Comparing Wisconsin to the Middle East protests in general and Tunisia in particular seems a little silly at first.  Wisconsin is nowhere near as extreme as Tunisia, the privileges the union is trying to protect and their potential to turn into a scene of large scale destruction** is lower than anything going in the Middle East.  But they do have something in common with Tunisia, Wisconsin will give people feedback on how successfully they can manipulate the political system by mobilizing people for large scale protests.

In 1959, Wisconsin became the first state to give their employees collective bargaining rights. They are going to be a trend setter again. The only question is whether they are setting the trend of disempowering public sector unions or increasing the power of public protests.

**Museums are unlikely to be looted and police stations probably won't be burned down.

So AOL is making a lot of money from old people who can easily unsubscribe while keeping their email adress. PC magazine said the money AOL was making from these old people was $244 million in Q3 of last year.  With this information in mind, it seems strange that AOL would do something that could get a lot of those old people very angry. With the decision to buy the Huffington Post, they also decided to become the face of liberal media online. While the stock market's reaction implies that the $315 million dollar purchase was a bad idea on its own merits, they are probably missing the consequences of AOL putting a bit "Liberal Media" target on its back.

Most old people lean right.  A 2009 Gallup survey found that 48% of people over the age of 65 identify as conservative while only 16% identify themselves as liberal.  It might not be long until right leaning media personalities decide that they can fight back against liberal media and save their fans money by encouraging them to unsubscribe from their useless AOL accounts. Right now AOL is losing subscribers at a rate of 30% a year. This move may have hastened the decline.  It will be interesting to see if AOL will be able to reinvent themselves and find a new niche to replace the old one they are losing.

I recently came across a Jul 28, 2010 report by the US Chamber of Commerce, China’s Drive for 'Indigenous Innovation' - A Web of Industrial Policies.  While conceptually it might be easy to understand the idea that unconnected foreign businesses are at a disadvantage in China, this report spells out many of the more specific ways that outside companies are put at a disadvantage when doing business in China and how this ties into China's drive for indigenous innovation.  

In the report, it is pointed out that it is clear to everyone that China's see a large part of its growth path through acquiring foreign technology. They show that China's  “The National Medium- and Long-Term Plan for the Development of Science and Technology (2006-2020) defines indigenous innovation as “enhancing original innovation through co-innovation and re-innovation based on the assimilation of imported technologies.”

A lot of these regulations target multinationals who are trying to compete with domestic brands.  The Chinese Compulsory Certification system often delays foreign companies from getting to market before domestic Chinese competitors have had a chance.  Companies that make products with encryption are reluctant to get the certification at all, as the process requires that they trust the Chinese government with proprietary trade secrets.  China also enacted an "Anti-Monopoly Law" in 2008 which some officials are trying to use to justify compulsory technology transfers from foreign companies dominating specific markets to domestic Chinese companies.  The general implementation of IP law is also said to be rather biased towards local companies, either because those enforcing the law have ties to local companies or because the punishment for stolen IP is still rather low unless it happens to be a ruling in favor of a domestic company against a foreign company.

One of the main ways they get this technology is through foreign companies looking for access to the Chinese market.  In return for partnering with a local Chinese company, the foreign company is given access to the large Chinese market with less regulatory hassle and lower tax rates.  

"The indigenous innovation drive is forcing foreign technology companies to anguish over balancing today’s profits with tomorrow’s survival. With its extraordinary infrastructure plans and a continental-sized consumer market that has just begun to really develop, China is a market no multinational can ignore. But the price of admission is getting more expensive by the day as China opens its policy toolbox to ensure that foreign technology allowed into China is accessible for “co-innovation” and “re-innovation” by Chinese companies."

- China's Drive for 'Indigenous Innovation, Page 31

The report then goes on to detail many different industries, from trains to green energy to airplanes where the foreign multinational enters joint partnerships to gain access to China's market and eventually gets supplanted by their former Chinese domestic partners.

The anecdotal evidence in favor of China's rise to technological prominence is just that - anecdotal.  Many of these anecdotes arise from specific mega projects targeted and funded by the Chinese government, so impressive progress is likely to be contained to major areas of interest. Still, there is no denying that domestic Chinese companies are able to copy ideas efficiently from their western competitors/partners.  When companies decide to do business in China, they better be thinking past the next quarterly earnings time period even if the stock market isn't. For some technology companies, it can make sense to move production to China if the other option is going out of business, but companies that have a sustainable business plan should think twice about who they will be competing with in 5 years time.

How this competition impacts the future is open to interpretation. If the low hanging fruit of innovation* has been picked, then it makes sense for the west to become much more protective of giving away any existing technological superiority. If China became as rich as the west in a world without significant innovation occurring, then while China's citizens would be much better off there would also be a major rise in the cost of resources that would lower the standard of living for most people in the west. However, if innovation is occurring on a normal historical course in these and other areas then while companies should protect their trade secrets China's attempts to catch up should not be a problem for anyone but their direct competitors.

*Much more on this later!