Barcelona is one of the best cities in the world. But unemployment is also one of the highest of the cities of Europe. Attending SIME in Barcelona I had the following idea. In the past tax free areas were created at airports, or in countries that wanted to have tax free zones for manufacturing. Barcelona still has a Zona Franca. But in the service economy that we live in now there are new impediments to entrepreneurship. Especially in Spain where entrepreneurs are always personally liable for their ventures, where it is hard to create a new business, where the government is always on your back. So I propose that Barcelona starts a Zona Franca de Emprendedores. Now how could an Entrepreneurship Zone work? Well it would be a closed area in which rules are different. For example social charges are not 50% over salaries as they are in some cases but they are say 10%, and so are taxes that employees pay, but also social benefits are low, no unemployment insurance for example cause as we know to find the winning start up an economy has to accept many start up failures. Barcelona already has @22, the entrepreneurship district. It just needs to change the working rules for those who work there. No income tax, no unemployment insurance.

Last night, at Google Zeitgeist, Google Called Home. Or at least my original home, South America. Samba, Capoeira, Tango, it was a fantastic party.

Here´s the video

And here are some pictures

And these are Loic Lemeur pictures, as you can see we were hanging out together. My pictures are taken with a Nikon D90 with an 85mm 1.4 lens. His pictures some of which I took myself are taken with a Canon Mark II D5, 85mm 1.2. I think I am soon trading my $2000 solution for his heavier, more expensive ($5000) but undeniably better camera.

Dieter Zetsche who runs Daimler AG, tells a story of an experiment with mice. When they are placed in a new environment with 3 different corridors they explore them all til they find the cheese. But when they find the cheese, if the cheese is always at the end of the same corridor for a while, in the future they stop looking. So if the cheese is later delivered at the end of another corridor they don´t look for it anymore and surprisingly….starve. He says he wants his company Daimler AG not to behave like the mice. And he gives an example of what Daimler is doing to be innovative. His example is Car to Go. But as we know these services have existed for many years. Its like ZipCar. But I guess the novelty is that a huge car company may embrace a concept like ZipCar.

In the long run is either go green or go bust but then Dieter says that there are 800 million cars in the world and 2 billion consumers waiting for one. I don´t want to think what the global atmosphere would look like if we had 3 billion cars.

He ends his speech with an analogy with dinosaurs and the car industry. These people should not be allowed to talk about dinosaurs as the more they talk about them the more they look like them.

Kudos for Chrystia Freeland, she is so very pregnant and flew in last night to moderate this panel. She also has two other girls at home in NYC. But I also feel sorry for her. And for all of us who many times have to choose between children and work.

At Google Zeitgeist I hear Lord Mandelson say two things about the quality of government that make sense. One is that the better a government in a country the more tolerant people are of globalization. The second one is that the more demanding consumers of a country are the better they are at choosing politicians.
Still listening to the UK Secretary of State for Business I get a sense that top politicians are as much witnesses of this global crisis as top people in business. The only “real” actor in these times is the crisis itself. Everyone else watches the data and tries to cope.

Santander from Spain is one of the most valuable banks in the world by market cap. Indeed if it were a US bank it would be the third most valuable bank in America. That is truly remarkable for a Spanish bank. But today I read a piece of news that intrigued me. That in order to get rid of real estate that it got as a result of bad loans it sells apartments at a discounts to its employees and relatives of its employees. Personally I think that having a loan portfolio that is exposed to your own employees is not a great idea. Neither is the concept of favoring your employees over your customers or anyone else for that matter. If I were a shareholder of Santander I would just want Santander to sell its real estate at the best available price in the marketplace.

I don´t get it. I am in NYC having dinner with my eldest daughter, Alexa, a freshman at Columbia University. She is telling me about her “History of the Middle East” class and, in passing, she says that there are 300 students in her class. 300 students? Alexa´s tuition is $25K per year and she takes 10 classes. Therefore each class is $2500, so here there are 300 kids each paying $2500 or the crazy amount of $750K for a class that has 28 sessions of an hour and 15 minutes. The professor who teaches that class can´t possibly be making more than $50K just for teaching that class as he must do a lot else, and professor salaries, I estimate, cannot be much more than $200K per year. So the gross profit on that class is $700K. Now how can an institution that can make $700K on one course lose so much money and constantly be asking all of us ex-alumni to contribute to it? I haven´t studied the university income statement in detail but it sounds to me that these large courses must be cash cows. Of course Columbia has tons of expenses, administrators, teaching assistants, grants and so on, but still it seems to have an amazing top line and a terrible bottom line.

It is interesting to see that the Spanish Flu epidemic of 1918 which killed from 3% to 5% of the population of Berlin, Paris, New York started slowly in the Spring and Summer and then went wild in the Fall killing most of its victims then. Flu spreads by proximity and physical contact. In the Fall schools start, people go indoors, and the chances of contact greatly increase. But what´s different now is not the medicine itself that has advanced very little against viruses but that we have the Internet. If the current Flu epidemic killed over say 300 people in Spain I would probably tell people at Fon to work at home over the Internet. I would not ask people to risk their lives to work at Fon. I would not send my children to school either and would ask them to study over the Internet. I would establish a plan to limit contact with the outside world, would stop traveling and would wait. I see Skype type products usage exploding if the Pandemic happens. I just hope it goes away though. News from Mexico were encouraging this weekend.

The majority of deaths came in the Fall

graph via www.investorconundrum.com.