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Sunday, May 01, 2011
Elon Musk on Running Tesla Motors and SpaceX - BusinessWeek
Elon Musk on Running Tesla Motors and SpaceX - BusinessWeek
Elon Musk on Running Tesla Motors and SpaceX
The PayPal founder wants to develop the technologies necessary to make life multiplanetary—while running two large companies at the same time
STORY TOOLS
Sam Comen for Bloomberg Businessweek
I've always wanted to be part of something that would radically change the world. In 1995, that was the Internet, which led to PayPal. After it sold, I wanted to create a low-cost Mars mission that would get people excited about space travel. The idea was to land a vehicle with a greenhouse on Mars and establish life there. The problem was finding a rocket. It would have cost about half a trillion dollars for one mission; rockets are not reusable. To make life multiplanetary, you need a transport system that's fully and rapidly reusable. That would lead to a dramatic reduction in costs. In 2002, I started SpaceX to solve those problems.
I run both [electric car company] Tesla (TSLA) and SpaceX myself. It's a heavy workload, and I've never really wanted to run companies. Unfortunately, I came to the conclusion I was better than the CEOs we hired. If I'm not CEO, I can't make the inventions happen in the way they need to happen. Professional managers—MBA CEOs—are not very creative or adaptable, and their skills don't suit a startup. Business is like a multidimensional probabilistic chessboard. The rules aren't set, and the same moves don't always make you win. A lot of people can be really good in a set-piece battle; my biggest differentiating skill is I can invent new pieces.
We're entering the era of commercial space flight, which will advance dramatically faster than in the past. But I made the decision to patent almost nothing: Our competition is the Chinese and Russian governments, against whom patents are unenforceable and can simply be used as a recipe. It's much better for our technology to be trade secrets. I'd rather keep the information to myself. There could be a Chinese spy or a cyber attack, but my CIO is from PayPal, which never got cracked.
People forget the power of inspiration. All of humanity went to the moon with the Apollo missions. The issue was cost. There was no chance to build a base and create frequent flights. That's the problem I would like to solve.
READER DISCUSSION
In 2016 China Will Become The World's Largest Economy
(CNN) – Time may be running out much faster than we thought for the United States.
In just five years, China may lay claim to the title “World’s Largest Economy”. This is not coming from China fearmongers or doomsayers – this is according to the International Monetary Fund and its new GDP forecasts.
The numbers: China’s gross domestic product will rocket $8 trillion in the next five years to $19 trillion. The U.S. GDP will grow $3.5 trillion in the same timeframe to $18.8 trillion. And it will be in that year - 2016 - that China's slice of world output will start to edge past the United States': 18% versus 17.7%. In the years after, that gap is forecast to widen.
So how can this be? And so soon? Especially after numerous prior estimates have forecast China’s #1 status to occur in the 2020s, if not 2050? Well, the IMF has based its predictions on numbers for purchasing power parity, or PPP. This gauges the strength of China's domestic consumption, which is then compared to that in the U.S. The famous Big Mac index is based on this. That operates on the notion that the iconic McDonald’s burger should cost the same in each of the more than 120 countries it’s produced. If a Big Mac costs less in another country, then that country’s currency is considered undervalued. This year, you’ll pay 40% less for a Big Mac in China than in the United States. Digest the implications of that morsel as you keep reading.
I interviewed Frederic Neumann, HSBC’s Managing Director of Asian Economics Research, here in Hong Kong. He confirmed PPP is one credible way to measure GDP, but that there are also other credible ways. Those 'other' ways, he says, show that China’s path to economic #1 is much longer than the IMF’s forecast leads us to believe.
Neumann says U.S. dollar terms are a different way to measure China growth. Using this "it would take much longer for the Chinese economy to overtake the U.S. - probably 2025," And while PPP measures domestic purchasing power, U.S. dollars are a better gauge for purchasing power on the world stage.
Per capita income is a third way to measure economic power. The CIA World Factbook estimates that China’s 2010 figure was $7,400, compared with $47,100 for the United States. With this in mind, Neumann says China might not overtake the U.S. until the 2040s or 2050s - a date more in line with past estimates.
Regardless, it is not a question of "if" but “when” China - which last year overtook Japan as the world’s second largest economy - will be the world’s biggest economy. Whenever it happens, that day will herald a new dawn for China and the end of an age for America.
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