Germany Offers a Blueprint for a US Middle-Out Economic Agenda

Steven Hill over at the Atlantic website presents an labor and education approach that should appeal to the right and the left in an article titled,

President Obama Wants America to Be Like Germany—What Does That Really Mean?

 He starts by posing the questions: 

"Want a smarter workforce? A stronger manufacturing sector? Germany seems to offer a blueprint for Obama's middle-out economic agenda -- if we take away the right lessons

Reuters

Americans have experienced a strong case of Germany Envy throughout the recession and slow recovery. In 2010, when the president pledged to double export growth in five years, policymakers looked to Germany for tips. In his latest State of the Union, the president plugged Germany, not only as a manufacturing powerhouse, but also as a standard for vocational training for young people.
The new liberal vision of a competitive economy built around a resurgent manufacturing sector and an educated middle class seems to ape what Germany does best. But how much do we really understand what makes the German economy a world-class leader?
It's true that, by U.S. standards, Germany has a model system for technical training of workers. The Land of Bismarck has fed its manufacturing machine with a steady supply of technicians, engineers and skilled workers through a superb apparatus of vocational training and technical apprenticeships. Companies work closely with regional technical schools, sometimes sponsoring programs to prepare the graduates so they are immediately job-ready.
But Germany's vocational training isn't top of the class by European standards. That prize goes to Denmark. Over four percent of Danish gross domestic product is spent on job training and support -- about the same percentage the U.S. spends on its military budget while allotting a mere 0.7 percent to job retraining and support. And Danes have job placement down to a quasi-science. Experts prepare what is known as a "bottleneck analysis," using pollsters to survey employers on what jobs they will need in coming years. The feedback is then used to identify the next labor shortages and to pick the correct training courses for individuals. One Danish jobs analyst said, "In our system, we can make supply and demand match," an impressive boast that shows a proactive government can help a flexible labor market.
THE SECRET SAUCE IS S.M.E.
Beyond vocational training, a huge factor in Germany's manufacturing and export success lies in its vibrant mittelstand -- those small and medium-size enterprises (SMEs) that form the backbone of the economy. Germany has a cornucopia of Fortune 500 companies that are manufacturing leaders -- global brand names like BMW, Siemens, ThyssenKrupp, Volkswagen, Daimler and BASF -- but what really sets Germany apart is its beehive of small and medium-size businesses.
About 99 percent of all German companies are SMEs, which are enterprises with annual sales of below EUR 50 million and a payroll with fewer than 500 workers. And around two-thirds of all German workers are employed in this sector. While that's the same as the EU average, it's higher than the United Kingdom (60% SMEs) and much higher than the U.S. (about 50%). While America's policy makers pay lip service to sound bites like "small business is the backbone of the American economy," Germany actually follows through with smart policy. The results speak for themselves.
While Germany's entire SME sector is impressive, its manufacturing SMEs are world-class. Nearly a third of Germany's SME workers are employed in the manufacturing sector, but those workers account for a disproportionate share of Germany's total exports, about 40 percent (compared to American SMEs which account for 31 percent of U.S. exports). Many enterprises have been run by the same family for decades, and companies are often handed down from generation to generation.
'KING OF NICHE MARKETS'
"America concentrates on the mass market and quantity, but Germany is king of niche markets," says Professor Bernd Venohr of Berlin's School of Economics. That entrepreneurial strategy has allowed these German companies to be manufacturing and export dynamos, providing developing nations like China and India with the high tech precision tools they need to become the mass production factories of the world.
A typical enterprise will focus on making a single, high quality product that is crucially needed by other industrial enterprises, and they are the best in the world at producing it. Many manufacturing SMEs have become world market leaders in their field, dominating the global market in an astonishing range of areas.
-- Tente specializes in heavy duty casters and wheels for industrial uses.
-- Würth is the leading industrial supplier of assembly and fastening materials worldwide.
-- Dorma makes doors and related accessories.
-- Rational makes ovens for professional kitchens.
-- Other examples include RUD (industrial chains), Koenig & Bauer (printing presses), Utsch (licence plates), Aeroxon (environmentally-safe insecticides) and Kärcher (high-pressure cleaners). The German renewable energy sector (wind energy, solar photovoltaics and biomass) has been the world's leader for many years, and much of it is driven by SMEs that are now expanding into international markets.
I interviewed the co-owner of Hegra Linear, a leading manufacturer of what is known as mechanical motion technology, based near Frankfurt. Their company has about 25 employees, and produces a little-known niche product: telescopic slides and linear guiding systems. These are high tech, low-friction shelves, slides and drawers needed in a wide range of industrial applications, including factory automation, automotive assembly, airplane production and more. For example, if you have a very large, heavy battery for a metro bus that you need to have easy access to for maintenance, then you need a way to smoothly slide that battery in and out. By setting that battery on one of Hegra Linear's high tech, near frictionless drawers, that makes it easy to slide it in and out and gain access. Hegra Linear does this extremely well, and business has grown rapidly in recent years. Said the owner, "We rely on our good reputation to bring in new customers."
These kinds of companies are not flashy or household names, but they are noted for having a relentless drive to produce high quality products, as well as stellar productivity and an obsession with improving operational performance. These SMEs are particularly strong in shop floor operations, with state-of-the-art, lean manufacturing practices that flows from their intensive investment in research and development.
While Germany's economy shrank in the last measured quarter, mostly due to the collapse of the overall European economy, it still runs a trade surplus with much lower unemployment than the U.S. German Chancellor Angela Merkel once was asked by then-British prime minister Tony Blair what the secret was of her country's impressive success. She famously replied, "Mr. Blair, we still make things." In Germany, manufacturing still dominates finance, not the other way around, as Germany has continued to emphasize manufacturing and exports over the financial industry.
THE POWER OF WAGES
The conventional wisdom among some observers of the U.S. economy is that manufacturing can't compete with low-cost labor in China. Germany has shown this viewpoint to be utter rubbish. One study by the US Bureau of Labor Statistics found that hourly manufacturing compensation (wages plus benefits) was $48 in Germany and only $32 in the United States (that study was for all manufacturing workers, not just those in SMEs, but Germany's manufacturing workers in SMEs make comparable wages to those working for their large corporations).
German workers in SMEs also all have quality, affordable health care. In the U.S., many workers in SMEs tend to have inferior health care if they have it at all. American apparel workers employed by SMEs are likelier to work in sweatshop-like conditions, with Sweatshop Watch reporting that "67% of Los Angeles garment factories don't pay their workers minimum wage or overtime." Workers in Germany's SMEs are not subjected to such deprived conditions.
All of these components have allowed the German manufacturing and export sectors to enjoy a sterling reputation around the world, and contributed greatly to Germany being the world's fourth-largest economy with a sizable trade surplus. And Germans have harnessed that wealth to foster an equitable and broadly shared prosperity that has given Germans an enviable living standard.
Moreover, unlike in the U.S. where Democrats and Republicans, left and right, fight bitter battles over the best manufacturing strategy, in Germany its various governments from both the right and the left mostly have been joined at the hip when it comes to manufacturing policy, as well as other economic policies. This has included specific policies to deal with the economic crisis, as well as longer term strategies. Good policies can make a difference, and Germany's have given it a competitive edge.
So for President Obama to cite Germany's vocational training for youth as a model is certainly a step in the right direction. But the German example cannot be cherry-picked. It is the sum of its parts -- from vocational training, through the strength of its SMEs, to its high-productivity export focus -- that makes it the envy of so many Americans."

Check out the article in it's native environs at:  http://www.theatlantic.com/business/archive/2013/02/president-obama-wants-america-to-be-like-germany-what-does-that-really-mean/273318/

Steven Hill is author of 10 Steps to Repair American Democracy: 2012 Election Edition and Europe's Promise: Why the European Way Is the Best Hope in an Insecure Age.

When Your Analogue Advantage is Gone - Maintaining Digital Era Brand Value

Here's a quick branding story excerpted from a article found on the digitalcamerainfo.com website about the recent Photokina show. For the non-photography versed reader, all you need to know is that Hasselblad and Leica created very high-end precision-built camera models throughout the era of traditional photography.  The mechanics and optics of their product were impeccable and true differentiators from the other brands in the marketplace.

The tactics of these venerable firms in a digital era that has somewhat democratized what were the advantages of their former analogue product are being found suspect by some. It is a comparative case study in the making as these two still highly valued brands move forward.

Here's the excerpt: 

"Photokina is one of the few occasions where the average photographer can bask in the glow of the highest of the high-end equipment that the industry has to offer. Yes, you can touch the Leica cameras and shoot with Zeiss lenses. Every other day of the year, they’re in the domain of professionals and rich doctors, but Photokina is a time of sharing. “Let the plebeians be entertained. We need a break from counting our money anyway.”

The Hasselblad Lunar is the Sony NEX-7 in a new shell, marked up 400%

But Hasselblad must think that we all turn stupid when we’re around fancy things. Mainly known for high-quality medium-format cameras and lenses, Hassy tried to pull the wool over our eyes with the Lunar, which is literally the Sony NEX-7 in an expensive case. The NEX-7 is a fantastic camera, and normally costs about $1,300 with a kit lens. Hasselblad made it uglier and bulkier and marked it up to $6,500 without changing anything about the performance—including the cheap kit lens.
They frame it as a luxury camera, something that projects an image, a sense of fashion and class. It’s really just another crass, ostentatious way for people to say, “Hey, I’m filthy rich, so I’m allowed to make stupid decisions,” like parking a Ferrari in a trade show booth (hey, Hasselblad did that, too).
To be fair, Hasselblad isn’t the first company to pull this stunt. Leica’s V-Lux series are always just Panasonic cameras with a red dot stamped on the front and a higher price tag. But at least Leica has the good graces to leave the cameras alone otherwise. Hasselblad arguably made the NEX-7 worse with such a gaudy design.
But it all points toward a gross trend: Expensive cameras as a status symbol. It’s one thing when people buy high-end cameras that they don’t know how to use. It’s another when companies bank on the fact that somebody will overpay for a camera only because it has a different logo. Let’s hope this experiment fails."

http://www.digitalcamerainfo.com/Features/The-3-Biggest-Photo-Trends-of-the-Next-2-Years.htm?utm_source=taboola&utm_medium=cpc

Where I do differ with this article is that an expensive camera as a status symbol is not a new trend. Ninty-eight percent of professionals never owned either of these brands. The largest part of Hasselblad and Leica marketshare has always been folks with more money than most any professional photographer. What is new is that these two revered brands have had to recognize that their long time quality manufacture differentiators in the marketplace are now gone. Right now, as they are running on reputation, all they have left is the value of those logos. Short-term, the revenues produced by the status seeker might keep the firms afloat while they figure out where they fit in this new imaging world. Their analogue product was a status symbol because it was unlike anything produced by their competitors. (Thirty years ago, a Leica or Hasselblad logo on a Minolta or Pentax would have been heiracy.) Hopefully they will realize that to do nothing more than stick their logo on other peoples product is not a long term solution. To wrap this with a car analogy... they're selling Hondas and Toyotas with BMW and Mercedes hood ornaments.

The Key Marketing Trends for 2013

Over the summer, Nick Johnson and his team at Useful Social Media have been doing some fairly intensive primary research with CMOs and other senior executives working in marketing around the world.
As Nick explains, "Happily, all of us (Harry, Em, Hayley and myself) spotted the same three themes coming up again and again. OK, so they’re slightly broader than just ‘social media’ – but I thought you might want to know more."

He has written up three explanatory pieces, taking us through the three themes individually. They’re on his Tumblr blog, and the links are below:

1. Customer-Centricity: How to put your customer at the heart of everything you do
2. The Accessible Consumer and increasing marketing complexity (incl. SoLoMo)
3. The Death of Push Marketing and ‘traditional’ company-consumer relations

Have a read, and please do give him your feedback.

About Nick Johnson

Nick founded Useful Social Media in 2009 to deliver business intelligence on social media for large businesses. Nick writes regularly for the blog, along with putting together the annual State of Corporate Social Media report and various other longer-form briefings.

An Historically Corrected Vote for Lincoln in 2012

Historically Corrected is a project of students and faculty at Washington College’s C.V. Starr Center for the Study of the American Experience, where Adam Goodheart is the director and Peter Manseau is a scholar in residence.
They provided a column to the New York Times yesterday titled Vote Lincoln in 2012.
As this blog has previously referred the the 16th President in the context of this year's elections, here's what they shared over at the NYT site:

"Mitt Romney may have upstaged President Obama in last week’s presidential debate, but it was Abraham Lincoln who stole the show at the last minute. An extended promotional trailer for Steven Spielberg’s forthcoming “Lincoln” biopic aired on several major television networks — including ABC, CBS and CNN — immediately after the final fadeout in Denver. Its soundtrack of soaring strings and crashing percussion, and its images of Union soldiers dying in agony and jubilant African-Americans rejoicing in freedom, certainly made presidential politics appear more thrilling than it might have seemed during the candidates’ umpteenth round of bickering over budgetary policy.
Nor was this Lincoln’s only appearance last Wednesday. Up against the ropes in the 73rd minute of his bout against Mr. Romney, Mr. Obama turned for support to a man any 21st century candidate would like to have in his corner. “As Abraham Lincoln understood, there are also some things we do better together,” the president said:

So, in the middle of the Civil War, Abraham Lincoln said, let’s help to finance the transcontinental railroad, let’s start the National Academy of Sciences, let’s start land grant colleges, because we want to give these gateways of opportunity for all Americans, because if all Americans are getting opportunity, we’re all going to be better off. That doesn’t restrict people’s freedom. That enhances it. And so what I’ve tried to do as president is to apply those same principles.

If this argument failed to land a rhetorical punch against his opponent, it could be because Mr. Obama has paraphrased Lincoln in a similar way many, many times before, including in his State of the Union address earlier this year. It could also be because he was not the only one on stage who likes to think that Lincoln has his back.

Library of Congress Lincoln the Rail-Splitter

The 16th president has been evoked so often by both sides that the current presidential race might be seen as the latest round of an ongoing custody battle over a certain young lawyer from Illinois. Although Mr. Romney himself has made only rare public references to his party’s first and most celebrated president, his supporters have not been so reticent: at the Republican National Convention in Tampa, delegates waved Lincoln fans and donned stovepipe hats.

Historically Corrected

A series about the uses and abuses of history in politics.

Indeed, there often seem to be multiple Lincolns in the political arena – not least because, setting aside his actual affiliation, he can be made to sound like the founding father of either party. Democratic Lincoln is the president of civil rights (freeing the slaves), federal power over state autonomy (saving the Union), government stimulus packages (those land grant colleges and railroads), and working-class pride (born in a log cabin). Republican Lincoln is the president of economic liberalism (freeing the slaves), strong military leadership (saving the Union) American global preeminence (think Gettysburg Address) and an up-by-the-bootstraps success story (born in a log cabin).
For Mr. Obama, the connection has often seemed less a matter of policy or ideology than a sense of spiritual kinship with a man whom he referred to in a July campaign appearance as “my homeboy from Illinois.” In February 2007, he kicked off his first campaign for the presidency in Springfield, Ill., with a speech suggesting that like Lincoln’s candidacy, his own would represent the groundswell of a new, activist American populism “gathered from the four winds.” In his convention address accepting this year’s Democratic nomination, he struck a far more modest tone: “While I’m proud of what we’ve achieved together, I’m far more mindful of my own failings, knowing exactly what Lincoln meant when he said, ‘I have been driven to my knees many times by the overwhelming conviction that I had no place else to go.’ ”

Library of Congress Lincoln Lying in state at the City Hall, N.Y.

Mr. Romney’s campaign, too, has used the language of Lincoln to connect his presidential aspirations to something larger and nobler. The foreign policy section of its website quotes Lincoln’s 1862 message to Congress: “The best ally world peace has ever known is a strong America. ‘The last best hope of earth’ was what Abraham Lincoln called our country. Mitt Romney believes in fulfilling the promise of Lincoln’s words and will defend America abroad in word and in deed.”
“We all know the president really cares about Lincoln,” said Harold Holzer, a prolific Lincoln scholar and former political speechwriter. “In my view, Governor Romney is answering him back in much the same way that he’s doing with Medicare and taxes: he’s not going to let the president take any high ground without also claiming it for himself.”
The Republican National Committee’s platform namechecks Lincoln twice – once in the context of the treatment of veterans and again in its statement against human trafficking. Laying claim to Lincoln in this way is not mere posturing. It is, instead, something of a rescue operation, an attempt to bring Lincoln back into the Republican fold after his wayward years as an avatar of the political left. A report released earlier this year by the conservative Heritage Foundation went so far as to declare Lincoln a “hostage” of progressives, with the Gettysburg College historian Allen C. Guelzo indignantly refuting the notion of Lincoln as “the father of big government.”

Library of Congress “Abraham Lincoln, the Martyr. Victorious.”

The Lincoln offered by the Romney campaign is, by contrast, a mascot for laissez-faire capitalism. In the aftermath of the “47 percent” controversy last month, Peter Wehner, an advisor to the Romney campaign, wrote a blog post for MittRomney.com enlisting Lincoln in an attack against the Obama administration’s alleged record of “economic stagnation, increasing dependency, and the expansion of the Nanny State.” According to Mr. Wehner, Lincoln would have had none of this. As evidence, he quoted a Lincoln speech given in 1860:

I don’t believe in law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else … when he may look forward and hope to be a hired laborer this year and the next, work for himself afterward, and finally hire men to work for him! That is the true system.

Much was left unsaid in Mr. Wehner’s selective quotation. In the speech, delivered in New Haven, Conn., several months before the start of his presidential bid, Lincoln was trying to draw connections between his antislavery opinions and his support of the American labor movement. Workers at Massachusetts shoe factories had gone on strike to protest wage cuts, and Lincoln – in a section of the speech unlikely to be quoted by his fellow Republicans today – declared, “I am glad to see that a system of labor prevails in New England under which laborers CAN strike when they want to.” And the ellipsis in Mr. Wehner’s version leaves out Lincoln’s statement, shockingly radical for its time, that “a black man is entitled” to partake in the American dream.
Selectivity aside, Mr. Wehner’s quotation illustrates well the difference between the two Lincolns at large in 2012: While Mr. Obama’s Lincoln fostered government programs because “some things we do better together,” the Lincoln of the Romney campaign favors deregulation and the entrepreneurial spirit above all else. Mr. Obama’s Lincoln is vaguely mystical: when he is not gathering the four winds to his cause, he is lost in contemplation. The Romney campaign’s Lincoln is nearly the opposite, a man of independent action and little reflection who encourages the independent actions of others. Offering the community organizer’s Lincoln and the corporate titan’s Lincoln, each campaign has made a Lincoln in its candidate’s image.
To be fair, it might be argued that this bifurcation dates back to the 1860s. When Lincoln ran for the presidency, his supporters portrayed him as a muscular, rail-splitting frontiersman. The other Lincoln, “Father Abraham,” martyred savior of the Union, the Christ-figure of America’s civil religion, only came later.

Washington College “Lincoln and Davis in 5 Rounds,1861″

And if the 16th president gets cable wherever he is now, he may be watching both contenders appreciatively. “Lincoln was, above all else, a politician — and a very talented one,” said Louis P. Masur, author of a new book on the political maneuvering behind the Emancipation Proclamation. “He enjoyed the game, and he knew how to evoke others’ names and ideas when it could get him political mileage.”
Despite this, the original Lincoln never took to the presidential campaign trail on his own behalf, not even when facing a tough re-election challenge in 1864 from the Democrats’ nominee, Gen. George B. McClellan. Instead, observing the custom of the era, he stayed home, kept working and let his record speak for itself. In 2012, he seems to be making up for lost time."

As they acknowledged, Students of Washington College’s Writing for Media seminar contributed research for the piece. To learn more about the Historically Corrected project,
click here.

Apple Continues to Offer Less Features or Compatibility to Ensure Future Upgrade Sales

8 Things The iPhone 5 Still Can't Do

Dylan Love at Business Insider is listing 8 things that the new i-phone 5 does not do that the competing smart phones have offered in all their most recent models:

NFC for mobile payments

Patently Apple

Instead of building NFC into the iPhone, Apple would rather have you use its Passbook system, which lets lets users store tickets, gift cards, boarding passes, and the like.
It can handle some (but definitely not all) of the tasks that you might use NFC for. For example, you can't use Passbook to wirelessly send money to a friend via PayPal. However, real credit card payments are out of the question.
NFC also lets you beam content between devices just by tapping them together. Samsung's Galaxy S III takes advantage of this feature.


(Considering that mobile payments are the future of commerce and banking, this ensures that Apple users will need to upgrade once the practice really takes hold. This omission alone ensures a mass replacement down the line. It's seems to be Apple's business model to omit the most obvious future need. Edw.)

An improved texting solution on the keyboard, like Swype

Swype is something of a mainstay on Android phones. Instead of tapping out your texts letter by letter, you can drag your finger over them without lifting it. The end result is that you get your message out much more quickly.

SD card support for extra storage

via johnmuk on Flickr

We'd like to be able to extend our device's storage capability beyond the 64 GB maximum. History suggests that external SD card support isn't going to be in a mobile Apple device any time soon.

A 128 GB option

MadeMan

The iPod Classic offered users 160 GB of music and video capacity. Many people (ourselves included) had no problem filling it right up.
Now that the iPhone is an easy replacement for your old iPod, we'd love to be able to carry the same amount of content around with us without having to pick and choose what stays at home.

Non-proprietary dock connection

We've never understood why our iPhones can't use a standard USB port and a standard USB cable to sync. Now the iPhone 5 introduces a new micro-dock connection requiring the use of its own special cable.
If you want to use your old sync cables, you have to buy this $29 adapter.

A Micro HDMI Port

Once again, if you want to get video off of your phone, it requires the use of a special adapter. (Unless you buy a $99 Apple TV.) The Kindle Fire HD and several Android phones use a micro-HDMI port, letting you run a cable straight from your tablet to the television.
This makes it easier, better, and more affordable for the user.

Replaceable battery

The battery life on the iPhone 5 has seen some nice improvements, but for the power users who are glued to their phones all day, it won't suffice.
We'd love to be able to carry an additional fully-charged iPhone battery that we could pop in whenever the first one bites the dust.

While we're at it, better battery life!

Ellis Hamburger, Business Insider

The iPhone 5's battery life is about the same as the iPhone 4S'. Yes, it has a bigger battery, but the new 4G LTE radio and bigger screen use up a lot of that extra power. We wish Apple had included a better battery in the iPhone 5 like the one on Motorola's Droid Razr Maxx. The Razr Maxx can last several hours longer than the iPhone 5."

(I have never understood the Mystique of Mac.
Their upgrade approach is the same one used each model year by Detroit automakers in the '50s and '60's, eventually folks will realize this and buy 'the import'. Edw.)


If you want to check out Dylan Love:

Dylan Love Writer

Contact:

e-mail:

dlove@businessinsider.com

Subscribe to his twitter feed
View his Google+ profile

Read more: http://www.businessinsider.com/author/dylan-love#ixzz26TAaMRBZ

http://www.businessinsider.com/iphone-5-missing-features-2012-9

Not Tweeting at Work is an Expensive Choice

Rejecting Social Media Marketing May Be Costly in the Long-Run

 

A couple of weeks back Miranda Miller posted a short article over at CMO.com about how the Financial Services Sector has generally been rejecting Social Media Marketing.

 

In the article Miranda reported that, "Over the past few years, investment in social media by the financial sector grew steadily; by Q4 2011, 22 percent of companies in the financial services sector were investing in social. Why, then, the precipitous drop to just 6 percent in the second quarter of this year?
This is what Anthony Cooper, MD of business intelligence company Pearlfinders, set out to explore in a blog post based on this curious finding from the Q2 2012 Pearlfinders Index.
Financial services firms certainly have unique challenges in social and several incidents over the past year point to the reality that they just don’t understand how to effectively manage those challenges yet. Barclays, NatWest, and HSBC all had their feet held to the fire recently over their respective handling of controversies.
There is great potential for negative sentiment towards banks, investment companies, and other financial services firms, given events such as bonuses for executives, accusations of impropriety, allegations of money laundering, and more.
Cooper explains what he found in a recent experiment: “Running six of the major high-street banks through social media monitoring software (Lloyds TSB, Barclays, RBS, HSBC, Co-operative and NatWest) reveals over 170,000 mentions on Twitter alone in the past 30 days. However, negative posts were twice as common as positive ones.”
Social media marketing will continue as a delicate subject for financial services firms, though Cooper expects to see the downward trend in investment in social turn around by the end of the year. He believes firms are holding out until they understand the platforms better, but haven’t rejected social media marketing entirely.
It could be a great opportunity for agencies and marketers who understand the risks and nuances inherent to the financial services industry. Cooper notes, “It will be about convincing traditional financial services companies that openness with the public will help build the trust that is lacking in the sector.”
Banks need to lead the social media conversation, he explains; they just haven’t quite figured out how to do so yet."

Today, Ryan Holmes reports in an article posted on the Fast Company website entitled "The $1.3 Trillion Price Of Not Tweeting At Work" that, as a whole, the C-suite at the Fortune 500 firms have been slow to adopt the technology.

In his article, Ryan shares how "on June 6, Larry Ellison--CEO of Oracle, one of the largest and most advanced computer technology corporations in the world--tweeted for the very first time. In doing so, he joined a club that remains surprisingly elite. Among CEOs of the world’s Fortune 500 companies, a mere 20 have Twitter accounts. Ellison, by the way, hasn’t tweeted since.
As social media spreads around the globe, one enclave has proven stubbornly resistant: the boardroom. Within the C-suite, perceptions remain that social media is at best a soft PR tool and at worst a time sink for already distracted employees. Without a push from the top, many of the biggest companies have been slow to take the social media plunge.
A new report from McKinsey Global Institute, however, makes the business case for social media a little easier to sell. According to an analysis of 4,200 companies by the business consulting giant, social technologies stand to unlock from $900 billion to $1.3 trillion in value. At the high end, that approaches Australia’s annual GDP. How’s that for a bottom line?
Savings comes from some unexpected places. Two-thirds of the value unlocked by social media rests in “improved communications and collaboration within and across enterprises,” according to the report. Far from a distraction, in other words, social media proves a surprising boon to productivity.
Companies are embracing social tools--including internal networks, wikis, and real-time chat--for functions that go way beyond marketing and community building. R&D teams brainstorm products, HR vets applicants, sales fosters leads, and operations and distribution forecasts and monitors supply chains.
Behind this laundry list is a more hefty benefit. Social technologies have the potential to free up expertise trapped in departmental silos. High-skill workers can now be tapped company-wide. Managers can find out “which employees have the deepest knowledge in certain subjects, or who last contributed to a project and how to get in touch with them quickly,” says New York Times tech reporter Quentin Hardy. Just cutting email out of the picture in favor of social sharing translates to a productivity windfall as “more enterprise information becomes accessible and searchable, rather than locked up as ‘dark matter’ in inboxes.”
Among the most promising (and heretofore least hyped) new social technologies are tools like Yammer (recently snapped up by Microsoft for $1.2 billion), which bring Facebook-like functionality into the office. Social-savvy employees post queries and comments to internal conversation threads and coworkers offer feedback, crowdsourcing solutions. Content can be shared and searched, so the same issues don’t resurface. Meanwhile, virtual groups offer a more interactive alternative than email or phones.
Interestingly, the report suggest that tools like Yammer are the tip of the iceberg. Right now, only five percent of all communications and content use in the U.S. happens on social networks, mainly in the form of content sharing and online socializing. But McKinsey analysts point out that almost any human interaction in the workplace can be "socialized"--endowed with the speed, scale, and disruptive economics of the Internet.
It seems noteworthy that the report’s conclusions have been echoed of late from the most authoritative of places: Wall Street. In the last year, the world’s largest enterprise software companies--Google, Microsoft, Salesforce, Adobe, and even Ellison’s own Oracle--have spent upward of $2.5 billion snatching up social media tools to add to their enterprise suites. Even Twitter-phobic CEOs may have a hard time ignoring that business case."


So Bankers should take note, as should all folks working in the C-Suite, that social media marketing is eventually going to be their main stream of marketing and needs to be taken seriously... big dollars are at stake.


 
Ryan Holmes is the CEO of HootSuite, a social media management system with 4 million users, including 79 of the Fortune 100 companies.
Miranda Miller does consulting for companies and NPOs looking to increase their visibility online.

Acquistions in a "Web Giant Eats Startup" Universe

In today's Newark New Jersey Star Ledger hard copy edition, ironically sharing the same 4 sheet spread with the obituaries, is Allan Hoffman's tech piece of how tech firms are having a feeding fenzy on one another. He goes on to make some interesting predictions of who's next on the dinner plate.

As Allan explains: "Facebook's acquisition of Instagram, for close to a billion dollars, is the poster boy for this trend, but it's far from an anomaly. Companies are routinely dropping tens or hundreds of millions on startups, often purchasing them for their talent -- that is, the brilliant engineers behind them -- or for an underlying innovation.
These deals aren't always obvious. Zagat, a company known for its slim restaurant review books, was acquired by Google. What's more, startups sometimes buy startups. Zynga, a gaming company founded just five years ago, bought OMGPOP, the startup behind the Draw Something app.
What's next?
Here are seven predictions for potential acquisitions -- some of them in the realm of possibility, others tossed out as fanciful provocations.
• Apple buys Tumblr
Apple gets a lot right, but not social networking and online communities. Past Apple efforts, such as eWorld and Ping, have pretty much failed. But Apple realizes "social" (as the trend is telegraphically labeled) is not disappearing, and Tumblr, a blogging and community tool, would provide a ready-made community for it to build into every feature of its software. You're buying an app from the App Store? Post that to Tumblr. Listening to a playlist on your iPod? Share that, too. Writing something with Pages, Apple's word-processing software? Press a button, and it's a post at Tumblr.
Tumblr's aesthetic is remarkably simple and streamlined -- just the qualities Apple prizes. It looks like the blogging tool Steve Jobs would have built.
Of course, Apple is sitting on billions in cash (around $120 billion), and it can have its pick of startups. In fact, Andrew Ross Sorkin of the New York Times recently wrote a column suggesting a "shopping list" for Apple. On the list? Twitter, Sprint, and Research in Motion, the maker of the BlackBerry.
• Tumblr buys Kickstarter
Although Tumblr is a startup, it's an established one, and established startups — even if they don't have much revenue — sometimes look to other startups to help them broaden their scope. Kickstarter, a service for funding creative projects, would seem like a natural fit for Tumblr. Both place a premium on creativity, both are based in New York, and both have active and engaged communities. Kickstarter projects already make money — the company takes a 5 percent cut of the funds raised — and those projects would get a boost by being promoted across Tumblr.
• Evernote buys Day One
An online note-taking tool, Evernote has acquired a number of companies, including apps for annotating screenshots and for sketching. Here's another possibility: Day One, a journal tool for iPhone and other Apple devices. Evernote seems to want to gather a variety of apps tying into Evernote, and Day One would provide yet another way you could capture or create information and then funnel it into Evernote as a central organizer and repository.
• Google buys Polaroid
Earlier this year, Polaroid announced plans for a "smart camera" -- essentially a full-fledged camera capable of using photo apps typically used on phones, such as Instagram. The underlying software for the Polaroid SC1630? Well, it's Google's Android software -- the software powering many phones and tablet computers. By buying Polaroid, Google would instantly position itself to be a major player in the reinvention of photography.
• Pinterest buys Stamped
The Stamped app is gaining a following for the way it allows you to share your "favorite things," such as movies, restaurants and music. Pinterest, meanwhile, is a runaway social networking phenomenon for its take on sharing images of "things you love." A Stamped acquisition by Pinterest might be a way to join forces — or just quash a competitor.
• Amazon buys Square
Mobile payments are on their way to replacing cash, or so it seems, and Square is a leader in the arena. If Amazon were to buy Square, it would have more data on customers, to learn what they buy when they're purchasing items in the real world of coffees, clothing and offline merchants. The system could also link up with the Amazon Payments system for buying products.
• Twitter buys Facebook
This isn't going to happen this month, but two or three years from now? You never know."

Hmmmm. Alan raises a thought about the next level of this trend.

Doesn't Microsoft already own a chunk of Apple? hmmm...or more appropriately "mmmm...that that's good eatin'".



You can read the on-line version of this piece over at NJ.com http://www.nj.com/business/index.ssf/2012/08/post_203.html

Alan Hoffman writes for the NJ folk on a regular basis, so check out his past articles. He can be reached by heading over to his own website, allanhoffman.com.

The 'Law Of Attraction' Can Improve Your Life

Share on Tumblr

digg

Aimee Groth and Ashley Lutz supplied a most untypical article to the 'Business Insider' website's 'War Room'. The piece produced some waring comments of it's own.

As a fan of Dr Wayne Dyer, who calls it the Power of Intention, I can say it's worth considering as a sustainable approach to business... or simply a way to improve one's life by allowing some peace in it.

Say Amy and Ashley, "Psychologists, New Age thinkers and religious leaders have been talking about the Law Of Attraction for years, though it gained popularity again when the book "The Secret" made waves in 2006.

The law is simply this: We attract whatever we think about, good or bad.

Oprah is a fan of the law and devoted an episode of her show to how it could change lives.

Whether or not you believe in the power of the universe, there is scientific research that proves the effects of positive thinking.

We've highlighted the most compelling elements from one of the most popular books on the topic, The Law of Attraction: The Basics of the Teachings of Abraham, by Esther and Jerry Hicks.

1.You attract good or bad experiences based on your thoughts.

"The one who speaks most about illness has illness. The one who speaks about prosperity has prosperity," Esther and Jerry Hicks write. "You attract all of it." By focusing on something, you make it happen.

2. Thinking about something means you invite it in, even if you don't want it.

"When you think a little thought of something that you want, through the Law of Attraction, that thought grows larger and larger, and more and more powerful," according to the book. So keep your thoughts positive.

3. The more you focus on something, the more powerful it becomes.

This allows you to create your own reality by "attracting" the experiences you want to have. You probably brought bad things upon yourself by worrying about them, according to the laws described in the book.

4. It's better to trust your emotions than over-think a decision.

In other words: Listen to your intuition. Instead of overthinking your choices, let your emotions guide you toward what is right and what is wrong. This will result in a more satisfying life.

5. You can make good things happen more quickly by thinking about them more.

"Want" and "desire" consist of wanting "to focus attention, or give thought toward a subject, while at the same time experiencing positive emotion. When you give your attention to a subject and you feel only positive emotion about it as you do so, it will come very quickly into your experience," the Hicks write.

6. To make a change, you've got to see things as you hope them to be, not as they are.

This is something that successful people know about. It's also called visualization. Michael Phelps spoke about picturing himself winning every night before bed.

"In order to effect true positive change in your experience, you must disregard how things are — as well as how others are seeing you — and give more of your attention to the way you prefer things to be," the book says.

7. You can increase your magnetic power by devoting time to "powerful thinking." each day.

Spend 15 minutes every day thinking hard about your goals, dreams and what you want from life. The Hicks say this increases your chances for success.

8. Success isn't a finite resource; everyone can have it.

Others being successful doesn't limit your success. And by attracting abundance to yourself, you are not limiting another, according to the book.

9. Don't allow yourself to wallow in disappointment.

Being disappointed only attracts more stuff to be upset about and is only a sign that you're not getting what you want in life. So think about how to get what you want instead of what you don't have.

10. Avoid TV shows that deal with negative experiences like crime or illness.

Letting this stuff in makes you think about it more and increases the odds it could happen to you. "Your attention to anything is drawing it closer to you," they say.

11. Know that your relationships with people are bad because you made them that way.

Giving your attention to the negative can wreak havoc on personal relationships. This mentality can help free us from bad relationships with relatives or a spouse. "Nothing can come into your experience without your personal attraction to it," they say.

12. Don't worry about what you're dreaming; instead use your dreams as a guide.

Dreams might provide some insight into the psyche, but you're not in the process of "creating" while you're asleep, the book says.

Source: The Law of Attraction: The Basics of the Teachings of Abraham"

 

So I write lists and post them to the fridge... hey, it works!

Sadly, somehow this topic can bring out the worst in people.There are some nice comments, but also some flames at the old water cooler. You can read the comments: http://www.businessinsider.com/how-the-law-of-attraction-will-improve-your-life-2012-7?op=1#ixzz22GQ7CrBa

Ashley Lutz

Subscribe to her twitter feed

Aimee Groth Editor, War Room

Subscribe to her twitter feed

Dr Dyer and O.

Eminent Domain Mortgage Seizures

U.S. Representative Brad Miller has provided an editorial to the American Banker Newspaper regarding Eminent Domain Mortgage Seizures. In the piece, the Congressman from North Carolina addresses how this inverted use of local law is circumventing the Banking lobbies in Washington who would normally keep such a program from being implemented.



Writes Representative Miller, "Wall Street's political operatives — the American Bankers Association, American Securitization Forum, the Securities Industry and Financial Markets Association, and the Financial Services Roundtable — wrote a panicked letter to the Supervisors of San Bernardino County in California to express "strong objection" to a proposal by a startup mortgage company. The letter conveys the unmistakable threat that Wall Street will sic its lawyers on the county and will "likely be reluctant to provide future funding to borrowers in these areas."
The proposal is that the county use eminent domain to buy underwater mortgages, almost half the mortgages in the county. The mortgage company, working with the county, would then negotiate new mortgages with the homeowners that they could afford. If the proposal worked as planned, the county would get relief from the foreclosure crisis, the mortgage company would make a profit, and the idea would spread to other counties and towns.
A legal challenge by Wall Street might be expensive to fight, but the arguments are pretty flimsy.
Eminent domain is commonly used to buy land for projects like roads and schools. Existing law allows the use of eminent domain to buy any kind of property, however, including even intangible property like trade secrets. There is no apparent reason that eminent domain could not be used to purchase mortgages.
The Constitution requires only that the county pay fair market value and that there be a public purpose. Deciding a fair price would not be hard. There are frequent auctions of mortgages with a sufficient number of informed, sophisticated buyers. The auctions are an almost perfect pricing mechanism. There would be comparable sales to determine almost any mortgage's fair market value.
Showing a public purpose would not be hard either. A public purpose can be cleaning up contaminated land, renewing a "blighted" neighborhood, or even stimulating economic growth by replacing residential neighborhoods with commercial development.
Wall Street argues that the county's purpose would not be to reduce the foreclosures that are wreaking economic havoc, but to enrich the mortgage company. But law professors, economists, community advocacy groups and politicians with no financial interests at stake have argued for just such an effort to address the foreclosure crisis. A program by a government agency not motivated by the pursuit of profit would be greatly preferable, but this proposal by the for-profit mortgage company obviously serves a public purpose.
The threat of a boycott is also hollow. A decade ago Wall Street bullied Georgia into gutting a state predatory lending law by refusing to buy Georgia mortgages. Wall Street has not bought mortgages since the collapse of the private securitization market five years ago, however. A threat of a boycott by Fannie Mae and Freddie Mac would be credible, but the threat of a boycott by Wall Street is not.
Wall Street quickly persuaded some mortgage investors, such as pension funds and insurance companies, to oppose the proposal, but investors will do fine – maybe even better than they would otherwise. The program would likely target homeowners with second liens. Mortgage investors own most first mortgages, but the biggest banks own most second mortgages and home equity lines of credit.
About half of delinquent first mortgages also have second liens. Second liens are secured by the value of the home in excess of the amount of the first mortgage. Since the housing bubble burst, there often is no excess. At foreclosure, first mortgage holders are paid in full before second lien-holders are paid anything, and the holders of seconds usually come away empty-handed. Courts give firsts the same priority over seconds in bankruptcy.
Second liens have a ransom value in voluntary modifications, however. Unless the second lien-holder agrees to something different, the voluntary reduction of principal on a first mortgage is a gift of collateral to the second lien-holder and may still not get the homeowner above water. Second lien-holders sometimes offer to reduce the second by the same percentage that the first is voluntarily reduced, a far cry from the priority in foreclosure and bankruptcy. Mortgage servicers, the companies responsible for negotiating voluntary modifications of first mortgages owned by investors, frequently have a stunning conflict of interest. The four biggest banks - Bank of America, JPMorgan Chase, Citigroup and Wells Fargo - control two-thirds of all mortgage servicing, mostly of mortgages owned by investors. The same four banks hold $363 billion in second liens, very commonly on the same property as first mortgages they service.
So the real losers from the program would be the biggest banks, the holders of second liens, not investors in first mortgages. And even for the biggest banks, eminent domain would not cause losses but reveal losses.
The biggest banks have delayed recognizing losses on seconds for years while paying dividends and lavish executive bonuses. Involuntary sales of seconds at fair market value would end fictitious valuations and require an immediate accounting loss, making dividends and executive bonuses much harder to justify and perhaps even revealing some banks to be insolvent.
The biggest banks have used their political power in Washington to defeat any effort that would effectively reduce foreclosures, such as allowing judicial modification of mortgages in bankruptcy, allowing a federal agency to use eminent domain to buy mortgages, or providing teeth for the chronically ineffective Home Affordable Modification Program, because those efforts would also require the immediate recognition of losses on mortgages.
But Wall Street's power in Washington may be as useless in defeating a proposal in San Bernardino County as strategic nuclear weapons are in fighting an insurgency. No wonder Wall Street is panicked."

To read the many comments this opinion piece inspired, go to: http://www.americanbanker.com/bankthink/eminent-domain-mortgage-seizures-terrify-wall-street-1050811-1.html

To read more about Brad Miller, his website is: http://bradmiller.house.gov/

25 Most Overused Words and Phrases in Press Releases

We know them all

Over at PR News, Danielle Aveta has posted an article about overused words in press releases.
She says that "One word can best describe “new,” “unique,” “innovative” and the other 22 words and phrases on the list below: predictable."

Here are the 25 words and phrases the PR News staff and it's community have deemed to be overused to the point of being almost meaningless:

1. Announced
2. Authentic
3. Award-winning
4. Best of breed
5. Cross platform
6. Cutting edge
7. Exciting
8. Exclusive
9. Groundbreaking
10. Impact
11. Improved
12. Innovative
13. Launched
14. Leader/leading
15. Leverage
16. Next generation
17. New
18. Proactive
19. Proud to announce
20. Revolutionary
21. Solution
22. State of the art
23. Unprecedented
24. Up and coming
25. Unique

You can read the full article at: http://www.prnewsonline.com/free/25-Most-Overused-Words-and-Phrases-in-Press-Releases_16723.html?hq_e=el&hq_m=2486196&hq_l=12&hq_v=a24480408a
Follow Danielle Aveta: @DanielleAveta

Some Banks Are Trying Not To Be Hated

This week in the American Banker is an Op-Ed provided by the Thought Leaders over at Simon-Kucher & Partners.

For readers not familiar with the firm, the partners at SK are in the business of giving advice to the industry; particularly to pricing product and services.

Simply put, the advice they are sharing with the retail bank industry were it adopted by bankers would, in today's climate, be a game changer. It includes the understanding that banks are entitled to a profit and that customers should expect good value. The marketing that goes with the philosphy writes itself.

They feel that there is a responsible way to approach pricing, which they are calling “Fair Value Exchange”. In essence it's where the "customer needs and bank needs are in equilibrium. The result is a fair return on savings and investments, a fair interest rate on a mortgage or other loan, and fair fees for checking. Fair Value Exchange needs to be the guiding principle in product development and pricing if the industry finally wants to get out of its ongoing image crisis. It is about designing products and services the way customers want them, identifying the optimal price points to meet corporate profitability targets and customer expectations, and communicating very transparently how much is charged and why."

Wow. Ethics and fairness in business. Every firm could apply these principles as a formula to success... it's not only the banking industry that would benefit from such an approach to business.

We're in an era when other consulting firms spend energy determining the tolerance levels of bank customers. In other words, how much nonsense and abuse a bank customer will accept before they leave for the competition. These firms advise banks on how to stay just a degree away from that point of the client exiting, the logic being that it "supposedly" maximizes returns. "Have the client hate only just enough to maximize the fees charged but not so much that they actually close their accounts." The current state of “bank-client relationships” are proving that this short-term gain is a long-term loss... for everyone.

A ‘thumbs up’ to the team at Simon-Kucher.

More good news is that some banks are getting it and employing the approach of treating as you would like to be treated. Jean Halliday reports over at the Forbes website about how, via cause marketing, the Bank of Ann Arbor, with only six locations, has nearly 20,000 fans, or “likes” on Facebook. That's the kind of social media success most institutions could only dream of.


Jean notes that, in comparison, " JPMorgan Chase, the nation’s biggest bank, has 20,071 fans, although the bank’s Chase Community Giving Facebook page has 3.3 million likes. So there is something to cause marketing.
In 2006, the Bank of Ann Arbor started advertising itself as the one that “helps.” President and CEO Tim Marshall said even during the darkest years of the recent economic downturn, the bank kept boosting its commitments to area non-profits.
As the bank approached its fifteenth anniversary, Marshall, also acting CMO, challenged his ad agency to find a way to increase its presence on Facebook. “I told them we had 279 Facebook fans, which was unacceptable.”
So the ad agency, Ann Arbor’s Perich + Partners, developed the Sweet 15 Local Charity Drive. Consumers who clicked the “like” button on the bank’s Facebook page could then nominate and vote for area non-profits. The 15 groups with the most votes split $75,000 from the bank.
“Rather than tout how much we’ve grown in 15 years, let’s celebrate by giving back,” said Ernie Perich, president of the ad agency and a bank director. He called the campaign an evolution of the “Helps” blitz.
The Bank of Ann Arbor got more than 16,000 fans on Facebook 60 days after the charity drive started. The drive attracted more than 100,000 votes.
He was so pleased with the results of the Sweet 15 event on Facebook, he ordered up another marketing program from Perich last fall. Perich decided to keep the bank’s same year-old ad format poking fun at bigger, out-of-town banks because consumers were already voluntarily sending their ideas for new ads to the bank.
Each radio, print and billboard ad used the line “Non-local banks think…,” like this one that won Perich several local Addy awards in 2011:

The ad refers to legendary college football coaches’ the U of M’s Bo Schembechler and his rival Woody Hayes from Ohio State.
People were asked to “Build A Billboard” on Facebook for the bank. Perich created an app that let fans see how their ads for the “Non-local banks think…” would look on billboards.
The Bank of Ann Arbor gathered 700-plus headlines from over 400 unique users during the contest. The Grand Prize winner, Janine Hutchinson, collected $1,000 and her name on the billboard for her “Non-local banks think Mani Osteria plays for the Tigers.” (It’s a local restaurant.)
Marshall said the Facebook promotions and ads are working, boosting awareness and positive feedback.
Indeed, Cause Marketing Forum of Rye, N.Y., says 47% of consumers have bought a brand at least monthly that supports a cause, representing a 47% jump in 2012 from 2010. And 39 % more people “would recommend” cause-related brands this year compared to 2010."

The article "Rebuild Consumer Trust by Offering a Fair Deal" by Jens Baumgarten, Ben Snowman, and Wei Ke can be found at: http://www.americanbanker.com/bankthink/Fair-value-exchange-restore-consumer-trust-1050303-1.html
Jean Halliday's piece "Facebook, Cause Marketing Help Boost Small Bank" can be read at the Forbes website: http://www.forbes.com/sites/jeanhalliday/2012/06/21/facebook-cause-marketing-help-boost-small-bank/

Could Lincoln Be Re-Elected Today?

FlackCheck asks: “Could Abraham Lincoln win re-election in 1864 if today’s technology and methods were available to his opponent?”

Are you familiar with the folks over at flackcheck.org.... it's a parody project of the Annenberg Public Policy Center of the University of Pennsylvania. As they describe themselves, "FlackCheck.org uses parody and humor to debunk false political advertising, poke fun at extreme language, and hold the media accountable for their reporting on political campaigns."

They are currently running a series applying the tactics of today's super pacs as they would have been applied to smear to the re-election campaign of Abraham Lincoln.

It is true, even in an alternate reality, that those who are ignorant of history are condemned to repeat it.

In this real world, the sister site of this project, factcheck.org is "a nonpartisan, nonprofit “consumer advocate” for voters that aims to reduce the level of deception and confusion in U.S. politics. We monitor the factual accuracy of what is said by major U.S. political players in the form of TV ads, debates, speeches, interviews and news releases."

They are a national treasure created and supported by the Annenberg Foundation and should be required reading in every American home.

    McClellan Campaign & Anti-Lincoln Super PAC

• Attacks on Biography

• How Poor is He Really?
• The Union Needs a Winner!
• Advocate of Women’s Rights?

• Attacks on Character

• Consistency

• The Flip-Flop President?
• Consistently Inconsistent

• Corrupt

• Lincoln the Lobbyist for Special Interests?

• Patriotism & Judgment

• Mrs. Lincoln: Is this What We’re Fighting For?
• What’s Really Guiding Abe?
• Lincoln the Traitor
• Who Stands Behind the Woman Behind the President?
• Honestly Abe

• Religious Belief

• President Lincoln’s War on Religion

• Temperament

• Can we trust a melancholiac with a second term?

• Trustworthiness and Honesty

• What are Lincoln’s core values?

• Attacks on Issues Position & Record

• Indictment of Past Action

• Believe In The Union
• Unconstitutional Abe
• Lincoln’s Homestead Act: A Redistribution of America’s Wealth
• Four More Years?
• Repeal Land-Grant College Act. Oust Abe.
• The Cost of Lincoln’s War
• Lincoln the Lobbyist for Special Interests?
• Soft on Immigration?

• Inferences about Future Action

• Mr. Lincoln’s War on Men
• Lincoln, a Tax and Spend Socialist

• Military Record

• Logrollers For Truth

Pro-McClellan ads

• Union Soldiers for McClellan

God bless Walter Annenberg and his TV Guide.

Credit bureau to trawl Facebook for information

The idea that a credit bureau would use public social media profiles to determine a person's credit rating shouldn't really surprise anyone.



Picked up on this story from 'the local de' about how a joint investigation by radio station NDR Info and Die Welt newspaper discovered internal Schufa papers (a credit bureau in Germany) tasking a research group with working out how to link information found on the internet with other details to determine personal credit ratings.

"Although the research institute – the private Hasso-Plattner Institute in Potsdam – said on Friday it was pulling out of the project because it had been “misunderstood” – the question remains of what information could reasonably be used by Schufa in making a credit rating.

The idea was to use profiles on services such as Facebook, Xing (An EU version of Linked In) and Twitter in order to get addresses, as well as gleaning information from property rental and sale sites such as immoscout24 or mobile.de.

This kind of talk always touches a nerve in Germany, where people are notoriously sensitive to data protection rules - as can be seen in the trail of legal wrangles with sites like Facebook and Google Street View. Germany successfully fought a battle to allow people to have their homes pixellated out on the latter.

The country's consumer protection and data protection groups are furious about the new intervention. “There is always a reason behind such research projects. If Schufa actually uses such data, it would be a completely new dimension,” said Thilo Weichert, data protection commissioner for the state of Schleswig-Holstein."

In the article, Credit bureau to trawl Facebook for information, the Local reported that Schufa,  a privately-held credit bureau – by far the biggest in Germany, confirmed cooperation with the Hasso-Plattner Institute for software systems technology (HPI) in Potsdam on the project.

They explain that, "The statistical linking of particular personal characteristics to ability or willingness to pay off loans could also be part of the research, while detailed information will be gathered in the huge data trawl.

Both the HPI and Schufa stressed that the research would be conducted according to the highest ethical standards, and that everything would be published after a three-year work period.

The more concrete plans of Schufa were contained in a second paper, Die Welt said. This included the idea that, “Information generated from the web would be linked by Schufa with other information and analysed from a business perspective.”

Consumer protection and data protection groups are furious. “There is always a reason behind such research projects. If Schufa actually uses such data, it would be a completely new dimension,” said Thilo Weichert, data protection commissioner for Schleswig Holstein state.

“People who are on Facebook do not think that what they say there could one day be influential in their credit status. That crosses a line,” said Edda Castelló, data protection commissioner in Hamburg.

Schufa's consumer advisory council said on Thursday afternoon it had not been informed of the plans - and that it was less than enthusiastic about them.

"We are disconcerted to find that the the contents or aims of this project were not discussed with the advisory council ahead of time," read an email sent by five of the council's 15 members to Schufa's managing director Michael Freytag.

They called for Schufa to urgently lay out exactly what it plans to do. "

It's another reminder that when using social media, only share those things you are comfortable sharing with the whole world... or, at least, your banker.