Can good ideas make tons of money?
While billionaires are fewer, some turn to apt-tech
Whoís going to end up owning the technologies of the future? We trim, blend, and append two 2009 articles from (1) The Sunday Times, March 1, on eco barons by Philip Beresford (via reader Robert Blau), and (2) Reuters, Sept 15, on world wealth by Joe Rauch.
by Philip Beresford and by Joe Rauch
Eco barons lead the way
This first Sunday Times Green Rich List has unearthed 100 tycoons or wealthy families worth £200m or more who have made either serious investments in green technology and businesses or hefty financial commitments to environmental causes. In total, the Green 100 are worth nearly £267 billion.
Warren Buffett (worth £27 billion) and Bill Gates (worth £26 billion), who regularly swap places at the top of Forbes magazine's annual list of world billionaires, have spent some of their financial firepower going green. Gates has backed alternative fuels such as oil from algae. Buffett has invested $230m in the Hong Kong battery-maker BYD.
Many of the 35 Americans in the Top 100 are drawn from Silicon Valley: e.g., Google's Larry Page and Sergey Brin (each worth £7.5 billion).
JJS: A smile pile of wealth is one thing but an enormous fortune is something else, a magnification of the original pile by government involvement. On one hand, inventors are due hefty rewards, but on the other, patents enclose the knowledge commons, excluding creative latecomers, swelling an original fortune to many sizes greater than a just return.
While a government granting patents well below their market value is one way politicians enable some to amass outrageous fortunes, regular old subsidies -- corporate welfare -- is another.
It helps that the Obama administration is committed to a huge stimulus package involving the very technologies that investors are focusing on. Even tycoons who are not in President Barack Obama's camp have moved into alternative energy. T Boone Pickens, oil explorer, corporate raider, and a Texan Republican, is investing part of his £1.8 billion fortune in wind turbines.
The 17 Chinese tycoons in the Top 100 are almost exclusively involved in solar and electric-car technology. Concentrated at the bottom end of the list, all the Chinese fortunes have been hammered as share prices have fallen sharply. A year ago, many would have been in the Top 50.
There are 10 British or British-based tycoons on the list. Sir Richard Branson (Virgin Atlantic and Records), is investing in alternative fuels.
The seven German tycoons are largely involved in wind turbines and the like. Aloys Wobben, a German engineering graduate, started Enercon in 1984, building his first wind turbine in his back garden. Today the company exports sophisticated turbines all over the world. German entrepreneurs who have made their fortunes elsewhere are also moving into green technology in a serious way. Twins Andreas and Thomas Strungmann, who built a £6.8 billion pharmaceutical fortune, have sold their pharma business and put many millions into saving a German solar company.
America's wealthy are not just investing in new technology, they are also spending their fortunes on direct environmental activism, saving large tracts of wilderness from developers, endowing university research into green energy, and climate change.
Read the Green Rich List click here
JJS: While going green to magnify a fortune may not be a sure thing, itís probably not any riskier than conventional investments.
World wealth down 11%, fewer millionaires
The 2008 global recession caused the number of millionaires worldwide to shrink 17.8% to 9 million, the Boston Consulting Group found.
Europe and North America posted 22% declines. The United States still boasts 3.9 million millionaires, the highest population on the globe.
Singapore had the highest density of millionaires at 8.5% of the population. Other countries included Switzerland, at 6.6%, Kuwait, at 5.1%, United Arab Emirates, at 4.5%, and the United States, at 3.5%.
Also, assets under management contracted worldwide for the first in nearly a decade; wealth dropped 11.7% to $92.4 trillion.
North America, particularly the United States, was the hardest hit region, reporting a 21.8% decline in wealth firms' assets under management to $29.3 trillion, primarily because of the beating US equities took in 2008.
Also hit hard were off-shore wealth centers, like Switzerland and the Caribbean, where assets declined to $6.7 trillion in 2008 from $7.3 trillion in 2007, an 8% drop.
The downturn has "shattered confidence in a way we have not seen in a long time," said Bruce Holley of BCG.
Europe posted a slightly higher $32.7 trillion of assets under management, edging out North America for the wealthiest region, though the total wealth in region dropped 5.8%.
Latin America was the only region to report a gain in assets under management, posting a 3% uptick from $2.4 trillion in 2007 to $2.5 trillion in 2008.
A return to 2007 levels of wealth, $108.5 trillion, will take six years, until 2013, according to the BCG.
JJS: In six years, could poverty be wiped out? Sure, with sufficient political will and with geonomics in place. While earning a fortune is fine, can one really earn a mega-fortune? Itís hard to see how anyone is worth several thousand times as much as another human being.
While outrageous fortune may indicate economic injustice, redistribution is no solution. What works instead is to ensure that every penny received be earned and every penny earned be received. That calls for a policy of geonomics, of shifting taxes off earnings, sales, and buildings, onto pollution, depletion, and exclusive claims to locations, while shifting subsidies out of programs for special interests, instead benefiting the general welfare, specifically paying a dividend to citizens.
Getting your share of the commonwealth, of Earthís worth, then you, too, can enjoy leisure and park your savings in cutting-edge ways to spare the earth.
Jeffery J. Smith runs the Forum on Geonomics.
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