4 Tips to Defend Against Hackers When Traveling Overseas

 

Feb. 6, 2013

The finger-pointing continues over the sources of cyber attacks on The New York Times and Wall Street Journal. The U.S. government and the publications have accused China of malfeasance. But China’s Ministry of Foreign Affairs and two Chinese academics dispute the allegations.

In citing a Chinese government study, the academics were quoted in several published reports claiming China is a victim – 12,513 Chinese Web sites including 1,167 governmental sites were attacked from April to December of 2011. (To see these articles, Google: “Chinese experts slam U.S. hacking accusations.”)

The government report claimed that 11,851 foreign IPs were responsible for the attacks and that 28.1 percent of them originated in the U.S.

“The accusations are unreasonable and irresponsible,” the publications quoted Professor Zhou Shijian, a senior researcher with the Center for US-China Relations of Tsinghua University in Beijing.

The U.S. accusations were disingenuous “both in legal basis and logics,” claimed Professor Liu Deliang, director of the Beijing-based Asia-Pacific Institute for Cyber-Law Studies. Professor Liu said the attacks on the U.S. publications could have been instigated by individuals, not the Chinese government.

“In the end, the accusation is nothing more than an excuse for the United States to wage wars on network security, and also for its trade protectionism, economic and foreign sanctions purposes,” he claimed. He contends the U.S. wants “hegemony” on the worldwide Web.

My sense is that both professors could be more diplomatic in their reactions.

After all, just ask Google. Given China’s record of censorship, hacking and countless violations of human rights, humor me. The professors’ claims appear to be mere symbolic acts of patriotism.

But whatever the origins of the cyber attacks, they serve as urgent reminders for businesspeople to exercise due diligence.

Protect against hackers when traveling

To defend against overseas hackers when traveling, at the minimum, here are four practical tips:

1. Don’t travel with your notebook computer that contains proprietary information. When you return home, clean your computer.
2. Remember you can’t watch your computer at all times. Your data can be stolen in customs or from your hotel room. Once there, use an encrypted drive and lock your computer in a hotel safe.
3. Don’t take your mobile device. Instead, get a pay-as-you-go phone. Otherwise, you take a big risk. Use a strong password so no one can access your data or e-mails.
4. Don’t use WIFI. And don’t conduct sensitive financial business, such as logging into your bank account.

From the Coach’s Corner, for additional insights, see: 11 Travel Tips – Save Money, Prevent against Cyber Theft, Fraud

It’s not whether you win or you win or lose, but how you place the blame.

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 

Will Manufacturing Jobs Return to U.S. from China?

 

Will federal, state and local governments change public policy to take advantage of economic developments in China?

With China’s gross domestic product dropping sharply, reportedly to 7.5 percent, vehicle sales down 1.3 percent, labor shortages, and the second-largest economy experiencing a real estate bubble with lower sales prices – it would appear China’s economic problems are worse than expected.

Plus, a study by a world-class consulting firm offers hope to regions in the United States beleaguered by high unemployment – the firm predicts labor issues in China mean U.S. firms will be less-inclined to offshore jobs.

As some U.S. states develop reputations as low-cost manufacturing centers and China’s wages increase, offshoring of jobs is expected to decline in five years, according to an international consulting firm. That’s the essence of a 2011 study by The Boston Consulting Group (BCG).

The firm’s report: “Made in the USA, Again: Manufacturing Is Expected to Return to America as China’s Rising Labor Costs Erase Most Savings from Offshoring.”

As usual, BCG offers enlightening insights.

“With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly,” said the firm’s press release. “Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama—increasingly competitive as low-cost bases for supplying the U.S. market.”

That’s thanks to a labor-shortage issue.

“All over China, wages are climbing at 15 to 20 percent a year because of the supply-and-demand imbalance for skilled labor,” said Harold L. Sirkin, a BCG senior partner. “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years.”

It’s a complex issue, but BCG further explained the rationale.

“After adjustments are made to account for American workers’ relatively higher productivity, wage rates in Chinese cities such as Shanghai and Tianjin are expected to be about only 30 percent cheaper than rates in low-cost U.S. states,” stated the press release. “And since wage rates account for 20 to 30 percent of a product’s total cost, manufacturing in China will be only 10 to 15 percent cheaper than in the U.S.—even before inventory and shipping costs are considered.”

Cost advantages in China will lessen

“Products that require less labor and are churned out in modest volumes, such as household appliances and construction equipment, are most likely to shift to U.S. production,” according to BCG’s Web site. “Goods that are labor-intensive and produced in high volumes, such as textiles, apparel, and TVs, will likely continue to be made overseas.”

Sirkin, who authored “GLOBALITY: Competing with Everyone from Everywhere for Everything,” advised U.S companies to examine all the labor costs.

“They’re increasingly likely to get a good wage deal and substantial incentives in the U.S., so the cost advantage of China might not be large enough to bother—and that’s before taking into account the added expense, time, and complexity of logistics,” said Sirkin.

BCG said the reversal has started.

“Caterpillar Inc., for example, announced last year the expansion of its U.S. operations with the construction of a new 600,000-square-foot hydraulic excavator manufacturing facility in Victoria, Texas,” the press statement indicated. “Once fully operational, the plant is expected to employ more than 500 people and will triple the company’s U.S.-based excavator capacity.”

Caterpillar acknowledged why.

“Victoria’s proximity to our supply base, access to ports and other transportation, as well as the positive business climate in Texas made this the ideal site for this project,” said Gary Stampanato, a Caterpillar vice president.

Two other companies change course

“NCR Corp. announced in late 2009 that it was bringing back production of its ATMs to Columbus, Georgia, in order to decrease the time to market, increase internal collaboration, and lower operating costs,” said the consulting firm. “And toy manufacturer Wham-O Inc. last year returned 50 percent of its Frisbee production and its Hula Hoop production from China and Mexico to the U.S.”

U.S. unions, of course, have been an obstacle.

“Workers and unions are more willing to accept concessions to bring jobs back to the U.S.,” noted Michael Zinser, a BCG partner who leads the firm’s manufacturing work in the Americas. “Support from state and local governments can tip the balance.”

Mr. Zinser said U.S. executives need to look a bigger wage-cost picture.

“If you’re just comparing average wages in China against those in the United States, you’re looking at the problem in the wrong way,” Zinser cautioned. “Average wages don’t reflect the real decisions that companies have to make. Averages are historical and based on the country as a whole, not on where you would go today.”

Another factor is labor shortage.

“In the U.S., we have highly skilled workers in many of our lower-cost states. By contrast, in the lower-cost regions in China it’s actually very hard to find the skilled workers you need to run an effective plant,” added Doug Hohner, another BCG partner who focuses on manufacturing.

China will continue as a major player in manufacturing U.S. products, but Mr. Hohner offers these forecasts:

• First, investments to supply the huge domestic market in that nation will continue.
• Second, in the absence of trade barriers that prevent offshoring, Western Europe will continue to rely on China’s relatively lower labor rates since the region lacks the flexibility in wages and benefits that the U.S. enjoys.
• Third, even though other low-cost countries—such as Vietnam, Thailand, and Indonesia—will benefit from companies seeking wage rates that are lower than China’s, only a portion of the demand for manufacturing will shift from China. Smaller low-cost countries simply lack the supply chain, infrastructure, and labor skills to absorb all of it.

Public policy

My sense is the big question is whether government will start doing the right thing in public policy? Oops, that goes for unions, too, and the ostensible political motivations of the National Labor Relations Board (NLRB).

A brouhaha comes to mind – those issues over Boeing launching a manufacturing plant in South Carolina. For years, state government and union political activity gave the aerospace giant no option, but to look for a better locale-alternatives to build the 787 Dreamliner.

You’ll recall the disingenuous complaint by the National Labor Relations Board against Boeing. It took months to settle.

So we don’t forget, here was the issue:

An editorial, “The right way to win Boeing jobs for Washington state” in a Tacoma, WA newspaper, The News Tribune, made a salient comment: “The NLRB complaint – which alleges that Boeing retaliated against its workers for striking when it choose to expand in South Carolina rather than Washington – appears to be little more than an attempt to assuage battered union interests.”

In a similar editorial, “NLRB complaint against Boeing needs critical look,” The Seattle Times cited President Obama’s rhetoric about generating jobs.

“Really a president does not create manufacturing jobs. He creates policies that may encourage companies to create jobs — companies like Boeing, which has now had the creation of 1,000 jobs in South Carolina second-guessed by Obama’s National Labor Relations Board,” wrote the editorial writers.

“In its complaint, the NLRB is attempting to reverse a U.S. investment by the nation’s No. 1 exporter 17 months after the company decided to make it — after the money has been spent, after the equipment is set up and after 1,000 workers have been hired. In South Carolina, assembly of the first 787 is scheduled to begin this summer. For the government to demand now that the company move everything to another state shows no sense of practical reality,” the newspaper asserted.

Let’s hope BCG is right and the manufacturing jobs return. But more than political rhetoric, we need competence in government. If the right public policies are implemented, political and economic liberties will improve for everyone – not just the unions’ leadership.

From the Coach’s Corner, here are more thoughts on job creation: Will public officials listen to Intel’s CEO?

“I don’t make jokes. I just watch the government and report the facts.”
-Will Rogers

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

 

How China-Google Controversy Might Affect Business, Government Security

 

Updated 6:50 p.m. April 20, 2010

The security issue between China and Google appears to be taking on new ramifications – threatening proprietary information for business and government agencies, if they do business with the giant search engine.

When Google was hacked last year by cybercriminals in China, they stole a computer program that managed access to Google’s programs, according to a New York Times article Monday. In the past, Google has denied hackers were able to access personal information from Gmail accounts, but the search engine did not respond to The New York Times report.

“As the story makes clear, businesses considering cloud services like those offered by Google, Amazon and others must ‘look before they leap’,” warns Internet security expert Stan Stahl, Ph.D., Citadel Information Group, Inc. (www.citadel-information.com).

“While it’s probably obvious to look at the security provided by the cloud provider, less obvious is that the business needs to also look at that part of security that will still be its responsibility, the part of security that the cloud service provider isn’t providing,” says Dr. Stahl, as the go-to security authority.

“Security can never be a matter of looking at ‘this’ or ‘that.’ Security must always be about looking at ‘this’ and ‘that’,” he adds.

As a management consultant, I wonder about two other questions:  What about the privacy of Google’s services and business and government agencies? Is the threat to Google’s business model more severe than first thought?

Google’s services for the private and public sectors are not limited to the following but they include:

•  AdSense is a platform for publishers to generate income by displaying a bevy of click-through advertisements, but Google requires sensitive information in order for publishers to receive payment. Google’s AdSense automatically inserts display and text ads, which are frequently changed.
• Google Analytics is a service that helps Web site owners to understand how they’re faring with visitors , such as how they reach your Web site and what they visit.
• AdWords is a sponsored links section. It’s the largest service of its kind and Google has the No. 1 market share.
• Merchant Center uploads product listings in for use in a variety of ways. They include AdWords ads, Google Search, Google Product Search, and Google Commerce Search.
• Checkout helps businesses increase sales by selling online.
• Website Optimizer, with access to sites, tests content in order for publishers to optimize the conversion rates of their visitors.

There are other Google services, but you get the idea.

The news article provided more alleged details that include Google’s “Gaia.” That’s Google’s stolen password system. Gaia is the Greek mythological goddess of earth. Gaia managed the entry to its services for the private and public sectors.

For more of the report’s details, see: Cyberattack on Google Said to Hit Password System

If The New York Times article is accurate, and my Biz Coach sense is that it is, businesses and public agencies doing business with Google might want to consider a security-needs assessment by a qualified expert. This is also a bigger threat to Google’s business model than we first believed. Google deserves support on this security issue.

(Disclosure: This site published Google public service messages.)

From the Coach’s Corner, in a new related development, BusinessWeek reports government criticism of Google in this article: Google Is Neglecting Online Privacy, Authorities Say

Also, worth reviewing are two Biz Coach columns regarding Internet security:

How to Protect Yourself from the Internet Crime Wave

Business 101 Lessons: Google vs. China’s Censors, Cybercriminals

Business 101 Lessons: Google vs. China’s Censors, Cybercriminals

 

January 13, 2010

So Google is finally paying attention to a free-enterprise business compass. In other words, the search engine is threatening to extract itself from China over censorship and cybercrime issues. Because it’s a huge marketplace, Google and other companies have been tolerant of such problems.

Actually, tolerating an uncontrollable, hostile environment violates principles in best-practices management. So it’s a tardy development, but let’s roll out the welcome mat.

After President Nixon bridged the diplomatic gap between the U.S. and China in 1972, companies and nations have tolerated and perhaps even encouraged China’s behavior – censorship, violation of human rights, intellectual-proprietary thefts, currency manipulation for cheap exports, other discriminatory-protectionism policies, and Communist Party activities.

In 2006, I wrote that I was disappointed by the decisions of Internet companies that decided to acquiesce to China’s behavior and environment. It’s one thing to accept it, but another to condone it and build a business model around it.

My reasons:

• Values matter
• The free-enterprise system works best
• Economic and political freedoms are connected – lose one and you lose the other

Business Leadership

To be a business leader, it’s important to know who you are…what your roots are…plan strategically…and always try to do the right thing – even if your decisions and actions are unpopular.

Actually, this principle applies to all facets of life and even sports. And I love writing sports metaphors for business topics.

For example, many Seattle Seahawks’ fans were delighted with the selection of Pete Carroll as coach, especially, after his initial press conference upon being hired away from the University of Southern California. That was when he explained why he was previously unsuccessful in the NFL. By any standard, he was dominant in his tenure at USC.

Before coaching at USC, his pro football teams – the New York Jets and New England Patriots – were mediocre. It was refreshing when he admitted in Seattle that he didn’t know himself or who he was in his earlier pro jobs.

In referring to his new team he made this comment: “When we start this thing off, they’re going to know where I’m coming from, because I know where I’m coming from.”

One of his Seattle predecessors, Cleveland Browns executive Mike Holmgren, had success as coach of the Seahawks and Green Bay Packers. But he was unsuccessful his first four years in Seattle because he was both coach and general manager. It was only after the management responsibilities were taken from him that he coached the team to the Super Bowl in 2005. During that time, I speculated that his lack of success stemmed from the Peter Principle. In essence, people rise to their level of incompetence.

Few people are equipped to handle both responsibilities. Even if they have all the technical and management skills, their attention to detail, energy and efficiency will plummet.

So possibly, the Google brain trust needed to learn about themselves and the downsides from conducting business while abandoning their values.

Socrates was right

Ancient Greek philosopher Socrates is known for his aphorism: “Know thyself.” And it’s right out of my human resources training materials.

For individuals, a complete self-assessment of strengths and weaknesses is the key to success. Once an employee knows who she or he is, then it’s possible to effectively set goals. Then, execution comes into play.

For success in business, an analysis of strengths, weaknesses, opportunities and threats will pave the way for writing a productive strategic plan and a business plan. And again, it’s important to execute.

Google’s courage will help other businesses to fully realize about the problems associated with foregoing their values in order to do business in China. Certainly, it will be a catalyst for discussion.

Google believes its security was violated by hackers based in China. But there is probably another motivation.

The search giant has relatively little to lose unlike companies such as General Motors. China is a profit source for GM. Depending on your preferred source of information, Google’s search market share ranges from less than 20 percent to 35 percent. But it isn’t enjoying bountiful profits because e-commerce is not as big in China as the rest of the world.

Here is Google’s explanation  of its new perspective.

Let’s hope others are paying attention.

From the Coach’s Corner, what is your profit forecast this year?

Here is a top-10 checklist for profits:  

1. Review and fine-tune your business plan. Be sure to discern your competitive landscape and benchmark your main competitors.
2. Bring on the A team – both in staff and advisors. Recruitment and training will remain important, and seek the best mentors and professionals for inspiration to help you sustain growth.
3. Remember Pareto’s Principle – the 80/20 rule – that applies to you and your business in a variety of ways. It means, for example, that 80 percent of your revenue comes from 20 percent of your customers. So evaluate how you spend your time and resources.
4. Enhance your staying power by concentrating on your most profitable customers while identifying new revenue sources.
5. In prospecting and marketing, select and target the right customers.
6. Add sizzle by improving your niche-performance. Uniqueness will count even more in this year.
7. Watch your cash flow and your firm’s overall budget each week.
8. Focus on quality in your business processes – make it your No. 1 job.
9. Innovate – plan for more marketplace changes and evolving consumer preferences.
10. Practice the art of mental toughness. Remember when it’s appropriate to ignore the opinions of others, and to persevere in your dreams against seemingly insurmountable odds. I’m still marveling at the success of my mother, who is in her eighties. She was diagnosed with macular degeneration, which meant she couldn’t read the newspaper. A couple of years ago, she had life-threatening complications from back surgery. A few weeks later, she was back in intensive care and doctors warned she wouldn’t walk again. Well, guess what? She’s walking, passed her driver’s test, and once again insists on preparing full-course meals, especially at family gatherings.  Mmm, delicious! Go mom!

Has China Prompted U.S. Tech Innovation and Funding?

Rare earths are critical. Hopefully, recent developments are much like the U.S. space program thwarted Sputnik threats in the 1950s.

 

While China depends heavily on commodity imports to fuel its economy, the country has developed a strategic advantage in technology with serious implications for U.S. security. And as Google has learned, China has cybersecurity issues.

China has surpassed the U.S. as a provider of technology information and products. China has also cornered the market in minerals known as “rare earths,” which are needed for production of technology products, such as computer disk drives and missile guidance systems.

Aside from dominance in the rare-earth sector worth about $1 billion, such developments have serious implications for the U.S. in commercial and military development. The minerals include cerium, dysprosium, lanthanum, and neodymium. China has invested in its rare-earths mines. But it now has gained control of processing technology and has underwritten the largest system of rare-earth research and development in the world.

Helping to fuel its growth, many U.S. companies have moved sophisticated facilities for manufacturing and research and development to China. The companies include Cisco Systems, Microsoft, Motorola and Nokia. That was 10 years after two Chinese companies, with the help of U.S. partners, reportedly bought an Indiana company, Magnequench. Magnequench was responsible for 85 percent of minerals used in the production of “smart bombs” for the U.S. armed forces.

That meant the U.S. military no longer has such a domestic manufacturer using rare earth technology.

In addition, you might remember the China-Unocal controversy in which the oil company was eventually acquired by Chevron. It’s now theorized that the state-run Cnooc also coveted Unocal because its subsidiary, Molycorp, owns the only rare earth mine in the U.S., but it isn’t operational for economic and environmental reasons.

China’s Partners

China has made global friends by initiating other global information-technology inroads:

It  inked an agreement with Kenya to provide low cost wireless e-mail and telephone services. Kenya is in an 800-million person continent where such technology has been unfathomable in many areas.

A Chinese company also built a major telecommunications facility in Angola. Surprisingly, the Chinese company will forego revenue opportunities to service Angola’s new telecommunications system.

China is also making inroads in radar and remote sensing technology in the use of microwaves for high-resolution aerial pictures. Scientists can now take aerial photos that have greater clarity even under difficult inclement conditions, day or night, even to photograph underground objects. The new system is called Synthetic Aperture Radar, or SAR.

The applications for aircraft and satellites are enormous – from agriculture to defense.

China has developed another global ally in economics and politics – Spain. Ostensibly, hoping for economic favor, José Luis Rodríguez Zapatero – the socialist Prime Minister of Spain – lobbied to remove the U.N. arms embargo of China.

Senor Zapatero was also instrumental in the sale of 20 Airbus A330 jets to Air China. Spain, Germany, France and the UK help underwrite Airbus. The jets were worth $3.1 billion.

The socialist is reportedly a devotee of the late Chinese Premier Mao Tse-tung, who was a founding member of the Chinese Communist Party in 1921.

Possibly prompted by such developments involving China, a bipartisan series of bills were introduced in the U.S. Senate to step up spending for domestic scientific education and research. Co-sponsors are also citing competition from India.

A package of legislation known by the acronym PACE, or Protect America’s Competitive Edge, was prompted by 20 recommendations by the National Academy of Sciences in 2006. The organization called for job creation and innovation.

PACE doubled funding for research, provided scholarships to entice new math and science teachers, and extended the credit for research and development. It altered the visa process to encourage foreign students to remain in the U.S. after they complete their educations.

The minimum price tag for the first year: $9.5 billion. It received support, for example, from the Institute of Electrical and Electrical Engineers – U.S.A. The public-policy group was formed in 1973 and has 235,000 members.

PACE captured headlines abroad. A headline in The Indian Express read: “U.S. tech bill: Boost our team but retain foreign talent.”

Competition from China and India and the resulting Senate bill and a wave of patriotism are reminiscent of a major event nearly 50 years ago during the Eisenhower presidency. Those were simpler times when manual typewriters were widely used, many Americans used a party-line telephone with their neighbors, and there was no Super Bowl.

Suddenly, the Soviet Union launched Sputnik I into space in the fall of 1957. Just weeks later, Sputnik II was launched carrying a dog. That was powerful stuff just before America was to celebrate Thanksgiving. Americans were caught off-guard and they went on alert.

Those two colossal events were the catalysts that prompted the U.S. to massively promote science and technology.

It marked the launch of the space age and the space race between the U.S. and Soviet Union, which deepened the perceived threat to Americans at the height of the Cold War. I was very young, but I remember the bold headlines and elementary-classroom safety drills, as Americans were fearful of the implication that Soviet nuclear-armed missiles would be capable of demolishing the U.S.

The difference between then and now is that relatively few Americans today seem to notice the threat to this nation from abroad in science and technology.

High school dropout rates are enormous. Even with the current resurgence in MBA school enrollments, it’s still troubling that only about 25 percent of young Americans are interested in obtaining an undergraduate degree.

In 1956, President Eisenhower was sufficiently liked by a majority of voters who enabled him to easily ride to re-election on an “I like Ike” theme. He couldn’t acknowledge that the U.S. already had significant knowledge about the Soviet military and space buildup, as a result of the CIA’s reconnaissance U-2 spy plane built by Lockheed. But the Soviet threat was widely acknowledged in this country and it was easy to rally Americans.

That’s not the case now.

While a significant number of Americans are wringing their hands about job outsourcing, many parents aren’t stressing education to their children. They aren’t connecting the dots between quality jobs and education.

The principles behind PACE haven’t solved the underlying cultural issue – nonchalant American attitudes toward education. America needs leadership for a well-orchestrated, bipartisan promotional effort to motivate parents and children about the benefits of higher education. We can’t afford not to get it done.

From the Coach’s Corner, for competitiveness, here’s more on America’s education needs:

• Keys to Economic Development: Managing Ignorance
• Study: Unemployment Stems Partly from Deficient Worker Skills, Education

“A people that values its privileges above its principles soon loses both.”

-President Dwight D. Eisenhower 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.