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We’ve seen storms like this [with that] intensity out at sea, but for it to come ashore with that kind of strength is almost unprecedented.~British disaster expert Steven Godby

13���MEDIACan Piracy Help the

Entertainment Business?

With rising digital revenues, music and PRYLH�¿UPV�PD\�JDLQ�IURP�FRS\FDW�SXEOLFLW\�

10��The Crowdsourcing Game

Tapping thousands of minds online for innovation

Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media.For subscriptions, research, and advisory services, please e-mail report@censeisolutions.com or call/fax +63-2-5311182. Links to online material on public

websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future.

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November 13, 2013

I ask all of you to join me in prayer for the victims of Typhoon Haiyan/Yolanda, especially those in the beloved islands of the Philippines.

~ Pope Francis on Twitter

POINT & CLICK

Access online research via your

Internet connection by clicking pictures,

graphics, and words in blue

POINT & CLICK

Access online research via your

Internet connection by clicking pictures,

graphics, and words in blue

9ROXPH�����1XPEHU��� 18��HEALTHChina Joins the Vaccine Race

A Chinese-made vaccine gets international approval, and China is set to become a player in a global $13-billion industry

For advertising, corporate promotions and free trial subscription, please email report@censeisolutions.com or call/fax us at +632-5311182.

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Strategic Analysis and Research by theCeNTeR FoR STRATeGY, eNTeRPRISe & INTellIGeNCe

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05���MANAGEMENTWhen Generations Clash

Mixing baby-boomers and Generation X was rough enough. Now come the globally connected, tech-savvy millennials. Here’s how to keep the company clicking

���Get the mix right: :KDW�WKH�GLHUHQW�age groups really want

���Digital boost: As DVDs and CDs slump, downloads are on the upswing

21��SOCIETYIf You Can’t Beat Them ...

A growing trend toward decriminalization of marijuana possession and even outright OHJDOL]DWLRQ�UHÀHFWV�D�QHHG�WR�UHWKLQN�DQWL�QDUFRWLFV�HRUWV

���The 40 years’ war: Interdicting drug supplies cost countless lives and billions of dollars

���How bad is grass anyway?

Doubts about the dangers of marijuana

���A public quandary: Attitudes toward the weed are changing

Call for applications for 2014 ACFJ MA Journ fellowships

This year’s submission deadline for the 2014 Fellowships for the Master of Arts (MA) in Journalism is on Wednesday, 15 January 2014. The fellowships are awarded to full-time Asian journalists who have excellent professional and academic record, a commitment to good journalism and leadership qualities. A grant covers tuition and other expenses for the two-year MA Journalism degree program offered by the Communication Department of the Ateneo de Manila University. Since 2003, more than 100 journalists from 15 Asian countries including Vietnam, China, Indonesia, Cambodia, and India have received the grant. Presently 26 journalists from Cambodia, China, Indonesia, Myanmar, Nepal, Philippines and Vietnam are enrolled in the program as fellowship grantees. Designed for working journalists, the MA Journalism program is a hybrid distance learning program. Online class sessions take place via the learning management system Blackboard, and classroom sessions are held at the Ateneo de Manila University’s Loyola campus in Quezon City, Philippines. The curriculum is made up of 12 courses including courses in ethics and specialized reporting and writing courses such as International Reporting, Investigative Journalism and Reporting about Religions. The program’s design allows working journalists and other media professionals to study at their own pace and time, and in their own homes or workplaces. The international faculty includes experienced journalists and academics from Australia, Canada, US, UK, Germany, the Philippines, India and Malaysia. To download the application form, visit the MA Journalism page (http://acfj.ateneo.edu/?page_id=128).

Remodeling the BusinessAs The CenSEI Report nears two years of publication, the Center for Strategy, Enterprise & Intelligence is revisiting its business model for the journal. With more and more people turning to mobile applications and online content, it is becoming imperative to shift to content optimized for app and web access.

Such a shift, it is argued, would not only provide more timely and convenient access to CenSEI material, but also enhance revenue opportunities, especially with many advertisers and sponsors keen to appear in phones and tablets sans the old browser.

This recasting of both the content medium and the business model for The CenSEI Report in collaboration and consultation with analysts, editors, designers, developers, and business partners, is necessarily taking up much company time and effort. For this UHDVRQ�DQG�DOVR�GXH�WR�VRPH�SHUVRQQHO�PRYLQJ�RQ��ZH�KDYH�UHJUHWIXOO\�EHHQ�KDYLQJ�PXFK�GLI¿FXOW\�FRPLQJ�RXW�SXQFWXDOO\�

Hence, starting with this issue, we will no longer have issue dates spanning two-week periods. Rather, the day the Report comes out will be the one marked on the issue, to alert readers until what date the information in it is current. This measure will be in SODFH�XQWLO�-DQXDU\��ZKHQ�EXVLQHVV�ZRUN�DQG�&HQ6(,�VWDI¿QJ�EHFRPH�PRUH�PDQDJHDEOH�

As subscribers of The CenSEI Report LQ�RXU�MRXUQDO�IRUPDW��\RX�ZLOO�EH�DPRQJ�WKH�¿UVW�WR�EH�RIIHUHG�DFFHVV�WR�WKH�FRPLQJ�RQOLQH�and app versions. Indeed, we will be inviting some of you to try out preliminary “beta” content, for your very helpful and valuable comments on the usefulness and accessibility of our material. More than anyone else, you will know better what the Report has always sought to deliver, and whether it is translating well into online and mobile media.

While issue dates are changing, what remains is our focus on The CenSEI Report’s prime deliverables: strategically important GHYHORSPHQWV�PRQLWRUHG�DQG�DQDO\]HG�IRU�WKHLU�VLJQL¿FDQW�DQG�ODVWLQJ�LPSDUW�RQ�EXVLQHVV��HFRQRP\�DQG�VRFLHW\��2Q�ZKDWHYHU�platform — emailed document, website posting, or mobile app — strategic research remains essential for sound decisions.7KLV�ZHHN��WKH�5HSRUW�URXQGV�RXW�RXU�VHULHV�RQ�RI¿FH�DUFKHW\SHV��ZKLFK�FRYHUHG�SUREOHP�SHUVRQDOLWLHV�DQG�VWDU�SHUIRUPHUV�LQ�past issues, with an in-depth look at the complex, often tense generational relations between baby-boomers in their 50s and 60s, Generation X nearing middle age, and twentysomething millennials.

Society tackles the immensely complex question of whether to legalize narcotics, starting with marijuana. Also sure to turn heads is Media’s article about how piracy may actually help the entertainment business.

Moving forward always demands exploring new directions — as we are doing in CenSEI.

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MANAGEMENT

Adapting to the New Normal: Boomers, Generation X, and

Millennials on the Job7KH�HQWU\�RI�\RXQJ�ZRUNHUV��D�PXOWLJHQHUDWLRQDO�ZRUNIRUFH��JOREDOL]DWLRQ��

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While generation gaps might be as old as civilization itself, a September piece in The Economist posits that

“businesses seem to be more worried than before DERXW�PDQDJLQJ�WKUHH�DJH�JURXSV�ZLWK�VXFK�GLHULQJ�attitudes.” As highly educated, tech-savvy Generation <��WKRVH�ERUQ�LQ�WKH�HDUO\�����V�WR�PLG�����V��workers enter the labor force in huge numbers, WKH\�DUH�H[SHFWHG�WR�VKDSH�WKH�RFH�ODQGVFDSH�IRU�years to come.

In fact, a 2011 report IURP�SURIHVVLRQDO�VHUYLFHV�¿UP�3ULFHZDWHUKRXVH&RRSHUV��3Z&� suggests that the career aspirations, work attitudes, and knowledge of new technologies of Generation Y workers or ³PLOOHQQLDOV´�ZLOO�GH¿QH�WKH�FXOWXUH�RI�WKH���VW�century workplace. Their preference for personal IXO¿OOPHQW�DQG�ZRUN�OLIH�EDODQFH�RYHU�FRUSRUDWH�VXFFHVV�LV�RQH�RI�WKH�NH\�GLHUHQFHV�WKDW�VHW�WKLV�generation apart from its predecessors.

2OGHU�JHQHUDWLRQV�DUH�ZRUNLQJ�ORQJHU��At the same time, older workers are retiring later because of factors such as increased life expectancy. Another PwC report on “Talent Mobility 2020: The next generation of international assignments” predicts that by 2020, baby boomers (those born between �����WR�WKH�PLG�����V��ZLOO�KDYH�DFKLHYHG�PRVW�RI�their career goals, but will be keen to work longer to EROVWHU�¿QDQFHV�WR�VHH�WKHP�WKURXJK�UHWLUHPHQW��7KH�UHSRUW�DOVR�VWUHVVHV�WKDW�WKH�GLHUHQW�JHQHUDWLRQV�LQ�the workplace bring a variety of qualities to the table, DVVHUW�GLHUHQW�QHHGV��DQG�KDYH��GLYHUVH�RSLQLRQV�about what matters to them.

In countries with an aging population like Singapore, encouraging older employees to continue working is key to maintaining the country’s economic vitality, according to an october 2012 study by Cindy Tan, a researcher in Singapore’s Civil Service College. The government, therefore, passed the Retirement and Re-employment Act in 2012, allowing employees

WR�ZRUN�EH\RQG�WKH�UHWLUHPHQW�DJH�RI�����+DYLQJ�D�multi-generational workforce, the study notes, can bring about productivity, creativity, and innovation, but it can also lead to intergenerational tensions in contexts such as younger supervisor-older supervisee relationships.

&RQÁLFWV�DULVH�EHWZHHQ�JHQHUDWLRQV�GXH�WR�GLIIHUHQFHV�LQ�DWWLWXGHV�DQG�H[SHFWDWLRQV��Generally, millennials say they are comfortable working with older generations and value mentors LQ�SDUWLFXODU��DFFRUGLQJ�WR�¿QGLQJV�RI�D�VXUYH\�FLWHG�in the 2011 PwC report. After all, millennials value regular feedback and praise for a job well done. However, tensions can still arise in areas involving the inability of senior management to relate to younger workers or the millennials’ personal drive being seen as intimidating by other generations. Further, half of the respondents in the survey of PRUH�WKDQ�������JUDGXDWHV�DFURVV����FRXQWULHV�WKLQN�their managers do not always understand how they use technology at work.

While boomers believe in paying one’s dues, millennials believe they can achieve anything with the right focus and access to learning, according to a 2012 PwC report, “Millennials at Work: Reshaping WKH�ZRUNSODFH�LQ�¿QDQFLDO�VHUYLFHV�LQ�$VLD.” Further, most are intensely ambitious and are looking for rapid career progression. Also cited in this report, ¿QGLQJV�IURP�WKH�VDPH�VXUYH\�DV�LQ�WKH������3Z&�UHSRUW�VKRZ�WKDW�����RI�PLOOHQQLDOV�ZRUNLQJ�LQ�$VLD�“felt that rigid hierarchies and outdated management styles failed to get the most out of younger recruits.”

:KLOH�ERRPHUV�DQG�PLOOHQQLDOV�GHDO�ZLWK�FRQÀLFWLQJ�views and attitudes, Generation X (born in the PLG�����V�WR�HDUO\�����V���LV�WLUHG�RI�EHLQJ�³VWXFN�in the middle between older workers who refuse to retire and younger ones who are treated far better than they ever were,” Marian Salzman of U.S.-based Havas PR says in the Economist piece.

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:NK�cenSEI�8KVUXZ �����November 4 – 17, 2013

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*HQHUDWLRQ�JDS�EHWZHHQ�\RXQJ�DQG�ROG�ZRUNHUV��In Japan, the workplace generation gap has existed since postwar times. A������SDSHU�by Gordon Mathews, a professor at the Chinese University of Hong Kong, argues that this is due to the stringent requirements of the adult social order and the fear that the young may not reproduce that social order. However, evidence discussed in the paper demonstrates the shifting balance of power between the young and the old in the corporate world. This shift, it says, is manifested through the willingness of tech-savvy young people to abandon their companies, partly in “seeking to strategically shape their own careers within a newly expanding ¿HOG�RI�SRVVLELOLWLHV�´�

The paper, published by the university’s Hong Kong ,QVWLWXWH�RI�$VLD�3DFL¿F�6WXGLHV, says the changing dynamics of the Japanese workplace is linked to the erosion of lifetime employment as the standard practice of elite corporations. As the young feel they FDQ�DRUG�WR�VKRZ�LUUHYHUHQFH�LQ�WKH�FRPSDQLHV�they belong to, older workers, in turn, have lost faith in the organizations they once believed would sustain them, it says.

6HQLRULW\�QR�ORQJHU�D�JXDUDQWHH�RI�DGYDQFHPHQW��The Economist piece posits WKDW�DV�¿UPV�WU\�WR�EH�PRUH�PHULWRFUDWLF�LQ�WKHLU�SURPRWLRQV��³ROGHU�VWD�FDQ�EH�GLVPD\HG�WR�¿QG�that their years of service no longer guarantee advancement; and that as digital skills become more important, younger workers are whizzing past them.” Being “digital natives,” the article adds, has allowed millennials to overtake older candidates in jobs that require an understanding of new areas, such as social media.

With the growing trend of workers reporting to younger managers, the article points out, the challenge is in keeping the older group motivated.

:LWK�D�GLYHUVH�ZRUNIRUFH��OHDGHUV�QRZ�KDYH�WR�PDQDJH�D�wider range of ages, which can

EH�ERWK�FKDOOHQJLQJ�DQG�IXOÀOOLQJ��Generational differences can

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GLIIHUHQFHV�LQ�WKHLU�ZRUN�IRUFHV�µ�EHJLQV�D�KRZ�WR�JXLGH�LQ�The Wall Street Journal RQ�PDQDJLQJ�GLIIHUHQW�JHQHUDWLRQV��´7KH�IULFWLRQV�PD\�EH�DJJUDYDWHG�E\�new technology and work

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collaborating, which is at the heart

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to fresh perspectives offered by

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the lack of corporate structure,

DQG�ODFN�RI�ULJLGLW\��7KH\�FDQ�also be inspired by the possibility

of the latest technological

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VLPSOH��ORJLFDOO\�RUJDQL]HG�NQRZOHGJH�GDWDEDVH���

*HQHUDWLRQ�<�QHHGV�D�SXUSRVH��QRW�MXVW�SHUNV��7KH�PLOOHQQLDOV�have a reputation for being

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in Entrepreneur��7KH�DUWLFOH��based on a panel discussion

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0XVH, says in the report that what

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DQG�D�VHQVH�RI�SXUSRVH��7KH�report also suggests creating

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5HPHPEHU�WKDW�PDQDJLQJ�WKH�PXOWLJHQHUDWLRQDO�PL[�LV�QRW�D�RQH�VL]H�ÀWV�DOO�PHWKRG��(PSOR\HHV�have different needs and priorities,

as well as differing views on how

WR�VKDSH�WKHLU�RZQ�FDUHHUV��$�JRRG�PDQDJHU�NQRZV�WKDW�KH�PXVW�EH�IDPLOLDU�ZLWK�WKH�GLIIHUHQW�OHDUQLQJ�VW\OHV��PRWLYDWLRQDO�WRROV��DQG�work attitudes of each generation

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0DQDJLQJ�WKH�%RRPHUV��*HQ�;��DQG�*HQ�<�LQ�\RXU�ZRUNSODFHCited in the report, a paper presented by Florian Kunze of the University of St. Gallen in Switzerland and Jochen Menges of Cambridge University says working under a youthful supervisor reminds older workers that they have failed to keep pace.

Meanwhile, a 2011 White Paper, “Transitioning to Workforce 2020,” by networking technology giant Cisco, suggests that globalization and a rapidly FKDQJLQJ�ZRUNIRUFH�DUH�UHGH¿QLQJ�KRZ�ZH�WKLQN�about competence, productivity, creativity, and the structuring of organizations. Globalization, coupled with vast improvements in information DQG�FRPPXQLFDWLRQV�WHFKQRORJ\��,&7���KDV�DOORZHG�work environments to become more collaborative and borderless. More importantly, a trend running concurrent with globalization is the changing workforce and its impact on the world’s skilled workers, given the aging populations of developed nations and the expansion of young workers in Asia.

<RXQJ�SRSXODWLRQV��JURZLQJ�HFRQRPLHV·�VHFUHW�ZHDSRQ��In rapidly growing economies, young populations are the secret weapon. In an August report in The Economic Times, India’s Minister of State for Human Resource Development, Shashi Tharoor, says that the FRXQWU\¶V�\RXWKIXO�ZRUNIRUFH�ZLOO�EH�����RI�WKH�population by 2020, as the labor force of China, U.S., and Japan ages. At Tata Consultancy Services �7&6���WKH�FRXQWU\¶V�OHDGLQJ�LQIRUPDWLRQ�WHFKQRORJ\�VHUYLFH�SURYLGHU������RI�WKH�ZRUNIRUFH�DOUHDG\�belongs to Gen Y, according to Ajoy Mukherjee, TCS executive vice president and global head of human resources, in an october interview posted on the Hindustan Times’ live Mint business-news site. Mukherjee reiterates that the challenge in operating in a business where technology becomes obsolete every three years is having to train and retrain people, an area that Gen Y is comparatively more comfortable in.

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<RXQJHU�JHQHUDWLRQV�VWUHVV�SHUVRQDO�GHYHORSPHQW�RYHU�FRUSRUDWH�SURJUHVVLRQ� In terms of tomorrow’s leaders, younger generations tend to focus more on personal development than corporate progression, which can be worrisome for business owners. “Getting to the top is no longer an automatic aspiration: work/life balance and personal IXO¿OOPHQW�DUH�PRUH�LPSRUWDQW�WR�PDQ\�SRVW�EDE\�boomers and many working women, who are more interested in being intellectually stimulated and valued as part of a team than in breaking through a �SHUFHLYHG��JODVV�FHLOLQJ�´�DFFRUGLQJ�WR�D�UHSRUW�E\�global executive search ¿UP�odgers Berndtson and Cass Business School in london.

The report, likewise, points out that factors, such as the rapid rise of developing economies, retiring baby boomers, greater international mobility, and more women rising to senior leadership positions are creating a fundamentally shifting business environment.

Moreover, an evolution in what employees want from their jobs is underway, and organizations need to account for these changes to remain competitive. Cisco, in its aforementioned report, contrasts job characteristics and employee expectations typical of the past with how the 2020 workforce will view these aspects in the future, as shown in the following table.

7KH�ZDU�IRU�WDOHQW�ZLOO�LQWHQVLI\�LQ�WKH�FRPLQJ�\HDUV� As boomers begin retiring, the war for talent will intensify, according to the report by odgers

Berndtson and Cass Business School. There will be massive exodus of talent over the next 20 years, it says, as the leadership and experience that has shaped modern business retires. one way of easing transition between generations, the report suggests, is for senior executives to use the last years of their careers to mentor and transfer knowledge to incoming executives.

A������UHSRUW�by strategy+business, published E\�JOREDO�FRQVXOWDQF\�¿UP�Booz & Company, SRVLWV�WKDW�*HQ�;�ZLOO�EH�FDOOHG�RQ�WR�¿OO�WKH�JDS�

left by baby-boomer departures in the years before millennials can contribute meaningfully to the organization. However, soon after Gen Xers assume managerial positions, an overwhelming number of millennials will be vying for these same jobs. They will also be faced with the task of managing a workforce made up of contractors, freelancers, and outsourced workers, or what is known as the “blended workforce.”

Similarly, the PwC report on talent mobility says the war for talent will continue to be a human-resource issue in 2020. Global mobility, thus, will play a key role in solving the problem of labor availability. The report further predicts that there will be a ����JURZWK�LQ�LQWHUQDWLRQDO�DVVLJQPHQWV�E\�������increasing the need for speedy knowledge transfer.

It notes, “Companies may go to creative, perhaps even extreme, lengths to secure and retain talent and knowledge as their existing workforce ages.”

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Businesses are now turning to the crowd for innovation ideas.

Among the big names that are innovating using WKH�LQSXW�RI�SHRSOH�RXWVLGH�WKH�¿UP�WR�UHVROYH�strategic problems, also known as crowdsourcing, are the world’s leading brewer Anheuser-Busch (to GHYHORS�D�EHHU�WR�FDWHU�WR�WKH�FUDIW�EHHU�PDUNHW�� Coca-Cola (to develop initiatives for marketing,

&URZGVRXUFLQJ�KHOSV�RUJDQL]DWLRQV�PHHW�innovation needs

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DGYHUWLVLQJ��DQG�VRFLDO�LVVXHV���General Mills (for innovative concepts/suggestions from food products to improvements to manufacturing, service, or PDUNHWLQJ�SURFHVVHV���Nokia (to improve the viability RI�LWV�SURGXFWV�LQ�DOO�PDUNHWV���DQG�Unilever (for diverse challenges ranging from developing cleaner FOHDQLQJ�SURGXFWV�WR�VWRULQJ�UHQHZDEOH�HQHUJ\���according to an 2FW�����EORJ�SRVW�on the site of open innovation network InnoCentive.

Meanwhile, consumer co-creation site eYeka presents an interactive timeline that shows how the world’s best brands have used crowdsourcing since the early 2000s for marketing- and innovation-related business objectives.

0RUH�FRVW�HIIHFWLYH�SHU�RXWSXW�RU�SHU�ZRUNHU��Per an April article in Harvard Business Review

by authors Kevin Boudreau and Karim lakhani, crowdsourcing enables companies to expose a problem to widely diverse individuals with varied skills, experience, and perspectives, “at a scale that exceeds even that of the biggest and most complex global corporation.” Additionally, crowds are motivated by a desire to learn and a chance to shine within a large community. Crowds are often PRUH�FRVW�HHFWLYH�SHU�RXWSXW�RU�SHU�ZRUNHU�WKDQ�traditional company solutions, the authors posit.

However, some of the concerns of the company about crowdsourcing include intellectual-property risks, costs, management problems, and the uncertainty of getting appropriate solutions. The main reason for resistance, the authors write, “is that managers don’t clearly understand what kinds of problems a crowd really can handle better and how to manage the process.”

“Crowds are moving into the mainstream; even if you don’t take advantage of them, your competitors surely will,” the authors write, adding that, “online

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/HDGLQJ�FRPSDQLHV�VXFK�DV�$QKHXVHU�%XVFK��&RFD�&ROD��*HQHUDO�0LOOV��1RNLD��DQG�8QLOHYHU�are innovating through crowdsourcing

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12

:NK�cenSEI�8KVUXZ �����November 4 – 17, 2013

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The�&RORVVDO�$UW��9LVXDO�&XOWXUH�blog brings a�QRYHO�VWUHHW�DUW�SURMHFW�WR�RXU�DWWHQWLRQ��D�SRUWUDLW�RI�D�\RXQJ�JLUO�LQ�%HOIDVW��1RUWKHUQ�,UHODQG��E\�&XEDQ�$PHULFDQ�DUWLVW�JRUJH�5RGULJXH]�*HUDGD��

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crowdsourcing platforms have become much more sophisticated, making it ever simpler to manage, support, and mediate among distributed workers.”

Author and entrepreneur Tim Ferriss lists in his blog 7KH���+RXU�:RUNZHHN�10 of the leading crowdsourcing and collaboration tools on the Web. on the list are X PRIZe Foundation, which designs and runs incentive competitions with prize of up to US$30 million, CoFundos for the development of open-source software, Genius Rocket, a crowdsourced creative design agency, Amazon Mechanical Turk, for simple tasks that computers cannot do, such as podcast-transcribing or text-editing, and Innocentive, an online platform for open innovation, crowdsourcing and innovation contests. other web tools for crowdsourcing and collaboration are UTest, IdeaConnection, NineSigma, ennovent and TopCoder.

*URZLQJ�UROH�SUHGLFWHG�IRU�FURZGVRXUFLQJ��For IT organizations and users, crowdsourcing will continue to shape innovation in the years ahead. 5HVHDUFK�¿UP�Gartner�SUHGLFWV�WKDW�E\�������³PRUH�than half of consumer goods manufacturers will UHFHLYH����SHUFHQW�RI�WKHLU�FRQVXPHU�LQQRYDWLRQ�and research and development capabilities from crowdsourced solutions,” one of its recent SUHGLFWLRQV�IRU������DQG�EH\RQG�for information-technology organizations and users. Moreover, crowdsourcing also brings a competitive edge: Consumer-goods companies that use crowdsourced solutions in marketing campaigns or new product GHYHORSPHQW�ZLOO�HQMR\�D����UHYHQXH�ERRVW�RYHU�QRQ�FURZGVRXUFHG�FRPSHWLWRUV�E\������

0RUH�VSHFL¿FDOO\��*DUWQHU�DOVR�VHHV�D�PDVVLYH�VKLIW�toward applications of crowdsourcing, enabled by technology, in advertising, online communities, VFLHQWL¿F�SUREOHP�VROYLQJ��LQWHUQDO�QHZ�SURGXFW�ideas, and consumer-created products.

The McKinsey Global Institute, in its report “The Social economy: Unlocking Value and Productivity Through Social Technologies,” estimates that leveraging social technologies and platforms including crowdsourcing and co-creation could improve productivity of high-skilled knowledge ZRUNHUV�E\�����DQG�FRQWULEXWH�EHWZHHQ�86�����billion to US$1.3 trillion per annum across four commercial sectors: consumer packaged goods, retail ¿QDQFLDO�VHUYLFHV��DGYDQFHG�PDQXIDFWXULQJ�DQG�professional services.

So, how can companies set up a successful FURZGVRXUFLQJ�HRUW"�,Q�DQ�August blog post on the Harvard Business Review site, Doron Reuveni, Ceo and co-founder of software and mobile app testing company uTest, shares his views and insights into what makes crowdsourcing work best.

)LUVW��¿QG�WKH�EHVW�ZD\�WR�VWUXFWXUH�WKH�FURZG�E\�examining factors such as whether the crowd will perform on-site or remote work or whether they will compete in single-winner or a multi-winner projects. Reuveni suggests that “spaces that enable multiple winners to perform remote work on a recurring basis DUH�D�EHWWHU�¿W�IRU�EXLOGLQJ�KLJK�JURZWK��VXVWDLQDEOH�crowdsourcing businesses. Going remote eliminates geographic restrictions, thus opening up the community to anyone with internet access.”

From there, companies should also tell prospective customers about how crowdsourcing will solve their problems. It’s also important to provide the community with opportunities to grow — including networking events, free training, games, awards and career advice. Another is to incentivize a community and create a path for their growth in these areas: money, reputation and increasing skill sets. More LPSRUWDQWO\��EXLOG�DQ�HHFWLYH�GHPDQG�JHQHUDWLRQ�engine — whether through sales, marketing and/or reseller strategy.

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:NK�cenSEI�8KVUXZ �����November 4 – 17, 2013

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MEDIA

POINT & CLICK

Access online research via your

Internet connection by clicking

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every year, piracy costs the U.S. economy 86����ELOOLRQ��LQFOXGLQJ�PRUH�WKDQ���������ORVW�MREV��DQG�86���ELOOLRQ�in government tax revenue, based on

estimates of the Institute for Policy Innovation �,3,���DV�FLWHG�LQ�D�0otion Picture Association of America��03$$� 2011 statement. Texas-based think tank IPI studies suggest that music piracy FRVWV�DQQXDO�KDUP�RI�86������ELOOLRQ��ZKLOH�¿OP�piracy FRVWV�WKH�8�6��HFRQRP\�86������ELOOLRQ��DQG�86�����ELOOLRQ�LQ�ORVW�UHYHQXH�WR�WKH�VWXGLRV�

A recent study suggests, however, that contrary to those and similar claims, digital piracy is not harming the industry and might actually be helping it.

The media policy brief from the london School RI�(FRQRPLFV��/6(�’s Department of Media and Communications, “Copyright & Creation: A Case for Promoting Inclusive online Sharing,” published in September, provides evidence to counter claims that FUHDWLYH�LQGXVWULHV��LQFOXGLQJ�PXVLF�DQG�¿OP��DUH�VXHULQJ�RYHUDOO�UHYHQXH�GHFOLQH�GXH�WR�LQGLYLGXDO�copyright infringement.

The claims of many in the music industry about a GUDPDWLF�GHFOLQH�LQ�UHYHQXH�DSSO\�VSHFL¿FDOO\�WR�the sale of recorded music in physical form, i.e., compact discs and vinyl phonograph records, the study observes. However, the study also notes that GHFOLQLQJ�VDOHV�RI�UHFRUGHG�PXVLF�ZHUH�RVHW�SDUWO\�by growing revenue from online sources, including streaming and subscription services.

“This suggests that had the music industry started to adapt to the digital environment earlier, rather WKDQ�WU\LQJ�LQLWLDOO\�WR�¿W�WKH�QHZ�GLJLWDO�FXOWXUH�into their old business model, the record companies could have witnessed growth much earlier,” the study concludes.

,Q�IDFW��ODVW�\HDU��VRPH�����RI�ZRUOGZLGH�UHYHQXH��H[FOXGLQJ�UHYHQXH�IURP�OLYH�SHUIRUPDQFHV��was generated by digital channels, including VWUHDPLQJ�DQG�GRZQORDGV��XS�IURP�����WKUHH�\HDUV�earlier. In addition, worldwide sales of recorded music show a slight uptick last year--0.3 per cent to 86������ELOOLRQ��IRU�WKH�¿UVW�WLPH�VLQFH�������

The authors of the policy brief posit: “The growing use of streaming, cloud computing and digital lockers full of infringing content, is attracting the

Piracy Might Actually Be Good

for the Entertainment BusinessThe music and movie industries should rethink the

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attention of the creative industry, suggesting that FODLPHG�UHYHQXH�GDPDJH�IURP�FLWL]HQ�¿OH�VKDULQJ�will soon become a secondary concern and that these new developments will spur them on to launching more legal services for internet users.”

3LUDF\�KDVQ·W�KXUW�PRYLH�UHYHQXHV��0RUHRYHU��WKH�/6(�VWXG\�VD\V�WKDW�8�6��ER[�RFH�LV�QRW�VXHULQJ�IURP�PRYLH�SLUDF\��FRQWUDU\�WR�the MPAA claim that online piracy is devastating the movie industry. In fact, Hollywood achieved UHFRUG�EUHDNLQJ�JOREDO�ER[�RFH�UHYHQXHV�RI�86����ELOOLRQ�ODVW�\HDU��D����LQFUHDVH�RYHU������UHYHQXHV��:KLOH�8�6��¿OP�LQGXVWU\�UHYHQXHV�IURP�WKH�VDOH�DQG�UHQWDOV�RI�'9'V�IHOO�E\������86������ELOOLRQ��IURP������WR�������WKH�WRWDO�JOREDO�UHYHQXHV�IRU�WKH�8�6��LQGXVWU\�LQFUHDVHG�E\����RU�86�����ELOOLRQ�RYHU�WKH�VDPH�SHULRG��7KH�8�6��¿OP�LQGXVWU\�ZDV�ZRUWK�DQ�HVWLPDWHG�86������ELOOLRQ��the study notes.

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0HDQZKLOH��³JOREDO�¿OPHG�HQWHUWDLQPHQW�revenues overall will continue to grow, generating UHYHQXHV�RI�PRUH�WKDQ�86����EQ�E\�������:LWKLQ�that, revenues from the worldwide physical-home-video market in the forms of sales and rentals of '9'V�DQG�%OX�UD\�ZLOO�EH�ZRUWK�OHVV�WKDQ�ER[�RFH�IRU�WKH�¿UVW�WLPH�LQ������´

0XVLF�ÀOH�VKDULQJ�GHFOLQHG��Illegal music ¿OH�VKDULQJ�GHFOLQHG�VLJQL¿FDQWO\�ODVW�\HDU��DV�

reported by the global information company The NPD Group. The number of users of peer-WR�SHHU��3�3��VHUYLFHV��GHFOLQHG�ODVW�\HDU�E\�����from their level in 2011. likewise, indicators such DV�WKH�YROXPH�RI�LOOHJDOO\�GRZQORDGHG�PXVLF�¿OHV�IURP�3�3�VHUYLFHV��¿OHV�EXUQHG�DQG�ULSSHG�IURP�&'V��WKH�QXPEHU�RI�¿OHV�VZDSSHG�IURP�KDUG�GULYHV��DQG�the volume of music downloads from digital lockers IHOO�E\����������������DQG������UHVSHFWLYHO\��IURP�their 2011 levels.

'LJLWDO�VHUYLFHV�KHOS�PXVLF�LQGXVWU\�UHFRYHU'DWD�IURP�WKH�,QWHUQDWLRQDO�)HGHUDWLRQ�RI�WKH�3KRQRJUDSKLF�,QGXVWU\��,)3,��'LJLWDO�0XVLF�5HSRUW�����, suggests that while

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7KH�VWXG\�QRWHV�WKDW�PRUH�SHRSOH�QRZ�DUH�XVLQJ�OLFHQVHG�VHUYLFHV��'RZQORDG�VDOHV�LQFUHDVHG�E\�����JOREDOO\�ODVW�\HDU��DQG�UHSUHVHQW�DURXQG�����RI�RYHUDOO�GLJLWDO�PXVLF�UHYHQXHV��7KH�QXPEHU�RI�SD\LQJ�VXEVFULEHUV�URVH�E\�����LQ������WR����PLOOLRQ��6XEVFULSWLRQ�UHYHQXHV�DUH�OLNHO\�WR�DFFRXQW�IRU�PRUH�WKDQ�����RI�GLJLWDO�UHYHQXHV��

%DVHG�RQ�WKH�UHSRUW��OHJDO�PXVLF�VHUYLFHV�DUH�DOVR�JHWWLQJ�EHWWHU�DW�PHHWLQJ�FRQVXPHU�QHHGV��'RZQORDG�VHUYLFHV�DUH�SRSXODU�EHFDXVH�RI�WKH�VHFXULW\�RU�HDVH�RI�SD\PHQW�WKH\�RIIHU��WKH�JXDUDQWHH�WKDW�WKH�VHUYLFH�LV�OHJDO��DV�ZHOO�DV�WKH�XVHUV·�WUXVW�LQ�WKH�EUDQG�RU�FRPSDQ\��0HDQZKLOH��XVHUV�RI�PXVLF�VXEVFULSWLRQ�VHUYLFHV�VD\V�VXEVFULELQJ�HQDEOHV�WKHP�WR�GLVFRYHU�QHZ�PXVLF��JHW�IUHH�RI�FKDUJH�WLHU�RI�RIIHULQJV�DQG�OLVWHQ�WR�PXVLF�ZLWKRXW�QHHGLQJ�WR�SXUFKDVH�LQGLYLGXDO�VRQJV�

$PRQJ�WKH�ODUJHVW�GLJLWDO�PXVLF�VHUYLFHV�DUH�$SSOH·V�iTunes

(����PLOOLRQ�DFFRXQWV���Spotify �ZLWK�RYHU���PLOOLRQ�SD\LQJ�VXEVFULEHUV��DQG�'HH]HU����PLOOLRQ���0XVLF�YLGHR�VWUHDPLQJ�VHUYLFHV�DUH�DOVR�VHHLQJ�VWURQJ�JURZWK��OHG�E\�WKH�PRVW�SRSXODU�digital video service YouTube��ZLWK�PRUH�WKDQ�����PLOOLRQ�DFWLYH�XVHUV��,QWHUQHW�UDGLR�LV�DOVR�VRDULQJ�LQ�SRSXODULW\��ZLWK�OHDGLQJ�service 3DQGRUD�DOUHDG\�DFFRXQWLQJ�IRU����RI�DOO�UDGLR�OLVWHQLQJ�LQ�WKH�8�6��6HUYLFHV�VXFK�DV�Slacker and�L+HDUW5$',2 are also

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7KH�JOREDO�PDUNHW�UHVHDUFK�FRPSDQ\�13'�*URXS·V�´$QQXDO�0XVLF�6WXG\�����µ�IRXQG�WKDW�$SSOH·V�L7XQHV�GRPLQDWHV�WKH�GLJLWDO�PXVLF�PDUNHW�IRU�SDLG�GRZQORDG�LQ�WKH�IRXUWK�TXDUWHU�RI������ZLWK�����VKDUH��IROORZHG�E\�$PD]RQ03��DW������EDVHG�RQ�DQ�$SULO�SUHVV�UHOHDVH��7KH�VWXG\�ORRNHG�DW�GDWD�IURP�PRUH�WKDQ��������FRQVXPHU�VXUYH\V�WR�JDXJH�FRQVXPHU�RSLQLRQV�DQG�KDELWV�LQ�PXVLF�EX\LQJ��

'LJLWDO�PXVLF�UHYHQXHV�ZLOO�H[FHHG�SK\VLFDO�VDOHV� According to the IFPI study, although the industry is less reliant on income from physical format sales, it still accounts for the majority of the music industry revenue. Sales of physical-format PXVLF�GHFOLQHG�IURP�����LQ������WR�DQ�HVWLPDWHG�����LQ�������,Q�some markets in Asia, sales of CDs and DVD music video are still increasing in Japan and South Korea (K-pop fans want high-TXDOLW\�SK\VLFDO�IRUPDWV��

However, PricewaterhouseCoopers, in its “Global entertainment and PHGLD�RXWORRN������WR������” predicts that the digital-music revenues will exceed physical UHYHQXHV�E\�������³:LGHVSUHDG�access to broadband and smartphones will encourage further growth in music subscription services, although there will be no uniformity in the way digital markets will evolve.”

Figures from the PwC report show an optimistic outlook for both WKH�PXVLF�DQG�¿OP�LQGXVWULHV��According to the report, globally, the music industry is getting back in shape: total consumer spending RQ�PXVLF�LQ������ZDV�86������billion, a slight fall from 2011. However, annual revenue will start to grow again in 2013, reaching 86������PLOOLRQ�LQ�������

',*,7$/�086,&�72�6853$66�3+<6,&$/�086,&�6$/(6�,1�����

Graph from PricewaterhouseCoopers “Global Entertainment and media outlook 2013 to 2017”

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$FFRUGLQJ�WR�13'¶V�³$QQXDO�0XVLF�6WXG\������´�����of consumers who had illegally downloaded music via P2P services in 2011 reported that they had stopped RU�UHGXFHG�¿OH�VKDULQJ�DFWLYLW\�GXH�WR�LQFUHDVHG�XVH�of free, legal music streaming services. other reasons include closure of preferred service and concerns regarding spyware and viruses.

Meanwhile, a 2013 study, “Copy Culture in the U.S. and Germany” by American Assembly, a research FHQWHU�DW�&ROXPELD�8QLYHUVLW\��¿QGV�WKDW�¿OH�VKDUHUV�are also heavy consumers of legal media. The study, funded by Google, analyzes data from more than 3,000 SHRSOH�LQ�WKH�8�6�DQG�*HUPDQ\��DQG�¿QGV�WKDW�8�6�¿OH�VKDUHUV�VSHQG�DURXQG�����PRUH�RQ�OHJLWLPDWH�online music purchases than users who do not pirate music via the internet. “They buy as many legal DVDs, CDs, and subscription media services as their non-¿OH�VKDULQJ��,QWHUQHW�XVLQJ�FRXQWHUSDUWV«7KH\�DOVR�display marginally higher willingness to pay.”

7KH�VWXG\�DOVR�¿QGV�WKDW�����RI�$PHULFDQV�DQG�����RI�Germans adults have “copied, shared or downloaded for free music, movies, and TV shows.” Among young DGXOWV��WKH�¿JXUH�LV�KLJKHU������

,OOHJDO�IUHH�PXVLF�UHPDLQV�FKDOOHQJH� According to the afore-mentioned study by the london-based secretariat IFPI, which represents the recording LQGXVWU\�ZRUOGZLGH�ZLWK�VRPH�������PHPEHUV�LQ����countries, illegal free music remains a big hurdle in the growth of legitimate music markets. It estimates that around one-third of Internet users globally still regularly access unlicensed sites. The recording industry wants to disrupt business models supporting unlicensed services, to make it harder for consumers to ¿QG�DQG�DFFHVV�LOOHJDO�FRQWHQW��DQG�HGXFDWH�XVHUV�DERXW�legal or licensed alternatives.

“The copyright environment is vital to the industry’s prospects. To improve it, music companies are

China

enters the

global

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industry, as both a center for developing new

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FRU�WKH�¿UVW�WLPH��WKH�:RUOG�+HDOWK�2UJDQL]DWLRQ��:+2��SXW�LWV�VWDPS�of approval on a China-made vaccine that protects children against

-DSDQHVH�HQFHSKDOLWLV��-(���DFFRUGLQJ�WR�DQ�2FW�����UHSRUW in Nature. Japanese encephalitis is a viral brain infection that is spread by mosquitoes and is common in parts of east and south Asia. The move could herald a step towards China becoming a global vaccine producer, the report adds.

)RUPDOO\�NQRZQ�DV�6$����������WKH�YDFFLQH�ZDV�DGGHG�WR�WKH�SUHTXDOL¿HG�PHGLFLQHV�list of the WHo, thereby giving it a WHo quality and safety endorsement. The report also says that the practical implication of this is that the vaccine can now be used by United Nations agencies. Though domestic VDOHV�RI�WKH�-(�YDFFLQH�EHJDQ�LQ������DQG�WKH�drug has also been widely exported, the WHo endorsement means that more countries will recognize its quality.

China’s potential in the vaccine market is underscored in a report from the National %XUHDX�RI�$VLDQ�5HVHDUFK�RQ�WKH������3DFL¿F�Health Summit in Seattle. It says the country’s ���GRPHVWLF�YDFFLQH�PDQXIDFWXUHUV�SURGXFH����W\SHV�RI�YDFFLQHV�WKDW�SURWHFW�DJDLQVW����diseases. “The industry’s massive annual output totals nearly 1 billion doses, the world’s highest yield in terms of a single national economy’s vaccine output,” it adds. The forces responsible for China’s huge growth in this market include: intense competition among domestic manufacturers, a surge of investment capital from within and abroad, government support, and motivated emigrants trained in multinational pharmaceutical companies, among others.

engaging with a range of intermediaries - including advertisers, search engines, internet service providers, mobile operators and payment providers - to make the internet a more conducive place for legitimate digital commerce,“ according to the report.

Criminal charges for violators of digital piracy laws in the U.S. face legal penalties including felony record, DFFRPSDQLHG�E\�XS�WR�¿YH�\HDUV�RI�MDLO�WLPH�DQG�¿QHV�XS�WR�86����������DV�stated on the RIAA website.

3LUDF\�KHOSV�JDXJH�YLHZHUV·�LQWHUHVWV� &RQWHQW�SURGXFHUV�FDQ�DFWXDOO\�EHQH¿W�IURP�video piracy websites, according to a 6HSW�����EORJ in The New York Times by Nick Bilton. These sites can be used to gauge public viewers’ interests, helping companies to determine which types of shows to produce or license.

laurence H. Tribe, a professor of constitutional law at Harvard law School, reiterates that content producers like NetFlix and HBo�FDQ�EHQH¿W�IURP�WKH�information they get from online piracy sites. He said LQ�DQ�LQWHUYLHZ��³:KHWKHU�WKH\�VHH�WKRVH�EHQH¿WV�DV�ODUJH�HQRXJK�WR�RVHW�WKHLU�ORVVHV�GLVFRXQWHG�E\�WKH�KLJK�FRVWV�RI�FRQVWUXFWLQJ�VXFLHQWO\�VWURQJ�anti-piracy protections is likely to be a function of a KDUG�KHDGHG��FRQWH[W�EDVHG�FRVW�EHQH¿W�FDOFXODWLRQ�framed by imagination.”

5HHG�+DVWLQJV��WKH�FKLHI�H[HFXWLYH�RI�1HWÀL[��WKH�leading subscription service for TV episodes and movies--implied that pirating builds demand, and people switch to the easier, paid product once subscription services become available. Meanwhile, -HUH\�/��%HZNHV, the Ceo of Time Warner, the owner of HBo, said that pirated content can be “a tremendous word-of-mouth thing” and goes as far as saying that the discovery that HBo’s Game of Thrones was the most pirated TV show of 2012 could be “better than an emmy.”

HEALTH

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A������UHSRUW from the Center for Global Development suggests that as the main diseases in poor countries become less of a priority in DXHQW�RQHV��GHYHORSLQJ�FRXQWULHV�FDQ�QR�ORQJHU�depend on rich markets to meet the costs of the GHYHORSPHQW�RI�QHZ�YDFFLQHV�IRU�WKH�EHQH¿W�of poor countries. “largely as a result of the low value and high risks of the developing country market, less WKDQ�����RI�JOREDO�VSHQGLQJ�RQ�health research and development is devoted to the major health SUREOHPV�RI�����RI�WKH�population,” the report notes.

The report, thus, highlights the importance of investing in the research and development of new vaccines. Immunization has a profound impact on rich and poor countries. It is cheap, UHOLDEOH��HHFWLYH��DQG�FDQ�UHDFK�the majority of children in low-income societies. Still, many in the developing world lack access to existing and new vaccines.

A WHo presentation by Miloud Kaddar, senior adviser and health economist, shows that the JOREDO�YDFFLQH�PDUNHW�WULSOHG�LQ�YDOXH�IURP����ELOOLRQ�LQ������WR�DOPRVW�����ELOOLRQ�LQ�������7KH�global market is also projected to rise to $100 ELOOLRQ�LQ�������,Q�DGGLWLRQ��PRUH�WKDQ�����QHZ�products are in the development pipeline, where ���DUH�RI�LPSRUWDQFH�WR�GHYHORSLQJ�FRXQWULHV���

Vaccine, as noted in the presentation, will become an engine of growth for the pharmaceutical industry. The growth factors are: the importance

of communicable diseases and new threats, the FRVW�HHFWLYHQHVV�RI�LPPXQL]DWLRQV��DQG�LQFUHDVLQJ�demand from new target populations from emerging markets, among others.

In a �����DUWLFOH�in Pharma Focus Asia, Pele Choi-Sing Chong, Ph.D., investigator and director of the Vaccine Research & Development Center, National Health Research Institutes in Taiwan, reported that countries like China, India, and Korea

still lag behind in terms of vaccine research and development, as well as production techniques, due to lack RI�¿QDQFLDO�VXSSRUW�DQG�WHFKQRORJ\�transfers from foreign companies. However, emerging infectious diseases, such as pandemic avian LQÀXHQ]D��DUH�FKDQJLQJ�WKH�ODQGVFDSH�of the vaccine industry.

'U��&KRQJ�QRWHG�����RI�JOREDO�vaccine supply is controlled by ¿YH�LQWHUQDWLRQDO�SKDUPDFHXWLFDO�companies: 6DQR¿�3DVWHXU, GlaxoSmithKline, Merck, Wyeth, and

Novartis. These companies will continue to dominate vaccine markets, he said, because they not only buy up small vaccine R&D companies, they are also expanding their manufacturing capacity by building more facilities around the world.

Asia may play a crucial role in both the development of new drugs and as a market for vaccines because of increasing demand from emerging markets. However, without immediate government funding and support, Asian countries may not be able to compete globally, Dr. Chong said. In order to develop a successful vaccine business in Asia, all parties, including the academe, government-funded research centers, and private entities, need to work together with risk/SUR¿W�VKDULQJ�LQ�PLQG��KH�UHLWHUDWHG����

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GovernmentsConsiderLiberalizing Drug LawsAs the War on NarcoticsFalters

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There is a growing consensus that the

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:RUOG�OHDGHUV�DUH�FDOOLQJ�IRU�D�GLVFXVVLRQ�RI�alternatives to the war on drugs

Governments around the world are ZHHGLQJ�RXW�KDUPIXO�DQG�LQHHFWLYH�drug policies, as world leaders discuss alternatives to criminalization

As of october 1, in Switzerland, the SRVVHVVLRQ�E\�WKRVH�RYHU����\HDUV�ROG�of 10 grams or less of marijuana has been decriminalized, that is, violators

ZLOO�RQO\�EH�¿QHG�������ZLOO�QRW�EH�UHTXLUHG�WR�appear in court, and the incident will not appear on their permanent records, according to a +XQJWRQ�3RVW�report.

In November, 2012, the states of Colorado, through $PHQGPHQW���, and Washington, via Initiative ���, legalized the production, sale, and use of marijuana for recreational purposes by adults. Currently, the use of marijuana for medical purposes is legal in 20 U.S. states and Washington, D.C., as summarized in this chart by the National Conference of State legislatures.

8UXJXD\�FRQVLGHUV�IXOO�PDULMXDQD�OHJDOL]DWLRQ��And Uruguay is a step closer WR�EHFRPLQJ�WKH�¿UVW�FRXQWU\�LQ�WKH�ZRUOG�WR�legalize a “full-scale marijuana industry” in an HRUW�WR�FRPEDW�GUXJ�WUDFNLQJ��DFFRUGLQJ�WR�D�August report from the Canadian Broadcasting Corporation’s news site.

The bill passed by the country’s House of Deputies on July 31, 2013, which could legalize the production, commercialization and distribution of marijuana, will likely make it through the country’s Senate sometime in the fall, as the government holds a majority there. Uruguayan President Jose Mujica is backing the bill as an alternative to the hard-line global war on drugs, which, he and others argue, may have done more harm than good. Mujica remarks, “We know we are embarking on a cutting-edge experiment for the whole world.”

Uruguay’s plan challenges international treaties that somehow “hold the whole drug prohibition regime together,” according to post-

doctoral fellow Nathan Jones of Rice University’s James Baker Institute for Public Policy, who goes on to say that marijuana legalization in Uruguay could be a “tipping point” in the war on drugs, the CBC reported.

According to latin America policy analyst Carlos Hidalgo of the Washington, D.C.-based public-policy think tank Cato Institute, there is currently a lively discussion among latin American countries on possible alternative approaches. He notes, “There is a wide consensus that the war on drugs is a failure – even defenders of the policy admit that it is not working well,” Hidalgo said in the CBC report.

*OREDO�FRPPLVVLRQ��*OREDO�ZDU�RQ�GUXJV�D�IDLOXUH��The Global Commission on Drug Policy �*&'3���D�22-member panel composed of prominent names including former United 1DWLRQV�6HFUHWDU\�*HQHUDO�.R¿�$QQDQ��IRUPHU�Polish President Aleksander Kwasniewski, former U.S. Secretary of State George Shultz, and British entrepreneur Richard Branson, even explicitly declared in 2011: “The global war on drugs has failed, with devastating consequences for individuals and societies around the world.”

In its 2011 report, the commission, which advocates PRUH�HHFWLYH�DQG�KXPDQH�ZD\V�WR�DOOHYLDWH�WKH�KDUPIXO�HHFWV�RI�GUXJV��GHWDLOHG�KRZ�WKH�ZDU�on drugs has not just failed to reduce supply and demand but also brought about unintended negative consequences, including the growth of a massive criminal black market and the stigmatization and marginalization of drug users.

$FFRUGLQJ�WR�WKH�UHSRUW��LQ�WKH�SHULRG�EHWZHHQ������DQG�������XVH�RI�RSLDWHV�URVH��������FRFDLQH������DQG�FDQQDELV�������(RUWV�WR�FXUE�SURGXFWLRQ�KDYH�EHHQ�LQHHFWLYH��ZLWK�SURGXFHUV�SURYLQJ�WR�EH�YHU\�

adaptive, e.g., shifting the location of production in UHVSRQVH�WR�GUXJ�FRQWURO�HRUWV�

Cannabis remains the most widely used illicit substance in the world. According to the World Drug Report 2013 from the 8QLWHG�1DWLRQV�2FH�on Drugs and Crime, there was a slight increase LQ�FDQQDELV�XVDJH�DPRQJ����WR����\HDU�ROGV�IURP������WR�������

0DULMXDQD�QRZ�PRUH�DIIRUGDEOH��PRUH�SRWHQW� In a 2012 report, “The War on Drugs and HIV/AIDS,” the GCDP notes that in the U.S., PDULMXDQD�KDV�UHPDLQHG�DRUGDEOH�DQG�DFFHVVLEOH��and has even increased in potency despite being the focus of the government’s war on drugs. $FFRUGLQJ�WR�WKH�UHSRUW��WKH�LQÀDWLRQ�DGMXVWHG�SULFH�RI�FDQQDELV�KDV�GHFOLQHG�E\�����DQG�LWV�SRWHQF\�LQFUHDVHG�E\������VLQFH�������

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According to a 2013 study of international drug-surveillance databases led by Dan Werb of the University of British Columbia’s Urban Health 5HVHDUFK�,QLWLDWLYH��LQ�WKH�8�6���WKH�LQÀDWLRQ�DGMXVWHG�SULFH�RI�FDQQDELV�GHFUHDVHG�E\�����ZKLOH�DYHUDJH�SXULW\�LQFUHDVHG�E\������EHWZHHQ������DQG�������,Q�$XVWUDOLD��LQÀDWLRQ�DGMXVWHG�SULFH�GHFUHDVHG�����EHWZHHQ������DQG�������

3UREOHPV�FDXVHG�E\�WKH�ZDU�RQ�GUXJV� In a 2011 working paper, “The Development of International Drug Control: lessons learned and Strategic Challenges for the Future,” which was SUHSDUHG�IRU�WKH�¿UVW�PHHWLQJ�RI�WKH�*&'3��0DUWLQ�Jelsma likewise argued that the escalation of the war on drugs in the past two decades has created a host of problems: prison populations around the world rose, incidence of human rights violations increased, and the criminalization of users impeded access to essential medicines and healthcare, including HIV/AIDS prevention strategies. Jelsma is the coordinator of the Drug & Democracy program at the Transnational Institute in the Netherlands.

'HFULPLQDOL]DWLRQ�RI�SHUVRQDO�XVH� According WR�-HOVPD��WKH�¿UVW�WR�DGRSW�³VRIWHU´�DSSURDFKHV�such as decriminalization in order to reduce harm were Canada, europe, and Australia, followed by several countries in latin America more recently. This means that possession of small quantities is QRW�FRQVLGHUHG�D�FULPLQDO�RHQVH�DQG�PHULWV�RQO\�administrative sanctions.

To date, possession of small amounts of marijuana has been decriminalized in countries such as Belgium, Switzerland, Spain, luxembourg, Portugal, the Czech Republic, and Ireland, as well as in several states in Australia and 13 U.S. states. Jelsma notes that other countries have simply de-prioritized “chasing cannabis users” and that in most european countries, those found with up to 30 grams are rarely prosecuted.

&KDUWLQJ�WKH�JOREDO�FUDFNGRZQ,Q�WKH�EHJLQQLQJ��LQWHUQDWLRQDO�GUXJ�FRQWURO�KDG�EHHQ�PRUH�UHJXODWRU\�WKDQ�SXQLWLYH��DFFRUGLQJ�WR�D�*OREDO�&RPPLVVLRQ�RQ�'UXJ�3ROLFLHV working paper�DXWKRUHG�E\�0DUWLQ�-HOVPD�RI�WKH�7UDQVQDWLRQDO�,QVWLWXWH��,Q�������WKHQ�8QLWHG�6WDWHV�3UHVLGHQW�5LFKDUG�1L[RQ�ODXQFKHG�WKH�8�6��OHG�ZDU�RQ�GUXJV��LQLWLDOO\�WDUJHWLQJ�0H[LFR��ZKLFK�KDG�EHFRPH�a big supplier of cannabis and heroin to the

8�6��PDUNHW��VHH�LQIRJUDSKLF�EHORZ���-HOVPD�UHFRXQWV�KRZ�WKH�8�6��KDG�DOZD\V�OHDQHG�WRZDUGV�SURKLELWLRQ�DQG��WRJHWKHU�ZLWK�&KLQD��HYHQ�ZDONHG�RXW�RI�WKH������,QWHUQDWLRQDO�2SLXP�&RQYHQWLRQ�EHFDXVH�LW�ZDV�KRSLQJ�IRU�PRUH�UHVWULFWLYH�PHDVXUHV��

Traditional colonial powers such as Great Britain,

)UDQFH��WKH�1HWKHUODQGV��DQG�3RUWXJDO�ZHUH�PRUH�VNHSWLFDO�RI�WKH�UHVWULFWLYH�8�6��VWDQFH��SHUKDSV�EHFDXVH�DOO�RI�WKHVH�FRXQWULHV�KDG�SURÀWDEOH�GUXJ�PRQRSROLHV�RYHUVHDV��,W�ZDV�RQO\�DIWHU�:RUOG�:DU�,,�WKDW�WKH�8�6���´KDYLQJ�HPHUJHG�IURP�WKH�ZDU�DV�WKH�GRPLQDQW�SROLWLFDO��HFRQRPLF�DQG�PLOLWDU\�SRZHU«�ZDV�LQ�WKH�SRVLWLRQ�WR�VKDSH�D�QHZ�FRQWURO�UHJLPH�DQG�DSSO\�WKH�UHTXLUHG�PXVFOH�WR�LPSRVH�LW�RQ�RWKHU�QDWLRQV�µ�6LQFH�WKHQ��LQWHUQDWLRQDO�GUXJ�SROLF\�KDV�IDYRUHG�FULPLQDOL]DWLRQ��

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At the core of criminalization is the premise that the threat of punishment works to deter the use of marijuana while decriminalization, will encourage widespread use which, in turn, will pose a threat to public health.

A 0D\������VWXG\, however, “found no evidence to support claims that criminalization reduces use or that decriminalization increases use.” Craig Reinarman of the University of California in Santa Cruz and colleagues compared cannabis use in Amsterdam, the Netherlands, where de facto

GHFULPLQDOL]DWLRQ�ZDV�DGRSWHG�LQ�������DQG�LQ�San Francisco, California, where the possession RI�PDULMXDQD�PHDQW�D�¿QH�RI�������D�FULPLQDO�record, and a possible arrest and court appearance. 6SHFL¿FDOO\��the researchers found that there LV�QR�VLJQL¿FDQW�GLHUHQFH�between the two cities in terms of “age at onset of XVH��DJH�DW�¿UVW�regular use, or age at the start of maximum use.”

,Q�WKH������ZKLWH�paper “Drug Decriminalization in Portugal: lessons for Creating Fair and Successful Drug Policies,” published by the Cato Institute, constitutional lawyer Glenn

Greenwald says that decriminalization of personal drug use in Portugal “has been a resounding VXFFHVV�´�)RU�LQVWDQFH��IRU�WKH����WR����\HDU�ROG�DJH�group in Portugal, post-decriminalization lifetime usage rates of cannabis, the most widely used drug in the european Union, are the lowest in the region (see IROORZLQJ�JUDSK���,Q�JHQHUDO��OLIHWLPH�XVDJH�UDWHV�LQ�Portugal for almost every substance decriminalized are lower than in the rest of europe.

The Cato Institute paper also notes that, overall, usage rates of prohibited drugs are lower in the eU than in other states that adopt a more criminalized approach. For instance, average cannabis usage rates are lower in the eU than in Canada, the U.S., RU�$XVWUDOLD��7KH������UHSRUW��³Illicit drug use in the

eU: legislative approaches,” from the european Monitoring Centre for Drugs and Drug Addiction �(0&''$��provides an overview of how the GLHUHQW�european Union member-states deal with the issue of personal drug use.

This mirrors the UN’s World Drug

Portugal has the lowest lifetime usage prevalence rate of cannabis

in the European Union. Portugal decriminalized the possession,

purchase, and consumption of drugs such as cannabis, heroin, and

cocaine in 2001 Cato Institute

/,)(7,0(�35(9$/(1&(�2)�&$11$%,6�86(�,1�(8523($1�81,21�����������

5HSRUW������¿QGLQJV��³7KH�UHJLRQV�ZLWK�D�prevalence of cannabis use that is higher than the global average continue to be West and &HQWUDO�$IULFD����������2FHDQLD��HVVHQWLDOO\�$XVWUDOLD�DQG�1HZ�=HDODQG����������1RUWK�$PHULFD����������DQG�:HVWHUQ�DQG�&HQWUDO�(XURSH��������´�7KH�81�report also notes, however, that cannabis use in North America and in majority of Western and Central europe is said to be stable or in decline. overall, however, cannabis use is on the rise, particularly in Asia.

)UDPLQJ�WKH�GUXJ�SUREOHP��The direction RI�GUXJ�SROLF\�LV�GHHSO\�LQÀXHQFHG�E\�WKH�discourse on prohibited drugs and how the drug problem is understood.

A report by the organization of American States �2$6��SURYLGHV�D�JRRG�PDFUR�OHYHO�YLHZ�RI�UHVSRQVHV�WR�WKH�GUXJ�SUREOHP��URRWHG�LQ�WKH�GLHUHQW�FRQWH[WV�in which the problem has been viewed:

���$V�SDUW�RI�D�EURDGHU�SUREOHP�ZKHUH�ZHDN�VWDWH�institutions are unable to manage the corruption and violence caused by organized crime���$V�PRVWO\�FHQWHUHG�RQ�WKH�LQHHFWLYH�DQG�resultant negative consequences of current rigid prohibitionist approaches���$V�DQ�LQGLFDWLRQ�RI�XQGHUO\LQJ�VRFLR�economic problems���$V�D�SUREOHP�WKDW�PRVWO\�KDV�WR�GR�ZLWK�KRZ�SURGXFLQJ�DQG�WUDQVLW�FRXQWULHV�DUH�³VXHULQJ�unbearable and unfair costs.”

The prevalence of cannabis use is higher than the global average in West and Central Africa, Australia and

New Zealand, North America, and Western and Central Europe ��8QLWHG�1DWLRQV�2I¿FH�RQ�'UXJV�DQG�&ULPH

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At a ceremony in Colombia in May, oAS Secretary *HQHUDO�-RVp�0LJXHO�,QVXO]D�SUHVHQWHG�WKH�¿QGLQJV�of the two-part report that Insulza hoped will serve as the basis for a “long-postponed discussion”: The Drug Problem in the Americas and Scenarios for the Drug Problem in the Americas �����������

While not an outright advocate RI�DQ\�VSHFL¿F�course of action such as legalization or regulation, the report provides empirical evidence on the current state of the drug problem in the Americas and four future scenarios that oAS members would likely face depending on their chosen response. Uruguay’s approach is based on an articulation of the drug problem under the second scenario. The report focuses on the situation in oAS member-states, EXW�WKHLU�¿QGLQJV�

could be applied to other countries as well. The following chart summarizes the four scenarios:

The Organization of American States outline four possible scenarios that

member states could face depending on how the drug problem is understood

and addressed �2UJDQL]DWLRQ�RI�$PHULFDQ�6WDWHV

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1DWLRQV·������6LQJOH�&RQYHQWLRQ�RQ�1DUFRWLF�'UXJV��DV�DPHQGHG�E\�WKH������3URWRFRO���0DUWLQ�-HOVPD��WKH�7UDQVQDWLRQDO�,QVWLWXWH·V�'UXJ�DQG�'HPRFUDF\�SURJUDP�FRRUGLQDWRU��argues in this �����UHSRUW�that

the scheduling of substances in

international treaties is plagued

by inconsistencies, partly due to

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7KURXJK�WKH�\HDUV��D�QXPEHU�RI�H[SHUWV�KDYH�VSRNHQ�RXW�DERXW�ZKDW�WKH\�FODLP�WR�EH�WKH�ÁDZHG�FDWHJRUL]DWLRQ�RI�FDQQDELV�DV�D�KLJKO\�GDQJHURXV�VXEVWDQFH��,Q�DQ�$XJXVW�FRPPHQWDU\��´:K\�,�FKDQJHG�P\�PLQG�RQ�ZHHG�µ�QHXURVXUJHRQ�DQG�&11�FKLHI�PHGLFDO�FRUUHVSRQGHQW�6DQMD\�*XSWD�WHOOV�KRZ�PDULMXDQD�ZDV�FODVVLÀHG�DV�D�6FKHGXOH���VXEVWDQFH�QRW�EHFDXVH�RI�FRPSHOOLQJ�VFLHQWLÀF�HYLGHQFH�EXW�EHFDXVH�RI�D�ODFN�RI�LW��*XSWD�TXRWHV�WKH�ZRUGV�RI�'U��5RJHU�(JHEHUJ��WKH�8�6��$VVLVWDQW�6HFUHWDU\�RI�+HDOWK�LQ�������IURP�WKDW�WLPH��´6LQFH�WKHUH�LV�VWLOO�D�considerable void in our knowledge

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active drug contained in it, our

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1HHG�IRU�D�GLVFXVVLRQ�RI�DOWHUQDWLYH�DSSURDFKHV��IXUWKHU�UHVHDUFK�LQWR�FDQQDELV��Decriminalization and legalization are just some of the alternative approaches available to governments around the world, but these only form part of the broader drug policy. Drug control should include harm prevention along with supply-and-demand reduction DQG�DQWL�WUDFNLQJ�HRUWV��7KH�(8¶V�approach stands out as a holistic model. Greenwald points out that the eMCDDA refers to a “global, balanced, evidence-based” approach among eU states. That is, eU states recognize that international cooperation is needed in all aspects of drug policy, from prevention to anti-WUDFNLQJ��WKDW�GHPDQG�UHGXFWLRQ�DQG�supply reduction require equal emphasis, and; that policy decisions must be grounded in empirical data and not on ideological or moral considerations.

It’s been four decades since the U.S. waged its war on drugs, and the evidence suggests that this hard-line approach has had limited success in terms of supply, demand, and harm reduction. Whether Uruguay’s move will be a tipping in the war on drugs remains to be seen, but it’s clear that, concerning sanctions on drug users, policies around the world are veering away from punishment and towards treatment and prevention. World leaders might consider heeding the call of organizations like the oAS and GCDP to join the discussion on possible alternative approaches to drug control. At the very least, further research RQ�WKH�KDUP�DQG�EHQH¿WV�RI�FDQQDELV�LV�needed to enable policy-makers to make better-informed decisions.

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Opinion polls by Cifra show that, while there was a slight

increase in approval and decrease in opposition, majority of

Uruguay’s population is still not in favor of legalizing cannabis &LIUD

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33

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Lou Reed, 71Rock icon /RX�5HHG������passed away�RQ�2FW������IURP�FRPSOLFDWLRQV�IURP�OLYHU�disease��5HHG�ZDV�JXLWDULVW��songwriter, and vocalist for

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PDQDJHG�E\�$QG\�:DUKRO and

which, despite its relative lack

RI�FRPPHUFLDO�VXFFHVV��KDV�since been regarded as one

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+RW�sauce

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