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XML Sydney Film Festival - "Serious Games" Lab

On X|Media|Lab’s sixth anniversary, we return as part of the Sydney Film Festival with a stunning program.

In partnership with ABC TV and Screen Australia initiative, XML Sydney “Serious Games” enjoins documentary filmmakers and game makers to produce groundbreaking new ideas about creating new forms for documentary and factual content.

Each of the finalist projects in the Lab will receive AUD$15,000 for concept development, and the best project will receive AUD$325,000 for full scale development.

The Pro Day Conference and Lab will feature some of the world’s leading serious games identities including Noah Falstein, the ‘father of serious games’; Ian Bogost, Founding Partner of Persuasive Games at Georgia Tech; Lee Sheldon, author of ‘Character Development and Storytelling for Games’, a primary text in game design at the world’s most distinguished universities; Michel Mol, the Director of Innovation and New Media, Netherlands Public Broadcasting; plus a selection of Australia’s outstanding documentary makers and game designers, and Australia’s leading playwright, Stephen Sewell.

In addition, the documentary filmmaker Ondi Timoner will be attending the Pro Day Conference and Lab. Ondi is the only director to win the Sundance Grand Jury Award twice (with ‘DIG!’ and ‘WE LIVE IN PUBLIC!’).

‘WE LIVE IN PUBLIC!’ is the featured documentary at the Sydney Film Festival. The film documents the chaotic and mesmerizing life story of Joshua Harris, the legendary founder of Jupiter Communications (still one of the world’s leading media research companies) and the aptly-named Pseudo.com. From his early childhood, being raised by the family TV set, to his meteoric rise and spectacular fall as one of the main characters and visionaries during the dot.com boom and bust of the late 90’s, ‘WE LIVE IN PUBLIC!’ gives a gut-wrenching view of the life of this flawed genius, while serving as a cautionary tale about the effect the internet will have on all of us.

The documentary will be screened at the Sydney Film Festival on the eve of the Conference Day and all delegates are invited to attend.

Oh, and one final flourish .... Joshua Harris himself will be attending the screening, the Pro Day Conference, and the Lab.

On the Road Again - Shanghai, Kuala Lumpur, Auckland

The Suzhou Lab was such a great experience! There really is something special about doing these cross-cultural events that are based on personal exchanges – they have a real magic about them, and leave permanently positive impressions and relationships.

What more can I say than quote Zareh Nalbandian, the co-Founder and CEO of Animal Logic who said it “was the best networking event I’ve ever attended”, and the Director of Kung Fu Panda, the amazing John Stevenson, who said he would attend “any XML, anytime, anywhere”. We’ll put him to the test on that very shortly!

[Pic: BH, Zareh, John S., and ME]

The Lab as a great success for ourselves as well. So many real opportunities are now emerging in China: we have 2 more Lab proposals under review; Creative Industries Roadmap consulting proposals; an online interactive consultation platform; a series of Masterclasses; an Outsourcing Roadshow; and on it goes.

XML now has 8 full-time people in China, in three cities – and that number will keep going up, imminently!

We also just had the pleasure of attending the Malaysian Multimedia Development Corporation (MDeC) 2-day think-tank to develop Industry – Academia liaison strategies. It was a fascinating insight into the state of the Malaysian animation and games industries, and the situations that need to be addressed which are principally, like everywhere else, 1) skills development and 2) market opportunities.

After a few years re-grouping and re-thinking after the Currency Crisis of the late 90's, it seems to me that the people at MDeC are engineering something a renaissance of the days when they really were forging ahead of just about everyone.

Stand-by for a significant announcement from MDeC and XML! And maybe more than one.

[Pic: The MDeC Industry-Academia Advisory Board]

And just arrived in Auckland for the Lab here next week – the line-up of people is about as exemplary of what we are trying to achieve with XML as we have ever done. We have the full 16 Projects already accepted, and less than dozen tickets left before it's Sold Out.

A New 'Australia' Media

(The Australian Boadcasting Corporation asked me to submit an opinion piece on contemporary Australian media - here is what I said)

Media is that through which we communicate with each other.

The idea of a national media is always a vexed question in any genuinely multicultural society, such as Australia claims to be.

The questions of who is allowed to speak, and who is silenced, what topics are discussed, the points of view that are permitted or censored, the usual and typical representations and misrepresentations; all of these forces coalesce into a form of repetition and predictability that passes itself off as the apparently lively discourses of national media.

However, we all know that something is terribly wrong with our media. From the corruption of corporate media, to the paucity of quality investigative journalism, to the hollowing out of public broadcasting, and the morbid state of the Australian film industry, we suspect that traditional media have become untrustworthy devices of vested interests monopolising our short available attention spans.

Media is no longer communication, but rather brain-sculpting; it acts as behavior modification in the service of those who possess its powers, taking the place of any genuine education and information provision.

Take Baz Luhrmann’s film entitled ‘Australia’, probably the world’s most expensive example yet of what is called “branded advertising”. To monopolise the word ‘Australia’, as if it were now a trademark belonging to his production company, is bad enough. But this representation of Australia has nothing to do with any Australia I know.

It looks like an English story made for an American audience, and which just happens to be set somewhere in Terra Nullius. And as a national narrative, most of actual Australia remain mere spectators of a story which doesn’t involve or include them. We just buy the DVD.

These kinds of stories get made because of the power structures and financial flows of the Western film industry. However, the time of these imperial narratives is now finished. The financial clout needed has flown to new geographic centres.

The capital to make such cultural documents is now readily available in the arc from the Middle East to India to China.

In my opinion, the consequences of the financial crisis will result in a permanent change of the structures of power and wealth. In this shift from West to East, we are witnessing what has been called “the greatest transfer of wealth in the history of the world”, and that was before the financial crisis began.

This is actually good news for Australia, if not for ‘Australia’. I suggest that this presents an opportunity to revitalise and re-enrich many parts of the Australian content creation industries. It means we can now turn our attention to new kinds of history and contemporary life. Stories that de-centre the imperial narratives and instead make use of our genuine multi-cultural experiences, and make new kinds of stories and films that are co-produced and intended for audiences in these new geographies, as well as internationally.

We have rich histories with these geographies, and everyday experiences of meaningful engagement, both of which provide materials to develop new stories and new kinds of stories. And it encourages us to turn our attention towards new articulations of understandings and the development of shared meanings: to create and inhabit new worlds.

We should be pitching our ideas and our skills to Abu Dhabi, Mumbai, and Shanghai; and we should be making stories that involve and interest them as well as ourselves, and which therefore also better reflects the real Australia and the histories of all its people.

This is the next phase of our national development: a new media Australia, and a new Australian media.

Creative Industries and the Financial Crisis

因 势 利 导 - “Yīn Shì Lì Dǎo”

Creative Industries and the Financial Crisis

Presentation at the 3rd International Creative and Cultural Industries Forum in Beijing December 17th 2008.

Dajiahao! (‘Hello everybody’!)

I want to tell you that I am very proud to be learning to speak Mandarin - slowly but surely. But I must say that it is still much more ‘slow’ than it is ‘sure’. So please accept my thanks for hearing me speak in English.

One of the ways that I am learning Chinese is to engage with Chengyu - the four character sayings - that are so beautiful, concise, and profound. I practise translating them and I feel this really gives me a great insight into Chinese ways of thinking.

So the way I want to introduce my topic today – ‘Creative Industries and the Financial Crisis’ – is to begin with a Chengyu that I learnt just last Saturday, at a Cultural Industries conference in Shenyang, in which one of the speakers there, a professor from Beijing, used a Chengyu to make a point about the development of the cultural industries in China.

He summarised: ‘因 势 利 导’ (‘yīn shì lì dǎo’).

The translator in Shenyang translated this as saying: ‘Let everything happen according to the real situation’.

I really like that translation – it’s beautiful. And she was translating in real time. So impressive. But I’d like to explore the Chengyu further, and those four characters, and try to get a more considered understanding of them, because the Chengyu of course will contain many, many meanings, and with great sophistication.

So here are a couple of other possible ways I think we could translate ‘yīn shì lì dǎo’ into English:

‘From the prevailing, take the lead.’

I’m translating ‘yīn shì’ as ‘from the prevailing’ – i.e., to recognise the real powers at work in any given situation; and ‘lì dǎo’ as ‘take the lead’ – utilising all the meanings in English: ‘take the lead’ meaning: ‘read the signs right’, ‘take your direction from’, and ‘follow the signs’

I’m also utilising the other English meaning of ‘taking the lead’ in terms of ‘to get in front’, ‘to get ahead’, ‘to be the leader’.

So ‘from what prevails … take the lead’.

Another way of rendering ‘yīn shì lì dǎo’ in English might be: ‘Reckon with … then proceed’

‘To reckon with’, using its multiple meanings in English, where ‘reckon’ means both ‘to calculate’, ‘account for’, and secondly, ‘to grapple with’, ‘to come to grips with’ the ‘yīn shì’, the situation.

And ‘then proceed’ – both in the sense of ‘proceeding’ (‘dǎo’), and in the sense of ‘proceeds’ – income, finances, interest, and interests (‘lì’).

From preceding, proceeding.

因 势 利 导

So with all these kinds of wonderful, intricate, and deep meanings in mind, all condensed into such a beautiful Chengyu, what I will now do is to divide the Chengyu into two parts, and ask two questions in relation to my chosen theme: “Creative Industries and the Financial Crisis”.

‘Yīn shì’?: ‘What is the real situation, now’? ‘What are the prevailing circumstances’? ‘What needs to be reckoned with’?

And secondly, ‘lì dǎo’?: ‘How to take the lead’? ‘How to proceed’? ‘How to get in front’ from that situation.

So these are the two questions I am asking as I go forward with the thought of the “Creative Industries and the Financial Crisis”: “What is the situation?”, and “How do we proceed?’.

Here is the Situation.

Let me list my Yin Shi –what I think are the most important points we need to be aware of in the real situation we face for the cultural and creative industries in China.

Firstly, we have to recognise that there is a Chinese Renaissance, and not only in industry and trade, but also in creative powers.  And it’s also important to remember that it’s a re-naissance. People in the West always refer to China and its ‘emergence’, but it is, in fact, China’s ‘re-emergence’.

As you know far better than me, up until the mid-1700s, China was by far the world’s biggest economy – it’s the re-establishment of that fact, taking place now.

The second Yin Shi: ‘understanding of the situation’ - I think we must be aware of is that this ‘financial crisis’ is a permanent change in the economic and political order of the world. What’s happening in the US, the UK, and Europe is a permanent change, not just a temporary problem. It’s going to take generations and generations for them to recover from this. In my opinion, the 19th and 20th Century structures of international power have ended.

The conspicuous difference between the Chinese stimulus package and the US and UK stimulus package is that China is drawing that from reserves, while the UK and the US are drawing that from debt. Yet more debt.

This is going to be compounded, literally, for generations to come.  If you follow the economic debate, you’ll know that the German Finance Minister has just attacked the UK on the grounds that they are bequeathing national debt to the people who will be paying it off forever. The existing order is now collapsing, at the same free-fall speed as the Twin Towers.

Third Yin Shi: a lot of people say that, well, China is in the same boat, because China relies on exports and foreign demand for manufacturing, and that’s very true. So the situation is definitely dangerous and the future is not certain.  But one suggestion is that China can and should develop domestic demand. China has this huge domestic demand potential, plus the highest relative per-capita savings ratio in the world – and that this under-developed resource may be able to compensate for the decline in exports to the West, and I think that this is a very hopeful point. I will come back to domestic demand in a minute.

The Fourth Yin Shi – ‘the reckoning of the real situation’- is that in the development of the creative industries, the cultural industries, the IP industries (the intellectual property industries) let us see recognise this: available investment cash is going to be totally decisive.  From here on, whoever has the cash is going to win. I’m sure you know where the cash is. And I mean actual real reserves, not more paper debt to cripple future generations.

China knows all this, I’m just restating it.  China has been on this path for a long time, long before I ever came here. But may I just concur in the observation that China’s huge investments in the development of intellectual property in 1) the green and environmental industries, 2) the hi-tech and knowledge industries, and 3) the creative industries – this will result in power and wealth.

Fifth Yin Shi: Innovation and creativity enter into every process, of every economic activity, at every point, in all industries.

I think that China’s investments in science and technology innovation in China will prove decisive.  For example, one statistic amongst very many: China is producing 800,000 engineering graduates every year, America is producing one tenth of that. Sheer quantitative numbers will, over time, make a qualitative difference.

Sixth, and very important to note, is that China’s hi-tech zones are proving completely resistant to the downturn.  That’s not actually surprising when you think about it - because that is where the infrastructure is, that’s where the investment is, and that’s where the best educated people are.

So that’s my list of the Yin Shi – these are the facts to which we must pay our attention. That’s the real situation in which we’re operating, with which we must reckon.

Do What?

Now I’m going to move onto the Li Dao – the other side of this beautiful chengyu’s equation - the taking the lead, proceeding, reading the signposts, finding the way, and creating wealth - the question of what should we do? 

I frame this question as a relationship between three orders: capital, infrastructure, and people.

So let me work through these three things…

1) Capital is funding – how do you get funding for your project?  At X|Media|Lab almost every company that comes into the Lab asks us whether we can help them get funding for their project ideas. Everyone knows – money makes ideas real, and ideas make real money!

2) By Infrastructure, I mean institutions - and in China, I think that system of  Technology Parks that are so active and so widespread, and their tight-coupling with  universities and government policies, will be a decisive factor. To a foreigner like me, the resources, the integration, and the commitment to world class excellence is really awe-inspiring.

3) And by People I mean ‘Talent’ – Creative skills, technical know-how, business acumen.

So now, here are my Li Dao – these are my ways ahead to make profit in the creative industries in the financial crisis.

1. Invest in People.

In digital media, as in all the creative industries, here is the truth: it is always people with great ideas that make things happen. You must empower these people and you must skill them and you must invest in them and you must invest in their ideas. 

So after all the investment in infrastructure, in buildings and roads, and computers, and airports - it’s equally important (to be factual, it’s the decisive importantance) to invest in people. That is my first Li Dao, my first ‘thing to do’, ‘way to proceed’.

Ok – but which people?

2. Invest in your PhD students.

America’s famous innovation in Silicon Valley is mostly done by PhD graduates who were explicitly looking for ideas with which they could start-up companies.

I know that in China the educational culture is that up until graduation, PhD students must be learning, acquiring, and absorbing pre-existing knowledge. The tradition of the classics, the methods of repetition, and the culture of Master and the Pupil is extremely strong. I understand that, and I deeply respect that.

But what I am saying is that graduate and post-graduate students are your best sources of innovation in science, technology, and digital media.  The Graduates, the Universities, and the Technology Parks must create a framework that enables the successful creation of start-up enterprises. That means access to finance, expertise, and infrastructure.  For example, the biggest single difference between start-ups that fail and start-ups that succeed are quality teams of people that simply have access to cheap rent, and those that don’t (hence the “garage” metaphor). So I hope that the Technology Parks are giving their graduate and PhD students cheap rent, so that they can start their businesses with their new idea.

May I summarise this way: Build infra-structures where subsidised rent, ideas people, highly-trained graduate students, skilled entrepreneurs, and commercial opportunities are fused into single geographical locations.

3. Bring the Skills Back Home.

I would also suggest, and this is obvious, attract back the overseas Chinese people, and especially from the US.

We will find out dramatically now, especially in the creative industries, but in every other industry too, that the opportunities in America have evaporated.  People, as I heard when I was in Los Angeles recently, in computer games companies, animation companies, are retrenching really outstanding people because they just can’t give them jobs. So China should be selective about attracting back really talented people for skills transfer into Chinese companies.

The other thing I would say is: to engage in continual professional development, and this is a task of the Technology Parks: to continually skill-up, to continually bring to ‘world’s best practice’ the people in the companies in these Technology Parks. 

Internationally, as I mentioned, and especially in the US, there are many, many outstandingly talented people with no future. China should look towards acquiring the best of the brains and bring them to China for knowledge transfer into local Chinese companies. I believe it is a great idea to develop official programs to assist with this attraction and transfer of talent into China.

4. Invest in projects, not companies.

Set up Investment Funds.  We have already said that who has the cash wins. Each of those Technology Parks or provincial governments can set up Investment Funds, because China has the capital and the West does not.

These Investment Funds should fund specific projects (individual IP), not companies. Companies should have many projects on the go, and some of them will fail - good, there is nothing wrong with that - and some of them won’t. So fund the projects and help the companies find success.

5. Find international partners with both funding and talent - and bring them in.

1. Set up an Investment Fund

2. Find International Partners who can bring money and/or talent

3. Appoint an Expert Advisory Board (International and Local) who can do the investment due dilligence and quality assurance for you
     
My two most important observations are:

6. Do *not* invest in foreign funds. 

Do not put the Chinese money overseas.  I was at a conference in Yangpu District in Shanghai a few weeks ago and some people who were Venture Capitalists from Silicon Valley came in and, I swear to you, here’s what they told the conference – they said ‘Give me hundreds of millions of dollars and we’ll take it back to San Francisco and we’ll take all our fees out of it before we do anything else. And you should trust us because we know better than you do.’  And I turned to my Chinese friend and I asked ‘Is this guy crazy?’ He answered me “Yes, he is”.

My advice is do not put your reserves into foreign funds to make decisions about investments: keep it here, and managed here. Invest in local companies and projects and help them get access to the best expertise so that they cam succeed themselves, domestically and internationally.

7. Don’t be afraid to invest in foreign projects to acquire their talent and knowledge.

For example there are many, many great opportunities in Hollywood right now that can’t get funding there. So fund those projects where you can own the intellectual property, get access to the expertise, the management, and the creative talent. That’s good, that’s positive.

The whole point of this, the whole point of X|Media|Lab, is to transfer know-how, skills in intellectual property to China by getting access to expertise. That’s what China should be seeking in digital media - access to expertise and the transfer of skills, knowledge, and international contacts directly into China companies.

8. And also invest in the development of local companies by investing in quality.

My last Li Dao – pointing the way, and taking the lead - is to observe that the development of the digital media industries can be domestically driven. In other words, that China can create a ‘virtuous circle’ by demanding high-quality cultural creations for their media consumption from their media producers.

In the whole world, Chinese are the most sensitive people of all to the relationship between diet and health. Extend the same thought to the creative and cultural industries. You must nourish creativity.

And lastly, if government is the ultimate buyer of cultural content, then they can make the decision to pay more for cultural content, and thereby increase the quality of the product. This is a question of priorities.

And, just as in any other industry, you must invest in the quality of the product. It must not just be cheaper, but but it must also be better.

Creativity and innovation are a constant striving, and are the result of investments in people’s talents in every industry: clean, green, knowledge, and creative

So, finally, I come to another, still yet provisional , attempt to translate this beautiful and deeply meaningful Chengyu: ‘yīn shì lì dǎo’ -

“Genuine understanding of the situation / is the best way forward”.

Thank you.

Exporting Interactive Media ...

I was asked to write a column for the excellent Digital Media magazine published in Australia about the possibilities of "export" markets ... here is what I wrote:

Don’t think “Export”, think “Networks"

X|Media|Lab began life as part of the Sydney Film Festival and is now held in seven digital media hotspots around the world: in Australia, Singapore, China, India, the Middle East, New Zealand, and Korea.

I want to share some experiences that have come from running 20 Labs that concern the changing landscapes of the digital media industries and the potential for accessing new markets.

XML

The basic idea behind XML is that individuals, start-up’s, and small companies trying to get an original idea to market are the lifeblood of all industry development. The organizing principle of the Lab is to put people with great ideas into direct contact with some of the best practitioners in the world who help them directly on their own creative, business, or technological ideas.

We’ve had over 150 mentors at the Lab’s including Shekhar Kapur, the world-renowned filmmaker; Stewart Butterfield, the founder of Flickr; Emmy Award Winners (USA); BAFTA Award winners (UK); Golden Rooster Winners (China); the Head of Moving Pictures from Pixar; Raman Hui, the Director of Shrek; and many other outstanding people who have enjoyed sharing their expertise with the companies participating at each XML and offering invaluable feedback on each company’s original idea.

The Emerging World

My belief is that the current malaise besetting the US and the UK economies is going to be around for a long time to come. The fragile financial systems, the long-term loss of manufacturing income, the sudden difficulty in accessing capital, the flight of R&D, and many other problems are leading, if I may speak grandiosely, to a great and lasting power shift from the West to the East.

These changes are especially important for producers in the digital media industries because these are the high growth markets, the youth markets, and the sheer numbers markets.

XML is already a couple of years ahead of these developments staging Labs in China, Korea, India, and the Middle East. At every X|Media|Lab, hundreds of connections are made between the participating companies and the new markets, talent, resources and opportunities in the emerging world.

Consider this: in both India and China, internet use is a mere 4-5% of the population. Each single percentage point increase in this number adds an internet audience greater than the entire size of the Australian population. And this percentage is growing very quickly.

This means that the economics and geography of media demand and consumption is quickly shifting on a daily basis.

The good news is that the Australian digital media industries are well placed to be part of this silent explosion, for these reasons: 1) digital media is not necessarily content- or culture-dependent; 2) digital media is fundamentally about networks and therefore partnerships are the key; and 3) expertise is exportable, not just content.

One of the striking opportunities I foresee is that, with the right kind of connections that XML strives to make possible, a small group of creative individuals with a great idea anywhere in Australia (and anywhere else) can partner with the vast resources available elsewhere to attempt projects that would be prohibitive or imposible in Australia alone.

For example, at the Suzhou Industrial Park in China where we ran a Lab on Animation earlier this year there are dozens of companies with thousands of highly qualified engineers who exist to secure outsourcing work where the IP is retained by the creators. A small creative team in Australia could instantly have a workforce of a hundred engineers to bring their idea to market. There are even funds available there to make this happen.

At the Suzhou Animation Lab we had no difficulty getting Pixar, Dreamworks, Lucas Arts, Virgin Comics and Animation to attend, along with a dozen Australian companies.

Australia’s Lost Decade

In Australia, the status of the digital media industries is nowhere near as highly-valued or well-resourced as where we run Labs elsewhere. This is due primarily to a) vested interests that have retarded our development; and b) a failure of advocacy.

One example will suffice: the 40% Producer’s Rebate for Feature Film in Australia. This would be a worthy initiative if it also applied to the interactive digital media industries of computer games, IP TV, mobile content and services and so on, where there is some chance of obtaining local and/or international market share. The fact that this rebate exactly does not apply to these vibrant, youthful, emerging industries, but only, and yet again, to the moribund Australian film industry (which manages to gather less than 3% of all Australian box office receipts) is an indictment on the frightful Canberra bureaucrats and the ineffective and supine industry body. These are the same people who were deeply complicit in the digital media industries’ Lost Decade under the Howard government. Some have even suddenly found their voice, and impertinently demand that Senator Conroy should have already fixed the broken-down contraption he inherited and which he opposed all along.

RSVP

In a small but effective way, XML is opening the doors to the great projects, markets, and initiatives taking place in the arc from the Middle East to Korea. XML succeeds solely by virtue of the people who take part in it. Please consider yourself invited to any XML and, we always say, “write yourself into the script”!

I had to fit it into 850 words OK?

I could go on ....

Beijing Olympics - and the strange case of Jimmy Page

It’s been an honor to be in Beijing during the Olympic Games, and to experience the sheer pride and joy, the great success – and the wonderful hospitality.

Even in these days afterwards, a great friendliness and happiness is wonderfully apparent.

It’s been a slow motion eye-opener spending so much time in Beijing and Shanghai over the last couple of years … and especially learning the almost total disconnect between the China you experience while you’re here, and what gets reported in the Western media.

Whether it’s about the quality of life in the major China cities, the advanced and accelerating quality of infrastructure and expertise, participation in the political processes, regional autonomies, or China’s commitment to peaceful development, most of the obdurate repetitions of the Western media are quite wrong, often willfully so.

One of the things that rankles most is the stupid idea that China is only capable of copying. Nothing could be further from the truth – in art, technology, and business, China is a cornucopia of invention and creativity. Above all, as so many Chinese people will warmly tell you, you must “come and see for yourself”, and yes, you must accept the invitation and get involved with these historic developments.

If there’s one phrase that encapsulates the West’s current attitude of supercilious superiority towards China, it’s “respect for intellectual property”. I read a lot, and I read about this all the time.

So you can imagine my hilarity when the London Olympics 2012 segment of the Closing Ceremony took place. The centerpiece of this hand-over to the future featured Jimmy Page of Led Zeppelin, the legendary guitarist from the most famous rock band ever in the West, launching into the song that made their entire career, and will always summarize them: “Whole Lotta Love”.

Don’t get me wrong: there’s no bigger fan of Led Zeppelin than me … it’s just that “Whole Lotta Love” isn’t Led Zeppelin’s song – they stole it.

It took 20 years – but eventually Led Zeppelin settled out of court with the original songwriter, the mighty American blues genius, Willie Dixon.

You may also be interested in hearing a whole lotta other songs that Led Zeppelin “borrowed”.

The next time I read about London’s leadership in the creative industries, the respect for intellectual property, and the prospects of London Olympics 2012 – well, just say I'll be “dazed and confused”!

Oh yes – that dreaded Chinese phenomenon of “censorship of artistic expression” has apparently spread to the London Games already.

There is no natural resource on Earth in more abundant supply than Western hypocrisy.

Preludes to XML 2008 - Wellington

There must be something about living on the edge of the world that motivates New Zealanders to push the boundaries when it comes to digital creativity.

Surrounded by water, the flora and fauna of the country diverged into a natural ecology unlike anywhere else in the world; the unique human culture arose in a similar fashion. New Zealand has long been the beneficiary of sequential waves of migration. They came first in long canoes from the Pacific then in tall ships from Europe. Now the face of the country is changing again from the benefits of recent Asian immigration. Each of these waves has contributed something special to the societal blend.

In the mid 19th century, settlers had to wait months for provisions to arrive from Europe and were often driven to fashion their own tools and implements in order to get their work done. Necessity has endowed New Zealanders with a hardy sense of self-sufficiency and a willingness to “muck in” and get the job done. This is as true on the sportsfield as it is in the creative industries. Indeed, research suggests that New Zealand is one of the most entrepreneurial nations on the planet; and especially so for the indigenous peoples.

It is these characteristics that have attracted the attention of the Hollywood entertainment industry in recent years. Wellington is home base for Lord of the Rings director Peter Jackson and most of that movie was shot in various locations around New Zealand. Jackson also has a stake in Weta Workshop, the Oscar award winning special effects house, and Park Road Post (Board Member Michael Stephens is attending both the XML Suzhou and Wellington Labs).

Apart from LOTR, Weta has been involved in providing high spec digital graphics effects for King Kong, X-Men, and forthcoming Avatar movies. Spinoff company, Massive Software provided the CGI magic for these movies and many others and now sells its services across the industry. Another digital innovator is Sidhe Interactive, responsible for developing some of the hottest games to be found on both Xbox and Playstation. Consequently, moves are now afoot to establish a Centre of Excellence in Wellington for screen and digital technologies. This entity will be responsible for bootstrapping cross-sector investment, mentorship and collaboration.

Wellington has also become home to another growing tribe of digerati. Australasia’s busiest e-commerce site TradeMe is headquartered in the Capital city. The company was itself traded in 2006, with media conglomerate Fairfax controversially paying $700 million for the trading website. However, the business and technologocial expertise built up through developing TradeMe has now percolated outwards, helping to grow a new generation of local technology start-ups, especially in the hosted software space. So it is very much within an encouraging local context of digital and cross media creativity that we frame the Wellington X|Media|Lab event. We are very proud to have TradeMe founder, Sam Morgan, as a Mentor in the Wellington Lab.

Wellington itself is a compact city of only 150,000 residents wedged between Cook Strait to the south and jutting hills to the East and West. Hutt City and Porirua are near neighbours only a few minutes drive to the north. The extraordinarily beautiful natural harbour is a centrepiece for the entire region. The administrative capital of New Zealand, Wellington has also emerged as a focus point for arts, music and cafe culture. Mindful that the city must compete with other Asia Pacific centres for people, ideas and capital, the city has repositioned itself as a “must see” destination full of museums, restaurants and cultural events.
Further afield, there are also other enclaves of digital innovation coupled with startling natural scenery.

Auckland is the home of Nextspace, a 3D graphics thinktank and mentoring venture supported by the government and highly successful Right Hemisphere. Down south in Christchurch is HitLabNZ which researches and commercialises human/computer interface technology such as virtual reality and simulation. Further south again, in Dunedin, is the home of Animation Research, provider of graphics depictions for the Americas Cup events. The city also has a cluster of exciting new technology companies within its Upstart technology incubator.

So why hasn’t New Zealand become the Finland of the South Pacific? In many respects the two nations began with a similar economic base and comparable population. But whereas Finland diverged away from agricultural commodities and tourism, these remain the backbone of New Zealand’s income and, unlike in Finland, there is not a market of 400 million at New Zealand’s back door. Achieving scale and attracting capital have always been challenging for even the most promising and hard-working of New Zealand technology firms. Therein lays both a challenge and an opportunity for investors, mentors and global connectors.

Interestingly, we already have more than 70 projects nominated – and plenty of those are red-hot quality commercial propositions. With this level of creativity, originality, and innovation, plus the usual amazing line-up of International Mentors, XML Wellington is going to be one of the very best yet.

[Many thanks to Paul Spence, the director of GeniusNet, a Wellington based technology management consultancy, who kindly wrote most of this post. e: [email protected]]

Preludes to XML 2008 – Suzhou

When I was discussing doing a Lab on animation in China with Sun Li Jun, the Dean of Animation at the Beijing Film Academy, he told me that best place to do such a Lab would not be Beijing, but rather Suzhou.

In my ignorance, I had never heard of Suzhou then but now I know much better why Professor Sun so wisely pointed me in that direction.

Located about 80 kms north-east of Shanghai, Suzhou is both an ancient cultural capital of China, and a shining example of the ‘New China’ with rapid development of a world-class infrastructure, a building mania, and a commitment to developing creative industries and a knowledge-based economy.

Getting from Shanghai to Suzhou is easy. The amazingly efficient train system gets you platform-to-platform on a brand-new bullet train in less than 30 minutes.

As soon as you arrive the first thing you will notice is construction, and lots of it. Along the wide-open boulevards – which seem eerily and pleasantly empty in comparison to China’s mega-cities (Suzhou is a mere 6 million population) – it seems there are thousands of major new buildings under construction: 5-star hotels, high-rises, university campuses, office blocks, warehouses, and luxury malls springing up everywhere. Planning permission has been given for a skyscraper and luxury hotel equivalent in height to the Jin Mao Tower in Shanghai, currently China’s tallest building (but soon to be overtaken by the awesome Shanghai World Financial Centre).

In the space of the past twelve months alone each of the following hotels will have opened brand new 5-star facilities in Suzhou: the Sofitel, Shilla, Kempinski, Shangri-La, Garden Hotel, Grand Metropark, Howard Johnson, the Regalia Resort, and Crowne Plaza.

Many of these new buildings have digital skins and laser lights which make night time in Suzhou a very colorful experience. New signature buildings include the new Suzhou Museum designed by the legendary I.M. Pei, and the extraordinary new Suzhou Science, Technology, Cultural and Art Centre, designed by Paul Andreu, whose continually changing solid plastics lightshow at night is mesmerizing and beautiful.

But Suzhou is not just hi-tech sophistication. It boasts 8 UNESCO-listed gardens including the “masterpiece of the genre”, the Humble Administrators Garden; the 1,700 year-old North Temple Pagoda (76 m.); and the ancient canals and waterways.

Our partner in staging the Suzhou Lab is the Suzhou Industrial Park. SIP is a vast sprawling industrial park full of high-tech, IT, and digital media companies. Locals boast that SIP is bigger than Singapore – which is not strictly true, but you get the idea.

Among many other ambitious plans, SIP is making investments to place Suzhou as the national Animation centre of excellence. They are building huge technology infrastructure clusters around the entire Dongsha Lake precinct intending to turn the area into a vast Animation industry incubator. The facilities include a 40,000 sq.m. National Animation Museum which will open in October.

It’s fascinating to me that so many of our China friends that we have taken to Suzhou in preparation for the Lab find a great relief to be there: the wide open spaces; greenery and lakes; fresh air; and a village feeling – combined with a pride in both Suzhou’s historical and cultural standing, and it’s excellently managed acceleration into the hi-tech and digital futures.

It’s a great honor to have XML included in these plans, and, equally so, that SIP is actively inviting XML delegates onto Advisory Boards and Consulting positions towards helping Suzhou shape their thinking and achieve their grand plans.

It’s really gratifying to see the basic ideas behind XML’s orientations, geographies, and partnerships beginning to have such important, long-term consequences.

Preludes to XML 2008 - Dubai and Doha

In an otherwise scintillating exposition of the emerging geo-political balance, Parag Khanna, senior research fellow at the New America Foundation, manages to leave out of his calculations almost entirely one giant powerhouse of development: the Middle East or, more exactly, the states that make up the Gulf Co-operation Council.

The GCC comprises six states – Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Bahrain, and Qatar. But they have untold energy resources and with energy prices at historic highs (and they ain’t going back down in our lifetime’s Buddy!), they are accumulating wealth of staggering proportions at ever-increasing speeds.

China’s levels of Foreign Direct Investment (FDI), now greater even than those going into the USA, and their levels of foreign reserves, plus the extraordinary levels of resources-based income gushing into the GCC and their neighbours, are having a profound but until now subterranean effect – something like the oil itself.

Make no mistake – a fundamental, irreversible change is happening … in fact, it’s happened already, and news of this shift is only now becoming almost daily news fare in the West. And these effects will become ever more magnified and permanent as these players become more confident in re-investing this income into Western securities and assets through their Sovereign Wealth Fund (SWF) vehicles.

And as well as this, the levels and scale of infrastructure development and industry diversification are startling – here is a summary of just a few of the gigantic projects underway, taken from the excellent “Business Intelligence Middle East” newsletter – highly recommended!

With all this in mind, and navigating by one of X|Media|Lab’s longest standing tenets (that “New Media = New Geographies”), we have been exploring and cultivating friendships in the region, and we place a very high priority on establishing a Middle East node in the XML international network.

When we say “Middle East”, we are referring to three relatively distinct regions: the Gulf States (including Saudi Arabia); the Levant (Syria, Lebanon, Jordan, and Palestine); and North Africa (Egypt, Libya, Morocco). Our progress so far has been concentrated on the Gulf States – and so far we have visited Dubai in the UAE, Doha in Qatar, and Muscat in Oman.

We’ll take a look at three emblematic initiatives from which we can learn something about the GCC: Dubai Media City; Al Jazeera; and the Burj Dubai; before looking at a few snapshots of economic life in the GCC.

Dubai Media City

The first thing to know about Dubai is the startling fact that income from “oil and energy resources” constitute less that 10% of Dubai’s GDP. Dubai is miles ahead of everyone else in the GCC in successfully diversifying its industries and revenues.

Dubai Media City (DMC) exemplifies a lot about this new Dubai. DMC is in the middle of a vibrant cluster that also includes Dubai Studio City, Dubai Internet City, Dubai Internet University, and Dubai Knowledge Village.

Companies that set up in this officially designated “free zone” pay no corporate tax; no income tax; have 100% company ownership; have no foreign exchange controls, trade barriers or quotas; and have no restrictions on capital repatriation. You can set up a business in the DMC Free Zone in 20 minutes. That’s pretty hard to beat.

These advantages are designed to promote media (and digital media) as part of the many economic diversification initiatives.

One striking factor of the GCC demographic is its relative youth. Roughly 50% of the population throughout the entire Middle East are under 24. Currently, broadband penetration is somewhere between 7-10% depending on the country. As the extensive world-class infrastructure gets rolled out now, this will mean an explosion of demand for media content and services from a vast young population who are born digital.

The best summary of the growth opportunities in media is the recently published report by the Dubai Press Club and pricewaterhousecoopers “Arab Media Outlook 2007-2011". The report can be downloaded here.

The staff at DMC are also emblematic of what is happening in Dubai – totally switch-on, results-oriented, multi-cultural, and multi-talented.

We are intensely excited to be in the throes of announcing X|Media|Lab Dubai for December 2008.

Al-Jazeera

What drew me to arrange the visit was having the opportunity in Dubai to take the time to sit and actually watch and experience the Al-Jazeera English channel. I was stunned! The quality of the reporting and journalism, the cutting edge use of viewer content and embedded mobile uploads, the use of user-generated documentaries, and the sheer freedom of speech was an awakening. It is so far ahead of the BBC and CNN on every level that, while I was watching it, I started emailing people from all over the world asking if they had ever seen Al-Jazeera. Their stories were all the same as mine – yes, of course we knew everything about Al-Jazeera; yes, of course we were media experts in touch with the latest trends and best practices … but, ah, no … actually none of us had ever watched it! It was mind-opening.

All I can say is that you must experience for yourself.

[Pic: In the central newsroom at the Al-Jazeera English Channel in Doha]

Before visiting the Al-Jazeera headquarters, I read Hugh Miles excellent history of the network. The three things that stood out in this book for me were: 1) how successful they have been building a global brand, which is also one of the most trusted media brands in the world, in a decade; 2) how brave they have been in face of acts of murder and sabotage; and 3) when you see it all retrospectively telescoped into a few chapters, how demonstrably immoral, illegal, and wholly without justification the Iraq war is. Unless, of course, the very basis of the GCC wealth we are covering here – energy resources and wealth – are the real “justifications”. Read it for yourself.

[Pic: with Safdar Mustafa, Head of Mobile, and Mohamed Nanabhay, Head of New Media, at Al-Jazeera]

If you don't have time to read the whole book, here's an excellent short paper that Miles wrote for "Foreign Policy" that summarises a few very important points.

By the way, the civil servants in the UK who leaked the minutes of the meeting between Blair and Bush where they discussed bombing Al-Jazeera headquarters, were sentenced to six months and three months in jail for leaking the minute.

Burj Dubai

In many ways, the story of the Burj Dubai encapsulates a good deal of the story of the GCC states, and Dubai in particular.

When it is completed the Burj Dubai at around 2,300 feet will be the tallest structure in the world of any type ever built. It already stands at 160 stories high and its exact final dimensions are strictly secret.

This is because the Burj is already subject to competition not from one but from three other buildings – and all of them are in the Gulf States: the Murjan Tower in Bahrain (200 floors); the Madinat Al-Hareer (“City of Silk”) complex in Kuwait; and, wait for it, the proposed 4,000 ft. Al Burj at the Dubai Marina just a few miles away from the Burj Dubai.

[Pic: The Burj Dubai in December 2007 - towering over a forest of skyscrapers]

The entire tenancy of the Burj Dubai has long ago completely sold out. The 700 private apartments on 60 floors were sold within 8 hours of going on market. The first 37 stories contain an Armani hotel (the entire building is furnished with Armani designs) and the corporate suites and floors are already full.

There have been many labour disputes in building the Burj Dubai, and this reflects a wider reality in the GCC. The populations of these states are comparatively sparse, by any standards. For example, native Bahraini’s may constitute less than 10% of the total population of Bahrain. The other states vary in the ratios but in all of them, it is immigrant labour, constituting an absolute majority of the population, who do this work, and effectively build the nation under the management of the indigenous people.

The nationals of Kuwait, Oman, and each of the seven Emirates are all in a minority. By far, the overwhelming employment of Gulf nationals is in the civil service, where economic, social, and cultural policy is developed and managed. In some Gulf city-states, 99% of the national labour force is in the public sector).

Citizenship and citizen rights are tightly controlled, and each day’s newspapers have extensive coverage of the latest benefits accruing to citizens in healthcare, education, housing assistance, marriage funds, child subsidies, land endowments, cheap loans, and other general welfare. It’s easy to forget that just a generation ago, the main sources of income for these thinly populated littoral tribal emirates were fishing, pearling, and other low-intensity maritime industries.

What is strikingly impressive is how intelligently and far-thinking the investments of the new-found wealth are being made within the framework of a very definite idea of commonwealth.

On a positive note, the UAE has recently allowed the foreign workers to organise themselves in Trade Unions.

Snapshots of Economic Life in the Gulf

The best intelligent introductions to all we have been exploring here, besides the honour and pleasure of meeting with the inspiring people at DMC and Al-Jazeera, are definitely two excellent books: “Globalization and The Gulf” and "Dubai and Co.".

The former book analyses the interplay of the ultramodern development of the Gulf States and the Gulf Co-operation Council (GCC) with the obviously entrenched tribal value systems that continue to organise and prioritise economic and social developments.

It’s important to understand that only a generation ago these were relatively poor regions, lightly populated (the UAE was all of 150,000 persons at independence in 1971), and foreigners were few and far between.

The principal organization of the common polity was built around kinship systems of local tribes and ruling families with intricate marriage practices that intertwined entire communities, bound by Islamic principles in which the profit motive is not the highest priority.

The presiding networks of ruling families are understood as caretakers at the top of a posited single, interrelated kinship web, and are considered the distributive dispensers of a wealth which is owned in common.

The Gulf cities’ pulsating multiculturalism is therefore embedded within a background of strong indigenous governance and control in which the everyday dealings with the culturally and religiously ‘other’ run parallel to a somewhat invisible (to outsiders) inner traditional logic of kinship and nativity.

The challenges of globalization to such a distinct and unique heritage are obvious. Free market capitalism seeks to order the world in utterly different ways, and the tensions are always in play. The centrality of local communitarian kinship networks is different from the priority of enforcing freedom and security for the movement of capital.

Their resources wealth has meant that the Gulf States have never been beholden to the tactics and priorities of the IMF and the World bank for their development. Nowadays, the states are increasingly investing their capital internally, and in sister states, rather than in Western stock markets and the associated financial gambling that passes for economic activity. This is leading to further intensification of competing priorities. Indeed, the USA has repeatedly refused to deal with the GCC as a trading bloc.

As the Gulf States move into the final decades of oil extraction and oil-generated wealth, they are firmly focussed on education, financial services, media and information industries, trade, and tourism.

It’s all exciting, complicated, overwhelming, and exuberant – all wrapped up in great material resources, and an infinitely civilized culture. Welcome to XML Middle East!

Preludes to XML 2008 - Seoul

The Importance of Friends.

Spending some time in Korea is made much easier if you have a few wonderful friends to smooth the path for you.

So we were blessed that we already had a great friend to make some amazing connections for us, Ms. Soh Yeong Roh, the Founder of the internationally famous Nabi Art Center, [pictured] who attended the Singapore Lab last August.

So a few great friends, a lot of reading and research, and plain old “meeting as many people as possible” introduced us to Seoul. Plus my old fashioned favorite: get out and walk around.

Right up front, even on the train from the spectacular Incheon airport into the heart of Seoul, the ubiquitous digital networking was immediately obvious. The entire carriage was digitally connected to something, somehow. Some people were even commubicating via face-to-face speech. Radical!

Korea’s eminence in digital media hardly needs restating: world leadership in broadband internet connectivity, and internet speeds; in online communities; in massively multiplayer online gaming; in 3G mobile content and services; and in digital TV. All are World No. 1 – in Korea.

I am on the International Jury for the Interactive Emmy Awards. In last year’s judging, for the Best Interactive Channel, the Korean entry was so comprehensively far ahead of any other offering, it was an awakening.

A good summary book is definitely “Digital Korea” by Tomi Ahonen and Jim O’Reilly, who observe: “the virtuous circle of devices, users, high-speed networks, and new services … cause both a “push” and a “pull” effect, dramatically accelerating the usage, and [therefore] improving service development”.

Korean people (and especially the under-twenty-fives) are exemplifying the digital future: constantly connected, continually multi-tasking, instantly time slicing, co-creating and sharing their own content, with low- or no-cost transactions - and totally mobile.

Most young people in Seoul have never used email. And never will.

Korean students receive 2 hours compulsory instruction per school month on mobile phone ethics and etiquette (e.g., compulsory first question when making any call: “Are you available to speak now?”).

Korea is cool! Korean music, TV soaps, films, games, and virtual worlds fill North and South Asia. When I was back in Singapore last year, literally thousands of young boys and girls thronged the airport arrival lounge to go hysterical and faint over a Korean pop singer who flew into town for a single sold-out gig.

But it’s not just the content, it’s the platforms and applications that excel.

Korea’s Cyworld is the largest “virtual world”, full stop (US site here). Cyworld combines social networking, blogging, music distribution, Web 2.0, video sharing, instant messaging, and a host of other services.

Cyworld has more active users than Second Life has had total avatar registrations. The complacent, and complicit, Western media continually delude us about the relative levels of innovation. Western companies however are not so blinded: Google, Yahoo, Microsoft, and many others, have set up major R&D centers in Seoul to test themselves in the world’s most demanding digital media market.

But how come?

The Importance of Government and Infrastructure.

Why is Google only the third-rated search engine in Korea? How has Seoul become the world’s preeminent test-bed for digital media applications? Why, in Korea, has digital media spread into intelligent homes, mobile phone payment systems, rapid mass transport systems, eco-cities, and robotics?

Firstly, government leadership, and something resembling a national innovation strategy. Over many years the national government has designed and implemented a “co-operate in order to compete” policy, taking responsibility for rolling out world’s best infrastructure, and using the education system as the basis for building a national broadband network.

The Innovation Policy consists of creating a virtuous circle of infrastructure, test beds, R&D investment, joint ventures, and regulation that guarantees open access for competing on services.

Additionally, the government insisted on the principle of hypothecation – In South Korea, all revenues from telecoms spectrum licenses were strategically reinvested into IT and telecoms infrastructure development.

All of this is depressing enough for those of us who have experienced a “lost decade” of government and bureaucratic obstruction and obfuscation merely to serve existing vested interests, and ultimately, to do nothing.

How come time- and space-wasting bureaucrats aren’t tossed out along with the governments they abet? If you live by the sword of complicity, then you should die by it too.

As I mentioned, easily the best introduction to all this progress and farsightedness is “Digital Korea” by Tomi Ahonen and Jim O’Reilly. And anything by the digital media consultancy +8* who specialize in mobile and internet business consulting in Korea, Japan, and China. (The Founder and CEO of +8*, Benjamin Joffe, will be speaking at our “Digital Media ‘08” Conference Day on March 7th in Sydney).

There are a few other specific factors contribute to South Korea’s success. Firstly, geography, it’s comparatively small and roll-out is far easier and less expensive that vast countries like Australia; amazingly, almost half the population of South Korea live in Seoul (though once you’re sitting in the traffic, this is perfectly believable). Secondly, language – Ahonen points out that multinationals like testing new products in Korea: the infrastructure is world-class, the consumers highly selective and very knowledgeable, and lastly, if the product fails, well, the rest of the world will never know! Thirdly, the Chaebol structures of government and business that make an integrated approach to business and R&D somewhat easier to co-ordinate than elsewhere.

Indeed, to me, the microscopic dimensions of digital technologies together with the giant scale of the Chaebol’s represent the two ends of life in Seoul. In almost any district, it’s easy to find and get lost down the infinite alleyways of beautiful restaurants, boutique fashion shops, geomancers, and art houses laced like capillaries in between the vast highways and mind-numbing conurbations.

The Importance of Culture.

Korean culture of course is the hottest in Asia. Korean music, film, TV soaps, internet innovations, and mobile apps etc are widely consumed, and much copied.

If I can hazard a guess: it’s like the rigidity and hierarchies of social structures and interactions are somehow balanced by an astonishing freedom of creative expression in the arts.

I mention balance – Korea, of course, has the Yin and Yang symbol emblazoned on their national flag!

Formally, (and generalizing beyond my qualifications), Korean people like to quickly calibrate age, gender, family, hometown, into understood hierarchies that regulate the flow of conversation. This is not unusual. In fact, when you experience it elsewhere, it should serve as a reminder as to how effectively the same kind of calculus is at work in our own dealings and relationships.

What is striking is that this rather strict Confucian ordering of the world from the perspective of the father, the male, the family, and the home outwards, is met with a kind of absolute freedom in the arts, including in digital arts and innovation.

In music, dance, fine art, architecture and elsewhere, the highest admiration is reserved for the absence of order, the unstructured, the non-programmed, the unexpected, and the aleatory.

In music, dance and theatre, the traditional frameworks are designed to create a free space where extemporaneity can occur. For example, in Sinawi, a traditional form of Korean folk music, there are no written scores; the music is fully improvised ensemble playing based around the instrumentation, only the tempo is set. The idea in Sinawi music is to arrive at moments of beautiful spontaneous harmony, while each musician is playing individually. This love of a “free jazz” format would have delighted John Coltrane!

In these arts, the performer’s own interpretation is more highly valued that imitating a master’s style.

In dance, superb technique is not valued highly. The effective expression of inner emotion is the highest value. The traditional dance is even called heoteun chum, “loose dance”, in which there are no restrictions or rules.

In the fine arts, spontaneity, eccentricity, blemish, asymmetry, randomness, and “intentional intentionless-ness” are what constitute a Korean aesthetic. Straight lines are to be avoided.

I strongly recommend Choi Joon-sik’s brilliant and beautiful introduction to all these themes in his book “Understanding Koreans and their Culture” (although, as a dutiful Derridean, I always pluralize … i.e., “Koreans and their Cultures”).

Indeed Professor Choi’s closing chapter is on the remarkable history of appropriation and localization of religious practice – the ever-present but underlying Shamanism, the best-practice Confucianism (admired for it’s ritual purity even by the Chinese), Buddhism, and the amazing post-war contagion of legions of Protestant sects (which curiously combine a revivalist shamanism with DIY, big business, churches - complete with US-style tele-evangelist profits … and scandals).

Our many thanks to the amazing people who smoothed out path and patiently explained the why’s and wherefore’s, and made the trip such a pleasure: Young Joon Hyung, the Founder of Cyworld; the Director of International Relations for Ohmynews, Jean Min; Soh Yeong Roh, Founder and Director of the Nabi Arts Centre; Dr. Song Yee Yoon , VP of SK Telecom (voted one of the world’s Top 50 Business Women by the Wall Street Journal); Professor Kim Jin-seo, Director of the Korea Content Management Institute; Professor Kimn Ha-Jine, Director of the Digital Media Association of Korea; many others; and of course, our guide, translator, and friend, Sarah Kim.

Here's a couple of Korean tech blogs well worth subscribing to:

Web 2.0 Asia
Koreacrunch

And you should definitely sign-up as a Member of the Seoul Digital Forum.

Next Stop: Dubai, Oman, and Doha

Preludes to XML 2008 - Beijing

2008 is going to be a magical year for X|Media|Lab. To give you some idea of how it has taken shape, here’s a review of the last couple of months ...

Beijing

In November we ran our first event in China. We were an official part of the International Creative and Cultural Industries Expo (ICCIE) in Beijing. Our four days consisted of a 1-day conference held at the Great Hall of the People, one of the world’s most iconic venues; a free day where our delegates could attend any of the ICCIE Seminars; and a 1-day “Virtual Worlds” Summit and business-matchingheld in partnership with our great friends at the Cyber Recreation District (CRD) in West Beijing. On the last day, we piled all the XML Delegates into a bus for our “Social Networking” day and had an amazing time visiting the Forbidden City, the Great Wall (at Badaling), and finishing at the Red Capital Club, hidden in an ancient hutong, where Chairman Mao, Lin Bao, and Zhou En Lai used to hang out.

Apart from the honour of providing the International delgates for the official launch of CRD’s “Dotman” Virtual World’s project, the 4 days gave us a great chance to test all the logistical parameters for running major XML events in China in 2008. We came away both exhilarated by the experience, and full of enthusiasm for what we can stage with our partners there.

The Cyber Recreation District people were very happy with the outcomes too. Shortly afterwards, the CRD’s partron, the Beijing Municipal Government, appointed XML to a two-year term as an official “Foreign Expert Advisor” on digital media industry development.

Anyone interested in the scope of the CRD “Dotman” project should check an article by Victor Keegan from the Guardian who interviewed the CRD Chief Research Scientist, Dr. Robert Lai, who attended the one-day Lab we did in London in October. It’s definitely ground-breaking, and potentially huge. We are happy to help co-ordinate any introductions from the XML Network to our friends at CRD.

[Photo: BH outside the Great Hall of the People with Second Life's most famous resident, Anshe Chung, who attended the XML events in Beijing]

Most of the International Delegates who attended the 4-day XML were in China for the first time. They were amazed! Amazed at the sophistication, the deeply civilized and welcoming reception they received, the giant luxury malls, the ubiquitous developments going up everywhere (and they didn’t get to see any of the second-tier cities where these developments are taking place at a stupendous scale and pace), and the commitment to digital media as one of the strategic industries to transition China away from the smoke-stacks of the past.

It’s worth noting a few points about why now, and what is contributing to this emergent China. The most salient features are these:

An enormous population; a huge economy; rapid growth; untold foreign reserves deriving from a globally dominant manufacturing sector; levels of Foreign Direct Investment (FDI) that are greater than the rest of the world’s developing markets put together; and, pivotally, the gradual opening of economic sectors to private or individual initiative to compete with the State Owned Enterprises (SOE’s).

The somewhat opaque inter-relationships between the strategic directives of the national government, the SOE’s, the Asset Management Companies (AMC’s), which stand ready to take the non-performing loans off the balance sheets of the banks, and the networks of the national banks themselves (often lending on a political rather than commercial basis), all together make any understanding of the true circumstances of China’s economic standing uncertain and incomplete.

I would reckon, however, that the Chinese financial system is very far indeed from the recent extraordinary events in the UK, where for the first time in the West since the Great Depression, there has been a run on a major bank, and the UK government has made the hapless tax-payers lenders-of-last-resort, providing this “private enterprise” with unguaranteed loans of a staggering 23 Billion GBP! Perhaps it’s time for the western economists who constantly question China’s financial systems to shut up for a while, and first put their own houses in order.

R&D - the Key

The International Delegates at the Beijing XML event had the honour of participating in the launch of the CRD’s “Dotman” Virtual World. But the Cyber Recreation District is far more than even this singularly massive project. In Chinese, the CRD actually translates as the “China Virtual Economic Zone”. It’s a “virtual” version of the “Special Economic Zones” that laid the groundwork for China’s domination in the global manufacturing industries.

That’s extraordinary enough - but CRD is far more than that. It’s a massive training and education facility, featuring eight seperate training academies, an IP protection centre, a business incubator, and an important R&D centre.

The development of a national R&D innovation network is one of the foremost priorities of the national government. CRD in Beijing is just one of these centres, which can be found everywhere in China with extensive government support, full local autonomy, and major partnerships with multinational technology companies.

[Photo: The X|Media|Lab Business Matching participants at CRD]

In Suzhou, Changsha, Dongsha, Hongzhou, Chongqing (a city of over 30 million people), and many places elsewhere, industrial parks and R&D centers are springing up out of the ground creating the 21^st Century China even as you read this. In Shanghai alone, there are over 70 (large and small) such centres competing for talent, investment, and R&D partners. The Suzhou Industrial Park (SIP), only 90 minutes drive north of Shanghai, takes up more square kilometers than the entirity of Singapore.

In the digital media industries alone, Nokia, Microsoft, Cisco, Lucent, Oracle, Seimens, IBM, Nortel, Agilent, Hewlett-Packard and many others have established major joint-venture R&D centres in these locations. The Microsoft R&D centre in Beijing alone currently employs over 3,000 full-time researchers. This will increase to a 10,000 headcount in less than three years - i.e., Microsoft, in its Bejing R&D head office alone, is acquiring 10 new R&D employees every single day.

Obviously, this will have long-term implications - not just because of the osmosis effect for the development of China innovation, as R&D employees shift between the multinationals and local start-up’s; but also as the weight of the R&D investment shifts from North America to North Asia, there will be an inevitable relative decline of R&D employment opportunities for graduates in the US. If you want to know where to look: China produces over 800,000 engineering graduates every year; the USA, less than 80,000.

Brands

I wasn’t surprised that the theme of the ICCIE Conference Day at the Great Hall of the People focussed on the issue of “Brands”. This is a critical issue for China. The paradigm example is this: the manufacturer in China gets paid 1 dollar for a shirt that is made in Shenzhen or somewhere similar. The shirt is made under contract for a brand-name such as H&M or Zara, who then sells the same shirt for 20 dollars on the High Street in Europe or North America. That is to say, 95% of the total income value resides with the owner of the brand-name, and not the owner of the manufacturing process.

As much as this defies logic, it is the world in which we live. (Note to self: dig out all those old Jean Baudrillard books on “symbolic value” and re-read them!). There is a definite understanding emerging in China that the while the ownership of the manufacturing processes has guaranteed it untold wealth relative to its previous status (at one stage in the early nineties, the market valuation of Microsoft exceeded the value of the foreign reserves of China), this amounts to little when compared to the relative profitability of the ownership of the brand.

I think we can expect to see many more experiments in both the creation and various forms of the ownership of brands emerging from China from hereon. This would include examples such as taking over foreign brands (Lenovo laptops, ie., IBM Thinkpads), creating home grown brands for the domestic market (e.g., Hipihi taking the place of Second Life), and taking equity stakes in Western assets through Sovereign Wealth Funds (SWF’s) and related vehicles - an eventuality made easier by the extraordinary self-immolations taking place in the fatally corrupted Western banking systems.

Of course, things will not be so easy nor so simple. In this “free trade” world, some markets are more-or-less free, and others not so more-or-less free. It’s sometimes puzzling as to which is which?

And of course, if eventually all the “free trade” rhetoric proves strained and hypocritical, and all the financial apparatus to support it backfires and fails, there’s always the last refuge of an absurd appeal to innate superiority.

[Photo: Bryan Ogden, New York; Suresh Seetharaman, Co-Founder Virgin Comics and Virgin Animation; David Ding, Singapore Entreprenuers; and Megan Elliott, XML at the Forbidden City]

Conclusion

The first XML event in China was a great joy to participate in. We all learnt so much, made such good friends, and had such an amazing time. Delegates came from Singapore, Australia, New Zealand, Japan, USA, UK, India, and Sweden.

Lastly, on China, here's some blogs and links we regard very highly:

Read Write Web

Ogilvy China Digital Watch

Plus Eight Star

Next Entry: Seoul