Adonis Diaries

Posts Tagged ‘Intel

Part two: Two main factors discriminating stable developed Capitalist economies; (Jan. 10, 2010)

Election law systems and the political decision of the winning coalition in election that generates State’s initiatives programs constitute the two main factors that differentiate among the capitalist economies in developed nations. The first part discussed the election voting system which determines the type of capitalist economy.  This part analyses the second main factors for economic capitalist development: State’s economic initiatives and financing.

The story goes that at the start of WWII, the US government had already decided to join the war in order to join in the spoil of the after war political conditions.  The US was preparing to enter the war at the proper time:   The Pacific Front (directed toward Japan) was the scene of heavy Federal investment in shipyard construction and fighter planes.

Frederick Terman of Stanford University capitalized on this influx of money to position the civil engineering and research infrastructure of the university.  The university set up programs to connect with businesses and encouraged professors and students to establishing joint private enterprises. Consequently, Hewlett Packard started with $70,000 in venture capital and 9 employees in 1939.  By 1943, Hewlett Packard had 100 employees and enjoyed sales of one million, mostly from the Federal government purchases.

In the 50’s, the electronic enterprise of Variant Associates was selling over 90% of its products to the US military.  By the end of the decade, Hewlett Packard, Variant Associates, Lockheed, and Fairchild Semi-conductor were selling almost exclusively to the Defense Department guided missiles, airplane fighters, and space vehicles.  Many important cadres quit establishing their own enterprises; Intel was one of them in Silicon Valley.

Timothy Bresnahan estimates that, even today, over 70% of research grants are provided by the various departments in US government. Over 50% OF STUDENT GRANTS AND TUITION WAVERS ARE DEPENDENT ON GOVERNMENT FUNDING. Over 50% of professional published articles acknowledge the financial support of the Federal government.

Congress frequently enact laws to serve industries that are cared for by the Federal government.  The current Telecommunication Act of 1996 was meant to encourage intellectual rights and properties.

There were four waves to Information and communication technologies.  The first wave started before WWII, the second at the onset of the cold war with the advent of integrated circuits and semi-conductors for guided missiles and performing radars. The third wave was related to micro-computer in the 70’s.  The fourth wave was the development of Internet network.  In all these periods, the US Federal government was the prime initiator, mover, and financier via many makeshift “venture capital” enterprises.

The Advanced Research Project Agency (ARPA) was created in 1960 and it financed the network ARPANET to link researchers in various universities receiving research grants from the Federal government for fast transfer of files and messages.

The technology centers in Seattle, Austin, Washington, Boston, and Ann Arbor are the creation of the US Federal government via grants to their corresponding universities. In every developed nation, it was the central government that initiated, financed, and motivated technological development and key economical branches.

This is the trend since before the “industrial revolution”.  Entrepreneurial motivating drive and private venture capital support are mostly myths to hide State interventions and fair global market trade agreements.

Germany economic power started a decade before WWI.  The US basically emulated the German economic Federally initiated and supported key industries:  The US economic system was over half a century late in adopting the German system.  Before WWI, Germany was the second industrial and economic power behind rich US.

France during President De Gaulle initiated and backed key industrial sectors.  The problem was that France missed the proper timing to privatize a few productive sectors, as the US did in the 70’s.

Information/Communication Technologies (ICT): Transmitter of crisis and catalyst of global economic restructuring; (Dec. 19, 2009)

Astronomical sums are invested in the technologies of information and communication (ICT). In 2008 alone, over 1.8 $trillion were spent by private and public institutions.

Since 1980, half the total investments by banks and financial institutions have been oriented toward the ICT sectors so that exchange of information and transactions be as fluid and instantaneous as desired on global scale. It followed that banks and financial institutions were drawn to diversification into acquiring factories, lands, real estates, and mines.

Multinational ICT companies were frequently reconfigured to adjust with evolving strategies and global market access.

Before the financial crash, Citigroup hired 25,000 computer programmers and invested 5 billion on ICT technologies and related infrastructure in 2008.  Lehman Brothers was using 3,000 programs on 25,000 servers around the world. 

This run for ICT technologies was viewed as the main tool for “space-time bailout” by channeling capitals to emerging sectors susceptible to inevitable expansion. The age in the 70’s was coined “society of information”.  Thus, in 2007, US multinationals profit from outside investment amounted to 25% compared to only 5% in 1960.

So far, Information and Communication technologies are the two main factors for capitalist global economy expansion and have displaced many traditional economies. For example, Skype (voice on internet) has over 400 million users and is the most important provider of international communication. Skype was the catalyst for the explosion of high debit mobile phone infrastructures and for the demand of internet services to enterprises. Facebook has 300 million subscribers (to be updated to over 900,000?).

Mobile phone is displacing computers and TV markets: there are over 4.5 billion users of mobile phones and the latest generations function as multimedia screens. Apple’s mobile has swept China and South Korea markets; over 100,000 programs were developed for its applications.

Amazon, Apple, and Google (via YouTube) have broken serious barriers into cartels in music, books, video games, and movies. Low priced connections are provoking the centralization of programs, data, images, and emails are frequently stored in “farm servers” belonging to giant operators.

In 2005, 19 out of the 25 first ICT enterprises were from the US and over half the satellites are US. Heavy weight consumers of ICT such as Wal-Mart and General Electric impose standards on information and communication systems that are applied globally.

By 2009, Samsung, Nokia, Nintendo, Huawei, Tate, SAP, Telefonica, DoCoMo, Americal Movil, Vodafone, and especially China Mobile are displacing minor US players among the 250 greatest enterprises. Newer investments are primarily flowing from China, India, and Mexico in ICT.

Although Cisco (the prime provider in web routers) has accumulated financial reserve of $20 billion, Microsoft (the emperor of systems of exploitation) around $19 billion, Google (dominating search engines and on-line video) around $16 billion, Intel (world leader in semi-conductors) around $10 billion, and Apple (programs most prized by elite users) around $26 billion, only China Mobile generated profit of $18 billion in 2009.

Publicity expenditures in 2009 amounted to $500 billion (though they declined by 10% after the financial crash), but multimedia expenditures in the US in 2008 reached $900 billion and are increasing by 2.3%. 

The giant ICT companies are trumpeting acquisition of competitors and setting the stage for an unknown educational, cultural, and economic world.  The capitalist global economy is going ahead and strong because of IC technologies; we have the impression that the world is reduced to a town square.




May 2020

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