Avoiding the Dangers

of Linear Thinking?
A Strategic Perspective on China &
The World in the 21st Century
Partha@ParthaGhosh

May 5th 2007

Partha S Ghosh
 The Real Challenge
The Challenge: How to use the power centers
Bohai Delta:
for the development of new economic models Tianjin, Qingdao,
enabling distributed wealth Creation ? Dalian

Yangtze River Delta

Shanghai, ZheJiang,
JiangSu

Pockets of metropolitan
Areas in Western China

Pearl River Delta

HK,Macao,Shenzhe
n, GZ
Partha S Ghosh
How do you sense the “State of Health” of
our Planet?

Increasing
Significance of China

Partha S Ghosh
 Global Population 650 Years = US today: 300M

Note : Each dot represents 1 million people

Boston Analytics Research
1. “Energy Consumption and Sources of Renewable Energy”, Amitabh Lath, (www.physics.rutgers.edu/~lath/Piscataway_2003.ppt)
Partha S Ghosh
 Population Hundred Years ago : 1,600 Million

Note : Each dot represents 1 million people

Boston Analytics Research
1. “Energy Consumption and Sources of Renewable Energy”, Amitabh Lath, (www.physics.rutgers.edu/~lath/Piscataway_2003.ppt)
Partha S Ghosh
 The Recent Past, 20 Years back 5,000 Million

Note : Each dot represents 1 million people

Boston Analytics Research
1. “Energy Consumption and Sources of Renewable Energy”, Amitabh Lath, (www.physics.rutgers.edu/~lath/Piscataway_2003.ppt)
Partha S Ghosh
 And Near Future 2020: 8000 Million

Note : Each dot represents 1 million people

Boston Analytics Research
1. “Energy Consumption and Sources of Renewable Energy”, Amitabh Lath, (www.physics.rutgers.edu/~lath/Piscataway_2003.ppt)
Partha S Ghosh
 Slow Pace of Dangerous Change : CO2 emission

World Carbon Dioxide Emission in Million Metric Tons

(1980 to 2050*)1
70,000

60,000 65 Billion
Million Metric Tons

50,000
Tons by 2050
40,000

30,000

20,000

10,000

0
1980 1990 2003 2010 2020 2025 2050
Boston Analytics Research
1. Energy Information Administration (http://www.eia.doe.gov) Year
Partha S Ghosh
Annual loss of Forest land 16.2 Mn Hectares

Annual Change in Forest Area (000 ha per year) 1990 to 2005)1

Europe 1,538

Asia 211

-661 Oceania & Australia

-804 North & Central America

-8,053 South
America
-8,415 Africa

-16,184 World

-20000 -15000 -10000 -5000 0 5000

Boston Analytics Research
1. “Extent of forest resources”, (http://www.mongabay.com/deforestation.htm)

Partha S Ghosh
Dynamics of Deforestation and Ecology: Require
Repurposing our Knowledge
• Less CO2 taken in
• Burning Trees adds even more
CO2
• Less photosynthesis takes
HYDROSPHERE ATMOSPHERE
place
• Increased risk of fire

• Increase in Flash Floods • Loss of vegetation

• Aquatic Habitat Degraded • Decrease in no. of species

• Flow of Water Changes • Increasing infestation

DEFORESTATION1
• Less Oxygen in the • Decrease of pollinators & seed
waterways dispersers
• Loss of human diversity

GEOSPHERE BIOSPHERE
• Soil Erosion

Boston Analytics Research

1. “The Choice: Doomsday or Arbor Day”, (http://www.umich.edu/~gs265/society/deforestation.htm)
Partha S Ghosh
The Essential Points:

1. Indeed Challenging &

Interesting times ahead

Partha S Ghosh
Powerful Forces at Work?
Changing Ecology

65 Billion Increasing
Tons of CO2 Population

Rising
Temperature Equity

Increasing
Sea Level Deforestation

Finite Resources

Partha S Ghosh
Powerful Forces at Work: Clash of Perspectives?

Digitization Changing Ecology

Wall Street
requirements Expectations
65 Billion
Tons of CO2 Increasing
Population

Rising CO2 Equity

Temperature

Deforestation
Increasing
Sea Level

Finite Resources

Partha S Ghosh
 Most of the world is still in the early stage of Economic
development

Energy Consumption per Capita vs. GDP per Capita (2004)1

140

120 Canada
Energy Consumption
(‘000 KWHr / Capita)

100 US
80% of Global
80 Population

60 Russia France
Germany Japan
Kazakhstan Czech
UK
40 Ukraine Republic Italy
Malaysia
Thailand Romania
20 Brazil
China Turkey
Indonesia Egypt Philippines
India 0
0 5000 10000 15000 20000 25000 30000 35000 40000 45000
GDP / Capita (US$)
Boston Analytics Research
1. Energy Information Administration - EIA (http://www.eia.doe.gov/)
Partha S Ghosh
Future Natural Gas requirement of Asia

Overview of Energy Scenario (In BCM)

Country 2001 2010 2015 2020 2025

India 22 65 90 114 143
China 28 54 74 102 142
Japan 79 91 99 108 119
South Korea 20 28 37 43 51
Other Asia 139 153 173 198 230
Total 288 391 473 565 685

Partha S Ghosh
The Essential Points:
1. Indeed Challenging & Interesting times
ahead

2. Emerging Economics must

make the difficult choice: Adapt
or Advance?

Partha S Ghosh
Old Path or New Path: Time to Choose?
Plastic Consumption per capita in Selected Countries vs.
GDP per capita (2003)1,2,3
Plastic Consumption per capita (in kg)

140
2
Developing and R = 0.8631
120 Moderately Developed Germany US
Countries
Singapore Japan
100

80 Canada

60
Malaysia
40
Hungary Highly
20 Thailand Developed
Poland Countries
China
Indonesia
0 India
0 5000 10000 15000 20000 25000 30000 35000 40000

GDP per capita (in US$)

Boston Analytics Research
1. http://www.dailytimes.com.pk/default.asp?page=story_11-9-2003_pg5_12
2. Poland and its investment opportunity – BCG Report
3. http://www.eia.doe.gov/
Partha S Ghosh
Cleary we are at the End of a Long Era?
Economic Development Curves
High

Information
Revolution
Productivity of Society

Industrial Revolution 2
(Internal Combustion
Engine)

Industrial Revolution 1
(Steam Engine)

2005 ~2010
Low
Time

Partha S Ghosh
Mega Challenge = Managing a Mega Transition
to avoid Mega disruption
1350 1900 2005 ~2010 2050

Era of Extraction &

Mono dimensional Value Creation

• “Unconstrained” Processing of Earth’s resources

• New Relationship of Space & Time
• Supply to Fuel Unidirectional Demand

1. Concentrated Next Era Paradigm?

Economic Growth
2. Ecological
disequilibrium Role of Emerging Economies?
3. Complex Politics of
Supply Chain
Holistic Approach?

PROBLEMS ≈ OPPORTUNITIES
Holistic Approach
Renewable and
Energy Clean Energy
Source

Ecology Equity

Energy ,Food
and Health for All
Sustainable Economic
Developed
Partha S Ghosh
 Scope of the Field?
Industry’s Future (?): Two Strategic Vectors
Balance?
Conservation
driven
Balance of Ecology

Future Business
Models

Consumption
driven Perspective?
Point Balance of Economic Holistic/Integrative
Solution Advance Solution
Partha S Ghosh
 Expanded Field?
Industry’s Future (?): Two Strategic Vectors

Balance?
Conservation

Carbon Free Systems Approach to

Energy Energy &
Balance of Ecology

System Transportation
Management
Future of
New Business Models
Chemistry Recycling
of Waste
for the Car
Agro based
Recycling Chemical
Lighter
Products Industry
Today
Improved
Consumption functionalities Process
Intensification
Perspective?
Point Balance of Economic Advance Holistic
Solution Solution
Partha S Ghosh
 Historic Perspective is necessary: 2500 of
Globalization
500 1500 1700 1800 1900 2000→
BC
Silk Road European Renaissance Colonization Decolonization
Empowerment Neo-
Chaitanya Renaissance?
Mahapravu
Social Reforms
In search of Raw oWealth Creation
Merchants of Venice Materials oBrand Creation
•Cotton
Stage 1: Venture-Trade Driven •Minerals Sources of
Competitive
Stage 2: Resource Driven Stage 3: Market Advantage
Driven
Stage 4: Skill, Scale, Scope
Driven
Raja Ram
Mohan Ray Stage 5:Digitization

Partha S Ghosh
The Essential Points:
1. Indeed Challenging & Interesting times
ahead

2. Emerging Economics must make the

difficult choice: Adapt or Advance?

3. China is an unique position to

lead the Paradigm Shift?

Partha S Ghosh
China’s Unique Status?

World: China:
Approaching Limits New level of
Confidence
US/EC victims of
significant Possibilities of early
momentum & Aging stage growth

Negative trade Rapidly Increasing

balances Financial Power

Concentration of Oil Relevance of Ancient

& Gas Wealth Wisdom

Partha S Ghosh
Opportunities to create new Economic Model
Percentage of Labor Force in Agriculture Across Various Countries v/s
GDP per Capita (2003)1,2,3
100%

90%
Countries with low GDP per capita
Percentage of Labor Force in

80% and high % of labor force in

agriculture:
70%
China
Agriculture

60%
India
50% Bangladesh
Upper-middle income Countries with high GDP
Indonesia
countries and Lower-middle per capita and low % of
40%
Pakistan income countries (Brazil) labor force in agriculture:
G7 Countries
30%
Nigeria 2
R = 0.578
20% Mexico
Malaysia France Germany
Brazil
10% Canada
South Africa Italy US Japan
0% UK

0 5000 10000 15000 20000 25000 30000 35000 40000

GDP* per Capita ($)
Note : * Real GDP with base year 2000

Boston Analytics Research

1. Energy Information Administration (http://www.eia.doe.gov)
2. Food and Agriculture Organization of the United Nations (http://www.fao.org/)
Partha
3. “World Bank list of economies, April 2006”, World Bank S Ghosh
(http://www.worldbank.org)
Mega Challenge = Managing a Mega Transition
to avoid Mega disruption
1350 1900 2005 ~2010 2050

Era of Extraction &

Mono dimensional Value Creation

• “Unconstrained” Processing of Earth’s resources

• New Relationship of Space & Time
• Supply to Fuel Unidirectional Demand

Multi Multi –tier

1. Concentrated
Economic Growth
Strategic Initiatives
2. Ecological
disequilibrium
3. Complex Politics of
Supply Chain
 The Promise of Chemical Industry has to be
applied in Multiple Scales
Three Scales of Knowledge Application
Holistic /Tera Scale
Perspective
Large Scale Systems Dynamics Tera Scale
Issues
1 •Global Ecological Balance ?
• Energy Balance ?
• Social Structures ?
Scales of Engagement

Current
Scale
2 1. Efficiency
2. Conservation
3. Recycling
Raw materials

Micro Nano
Cellular /Nano Scale
3 Level
functionalities

Microscopic
Perspective

Partha S Ghosh
New technologies could indeed trigger a New Era
Process Industry Reconfiguration

Nano Information
Technologies Technology

10011000101110
Upstream Downstream

Opto Technologies Biotechnology

Partha S Ghosh
Large Scale Engineering systems thinking is
essential

BioEnergy

Engines
Wind Farm PV Array
Stirling
Rooftop PVs
Transmission and
Distribution
Fuel Cells

Microturbines Fuel Cells

Reciprocating engines

Residential Commercial
FuelMicroturbines
Cells
Reciprocating engines
Industrial

The Virtual Power Plant

z Aggregates the output of thousands of micropower technologies
z Peak shaving becomes power trading on the wholesale market
z Coordination and control through a new communications infrastructure

Partha S Ghosh
 Solar Energy has the potential to address our growing
energy needs in an environmentally-friendly way
Basic Mechanisms of Solar Energy Conversion1

Fuel
Light
Electricity

Fuels Electricity
CO2 O2 H2
e e
Sugar
sc M sc M
H2O
H2 O
O2

Photosynthesis Semiconductor/Liquid Photovoltaic

Junctions
Boston Analytics Research
1.”Global Energy Perspective”, Nathan S. Lewis, California Institute of Technology, Pasadena, CA
Partha S Ghosh
 Equipment efficiency?

Equipment Efficiency vs. Equipment (2004)1,2,3,4,5

Thermodynamic
100% Efficiency=100%
20% improvement
Equipment Efficiency

80%

60% 35% improvement

10%
40% improvement

20%

0%
Lighting IC Engines Air Heaters Boilers
Devices Conditioners
Equipments

Boston Analytics Research

Partha S Ghosh
 Reduction in energy intensity could reduce
world energy demand by 14% to 20% in 2025
World Energy Demand in Quadrillion Btu (2025)1 :If Energy Intensity is Reduced in
Selected Regions

645.0 10.3
Quadrillion Btu

700 38.2 15.2 26.5 554.8

600
500
400
300
200
100
0
2025
Reduction Reduction Reduction Reduction
2025
Projected in India in China in Western in US
Projected
Energy Europe
Energy
Demand Demand after
Assumptions: Reduction
•Energy intensity is reduced by 35% for India and China
•Energy intensity is reduced by 20% for Western Europe (WE) and US
Partha S Ghosh
Multiple Perspectives is
necessary ““Synthesize
Synthesize Perspectives
Perspectives
to
to be
be Effective
Effective

Technological
Technological
Cultural
Cultural &
& Market
Market
Environmental
Environmental

Historic/Geo
Historic/Geo Macro
Macro Socio-
Socio-
Political
Political economic
economic

Need
Need toto
understand
understand thethe
"Big
"Big Picture“
Picture“ toto
deal
deal with
with the
the “nuts
“nuts
&& bolts”
bolts”
perspectives
perspectives
Partha S Ghosh
 Last 5,000 Years… …..Future Possibilities..
Economics of Linear Economics of Closed
Mechanics: Extraction, Loop Harmony
Exploitation & Experimentation

Solar , Wind
Bio Mass Fuel Cells
Agro

New Energy
Clean and Power
Water Technologies
Broadband
Clean Energy

Knowledge for
Recovery/Recycle

Partha S Ghosh
Five Point Agenda:
1. Emphasis on original thinking to advance progress of
civilization as opposed to extension of Western Models
2. Develop Village centered Economic models with heavy
use of Convergence, Bio Engineering and new
Systems thinking
3. Use China’s success with Land and Manufacturing
productivity to think of new avenues of Knowledge
Productivity (Boston Analytics story)
4. Develop universal approach to Geo potential issues
building on Ancient wisdoms – Holistic approach to
problem solving
5. Renew education system to enable Next Renaissance
Partha S Ghosh