The Coronavirus Threat: A view from East Asia.

Regular readers of Nones Notes Blog know that my brother, Nelson Nones, has lived and worked outside the United States for nearly 25 years – much of that time in East Asia. So naturally I was curious about his perspectives on the spread of the Coronavirus from its epicenter in Wuhan, China, what precautions he is taking in the face of the threat, and his perspectives on how the actions of Asian countries affected by the outbreak may be mitigating the potential effects of the virus.

Here is what Nelson wrote to me in response to my query:

The Coronavirus has not affected my business here in Bangkok to date. I did make a trip to Singapore during the last week of January and to Taiwan during the first week of February, after arriving back in Thailand from the U.S. on January 12th.  I haven’t been sick at all – before or since.

However, in an abundance of caution I am keeping myself at home as much as possible, and I have decided not to travel anywhere until the current hullabaloo dies down.

As for the situation here in Thailand, this country is actually the location of the first COVID-19 (Coronavirus) case ever recorded outside Mainland China. This was back on January 13th, just two weeks after China first notified the World Health Organization (WHO) of the new disease, and only two days after China recorded its first COVID-19 death.  

The patient here in Thailand was a Chinese woman who had traveled from Wuhan, the epicenter of the pandemic.

Since then, Thailand has recorded 42 additional cases for a total of 43 patients, of whom only one died (on Sunday March 1st), and 31 have recovered.  This leaves 11 active cases – all considered mild.

The first case of human-to-human virus transmission within Thailand was recorded on January 16th, affecting a taxi driver. Of the 43 cases confirmed so far, 25 affected Chinese citizens; seven affected Thai citizens with travel histories to China, Japan or South Korea; seven affected Thai citizens who work in the tourism or healthcare industries; and the remaining four were other domestic cases (of which only two potentially represent “community spread”).  Thailand’s infection growth factor peaked on January 26th.

Being one of the world’s most popular tourist destinations (especially from China), Thailand has never imposed any travel restrictions, even from China (nor has the U.S. ever imposed any COVID-19 travel restrictions on Thailand), but all arriving international passengers are screened by an initial body temperature check. Those who fail the initial screening are required to disclose their travel histories within the past 14 days, in detail.  If they have travelled to or from any affected areas, and exhibit any COVID-19 symptoms, they are immediately quarantined at a specially-designated hospital for isolation and treatment.

Under the circumstances, and considering its geographic proximity to China as well as the normal volume of Chinese tourist travel, I think Thailand’s containment efforts so far have been successful and offer some lessons for the United States. Containment in India, Indonesia and Bangladesh so far is even more impressive (Indonesia reported its first two cases only on March 2nd).

Displayed below is a listing of South, Southeast and East Asian countries, ranked by population (together with the U.S. for comparison purposes), showing the number of cases and deaths reported so far:

* Excludes Diamond Princess cruise liner cases.

Sources:

Case data are from https://www.worldometers.info/coronavirus/#countries

Populations are from https://en.wikipedia.org/wiki/List_of_countries_by_population_(United_Nations)

The countries shaded in green, above, are those which did not require advance visas for Chinese citizens holding ordinary passports, prior to the imposition of temporary COVID-19 travel restrictions. These countries were either visa-free or allowed “visa on arrival.”

The countries in red typeface, above, are those which had imposed temporary COVID-19 travel restrictions as of early February 2020. These include “entry bans on Chinese citizens or recent visitors to China, ceased issuing of visas to Chinese citizens and re-imposed visa requirements on Chinese citizens or countries that have responded with border closures with China.” (See https://en.wikipedia.org/wiki/Visa_requirements_for_Chinese_citizens for source data.)

It’s quite clear from the data above that, excluding Mainland China itself, there is little or no correlation between the incidence of COVID-19 cases or deaths and the leniency of a country’s previous or current travel restrictions in so far as Mainland Chinese are concerned.

Indeed, all of the four countries having a higher number of cases than Thailand (Japan, South Korea, Hong Kong and Singapore) required advance visas before the COVID-19 outbreak, and all but one (Hong Kong) had imposed COVID-19 entry bans as of February 2nd

Conversely, apart from Thailand, the countries which did not require advance visas before the COVID-19 outbreak have averaged fewer than one case per country (although all of them except Cambodia and East Timor had imposed temporary COVID-19 travel bans by February 2nd).

The countries shown in bold typeface above are those which are geographically closest to the COVID-19 epicenter. An average of 570 COVID-19 cases have been reported within each of these 10 countries; only Laos has been immune so far. Conversely, an average of 6 COVID-19 cases have been reported within each of the remaining 26 countries (excluding China itself).

From these data, I’ve drawn the following four generalizations:

  • Outside of Mainland China, international travel bans and visa restrictions are not effective tools for controlling the spread of COVID-19 disease within a country.
  • Geographic proximity to Mainland China is well-correlated to the historical spread of COVID-19 disease in South, Southeast and East Asia.
  • Vigilant screening and disposition of suspected cases is vital to containing the spread of COVID-19 disease, as Thailand’s experience demonstrates.
  • Allowing high concentrations of suspected cases to form without treatment, such as Wuhan (China), the Diamond Princess docked at Yokohama (Japan) and Shincheonji church at Daegu (South Korea), is a recipe for disaster.  

Of course, the virus and its spread is an evolving narrative, and Nelson’s observations may soon be overwhelmed by new developments. Still, I was somewhat surprised to read that the situation is not quite as dire as the news reporting here in the U.S. would seem to indicate.

Have you heard from overseas friends or colleagues about how they are responding to the Coronavirus outbreak? Please share their perspectives with other readers here.

Weighing in on America’s most trusted brands.

tutdIf someone were to tell you that the Unites States Postal Service is the most trusted brand in America right now, that might seem surprising at first blush. But that’s what research firm Morning Consult has determined in its first-ever survey of brand trust, in a report issued this past month.

Survey respondents were asked how much they trust each of the brands under study to “do what is right.” The ranking was determined by the share of respondents giving the highest marks in response to the question – namely, that they trust the brand “a lot” to do what is right.

The USPS scored 42% on this measure. By comparison, runner-up Amazon scored ~39% and next-in-line Google scored ~38%.

Wal-Mart rounded out the top 25 brands, with a score of ~32%.

The Morning Consult survey was large, encompassing more than 16,000 interviews and covering nearly 2,000 product and service brands. The size of the research endeavor allowed for evaluation based on age demographics and other segment criteria.

Not surprisingly, ratings and rankings differed by age.  Unsurprisingly, the USPS is ranked highest with the Gen X and Boomer generations, whereas it’s Google that outranks all other brands among Gen Z and Millennial consumers.

mibAnother finding from the research is that of the 100 “most trusted” brands, only two were established after the year 2000 – Android and YouTube. That compares to 20 of the top 100 most-trusted brands that were founded before 1900.  Clearly, a proven track record – measured in decades rather than years – is one highly significant factor in establishing and maintaining brand trust.

Also interesting is the study’s finding that brand attributes related to product or service “reliability’ are far more significant over factors pertaining to “ethics.” Shown below are the factors which two-thirds or more of the survey respondents rated as “very important”:

  • Protects my personal data: ~73% rate “very important”
  • Makes products that work as advertised: ~71%
  • Makes products that are safe: ~70%
  • Consistently delivers on what they promise: ~69%
  • Provides refunds if products don’t work: ~68%
  • Treats their customers well: ~68%
  • Provides good customer service: ~66%

By contrast, the following factors were rated “very important” by fewer than half of the respondents in the survey:

  • Produces products in an ethically responsible way: ~49% rate “very important”
  • Produces products in a way that doesn’t harm the environment: ~47%
  • Has the public interest in mind when it comes to business practices: ~43%
  • Is transparent about labor practices and the supply chain: ~42%
  • Produces goods in America unless it is particularly costly: ~40%
  • Has a mission beyond just profit: ~39%
  • Has not been involved in any major public scandal: ~38%
  • Gives back to society: ~37%
  • Has strong ethical or political values: ~34%

There is much additional data available from the research, including findings on different slices of the consumer market. The full report is accessible from Morning Consult via this link (fee charged).

Facial Recognition Faceoff

Facebook has been resisting outside efforts to rein in its “faceprints” facial recognition initiative – and mostly losing.

I’ve blogged before about the concerns many people have about facial recognition technology, and the troubling implications of the technology being misused in the wrong hands.

Facebook would claim to be the “right hands” rather than wrong ones when it comes to the database of “faceprints” it’s been compiling over the past decade or so. But its initiative has run afoul of an Illinois biometric privacy law passed in 2008.

The Illinois measure, which prohibits companies from collecting or storing people’s biometric data without their consent, is one of the strongest pieces of legislation of its kind in that it also allows individual consumers to sue for damages – to the tune of up to $5,000 per violation.

And that’s precisely what’s happened.  A class-action suite was filed in 2015 by a group of Illinois residents, alleging that Facebook has violated the Illinois privacy law through its photo-tagging function which draws on a trove of “faceprint” photos to recognize faces and suggest their names when they appear in photos uploaded by friends on Facebook.

Facebook has vigorously resisted efforts to rein in its faceprint initiative, arguing that any such lawsuits should be dismissed because users haven’t actually been injured by any alleged violations of the state law.

That stance has been rejected – first in U.S. district court and then in the court of appeals. Undaunted, Facebook appealed to the U.S. Supreme Court which turned down the appeal in late January.

Rebuffed at all legal levels, Facebook has now decided to settle the suit for a reported $550 million, including payments of ~$200 each to claimants in the Illinois class-action suit.

Facebook has lost, but the whole notion of facial recognition technology could well be like playing a game of whack-a-mole. As it turns out, another firm has developed similar functionality and is busily selling facial recognition data to police departments across North America.  According to a recent investigative article publishing in The New York Times, a company called Clearview AI has mined billions of photos from Twitter, Facebook and other social platforms.  (Clearview is now being sued in Illinois for allegedly violating the same biometric privacy law that was at the center of the Facebook suit.)

And indeed, the efforts to rein in facial recognition activities may be a little too little, a little too late: According to a recent report from Business Insider, the faces of more than half of all adults in America have already been logged into police or government databases.

… Which brings us to a parallel response that appears to be gaining traction: figuring out ways to fool facial recognition software.  A number of entrepreneurs are developing intriguing methods to beat facial recognition software.  Among them are:

  • Clothing designers have begun to target weaknesses in the ability of facial recognition software to process overlapping or unusual shapes, as well as deciphering multiple similar images appearing in close proximity. One such example is a pair of goggles fitted with near-infrared LEDs that interfere with the ability to scan facial features.
  • Headscarves decorated with different faces “confuse” the software by overloading it with excessive amounts of data in the form of numerous facial features.
  • So-called “adversarial patches” – a graphic print that can be added to clothing – exploit the vulnerabilities in facial recognition scanning by making a person “virtually invisible for automatic surveillance cameras,” according to creators Simen Thys, Wiebe Van Ranst and Toon Goedemé.

Will the two-front attack on facial recognition technology from the legal as well as technology standpoint succeed in putting the facial recognition genie back in the bottle? It’s debatable.  But it’s certainly making things more of a challenge for the Facebooks and Clearviews of the world.

Hot-desking on the hot-seat.

“Few aspects of office life are more dispiriting than hot-desking — the penny-pinching ploy that strips people of their own desk and casts them out to the noisy, chaotic wasteland of shared work spots.” 

— Pilita Clark, Correspondent, Financial Times

I’ve blogged before about so-called “open office” layouts and how they’re disdained by many employees. But even with all of the unpopularity of open office layouts, there’s another office concept that appears to be even more despised: “hot-desking.”

Hot-desking is a concept that came into being more than a decade ago, and it takes the idea of “open offices” a step beyond. It’s a design in which workers are not assigned to a regular desk or cubicle, but instead find whatever desk is available to them on any given day.

If you read the literature from five or ten years ago, you’ll see all manner of compelling reasons being proffered as to why hot-desking is a worthwhile concept. One rationale is that hot-desking fosters “agile working” and more collaboration among employees — at the same time making communications between workers more effective and thereby enhancing the exchange of information.

Reading those advocacy pieces, there are numerous references to employees finding hot-desking to be “liberating,” “motivating,” “energizing,” and so forth.

Advocates of hot-desking appear to equate it the practice of working “wherever” — just to long as the work gets done. “Wherever” can mean at home, in coffee shops, or anywhere around the office.

If all this seems a little too neat and tidy, the your suspicions are warranted. Because some observers are onto the real reasons companies adopt hot-desking work environments — which is to save on office space and its associated costs.

Is it any wonder that hot-desking is promoted by top executives, finance and facilities management personnel more than any others?

Alison Hirst, PhD, a research specialist at Anglia Ruskin University in Cambridge, UK, who has experienced hot-desking personally, clues us in on what’s actually happening. She spent three years carefully studying one organization that moved to a hot-desk environment:

“Like many companies, it had switched to hot-desking to reduce property costs and enable precious office space to be used flexibly. In the language of facilities management, an office building can be ‘crunched’ by increasing the staff-to-desks ratio, and it can be ‘restacked’ as teams and departments are moved around like boxes.

But in this bid for cost-cutting, a number of employees are made to feel underappreciated at best and unwanted at worst. There is often a subtle division between those who can ‘settle’ and reliably occupy the same desk every day, and those who cannot.”

In Hirst’s observations, “settlers” are able to arrive at the office early choose their preferred desk. By repeating their choice over time, it effectively establishes this desk as “their” space — whether it be because of its preferred location near to windows, or near to their closest colleagues.

Those who cannot arrive sufficiently early — such as part-time employees or those with childcare responsibilities — are left to hunting around for a suitable workspace, often far removed from the colleagues with whom they need to work most closely.

Last year, business author and journalist Simon Constable penned an opinion piece for Forbes with the provocative title “How Hot-Desking Will Kill Your Company.” In it, Constable contends that for most companies, the drawbacks of hot-desking vastly outweigh any benefits. Constable, who also has personal experience working in a hot-desking environment, makes these salient points:

Hot-desking signals that employees don’t matter — companies like to say that their employees are their single best asset. But when an employee isn’t even offered a permanent desk, it sends a completely opposite message.

Super-quick meetings won’t happen — Brief impromptu meetings are a vital part of office efficiency. In concentrated work environments with relevant teams of employees, such micro-events are important but don’t interrupt much of the workflow because of the proximity of the workers involved. If having short 3- or 5-minute meetings will require summoning people from all over the building, that super-quick meeting will soon become a frustrating 15 or 20 minutes, eating away at productivity. Which means they’ll rarely happen at all.

Inefficiencies add up quickly — The combined total costs of small-but-incremental negative effects adds up. The larger the office, the worse the impact is likely to be.

Rank hypocrisy — Employees notice that many of the biggest advocates for hot-desking are the people who have dedicated desks for themselves — and often their own individual offices with doors. “Hot-desking for thee but not for me.”

Fortunately, I work in a small office where everyone is not only locationally proximate, we even have walls and a door for when privacy is needed for meetings or concentrated creative/copywriting time without distractions. Closed-door activities may only happen once or twice per week, but they increase work efficiencies. I consider our situation fortunate not to be forced into open-office or hot-desking scenarios.

What are your thoughts on the hot-desking concept? If you have personal experiences, please share them with other readers here.

Amazon: Where utilitarian products deliver stellar results.

In the era of e-commerce, year after year the growth and financial success of Amazon continues to be noteworthy — seemingly impervious to economic downturns or volatility.

What’s the secret sauce?

The answer is interesting. It isn’t that Amazon dominates any particular product category. Rather, it’s the kind of product — “utilitarian” — that cuts across many categories.

From cellar to stellar: Amazon shares’ incredible run.

Utilitarian products tend to be practical, generally inexpensive or downright cheap … and typically carry little risk associated with making a regretful purchase choice. They aren’t the type of products that inspire brand affinity, and they typically don’t require very much in the way of pre-purchase research on the part of buyers.

Moreover, on Amazon these utilitarian products have an equally utilitarian path to purchase. Purchase “journeys” — such as they are — are straightforward. Often they begin and end on Amazon’s site, with few or no deviations to conduct research or compare brands.

This is where Amazon excels — in nudging shoppers down the sales funnel while giving them no reason to go away from the website. Amazon makes the purchase steps quick, effortless and satisfying — and probably easier to complete than anyplace else online. If there is a more elegant purchase procedure out there in cyberspace, I have yet to find it.

And if some shoppers might wish to do a little more product evaluation, Amazon makes that possible as well, with consumer reviews offered right on the site for quick and easy evaluation and validation.

Of course, there are certainly product categories that aren’t particularly “utilitarian” in nature, and this is where Amazon’s model is a little less effective. A category such as women’s apparel is more brand-specific and brand-driven, and the purchase journeys in that realm are typically more longer, more circuitous, and more discovery-focused.

But Amazon has effectively carved out a niche in so-called “basic” products to the degree that it has become the “go-to” destination for thousands of products that are “common” in every sense of the word — resulting in some very uncommon business and financial results for the company.

Closed-loop manufacturing: Practicality or pipedream?

Some of today’s more “socially aware” companies like to talk about becoming a closed-loop manufacturer. The topic seems particularly prevalent in the electronics industry, where generally higher profit margins may make it easier to actually accomplish such a challenging goal.

The most recent example of this is Apple. One of its key strategic objectives is to bypass the mining industry as much as possible by “mining” instead the innards of its customers’ discarded electronic devices.

Apple does quite a bit of this activity already, as it turns out. In 2018, the company reported that it refurbished nearly 8 million of its devices — thereby helping to divert nearly 50,000 metric tons of electronic waste from landfills.

But now it’s doing even more. Apple has developed a robot that is engineered to disassemble electronics. The robot, dubbed “Daisy,” is able to disassemble 1.2 million devices per year, retrieving 14 types of minerals for reuse. There are now multiple locations in the United States which can receive discarded Apple iPhones for disassembly and closed-loop manufacturing.

Of course, Apple’s lofty objective isn’t without its critics. Some note that Apple eschews the idea of manufacturing devices that can be repaired, rather than merely recycled. Others rebut the idea, noting that advancements in electronics make it unrealistic that the life of any single Apple device would ever extend longer than single-digit years.

Still others doubt that Apple will ever succeed in becoming a true closed-loop manufacturer. Kyle Wiens, who heads up iFixit, a firm that advocates for electronics repair versus replacement, is one such detractor. Says Wiens, “There’s this ego that believes they can get all their minerals back — and it’s not possible.”

What are your thoughts about the potential of closed-loop manufacturing and the Apple experience? Feel free to share your observations with other readers here.

Yet another challenge for publishers: Subscription fatigue.

As if it isn’t enough that newspaper and magazine publishers have to compete with an ever-widening array of information providers, in the effort to migrate subscription revenues from print to digital these publishers are squaring off against an additional challenge: subscription fatigue.

Not every consumer is opposed to paying for media, but with so many fee-based streaming services now being offered — including the ones by powerhouses like Netflix and Spotify — trying to get people to focus on “yet another” resource is proving difficult.

Moreover, when it comes to news information sources it’s even more challenging. According to a recent Digital News Report prepared by Reuters Institute, when given a choice between paying for news or paying for a video streaming service, only ~12% of respondents in the Reuters survey stated that they would pick the news resource.

It seems that with so many time demands on people’s online activities, fewer are willing to pay for access to information that they don’t wish to commit to consuming on a regular basis. Unlike most of the entertainment streaming services, news stories are often available from free sources whenever a consumer might choose to access such news stories. Those alternative news sources may not be as comprehensive, but i’s a tradeoff many consumers appear willing to make.

This is hurting everyone in the news segment, including local newspapers in smaller markets which have faced a major falloff in print advertising revenues.

Underscoring this dynamic, more than 1,800 newspapers in the United States have closed their doors in the past 15 years. Today, fewer than half of the country’s counties have even one newspaper within their borders. This fallout is affecting the availability of some news information, as local media have a history of covering stories that aren’t covered elsewhere.

But it’s yet more collateral damage in the sea change that’s upended the world of newspapers and periodicals in recent years.

More findings from the Reuters Institute report can be accessed here.