The Schumpeter Issue 9

8/3/2019 The Schumpeter Issue 9

1/12


2/12

Dear Readers,

It is with pleasure that I present you

Tanvi Narayan and Kirti Sharma, who

alongside myself, constitute the editorial

team of The Schumpeter.

David Osborne

Dear Readers,

Welcome to the ninth edition of The

Schumpeter and what an exciting issuewe have lined up for you. Everything from

hot-button, home grown topics such as

Scotland's Independence to the interna-

tional arena where we take a look at the

Eurozone crisis and the creeping powers

of on-line copyright legislation. We hope

you enjoy reading it as much as we en-

joyed putting it together.Also, we would like to say huge thank you

to all of you that contributed articles and

assisted in getting this issue off the

ground. Remember, anyone from any dis-

cipline can submit articles so if your pas-

sionate about an issue, get writing and

send it in! You could be the next Krug-

man in the making - how do you knowunless you start getting your opinions on

paper?

Lastly, on behalf of all the team we would

like to wish you a happy (albeit belated)

new year and we wish you the very best

for this academic term and the final ex-

ams.

Kirti Sharma

Letters from the editors.Page 2

Write for us ...Page 3

ACTA..Page 4

Scottish Independence ...Page 5

Occupy London.....Page 6

Labour Pains....Page 7

The Eurozone Crisis: Q&A..Page 8

Technology and Education ..Page 10

Tanvi Narayan Kirti Sharma David Osborne


3/12


4/12

By Steven Perianen

The Anti-Counterfeiting TradeAgreement (ACTA) has beena controversial and reoccur-

ring topic that affects internetusers worldwide. In January2012 thousands of protestors

took to the streets of Polandfollowing their governments

signing of the treaty.Anonymous, an online activ-

ist group, has launched a se-

ries of attacks on the websitesof ACTA supporters. Recently

Mr Kader Arif, a key FrenchEuro MP resigned from hispost as the rapporteur forACTA in protest of the treatys

hasty progression. With all of

the surrounding controversy ithas become one of the mosthigh profile agreements ofthe internet age but what ex-actly are the fundamentalobjectives of ACTA and are

the blueprints to achieve

these aims reasonable?

Formal negotiations on ACTA

started in 2008 and the firstdraft was finalised followingmultiple deliberations in 2010.ACTA was designed within anindependent international

body; existing internationalinstitutions such as the WorldTrade Organisation were dis-

regarded as plausible entitiesto negotiate the agreementdue to existing member

countries continuously block-

ing the issue. Earlier this month

22 EU member states signedthe agreement, including theUK.

According to the Organisa-tion for Economic Coopera-

tion and Development(OECD) $250 billion a year of

international trade breachesintellectual property rights(IPRs). The purpose of ACTA isto facilitate the internationalcooperation of practices touphold these IPRs. ACTA does

not create new intellectualproperty laws or harsher crimi-nal sentences for offenders,

instead it is an internationalframework which makes it

harder for a party to breachIPRs. Broadly speaking, theACTA legal framework stipu-

lates:

Guidelines for civil courts

and authoritative actionagainst a party that is

suspected of IPR in-fringement.

Customs control that

prevents counterfeitproducts from crossingborders

Criminal enforcementthat outlines categories

of infringement and pro-

cedures of prosecution.

Enforcing IPRs in the digi-

tal environment by usinginformation collected by

internet service provid-ers (ISPs).

The European Commissionstated that ACTA is essentialfor businesses survival and

that enforcing a global stan-dard would protect European jobs by reducing piracy; athreat which, if left un-

checked would continue todevastate industries with shar-able digital content. For in-stance, the music industry has

lost one third of its value re-

sulting in reduced investmentin new music ventures world-wide. As a result it is pre-dicted that there will be ap-proximately one million crea-

tive job losses in Europe by2015. The European music in-dustry has taken actionagainst piracy independentlyresulting in the closure of

popular file sharing sites suchas PirateBay and LimeWire inItaly and Denmark. However,the industry depends on gov-ernment intervention to fight

this war on piracy and it is be-

lieved that ACTA will formaliseand strengthen the govern-

ments ability to assist the in-

dustry in these cases.

These objectives are not anupheaval to the existing ar-chitecture of the current

copyright and IP laws, ratherACTA simply aims to provide

a more unified, global frame-work for the existing legisla-

tion. However, it is not whatACTA aims to achieve that isthe reason for discontent butrather how they propose to

do it. The attention is in the

detail.

Article 27 of ACTA regardingthe enforcement of IPRsonline requires the states tosupport cooperative efforts

with the business community.

The potential issue with thiscommitment is that it poten-tially legitimises and promotes

the policing and even punish-ment of alleged infringe-

ments outside normal judicialframeworks. A company candetermine to some extent

what constitutes as an IPRbreach however, in most

cases these companies arenot objective enough to de-termine whether content is

illegal. Consequently, the act

ACTAThe internet age crusades


5/12

requires internet intermediar-

ies to disclose information onalleged copyright violators,this means mass monitoring ofmillions of internet users re-gardless of whether they are

under suspicion. This prioritisesinterests of right holders be-yond that of free speech, pri-vacy and other elementary

rights.

In addition, ACTA fails to dis-tinguish misuse of protectedproperty. Requirements defin-

ing appropriate punishmentcan depend on: the com-mercial scale of the breach,

the economic value gainedby the violator, and the fail-

ure of the internet serviceprovider to stop the contra-vention. Unfortunately, all ofthese factors are ill-defined.For example, if a popular

blogger unintentionally putmultiple copyright-protected

images on his blog, numerousvisitors to the blog would re-

sult in commercial scale re-production of the image. Hereceives an indirect eco-

nomic advantage because

he does not pay for the im-ages and his internet serviceprovider aided and abet-

ted the infringement by

not taking action against this

offender. Under the defini-

tions of ACTA this blogger

and his ISP have conductedcriminal offensives, punish-able under ACTA and the as-

sociated IP laws. This can po-tentially lead to a systematic,

but legally justified censorshipattack on a multitude of infor-mation sites, blogs and forums

which may only be commit-ting minor infractions. Al-

though these sites were not

the initial impetus for thisagreement, they can and will

be in the firing line.

To date Australia, Canada,

the European Union, Japan,Korea, Mexico, Morocco,New Zealand, Singapore,Switzerland and the UnitedStates have all signed up to

ACTA. The European parlia-ment need to ratify the treatybefore it is enforced and thefinal deliberations are sched-uled for June 2012. Whether

ACTA will be shot down bypoliticians for fear of publicreprisal, is yet to be seen.

By David Osborne

For the people of Scotland,2014 will be a very excitingyear. Glasgow will host the2014 Commonwealth Games,Scotlands prestigious Glen-

eagles golf club will host the

Ryder cup a few weeks later.

Scotlands First Minister, AlexSalmond of the Scottish Na-tional Party (SNP) has also an-nounced that in the autumn

of that year, Scotland willhold another internationally-watched event a referen-dum on whether to be inde-pendent from the United

Kingdom.

Alex Salmond and the SNP

have controlled the ScottishParliament in the Holyroodarea of Edinburgh since 2007and many of his supportersclaim that Scotlands inability

to control all of its own affairsis detrimental to its own inter-ests. They grumble that thecurrent level of devolution isinsufficient. Holyroods de-

volved power affects matterssuch as education, healthand prisons, which are dealtwith in Scotland rather thanat Westminster. This has no

effect on the Scottish legal

system however, as it has al-ways been different to that of

the rest of the United King-

dom.

The proposal to hold a refer-endum in Scotland has fea-

tured in the SNP electionmanifesto since the 2007elections. The referendum

was planned for 2010, butonly 50 of 129 Members of

Scottish Parliament supportedit. With the SNPs landslide vic-

tory in 2011, there was a newzeal for this commitment to a

referendum.

Mr Salmonds referendum

proposals do not solely in-

clude options for and againstindependence, but provides

Scottish IndependenceThe divided kingdom


6/12

a third option, known asDevo Max which involves

having more decisions madein Holyrood. However, thedefinition of this deep devolu-tion is still very murky. There

are many challengers inWestminster.

Lord Wallace of Tankerness, aformer deputy first minister, in

an interview with BBC Scot-land stated that, "A referen-dum that would put in train

negotiations, if it was success-ful, to change the union - therelationship of the union be-tween Scotland and England

- that, we believe, is not lawbecause it exceeds thepower given to the ScottishParliament under the Scot-

land Act."

The UK government offeredto legislate to provide the le-gal powers to Holyrood to

conduct the referendum, butthis would mean holding the

vote on Westminsters terms.Camerons government

would set the questions

asked, the date and choosethe operator of the referen-

dum. This was rejected by theScottish government who see2014 as ideal, as in that year

the Scottish nation will becheered on by a series of in-

ternational events.

According to the Deputy First

Minister Nicola Sturgeon ofthe SNP, With independ-

ence, Scotland will be ranked

sixth in the world league tableof OECD nations in terms of

GDP per head ten placesahead of the UK at sixteen.

Supporters of Scottish inde-

pendence also believe that

this; with the revenue fromthe North Sea oil, Scotlandwould be a safe-haven for

investors.

Many businesses in Scotland

are not as sanguine aboutthe economic benefits as MsSturgeon and fear that sepa-rating from a global eco-nomic power into a smaller

nation would be detrimental,even if Scotland were to be-come more integrated intothe European Union than the

UK currently is.

Politicians on both flanks inWestminster are equally lack-

ing in optimism about the in-dependence. Scotland haslong been a stronghold forthe Labour Party and a sepa-

ration would jeopardise theirchances in the next GeneralElection. The ConservativeParty, despite having com-paratively few seats north ofthe border is also very com-mitted to defending the un-

ion.

Opinion among the Scottishpopulation is also divided. A

recent poll by the SundayTelegraph, stated that 40%were in favour of independ-

ence, 43% opposed inde-pendence and 17% were un-

sure.

According to the SNP mani-

festo, an independent Scot-land would be a full memberstate of the European Union

but will retain the Scottishpound sterling, unless the

Scottish electorate opts touse the Euro requiring a refer-endum on its own accord.

Queen Elizabeth II would alsoremain the head of state of

Scotland, which echoes theUnion of the Crowns in 1603.

The power is in the hands ofthe Scots. If they choose inde-pendence, their nation will

have to live with the conse-quences. A loss will be a

complete blow to the SNP. A

challenge lies ahead for AlexSalmond and the SNP; timewill tell how well he assumes

it.

By Kirti Sharma

Occupy London was one ofthe most watched news itemsthroughout the end of 2011,

an organised throng ofpeaceful protesters huddleden masse in St Pauls iconic

courtyard; the proletariat ma-chine squatting on the door-

steps of the gilded city. Butthe protesters torch was

snuffed out after they were

officially evicted on Friday27th January after a high

court ruling by Mr JusticeLindblom. However while thebattle at St Pauls might be

lost (particularly if the protest-

ers appeal fails) the questionremains, how will OccupyLondon continue to fight theirwar and more importantly is

this war justified?

Occupy London was born

from the turmoil of the finan-cial crisis and they aim to be

the communitys voice pro-

testing unemployment, priva-

tisation and austerity, to

achieve a future free fromausterity, growing inequality,unemployment, tax injustice

and a political elite who ig-

Occupy LondonMisguided nuisance or the beginning of

a world revolution?


7/12

nores its citizens. However, as

with most things this hope fora more utopian society ismore easily wished for thanaccomplished. To move to-wards achieving these goals

the group presented the fol-lowing proposals to the Cityof London Corporation in No-

vember last year:

1. Publish full, year-by-yearbreakdowns of the City cash

account, future and historic.

2. Make the entirety of its ac-

tivities subject to the Freedom

of Information Act.

3. Detail all advocacies un-dertaken on behalf of thebanking and finance indus-

tries, since the 2008 financialcrash.

As one cannot turn back thehands of time and avoid thecrisis completely, this three-

point plan of increased trans-parency with a focus on fu-

ture expenditure is a reason-able means to go some waytowards insuring society from

a repetition of history. If thefinancial sector, the regula-tors and the government are

reminded of the on-goingconsequences from the cir-

cumstances of the crash andthat the issues of increasedtaxation and rising unemploy-

ment are not taken lying

down by the public, then

they are less likely to allow the

same situation to occur. Noone wants a Bolshevik-typeup-rising on their watch andsmall concessions made tomeet on a middle ground

should avoid a revolution.However it is important to

note that while these claimsare not yet the blueprint toremove capitalism from soci-ety, at their fundamentallevel Occupy London is ananti-capitalist group and as

time goes on it is likely thattheir proposals will becomemore extreme to achieve an

anti-capitalist solution. Never-theless, a failure in capitalism

does not mean that its an-tithesis is the solution. For ex-ample Communism has beenevoked before as a sledge-hammer solution to the fat-

cat capitalist culture andfailed miserably; just consider

the creation of the Soviet Un-ion which resulted in Civil

War, dictatorship and Stalinsfive-year plan creating wide-spread famine and a deathtoll numbering in the millions.

In fact even though capital-ism within the financial sector

has caused the current crisiswe face today, anotherbreed of capitalism in the

form of new small businesseshas been cited as a lifeline to

drag the economy out of the

downturn and is potentially a

more sensitive and realisticsolution than a completeabandonment of capitalism.

Another issue with the Oc-cupy London protest is the

platform they have chosen tovoice their arguments, with

their campsites being the fo-cus of sharp criticism. For ex-ample the sites at St Pauls,Shoreditch and Finchley havebeen condemned as beinghubs for increased crime and

drug use and containershave been installed for thesafe disposal of syringe nee-

dles. In addition the obstruc-tion of the campsites espe-

cially around the St Paulsarea has made it increasinglydifficult for the restaurants,shops and tourist attractionsto operate as normal. It is for

reasons such as these thatthe court ruled in favour of

eviction. It is understandablewhy they have chosen such a

high profile location, howevertheir message cannot con-tinue to come at the cost ofthe businesses in the area. At

the very least this is counter-productive to their cause in

the long run where they wantto see less of a tax burden onthe common individual,

which can only happen if thebusinesses continue to turn a

profit and pay taxes.

In some senses, it will be un-fortunate to see the campsite

broken up. Especially as theprotesters have become a

community unto themselveswith a vibrant life-force thataims to bring equality through

knowledge and opportunitiesto voice concerns with public

forums and lectures. For ex-ample, in the St Pauls camp-site they have the City Uni-

versity Tent (no affiliation with


8/12

our own university) which

holds a multitude of eventsfrom independent fi lmscreenings to lectures on cli-

mate change.

Whether one agrees or not

with their aims, political ide-ologies and denigration of

the financial sector, it is clearthat the group is a remark-able example of humanteamwork and action andtheir deeds are undoubtedlypeaceful, honest and well-

meaning and although theirdays are rightly numbered intheir campsites, they should

use this last length of lever-age they have to make sure

their three-point plan be-comes a reality. Time will tellhow they will continue tokeep their profile raised, butin todays internet age and

the ability to achieve viralpublicity easily and cheaply

combined with their alreadystrong, organised and pas-

sionate following, it is unlikelythis group will fade into ob-

scurity.

By Tom Doherty

Last year, Labour unveiled aneconomic plan knowing that

it will never need to imple-ment it. The solutions weresimply recommendations forshort-term problems and bythe time of the next electionnone of the points of The 5

Point Plan will be valid. It is

clear that Labour needed to

restore credibility and make aplan that resonated with thepublic mood. This has been a

recurring theme of Laboursstance on a variety of plat-forms. Whether it is Europe,News International or the Fi-

nancial Sector, Labour hasstarted by listening to thepublic mood and developinga position that balances the

attitudes of the party and thepublic.In so doing, it has led to EdMiliband successfully corner-ing the Prime Minister David

Cameron a number of times.

From the apparent phonehacking of Milly Dowler to

Government-owned bankbonuses and the removal ofFred Goodwins knighthood,

Labour has led the positionand the outcome of all of

these events. And these areby no means insignificant

events. But despite showing astrong appreciation of the

public mood the public con-tinue to deny Eds abilities.Labour continue to slump inthe polls and it becomes

more and more apparent astime goes on that they dont

disagree with what is beingsaid, simply who is saying it. Itseems Ed Miliband lacks the

presence of a Prime Minister,as his predecessors didnt.

With 3 years until the nextscheduled election, Ed maywell have time to prove his

place. But he must stay trueto his beliefs. Recently, he

and Ed Balls were criticisedfor their support of Govern-ment plans for public sector

pay restraint. He was blastedby the unions who supported

him and by various outsiders

for not being the opposition.In the face of this criticism it is

careful to remember that theoppositions position is not to

always oppose, but more of-ten to scrutinise. It is right tosupport pay restraint over fur-ther unemployment and for

this Labour must be com-

mended, not attacked.

The scar of Labours recent

economic history may still betoo close to home for some.With millions unemployed,

many will blame Labour fortheir experiences. But with a

continuing struggle almost 2years on into a new Govern-ment with the economy onthe brink of recession, thepublic may begin to warm toLabours ideas. The Five Point

Plan was an unsuccessful at-

tempt to make them listen,but it was successful in allow-

ing the party to finally have apolicy to rally around.Granted not all the points ofthis plan were sensible or alto-

gether viable, there wereparts that resonated with

credibility. And more recentlythe IMF has suggested thatcountries with room to ma-

noeuvre should use that abil-ity to stimulate growth echo-

ing the suggestions from theopposition benches.

Rebuilding Labour may well

be a difficult task given therubble that was left behind.

The occasional voice ofdoubt in Ed Miliband thatsounds from the back

benches will not be enoughto topple him and it seems

that Ed will indeed take La-bour through to the nextelection. Ed needs to be boldin changing Labours mind-

Labour Pains


9/12

set. He must be brave

enough to develop medi-cines that may be hard toswallow if he is sure the pa-tient needs it. The first monthof 2012 has been bright for

Labour and its leader, if thefollowing 11 are just as goodthe public will be forced tonotice Mr Miliband for all the

right reasons.

By Tanvi Narayan

The growing crisis in the Euro-

zone threatened to under-mine the global economicrecovery as markets plunged

across the world on fears thatEuropean leaders may not beable to contain the debt con-tagion spreading from

Greece.

As events in Europe continueto unravel at dramatic speed,

academics in European poli-tics at Sussex University haveintensified their efforts to pro-vide scholarly analysis of thelatest developments as theyoccur. With the pace of de-

velopments outstripping theability of political leaders torespond, what was initiallycalled as a summit to bless a110bn (95bn) rescue pack-

age for Greece turned into afrantic exercise in global crisis

management.

There is something, however,

that may be even more diffi-cult to believe: the euro debt

crisis, for all its power to shakefinancial markets and theglobal economy, is just chap-

ter 1 in a story that will run forthe next two decades. This

crisis is only our introduction tothe kinds of wrenchingchanges that virtually every

nation's economy will face

over the next 20 years.

Recent articles by leadinga c a d e m i c s d i s c u s s i n g

the EU, the Euro-zone crisis,Camerons stance at last

weeks EU summit and the

subsequent fall-out in Britishpolitics have drawn some of

the following conclusions:

Failure in Brussels: The Euro-pean summit has not solved

the Euro-crisis and the Euromay still collapse, in whichcase the bust-up in Brussels

may not matter quite asmuch as it seems to right

now. The recent EuropeanCouncil meeting announceda plan to negotiate a treaty

on fiscal discipline by March2012 and provided small

amounts of additional fund-ing, partly via the Interna-tional Monetary Fund, to help

indebted states. But it failedto convince the European

Central Bank (ECB) to expandits so-called 'quantitative eas-

ing' to buy up bonds of Italyand Spain and others. WithItaly needing to roll-over debtin early 2012, the monetary

union could still collapse.

Global impact of any Euro

collapse: A collapse of theEuro would throw not justEurope but much of the rest

of the world into severe re-

cession.

The Cameron effect: ThePrime Ministers decision not

to work with the other 26

member states to solve thecrisis may be a historical turn-

ing point in British politics,leaving the country isolatedand ultimately destroying

not just the current coalition,but if it increases support for

independence in Scotland,the UK itself.

Q: How has the UKs position

in Europe been affected by

economic crises in Europe?

A: The new treaty proposed

by the European Council willbe intergovernmental andstand outside existing EU trea-

ties.

The UK will remain a member

of the European Union (EU),which is governed by consti-tutional rules set out in the

European treaties.

No one can force the UK to

leave the EU. However, theUK is now regarded by the

other 26 members, even for-

mer friends such as Polandand the Scandinavian coun-

tries, as being unreliable,lacking in solidarity and de-structive.

Continental Europe thinksthat Mr Cameron tried to un-

dermine efforts to save theEuro even though thisprobably was the last thing

he wanted to do. So it is

unlikely that anyone wouldmove to stop the UK's exit ifthat is what the government

wants.

Critics of Camerons stance

argue that the UK has thrown

away in a few days the politi-cal capital and credibilitythat governments of both

parties have spent years

building up.Q: How will events in Europeimpact the UKs coalition

government?

Eurozone Crisis: Q&A


10/12

A: Crisis or no crisis, Europe

would have had the potentialto cause the coalition gov-ernment a headache.

But Mr Cameron's 'veto'andDeputy Prime Minister Nick

Clegg's reaction to it hasturned an international crisis

into a domestic drama thatcould spell the beginning ofthe end for a coalition that,even to many Liberal Democ-rats and Conservatives, wasalways somewhat counter-

intuitive.

On the other hand, the junior

partner in that coalition hasfaced humiliation before (ontuition fees and electoral re-

form, for instance) withoutshowing any serious inclina-

tion to walk away.

Whether they grumble butstay right where they are will

depend on whether the bust-up in Brussels is merely a tem-

porary blip or, as many Con-

servatives hope, an irrepara-ble tear in the fabric of the

UK's relationship with its EUpartners.

Q: What would be the conse-

quences of a Euro collapsefor the UK?

A: If the Euro goes down, allbets are off. Although UKbanks may not be as ex-

posed as some of their conti-nental European counter-

parts, they still stand to losebillions.

If that happens, the creditcrunch will get a whole lot

'crunchier'.

Exports and output in the 'realeconomy' will also dip dra-matically, offering the pros-

pect that the incipient reces-sion may even turn into a de-

pression.

If that happens, the govern-

ment's aspiration of reducing

the deficit in four or five years

will be a distant memory.

Whether it suffers politically,however, will depend on theextent to which it can blame

Europe for all our woes andwhether Labour can come

up with a credible alternativesomething of which there is

as yet little sign.

Q: Why should the UK be an-swerable to the problems ofother EU states?

A: The UK's financial servicesindustry is actually responsible

for much of the country'sdebt and deficit.

In seeking to protect the in-

dustry, Mr Cameron byweakening Britain's position in

Europe more generallymayactually end up damagingprecisely those interests he

sought to stand up for.

We also need to consider the

paradox that Britain's (andDenmark and Sweden's) insis-tence on staying out of the

single currency may havemade it easier for the rules tobe bent by those countries

that did adopt the Euroandit was the bending of those

rules that led in no small partto the current crisis.

Semi-detachment, or even

complete separation, mayseem like an attractive posi-

tion to some but given geo-graphical and economic re-alities it may be a self-defeating stance.

By Joaquin Thul

When Steve Jobs announced

the launch of Apples iPad,he might not have consid-ered the effect on technol-ogy he was about to create.

Maybe he did know, ormaybe he didnt. Truth is that

nowadays all technology-related companies are plan-ning to launch their competi-tor to the iPad. However, thesurprising thing behind this is

the relation between the OneLaptop per Child programmeand the tablet computermarket.

One Laptop per Child (OLPC)is a not-for-profit organisationthat aims to provide childrenall over the world with a low-

cost, low-power connectedlaptop in order to help themin their learning process. This

programme has been runningfor the past six years and

started by targeting childrenin developing countries. Sofar, over 2 million childrenand teachers from differentcountries have been pro-

vided with an XO laptop (thename given to their laptops).These personal computers

are designed with very resis-

tant materials and open-source software which en-ables them to be manufac-tured at a very low cost. Thisdoes not make them equiva-lent to toys, these devices

are also equipped with fea-tures that can be found on aregular laptop, such as USBports, a webcam, a micro-phone, speakers and even

feature Wi-Fi connectivity. Theprogramme aims to help thelearning process of everychild, with up-to- date teach-

The Technological Frontier

of Education


11/12

ing methods based on new

technologies.

This idea was first applied to

Uruguay, which was the firstcountry in the world to pro-vide one laptop to every pri-

mary-school student. Al-though it is still too early to

see the results of the wholeprogramme, the primary out-come appears to be verypositive.

However a recent report fromthe BBC on the Consumer

Electronics Show (CES) showsthat the OLPC programme

could be also entering thetablet computer market in2012 in order to provide chil-

dren not with an XO laptop,but rather with a tablet com-

puter. According to theOLPCs Chief Technology Of-

ficer, giving them a tablet

computer could lower costsand lower the power con-

sumed by each device. Thequestions now appear to be

different: Should OLPC enterthe tablet computer market?Is it really necessary for chil-dren to learn how to use a

tablet device instead of alaptop?

In order to explain this we firstanalyse the beginning of thishuge market euphoria for

tablet devices. When Ama-

zon launched the first editionof their e-books reader Kindle,it was criticised for being acold substitute for regular pa-

per books. However, whenApple launched their iPad,

which in reality is an improvede-book reader device thatcan connect to the Internet

and play music, it was almostworshipped. Although it was

criticised by many, the iPadwas the first truly successfultablet computer. Nowadays

all main technology brands

like Microsoft, RIM, HP, Pana-

sonic, Dell, Sony, etc., areworking on their own tabletdevices and getting ready tolaunch substitutes for the

iPad.

One of the most well-knownconcepts in microeconomics

is the principle that supplycreates its own demand. Thisis known as Says Law, a con-

cept criticised by John May-nard Keynes, and madepopular by the French

economist Jean-Baptiste Say.However, the validity of thisconcept still generates a con-

siderable debate betweenclassical and supply-side

economists. We may try tounderstand the markets re-

action to the iPad in terms ofthis concept. When Appleintroduced its new creation

the market developed a cer-tain need to have it. Maybe it

was due to the high level ofbrand-loyalty that Apple users

exhibit for the company, thisproduct was a huge success.Moreover, the iPad is just aproduct which resembles

more a large iPhone with thebenefit of a few additional

apps. There is no logical ex-planation to why this newproduct generated such

euphoria in consumers, to thepoint that every company

now wants to sell their owntablet.

Why would the OLPC pro-

gramme, also want to enterinto the tablet market? The

OLPC states on their websitethat they consider children allover the world to be theirmission, and not their mar-

ket. Therefore they should

first try achieve their first goalof providing every child witha low-cost laptop to help

them with their studies,

not just equip them with the

latest technological fad. CES

idea to enter the tablet mar-ket only conveys the mes-sage that they are more con-cerned with keeping up with

other technology compa-nies rather than achievingworldwide connection for

young students.

We may say that the creationof this new market for tabletcomputers by Apple is veryappealing for its rivals. It is

perfectly logical to under-stand the other companies

willingness to enter in that

market and grab a piece ofthe cake. But it is not that

easy to see why a not-for-profit organisation is also try-ing to develop their tablet forchildren. The excuse of lowercosts or lower energy con-

sumption seems plausible atthe first glance, but it be-

comes less clear once theystart negotiating with Micro-

soft in order to include theiroperating system on the new

versions of the XOs.

Education as a growth gener-

ating factor is a crucial topicin developing countries and it

seems that the discussion nowis centred more on techno-logical aspects rather than

educational ones. It seemsthat the main concern is howto develop the latest devicerather than how to make thecurrent XO laptops available

for every child. The questionof whether tablets will help

achieve global connectivityfor education more success-fully than the regular XO lap-

tops is not an easy one to an-swer. We will only be able to

tell once we start seeing thisprogrammes results in the

long term.


12/12

Date post:	06-Apr-2018
Category:	Documents
Upload:	davidbosborne
View:	222 times
Download:	0 times

The Schumpeter Issue 9

Documents