnership (RCEP), which has recently been announced at the ASEAN summit in Phnom Penh that concluded in late November 2012. The RCEP will include the 10 members of the Association of Southeast Asian Nations (ASEAN) plus China, India, Japan, South Korea, Australia and New Zealand, and will have the effect of lowering trade barriers and custom duties across the region by the end of 2015. ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

In the Asia-Pacific region, economic alliance negotiations have mostly so far been conducted bilaterally.The six ASEAN partner countries, including China, Japan, Australia, India, South Korea and New Zealand, already have respective Free Trade Agreements (FTA) with the ASEAN nations. But the envisioned extensive FTA would be created by expanding the existing frameworks. The countries will beging to hold first-round talks with the aim of concluding the negotiations at the end of 2015. Nevertheless, this is not to say that the new FTA will be easily achieved, there are many challenging tasks to be accomplished before it can produce effective results.

China will become No. 1

The OECD believes that within 50 years China and India will have become the major economic powers of the world. The organisation that brings together the 32 most industrialised countries of the world maintains that these two countries will account for almost half of the world's wealth in 2060.

In a report entitled A Look at 2060: An overview of long-term growth, the OECD concluded that the global economy will grow at a rate of 3pc over the next 50 years. The OECD estimates that the current economic crisis will fade and the world economy will grow with consistency, but with a different pattern to the current. The Report identifies that emerging countries will behave with more vigor and growth, but gradually their evolution will slow and will go on to match the average of the current OECD countries.

This uneven pace of economic growth will lead to a radical change in the world balance. The combined GDP of China and India will soon overtake the European economies and exceed that of all current members of the OECD in 2060. In 2060, China will have economic growth of 4pc and will increase its specific share of the global economy from 17pc to 28pc of the total.

The euro area which now accounts for 17pc of the global economy, according to OECD projections in 50 years will only account for 9pc of the total. Furthermore, the US whose economy currently represents 23pc of the world economy will reduce its weight to 17pc in 2060.

Australia's place in the Asia-Pacific Region

At the end of October 2012, Australia published a policy white paper that looks at its role of being a European country in the Asia-Pacific region.

Australia has European cultural origins and other alignments which sometimes hamper its image in the Asia Pacific Region. But nevertheless it relies increasingly on Asian immigration, especially from China and India, to ensure its economy competitiveness and to meet the annual residence quota within its population policy.

It has considerable security interests in its territory and maritime zones, but it only has a small population of 23 million. It is a US ally but it also has close economic and increasingly societal ties with China who has become its top trading partner in recent years.

Interestingly, Qantas, its national airline, has just re-positioned itself as a new regional hub-and-spoke network airline to service the Asia-Pacific region. It has abandoned its flights to Europe choosing instead to enter into a partnership agreement with Emirates flying its customers to the Dubai hub where they will be able to connect to other destinations outside the Asia-Pacific Region.

The Geo-Trade Blog will continue to follow closely how Australia continues to engage with the Asia-Pacific region and how it develops its strategic policy alignments with China and the US, particularly whether they will be governed by cultural affiliation with the US or by economic interests in the Asia Pacific Region.

The Pacific Century is getting underway

Map of the Asia Pacific Region

The US and the Pacific

Rarely has Rarotonga, the main city of the Cook Islands, seen so many important world leaders at its annual summit of the Pacific Islands Forum as at this year's event with the US Secretary of State in attendance. But this is indicative of the wider US' policy of the re-balancing of the US' strategic posture away from Europe and the Atlantic towards the Pacific. 

The competition for influence in the Pacific Islands recalls the days when they were more significant, both economically and strategically in the 19th Century when boats sailed readily from European countries in search of trading opportunities. In contrast, the 20th Century was very much an Atlantic Century dominated by the US and Europe.

Russia's Pacific Side

Russia has just inaugurated the longest cable bridge in the world, measuring 3,100 metres between Russky Island and Vladivostok. The bridge is quite spectacular, it is as tall as the Eiffel Tower and was built for the APEC Heads of State meeting. As such, the bridge is a symbol of Russia's plans to develop its Pacific side and strengthen its ties with its Pacific side, which in the words of Putin is "the most important geopolitical task" for the 21st century. 

Russia's new Vladivostok Bridge on its Pacific Coast

Europe is set to become the biggest loser

So far the impact of the shift in power from Europe to the Asia Pacific has been greatly underestimated by Europe. Interestingly, Asia has developed so fast that its population has not adjusted to their growth in prosperity by taking its foot off the throttle the way people have in Europe — opting for more leisure and higher levels of public spending. In Asia, people continue to work as hard as they did when they were much poorer.

For example, the average UK citizen works 1625 hours a year — a 35-hour week with four weeks’ holiday plus bank holidays. This compares with 2307 hours in Singapore and 2287 in Hong Kong. In economic terms, this means the Singaporean is working the equivalent of four months a year more than Europeans do. 

Add to that the top rate of income tax in Singapore is 20pc and in Hong Kong 15pc, and the net effect is that per capita GDP in Singapore is 30pc higher than in the UK, and in Hong Kong it is 50pc higher. The gap is widening as people in Asia show little sign of slackening off. Furthermore, life expectancy rates are also on the rise. 

Therefore, changes in Europe to compete with this blast of competition from Asia Pacific will have to be more fundamental and far-reaching than anything European politicians have yet dared suggest. The West has allowed its cost base to become bloated. Unless this is tackled, the future looks bleak, with many other countries going the way of Greece through stagnation to economic near-collapse with all the accompanying political implications that will test democracy.

Conclusion

The Geo-Trade Blog predicts that the next decade is going to see closer regional cooperation around the world – in América Latina, and in Asia too and maybe even in Africa. Basically if your neighbour’s house is on fire, then your house is on fire too, it makes sense to work together to prevent fires in the first place although the Geo-Trade Blog expects this to be a long and tortuous process.

Furthermore, the last few years have seen economics and politics pulling in opposite directions. The economics calls for more labour mobility; the politics argues for closed borders, particularly in Europe and the US. The economics calls for investment in the productive potential of the economy for 21st Century but  the politics is dominated by older voters in Europe and the US for whom the prime issue is the debt that society owes them for a lifetime of work. These two positions look very challenging to reconcile.


 

Copying and business - does it really matter?

The new composite 787 Dreamliner airplane Photo: Boeing

 
Copying, Imitation and Business Innovation

Copying is much more common than innovation in business and it is a much surer route to growth and profits. Studies consistently show that imitators do at least as well and often far better from any new product than the original business innovators do.

 

Companies do not readily admit to being copycats. This is because it is not well accepted in general and secondly, because it can be legally risky. Apple recently won a victory in the US over Samsung for imitating the design features of its products with its Galaxy smartphones and tablets. 
 

The pace and intensity of legal imitation has quickened in recent years. In the real world, companies copy and succeed. Interestingly, the iPod was not the first digital-music player; nor was the iPhone the first smartphone or the iPad the first tablet. Apple imitated others' products but made them more appealing to consumers. 

 

The multi-billion-dollar category of supermarket own-label products is based on copying well-known brands, sometimes down to the details of the packaging. Fast-fashion firms like Zara have built empires copying innovations from the catwalk.

Copying may be safer still when the imitator is not grabbing the innovator's customers: Southwest Airlines, an American low cost airline, did not object when Ireland's Ryanair cloned its business model in Europe. 

 

Furthermore, Asian companies—such as Panasonic, whose former parent, Matsushita, was nicknamed maneshita denki, “electronics that have been copied”—have excelled at legal imitation. Therefore it would appear that copying is here to stay.

But what is the role of fakes

The role of high end luxury good fakes is an interesting social phenomenon. Some people buy luxury brands as an act of self-expression. The key to understanding fakes is that "Status" is a “positional” good. This means that to be at the top of the social heap, it is not enough to have fine things. Your things need to be finer than everyone else's. 

Others buy them as an act of social emulation, that is, they want to wear the same brands as the people they aspire to be. Studies suggest, such status-seeking consumers are more likely to buy counterfeits.

For example a Prada handbag is a mixture of two things: a well-made product and a well-marketed brand. But some consumers value prestige, but not quality. Imitations allow shoppers to “consume” the prestigious brand without buying the high-quality good.

But a luxury brand confers status only because it is exclusive. That is, it has to be widely popular, but not widely accessible. People who buy Prada are paying for exclusivity.

Copying paintings is nothing new either

A copy of the Mona Lisa was recently discovered in the Prado Museum in Madrid. This painting was created side by side with the original that now hangs in the Louvre - the version signed by Leonardo da Vinci. In the Louvre's original, which will not be cleaned in the forseeable future, Lisa's face is obscured by old, cracked varnish, making her appear almost middle-aged. In the Prado copy we can see her as she would have looked at the time - as a radiant young woman in her early 20s. Hence there now exists the rather odd spectacle that the copy of the Mona Lisa is more beautiful than the original.

Mona Lisa (Left Louvre) (Right Prado Copy)

The better preserved Madrid copy reveals much about the painting that has been lost in the original, for example,  the semi-transparent veil around her left shoulder.

Also of note, it would appear that the underdrawing of the Madrid copy was very similar to that of the original. This suggests that the original and the copy were begun at the same time and painted next to each other, as the work progressed. This is important in itself for what it tells us about Leonardo's studio practice. The production of a second painting alongside the original is indeed intriguing. The value of the original masterpiece surely is diminished given that a further copy exists, albeit produced in the same studio and preserved in a better state, even though it may not have been fully authored by the master artist. This surely blurs the relationship between copy and original that so much emphasis is put on in the art world. 

Conclusion

Whether it be copying of business models, ideas, products, artworks, copying and imitating is an essential part of most creative processes that we often choose to conveniently ignore. The Geo-Trade blog has sought to illustrate this point and to highlight that by putting limits on the freedom to copy and imitate only restricts the flow of ideas and knowledge to everyone's detriment. This is not to say that someone should not be able to benefit from the time and effort they have put into inventing something (otherwise perhaps nobody would bother to invest their time in innovating) hence to avoid their innovation being ripped off immediately, the Geo-Trade Blog endorses the need for an "exclusive right" during a relatively "short period" to enable them to reaps the full benefits of their innovation, but, with the acceptance that this is a limited right and sooner or later, their innovation will be replicated by others that may well do it better, who will in turn be copied. The cycle continues. 

Enhancing Human Ability in the 21st Century

The Economist recently published a video interview on pushing the limits of human ability in light of the 2012 London Olympic Games. Watch an interesting discussion on the limits of human ability and what it would take to surpass them.

The Top Genetic Enhancements already done in mammals

Whether we are talking about making people smarter or stronger or able to fly or whatever, we are talking about making changes to the complex systems that underpin human ability. Below is a quick canter through the top genetic enhancements that have already been done in mammals (and hence could presumably be done in humans).

1. The Doogie Mouse. Better memory through over expression of NMR2B. A very simple, yet good demonstration of how plastic our memory system is. Since then several other ways of enhancing memory genetically have been found, with slightly different effects on different types of memory, forgetting and side effects.

Tan, D. P., Q. Y. Liu, et al. (2006). "Enhancement of long-term memory retention and short-term synaptic plasticity in cbl-b null mice." Proceedings of the National Academy of Sciences of the United States of America 103(13): 5125-5130.

2. Color vision mice. Adding human photo pigment allows (at least females) to see new colors. This is extra interesting since it shows the brain can adapt to the signals from a new sense, at least when growing up with it.

Gerald H. Jacobs, Gary A. Williams, Hugh Cahill, Jeremy Nathans, Emergence of Novel Color Vision in Mice Engineered to Express a Human Cone Photopigment, Science 23 March 2007: Vol. 315. no. 5819, pp. 1723 - 1725

3. Methuselah mice. By reducing growth hormone levels long-lived dwarf mice can be produced. The current record holder survived 4 years 11 months and 3 weeks, while normal mice have a two year lifespan.

A. Bartke, H. Brown-Borg, J. Mattison, B. Kinney, S. Hauck, C. Wright, Prolonged longevity of hypopituitary dwarf mice. Exp. Gerontol. 36, 21-28 (2001) Bartke A, Brown-Borg H. Life extension in the dwarf mouse. Curr Top Dev Biol. 2004;63:189-225.

4. Monogamous voles. Normally non-monogamous voles can be turned monogamous (and more social) by changing the vassopressin V1a receptor.

Lim M. M., Wang Z., Olazábal D. E., Ren X., Terwilliger E. F. and Young L. J. 2004 Enhanced partner preference in a promiscuous species by manipulating the expression of a single gene. Nature 429, 754–757.

5. Regenerating MRL mice (OK, a case of accidental breeding rather than genetic engineering, and it involves at least 20 genes). These mice regenerate holes punched in their ears as well as some injuries to heart muscle.

Schuelke M, Wagner KR, Stolz LE, Hubner C, Riebel T, Komen W, Braun T., Tobin JF, Lee SJ. Myostatin mutation associated with gross muscle hypertrophy in a child. N Engl J Med 2004: 350: 2682–2688.

Lee SJ (2007) Quadrupling Muscle Mass in Mice by Targeting TGF-ß Signaling Pathways. PLoS ONE 2(8)

6. The hard working monkeys. Work discipline through a blocked dopamine D2 gene. Monkeys tend to slack off until they get close to a reward they have to work for. If injected with a DNA construct that blocks the D2 receptor they worked at an even rate. This is likely less a case of workaholism and more a case of specific memory impairment for how rewarding situations look. Still, adjusting the dopamine system is likely to enable boosts of motivation.

Zheng Liu, Barry J. Richmond, Elisabeth A. Murray, Richard C. Saunders, Sara Steenrod, Barbara K. Stubblefield, Deidra M. Montague, and Edward I. Ginns, DNA targeting of rhinal cortex D2 receptor protein reversibly blocks learning of cues that predict reward, PNAS August 17, 2004 vol. 101 no. 33, 12336–12341

7. Anticancer mice. These mice (the result of a lucky mutation) have immune systems that kill cancer cells efficiently and can even help other mice through blood transfusions.

Cui Z, Willingham MC, Hicks AM, Alexander-Miller MA, Howard TD, Hawkins GA, Miller MS, Weir HM, Du W, DeLong CJ. Spontaneous regression of advanced cancer: identification of a unique genetically determined, age-dependent trait in mice. Proc Natl Acad Sci U S A. 2003 May 27;100(11):6682-7.

Hicks AM, Riedlinger G, Willingham MC, Alexander-Miller MA, Von Kap-Herr C, Pettenati MJ, Sanders AM, Weir HM, Du W, Kim J, Simpson AJG, Old LG, Cui Z. Transferable anticancer innate immunity in spontaneous regression/complete resistance mice. PNAS E-published May 8, 2006.

8. Antiobesity mice. These mice are protected from getting obese and diabetic from their diet by their lack of acyl-CoA:diacylglycerol acyltransferase 1 (DGAT1). Their fat tissue can even reduce obesity and glucose buildup in other mice if transplanted. There are other strains protected from obesity by lack of other proteins, and a strain that have more adiponectin that put all excess fat into their blubber, remaining healthy despite turning very obese.

Smith SJ, et al. Obesity resistance and multiple mechanisms of triglyceride synthesis in mice lacking DGAT. Nat. Genet. 2000;25:87–90 

 

Chen HC, et al. Increased insulin and leptin sensitivity in mice lacking acyl CoA:diacylglylcerol acyltransferase 1. J. Clin. Invest. 2002;109:1049–1055. doi:10.1172/JCI200214672.

9. Marathon mice. These mice have more expression of PPARδ in their muscles, which makes them turn into type I (slow twitch) fibers that work well for long-distance running. The mice have more endurance and - even when not training - increased resistance to obesity.

Wang YX, Zhang CL, Yu RT, Cho HK, Nelson MC, et al. (2004) Regulation of Muscle Fiber Type and Running Endurance by PPARδ. PLoS Biol 2(10): e294

So what does this mean for the future

The Geo-Trade Blog believes that our relationship with technology and how it stretches our ability to perform in the world will be one of the key areas of advance in the 21st Century. In fact, how we answer the following questions will be key to determining the parameters: What does the future, near and far, hold for humans? Is enhancement the next stage of evolution? Should any limits be imposed? And if so, how?

Water in the 21st Century

Water is a common pool resource in the 21st Century

From the water wars and the pumping races in California in the 1950s to irrigation systems in Spain and mountain villages in Switzerland, all have demonstrated that people are able to draw up sensible rules for the use of common-pool resources like water. Water in the 21st century will increasingly need its own set of sensible rules to meet the new political, economic and environmental realities of the 21st century.

The Colorado River in the US

The Colorado River provides much of the water for many cities and farms in seven states in the US including Colorado, Wyoming, Utah, New Mexico, Nevada, Arizona and California before it reaches México. But flows of water on the Colorado River in the US have been forecast to decrease by up to 30pc by 2050. In the Northern States its water supports cattle empires. In the Southern States especially in California, the river irrigates deserts to produce much of the US' agricultural products, fruit and winter vegetables. And all along the way, aqueducts branch off to supply cities from Salt Lake City, Denver, Phoenix and Los Angeles. Interestingly, the Metropolis closest to Lake Mead, Las Vegas, gets 90pc of its water from this one source. 

Map of Colorado River in US West

Arguments over water tend to have four dimensions – physical, legal, political and cultural. For the physical the standard response is to summon the engineers. In the case of the Colorado River, engineers are already digging a new intake at 890 feet (lower than the current intakes as the water level in Lake Mead has decreased to ensure a guaranteed water supply to Las Vegas). Another response is to call in the lawyers. This was the preferred approach in the 20th century, in the era of the so called “water wars”. Starting with the the Colorado River Compact of 1922 and continuing with statutes, a treaty with México and case law until the 1960s, a truce was achieved. Called the Law of the River, the resulting regime determines who along the river has what right to how much water. 

At least, it does in theory. The problem is that the law took shape after two decades of record water flows, which became the basis for allocation. As a result it apportions more water than there is in the river. For decades that did not matter, since there was so few people. Then the cattle, fruit and people multiplied. The law's seniority rules theoretically mean that, for example, the taps to Las Vegas would be shut completely before agriculture in California were to loose a drop of water. This gives rise to the political dimension.

In the 21st century, cooperation has mostly replaced the old rivalries among agricultural and urban users among the seven river states. Nevada and Arizona have a water banking partnership and Arizona stores excess water in its aquifers to share with Nevada if needed. In California, the water utility of Los Angeles has bought water rights from some farmers. But inevitably arguments still persist. 

This leads into the final dimension which is the cultural dimension. The argument here is directly related to the culture of the US West. For example, does every middle-class household really need a lawn in a desert? In some cases, counties have begun paying their citizens to rip out their turf and opt for a desert landscape garden instead that can be just as chic. 

Egypt and Ethiopia are fighting for the Nile's water too

Most of the water that flows down the lower reaches of the Nile, the world's longest river, comes from the Ethiopian highlands. Up until recently the Ethiopian Government had been content to abide by a Nile River Water Treaty negotiated in 1959. The trouble is the current treaty has strongly favoured the biggest and most influential consumer of Nile water, Egypt. Ethiopia, which has recently overtaken Egypt as Africa's second-most populous nation has joined together with the other upstream Nile nations including Burundi, Congo, Kenya, Rwanda, Tanzania and Uganda to re-write the 1959 Nile River Water treaty taking advantage of the power vaccuum in Egypt's leadership after the Arab Spring. 

The combined population of the upstream countries along the Nile is 240m against Egypt (85m) and Sudan (30m) and South Sudan (14m). There are also plans afoot for Ethiopia to dam its bit of the Blue Nile and to build a large hydro-power capacity that would be the centrepiece of a plan to increase the country's electricity supply five fold over the next five years. These plans will undoubtedly have a big impact on other Nile countries downstream and have the potential to provoke cross-border water conflicts.

 And what about fracking and high water use it requires

In order to extract gas held in the hard shale rock, it is necessary to break up small sections by firing large quantities of water mixed with fine sand and fracking chemicals at a very high pressure to make the shale rock give up its gas. Water has been identified as a serious problem for mining shale gas mainly because of the quantities of it that are needed to successfully frack wells. But worse of all there have already been cases where local ground water aquifiers have been polluted by the harsh chemicals used in the fracking process. It is estimated that the average shale well uses around of 22m litres of water to extract the gas. If as predicted by many energy experts, shale gas extraction goes ahead at full speed, worldwide gas could make up around 25pc of primary energy by 2035 adding further pressure to the common pool resource of water.

So what does the future hold

The Geo-Trade Blog believes there is an increasing awareness of the need to act on the world’s impending water challenge in the 21st Century. Nevertheless growing global resource use highlights the complex interdependencies between water and energy, agriculture, industry, urban growth and ecosystems.

Governments and business need to prepare for long term water scarcity and to consider a framework to share the world's water - a common pool resource. Of particular importance are the challenges to addressing water issues at policy level nationally and internationally, to avoid cross-border water conflict. The Geo-Trade Blog believes that people do have the capacity to  draw up sensible rules for water use in the 21st Century but consideration needs to start now.