Police Using ALPR/ANPR to Track People

Automatic License (or Number) Plate Recognition has been around for several years. In the UK, a CCTV network -– with more than 10,000 cameras just in the London area -- can be used to track vehicle movements in real-time. The data is stored for five years and can be analyzed by intelligence services and used as evidence in a criminal case. When the system became operational in 2006, the ANPR center in the north of London was already able to store 50 million plate reads per day.

That's a lot of data to retain. Until recently, a police officer would enter a license plate in a computer terminal and get information about any possible violation, theft, etc. If everything were normal and no further action were required, the search would be deleted. But ALPR systems work differently. They retain the license plate number, time, date, and GPS location of the vehicle. With completely autonomous systems installed in roads and police cars, each unit can scan several thousand cars per day and store the information about their location.

In some places, ALPR systems are already sending tickets for violations automatically, without human supervision. For example, Spain and the Netherlands are using average speed cameras to detect speeding. Since speeding drivers know most of the locations for fixed radar systems, they tend to brake to a legal speed when approaching the systems and subsequently accelerate back to illegal speeds. With the ALPR systems, no radar is necessary. The cameras read every license plate and calculate the time it took to get from one camera to another. If the average speed is 10% or more above the speed limit, a ticket is issued automatically. This has the advantage of enforcing speed limits over long distances and not penalizing drivers who exceed the speed limit for only a few minutes. But it also raises the issue of a computer system issuing a penalty for a violation.

In many countries, there is no legislation to protect people from abuse of the system. Privacy groups are getting really concerned, and with reason. How long is the location data is going to be stored? Who has access to the information, and for what purposes? What is the standard the government agencies need to meet to investigate the movements of an individual?

In the US, many cities and towns are now purchasing ALPR systems for local police with grants from the Department of Transportation, and organizations such as the ACLU are working hard to raise awareness about the potential threat to normal citizens’ privacy.

"With very narrow limits imposed on its use, the technology can be deployed without negatively affecting civil liberties. Unfortunately, use of the machines is spreading in Massachusetts and nationwide, entirely without these protections, becoming another mechanism enabling the tracking of ordinary people," the ACLU of Massachusetts said in a September press release. In its latest newsletter, it also said:

Information sharing among state and federal agencies is problematic partly because of the kinds of advanced data-mining software available to law enforcement. Here in MA, Amherst and many of the other towns who received funds expressed their eagerness to use data-mining software made specifically for ALPRs, called "BOSS," or "Back Office System Software." This technology is what makes ALPRs particularly dangerous because it can pick out particular data from a mountain of information and arrange it in such a way that enables frightening tracking of motorists.

Just like location tracking of your cellphone, ALPR systems pose a serious threat to people’s privacy, and their use needs to be regulated.

Article first published as Police Using ALPR/ANPR to Track People on Enterprise Efficiency

Mondragon Co-Op Movement, The Power of Collaboration

In a recent article, I discussed how geographic location can make a huge impact on innovation -- how an industry can benefit from being in close physical proximity to the suppliers, researchers, educational institutions, and other organizations that support and complement the industry. In this blog, I introduce the Mondragon Co-op, an organization that has harnessed this "power of the commons."

Few people in the United States have heard of Mondragon (Arrasate in the Basque language), but this small mountain town in the Basque region of Spain is the birthplace of one of the most successful cooperative systems in the world. The Mondragon Co-op is the home of over 250 companies working together in areas of manufacturing, retail, finance, and knowledge. At the end of 2010, the combined revenue was around $20 billion. The Mondragon Co-op employs over 100,000 people, making it the fourth-largest industrial group in Spain. Since 1943, it has had its own technical school (now called Mondragon University), which offers curricula in engineering, business, social sciences, culinary arts, and more.

I remember my first visit to Mondragon in 1985. At the time, I was the technical director of a small software company in Madrid that had the distribution rights for AutoCAD in Spain. I went to Mondragon to give a presentation of a new version. That was my first experience in the Basque region. (In Spain, we call it País Vasco or Basque Country.)

I was really impressed. The town was bustling with activity, the facilities and buildings were impressive, and everything was organized in a campus where people worked together as one team. (Language, however, was an issue. Though only 15 percent of the Basque population at that time spoke the Basque language Euskera, it was the main language used by everyone at Mondragon.) I was amazed by the organization and the level of technology in the area. It was like nothing I had seen before anywhere else in Spain.

The Mondragon Co-op was officially incorporated in 1956, but the story begins in 1941 with the arrival of a young Catholic priest, Jose Maria Arizmendiarrieta. The town had been devastated by the Spanish Civil War, but the great social movements are those stimulated when boundaries are broken, and Arizmendiarrieta did just that. He established a vocational school, which later became a technical school to train the young people in technical skills, social responsibility, and human values. In 1955, he selected five former students, all workers at a locksmith factory, and created the Ulgor workshop (now the successful Fagor group of home appliance manufacturers).

Over the next 15 years, Spain's isolation from the international community (due to Francisco Franco’s military government) and the initial growth of the postwar economy sparked the creation of other co-ops in Mondragon. During that time, responding to the need for financial, insurance, and retail services, the co-ops started their own savings bank (Caja Laboral), the insurance and retirement group Lagun Aro, and the commercial group Ularco (now the Eroski group, the largest Spanish retailer).

The arrival of CAD/CAM/CAE systems in the 70s was the starting point of a new era for Mondragon. Due to the large investments necessary to acquire those systems before the PC revolution, the Mondragon Co-op decided to create a common research and development facility, Ikerlan, a nonprofit organization to provide development services to the members of the different cooperatives and other organizations. It now employs over 200 researchers and provides services in embedded systems, power electronics, process control systems, energy efficiency, and sustainability.

In "The Mondragon Experiment," a 2009 article published in Harvard International Review, Greg MacLeod wrote:

The Mondragon Corporation is striking in that their annual strategic plan usually includes a job creation target. Most large global corporations, in contrast, develop strategies to increase earnings through job reduction. Conventional corporate managers argue that a "job creation" strategy necessarily leads to inefficiency and losses. But empirical testing suggests otherwise.
In 2006 and 2007, most large global corporations experienced a decline in revenue. Mondragon, on the other hand, increased revenues from $15 billion to $17 billion, an increase of over 13%. In 2007, Mondragon returned over US$50 million to workers as a share in profits. During this period, Mondragon’s total workforce expanded from 83,000 to 103,000, an increase of 20,000. One reason for Mondragon’s freedom of operation compared to conventional corporations is that it does not rely on stock markets for capital. Instead, it relies on its associated bank and worker shares as well as commercial loans.

Mondragon is home to some of the most successful industrial and commercial companies in Europe, such as Fagor, Danobat, Eroski, ULMA, and MIK. Without the drive of collaboration, the use of the most advanced technology, and the commitment to the society and its values in a place that was almost destroyed by war, it would have been impossible.

The Mondragon Co-op system is a case study at many top business schools all over the world. Some of its ideas have been replicated in many places, especially in communities that suffered recent catastrophes like war, natural disasters, and resource shortages.

Article first published as The Power of Commons: Mondragon Co-Op Movement on Enterprise Efficiency

America Can't Manufacture Hi-Tech Products Anymore

"American companies discovered that they could have their manufacturing and even their engineering done more cheaply overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering." -- Andy Grove, former Intel CEO, a year ago in Businessweek.
Other voices go much further, even claiming that decades of outsourcing have left the high-tech industry without the means to "invent" the next generation of products.

There are many factors that undermined the ability to manufacture high-tech products in the US -- and in many other countries of the "first world" -- but here are a few important ones.

The erosion of the commons. When it comes to knowledge, distance does matter. Engineers and scientists are more likely to exchange ideas and new concepts locally. When a high-tech firm's leader cuts funding for long-term research and start outsourcing those activities, it puts pressure on competitors to do the same. That affects the hiring of experienced people and new brains coming out of universities, who see no future in the area and move to other regions (and countries) to find work where their expertise is needed. Soon the critical mass of skills and knowledge erodes, and the other areas of design and manufacturing are forced to move, as well.

Some international corporations have realized that and have moved their research facilities to where the knowledge and brainstorming is happening. The Swiss pharmaceutical giant Novartis moved its research headquarters to Cambridge, Mass., to have its scientists close to other biotech firms in the area and to colleagues and universities leading in that area of research.

Most of the supply chain is in Asia. When the PC industry started in the 80s, most components were manufactured in the US. Since the PC business was very competitive from the beginning, OEMs started to look for cost-saving opportunities overseas. They started to outsource the PCB assembly to subcontractors in South Korea and Taiwan.

Soon, with margins declining rapidly, more pressure to cut manufacturing costs allowed the Asian manufacturers to do more work. They learned fast and started their own industry in key components such as LCDs, injection molding (a result of the massive investment in toy manufacturing in China), lithium-ion batteries, wireless cards, controller boards, flex circuitry, etc. US firms were only too happy to oblige, thinking they still had the high-end design and engineering of innovative products in their hands. But now Asian companies are leaders in those fields with their own products, and nobody can compete with them. With all those components being manufactured in Asia, who wants to import them to assemble the final product somewhere else?

Financial pressure from Wall Street. In his Businessweek article, Andy Grove mentions a friend who joined a large VC firm as a partner. "His responsibility was to make sure that all the startups they funded had a 'China strategy,' meaning a plan to move what jobs they could to China. He was going around with an oil can, applying drops to the guillotine in case it was stuck."

Basically, investors don’t believe anymore that a high-tech firm can manufacture products in the US profitably. Why should a startup try to convince them? Until Wall Street starts realizing the long-term damage that strategy is doing to the American economy, especially in innovation, the situation could only worsen.

Lack of government support. The US doesn’t have a job-centered economy anymore. It is consumer-centered. The way to fuel the economy is trying to restore consumer confidence and provide cheap credit to encourage spending. Instead of providing the means and support to restore research and manufacturing, the government is more interested in short-term strategies to fuel consumer confidence.

Also, there is no support for collaboration, because we fear foreign investment in key areas of the economy. A clear example is the Fiat-Chrysler deal. The Italian firm wanted to acquire a minority stake of the US car giant in exchange for transferring efficient diesel technology (already in use by GM in some of its European models). Some in Congress opposed the deal, because they didn’t want to use any taxpayer money to help a foreign corporation.

I think the manufacturing of the current generation of high-tech products in the US is basically gone. But restoring research and the "commons" could be a beneficial long-term strategy to rebuild the leadership in the design of new products. New technologies and materials could also be used to restore manufacturing here. If the industry and the government continue to focus on cheap products and competitive manufacturing abroad, then the battle is lost.

Article first published as Why High-Tech Brands Can't Manufacture in the US on Enterprise Efficiency