TIME

Morning Must Reads: December 9

Capitol
The early morning sun rises behind the US Capitol Building in Washington, DC. Mark Wilson—Getty Images

Exclusive: Putin Cut Ukraine Criticism From Speech Ahead of Peace Talks

Russia’s President apparently cut out a blistering critique of Ukrainian authorities from a Dec. 5 speech just moments before delivery, TIME’s Simon Shuster reports, as his position on the conflict with his country’s neighbor softens ahead of the next round of peace talks

How Sharing Your Health Data Could Change Medical Research

A slew of companies and organizations promise to tear down barriers to data collection and sharing by encouraging patients to give away their information

Senate to Release Torture Report

The report, expected on Tuesday, will shed light on the CIA’s use of so-called “Enhanced Interrogation Techniques” in the years after 9/11

President Obama Gets Personal With Stephen Colbert

Obama took his first and final turn on the Colbert Report Monday night, fending off verbal assaults from the faux-conservative comedian. The appearance on the satirical show was partly meant to highlight the ongoing open enrollment for health insurance in 2015

Second Nor’easter Is Coming

A second nor’easter in two weeks will slug the Interstate 95 corridor starting Tuesday, prompting winter storm watches and warnings in six states. The storm is expected to arrive with strong winds and 2 in. of rain from Maine to New Jersey

Prince William and Kate Just Met Beyoncé and Jay Z

The momentous encounter took place Monday night at the Barclays Center in Brooklyn, where both couples watched the Brooklyn Nets play the Cleveland Cavaliers, which meant LeBron James was also in the same room. The royal couples had courtside seats, and sat across from each other

New Batch of Ferguson Grand Jury Documents Released

Bob McCulloch, the prosecutor who oversaw the Ferguson police shooting inquiry, has released additional grand jury documents after not including a law-enforcement interview with a key witness in the initial public release of evidence

Portland Tells Uber to Stop Operating

The City of Portland filed a lawsuit against Uber on Monday, alleging that the ride-sharing service broke local codes. Officials said Uber was “in violation of the City of Portland’s Private for Hire Transportation Regulations,” in a suit just three days after Uber’s Portland launch

RNC Chairman Reince Priebus Set for Re-Election Bid

Republican National Committee chairman Reince Priebus formally declared his bid for a third two-year term on Monday evening in an email to members. “With such support it is impossible for me to say no,” Priebus wrote to members of the committee

Sierra Leone Has Highest Number of Ebola Cases

Sierra Leone has surpassed Liberia as the country with the highest number of Ebola cases, according to the most recent World Health Organization statistics. The WHO said transmission of the virus was “intense” in Sierra Leone

Malaria Deaths Nearly Halved Since 2000

According to the World Health Organization’s World Malaria Report 2014, the mortality rate decreased by 47% worldwide since 2000, and the number of infections went from 173 million the same year to 128 million in 2013

Actor Who Played The Addams Family Son Has Died

Ken Weatherwax, who played the Addams Family’s pudgy, cake-loving son, Pugsley, on the 1960s television hit, died of a heart attack on Sunday. He was 59. The actor was best known for his memorable role in the cult series, but later said the part stymied his acting career

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TIME Innovation

Five Best Ideas of the Day: December 8

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. A new crowdfunded software tool for reporting sexual assault can reduce stigma and protect survivors.

By Shafaq Hasan in Nonprofit Quarterly

2. Millions of discarded laptop batteries could light homes in the developing world.

By David Talbot in the MIT Technology Review

3. A long overdue transparency plan for clinical trials will finally open results to the medical community and the public.

By Julia Belluz in Vox

4. Without role models or a road map through the upper ranks, women are leaving the tech industry at the mid-career point in droves.

By Sue Gardner in the Los Angeles Times

5. A new plan to drop strips of prairie into cropland helps preserve soil and battle climate change.

By Dylan Roth in Iowa State Daily

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Research

How Sharing Your Health Data Could Change Medical Research

health data smartphone
Getty Images

"There is an increasing appreciation by people that they actually own their data"

In the field of health research, data have long been held closely by the researchers who collected it. The knowledge is considered proprietary information owned by whoever conducted and funded the study, even if it has the potential to lead to future health advances.

Now, a slew of new companies and organizations promise to tear down the barriers to data collection and sharing by encouraging patients to give away their data. In addition to fostering diverse research projects, data donation helps patients learn about themselves and improve their own treatment, the companies say. The change has taken root in the medical community, and if roadblocks to privacy and data ownership can be overcome, data sharing efforts may just change the nature of research.

“Increasingly people are realizing this is an ethics issues,” says Yale Professor Harlan Krumholz of the need for relevant data to be shared among researchers. “If our job is to save lives, then it doesn’t make sense that we not share data and get as many people working on the problems as possible.”

Generally, here’s how it works: Patients contribute information about their health and receive a personal benefit of some sort. At PatientsLikeMe, for instance, patients can get treatment tips from others who have the same ailment. 23andMe, another service, provides participants with genetic information that can be used to trace ancestry. There’s also the benefit of knowing you’re contributing to medical advances.

Garth Callaghan, who suffers from kidney cancer and shares his data with PatientsLikeMe, says sharing gave him a sense of control over an ailment that he felt had taken over. “Other patients help me direct my medical team instead of me just being a participant and listening to my doctors and saying yes,” he says, adding that he hopes that sharing his data means other patients won’t need to “reinvent the wheel.”

With data in hand, the companies collecting information then act as intermediaries, deciding which research projects are worthy and facilitating access. But unlike in the long-standing research model, in which a single set of data is typically used for one study, data can be used for many projects with many different goals. In most cases, participants are also notified of the results of studies in which their data was used.

Collecting data without an initial driving question also upends traditional procedures of medical research, says James Heywood, co-founder of PatientsLikeMe.

“The world is built on this old model of raise a question, design an experiment, recruit a group of people to solve it…not in this model that we’ve built,” he says, which he calls an integrative learning model.

Health data sharing companies are only a few years old, but their influence has grown quickly. Prominent academic institutions like Yale University have signed on, along with big pharmaceutical companies like Johnson & Johnson and Pfizer.

“When we started this, it was seen as amusing. People were thinking ‘Are you kidding me?’” says Stephen Friend, who runs a non-profit he co-founded that builds platforms to facilitate data sharing. Now, he says “hubris has turned into humility” as researchers have realized the potential.

Still, Friend acknowledges there’s a long way to go and that research money spent on data intended to be shared still represents the “0.1%” of research funding.

Privacy and the question of who owns medical data are some of the concerns holding back data-sharing efforts. Typically, scientific data has been owned by whoever collects it, often universities or academic institutions that fund research. Each company has its own philosophy about who owns data when it’s shared.

Emily Drabant Conley, director of business development at 23andMe, says her company’s policy is “you own your data.” PatientsLikeMe has a policy of “mutual license,” in which both patients and the organization have rights to the data. Regardless of which model prevails, the notion that study participants have any right to their data is a noteworthy change.

“There is an increasing appreciation by people that they actually own their data, and that can actually be useful to them,” says Krumholz. “All these things are coming together in a movement to empower patients and people.”

MONEY online shopping

How to Stop Facebook from Ruining Your Holiday Gift Surprises

Wrapped bicycle
Michael Blann—Getty Images

Parents who shop online—so all parents, basically—need to know how easy it is for kids to find out what they're getting for the holidays.

Every week, it seems, there’s a new scandal about email passwords being stolen or retail customers’ data being hacked by stealthy cyber criminals. Yet such incidents represent only a teeny-tiny slice of how our online behavior is spied upon and used. In the vast majority of cases, our data is tracked and used in entirely legal ways by search engines, social media, retailers, and advertisers. Legal or not, the repercussions of such tracking—and the ads that inevitably follow—can feel like an ongoing privacy violation.

What’s more, targeted ads come with the potential of revealing secrets about what people have been searching, browsing, and buying online. While the results are generally not nearly as devastating as identity theft, they can create tense situations. In probably the most notorious example, a father found out his high school daughter was pregnant only after Target had sent her coupons for cribs and other baby products—offers that were based on her shopping history.

This time of year, the relentless stream of targeted (also known as “interest-based” or “retargeted”) ads that pop up in banners or on the side of web pages also come with the potential of ruining a holiday gift surprise. Say a mom does some browsing online for presents for her son. Soon thereafter, the items she viewed start showing up in ads on the device that was used, along with ads “inspired” by her browsing history.” If and when the would-be recipient hops on the same device, he’ll see all of those ads. Without much sleuthing, he’ll be clued in about what mom was shopping for, and he’ll have a good idea to expect the new Nike high-tops, game console, or whatever come December 25. So much for the big reveal.

It’s unclear how often this scenario plays out, but it’s a possibility some parents worry about. “I guess you have to pick btw letting your kids use the computer and shopping online, since custom ads follow you and spoil gift surprises,” one mom tweeted recently. Last year the founder of Marketing Land wrote at length about his wife’s frustrated attempts to stop banner ads from Macy’s, ThinkGeek, and other retailers she shopped from popping up on the computer she often shared with her kids.

It’s not just parents who worry about blown surprises. One Reddit user recently posted, coyly and excitedly, that her longtime boyfriend had been getting engagement ring ads in his Facebook feed. Surely, she felt, this was an indication that he was getting ready to pop the question. One commenter followed up with a story about a friend whose boyfriend also was flooded with engagement ring ads before he proposed. Then, as soon as she changed her status to “engaged,” she was slammed with weight loss ads offering to provide assistance “fitting into your dress.” Naturally, the baby-related ads followed after the wedding took place.

“You’re stalked with ads related to what you’ve been shopping for all the time,” says Bruce Schneier, an internationally renowned computer security expert and a fellow at Harvard’s Berkman Center for Internet and Security. Nonetheless, Schneier thinks it’s probably “a rare occurrence” for people to correctly deduce what they’ll be getting as holiday gifts based on the ads they see on a shared computer. “When a kid sees an ad for an Xbox, he’s probably just going to think I want an Xbox, not Mom got me an Xbox.”

For that matter, the presence of these ads is no indication of whether anything was actually purchased. As an Al Jazeera column about “curated” and “retargeted” ads noted, consumers can be “stalked by socks” and other items they browsed while shopping online regardless of whether or not they purchased the goods, or whether they searched for such goods randomly, as a goof, or out of genuine interest. “Personalized ads can be right, but they’re often wrong” in terms of being truly appealing to the right set of eyes, Schneier says.

Most e-retailers offer consumers the right to opt out of being subjected to tracking and retargeted ads, but Schneier thinks doing so is a waste of time. Not only are the processes for opting out convoluted and filled with loopholes, there are so many digitized eyeballs monitoring your online activity that successfully negating them one at a time is virtually impossible.

It’s much better and more effective, he says, to install a tool such as Adblock Plus (which blocks some or all ads according to filters checked by the user), Privacy Badger (which automatically blocks trackers or ads that it deems to violate “the principle of user consent”), or some combination of several blockers. Others recommend shopping online in private browsing mode; when using Google Chrome Incognito, for instance, the browser doesn’t save a record of what sites have been visited, and therefore (theoretically) there should later be no retargeted ads that surface as a result.

If you’re dealing with an especially stubborn child or spouse who has a history of noticing what online ads foretell in terms of holiday gifts, you might want to try a different strategy: Spend some time here and there clicking on all sorts of items haphazardly, or purposely browse for things you know he’d absolutely hate to receive on Christmas. The resulting collection of retargeted ads is likely to be so random, nonsensical, and disappointing that it’ll throw him off the trail and he’ll have no clue what you actually bought.

As a bonus, you’ll simultaneously be messing with the retailers, browsers, and other bots that generate these annoying ads in the first place.

MORE:
What Should I Do If I’ve Been the Victim of a Data Breach?

TIME Innovation

Five Best Ideas of the Day: November 19

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Teach data literacy in elementary school.

By Mohana Ravindranath in the Washington Post

2. A new app lets kids explore the life and living conditions of other children around the world.

By Laura Bliss in CityLab

3. Politics inside Yemen — once a reliable U.S. ally and success story in the war on terror — has pushed the nation out of our influence.

By Adam Baron in Defense One

4. When it comes to science and health news, radio might save journalism.

By Anna Clark in Columbia Journalism Review

5. Rooftop solar power could beat the price of coal in two years — if utilities don’t shut it down.

By Lucas Mearian in ComputerWorld

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Companies

Uber Investigating Executive Over Use of ‘God View’ to Spy on User

After spate of bad publicity

Uber said Tuesday that it’s investigating one of its top New York executives for tracking a reporter without her permission.

The ride-sharing App has a system known as “God View,” BuzzFeed reports, in which the location of Uber vehicles and waiting customers are “widely available to corporate employees.” BuzzFeed reports that an executive used this system to track one of its reporters while she was working on a story about the company that has put it under fire for revelations that an executive raised the prospect of investigating journalists.

Early this November, one of the reporters of this story, Johana Bhuiyan, arrived to Uber’s New York headquarters in Long Island City for an interview with Josh Mohrer, the general manager of Uber New York. Stepping out of her vehicle — an Uber car — she found Mohrer waiting for her. “There you are,” he said, holding his iPhone and gesturing at it. “I was tracking you.”

Mohrer never asked for permission to track her.

[BuzzFeed]

TIME The Brief

#TheBrief: The Battle for Control of the Internet

Explaining what 'net neutrality' really means to you — and the future of the Internet

President Obama took to the White House YouTube channel Monday to call for broadband internet providers to be regulated as a utility — a move that signals his support for the concept of “net neutrality“.

What’s net neutrality? It’s the idea that Internet service providers (ISPs) like Comcast or Verizon should treat all content equally. It might not sound like an inspirational cause, but the question of who has rights to control the Internet affects almost everyone.

Cable companies are clamoring for the right to give faster speeds to certain clients, while many content providers are in favor of keeping all data on the Internet on equal footing.

Watch #TheBrief to find out what’s at stake.

TIME Innovation

Five Best Ideas of the Day: November 10

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Food touches everything in our lives. Yet we have no national food policy. That must change.

By Mark Bittman, Michael Pollan, Ricardo Salvador and Olivier De Schutter in the Washington Post

2. Electronic Medical Records should focus more on patient care and less on meeting the needs of insurance companies and billing departments.

By Scott Hensley at National Public Radio

3. Anonymous social media often hosts vicious harassment targeting women and minorities. A new plan to monitor threats online is working for a solution.

By Barbara Herman in International Business Times

4. “You can’t wear a Band-Aid for long, particularly when the wound keeps bleeding.” Two years after Hurricane Sandy, New York is far from stormproof.

By Lilah Raptopoulos in the Guardian

5. China and the U.S. should take aim at a new “grand bargain” to head off tensions and mistrust in their relationship.

By Wei Zongyou in the Diplomat

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Innovation

Five Best Ideas of the Day: November 4

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Peer-to-peer sharing of experiences could transform health care.

By Susannah Fox in Iodine

2. A technological and analytical arms race is producing the best athletes in history. Can those advances be applied to education?

By James Surowiecki in the New Yorker

3. In South Bronx, startups are ‘onshoring’ technology jobs and trying to spark a revolution.

By Issie Lapowsky in Wired

4. ‘Sister City’ relationships foster cross-border collaboration and spur economic development.

By Nehemiah Rolle in Next City

5. Colleges and universities should focus on student success beyond graduation.

By Karen Gross and Ivan Figueroa at Inside Higher Ed

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY General Electric

The Untold Story Behind GE’s Most Lucrative Business

A General Electric Co. employee examines a component for a gas turbine at the company's factory.
Fabrice Dimier—Bloomberg via Getty Images

GE’s services business should be a big story for investors.

The financial media these days has two stories when it comes to General Electric GENERAL ELECTRIC CO. GE 0.6942% the one that says GE is downplaying its banking business and the one that shows how GE is returning to its roots by “making stuff” again.

While both storylines are important to GE investors, a separate transformation taking shape inside the world’s seventh-largest company will steal the spotlight in the years to come. The seeds of GE’s next big breakthrough were planted nearly two decades ago, but they’re just now taking root as manufacturing enters a technology- and data-fueled era.

Read on to learn the untold story of GE’s most lucrative business and discover why it’s so important for shareholders to understand.

The one that (almost) got away

The origin of this story dates back to the early 1990s. Jack Welch, also known as “Neutron Jack,” was GE’s CEO, and he was busy making his mark on corporate America.

Quadrupling GE’s market value in roughly 14 years made Welch a superstar in the eyes of everyone from the media to stockholders. To business students around the country, he was the Michael Jordan of their future profession.

Like Jordan, Welch was a fierce competitor, and his unorthodox, assertive style of management took his team to the top: GE became the largest company in the world.

By the mid-1990s, however, this titan of industry faced a dilemma within GE’s walls.

His success to date had rested on strategies that boosted manufacturing efficiency, heightened competition among his managers, and focused strictly on markets in which GE could steamroll the competition. Each had its pros and cons, but the latter strategy specifically began to show signs of obsolescence in the mid-1990s.

This strategy had become known as the “No. 1 or No. 2″ policy at GE. It meant General Electric aimed to dominate the industries in which it operated, or else it would abandon the cause. Anything less than first or second place in market share was simply unacceptable.

As GE grew in size, this all-or-nothing style of thinking caused some serious problems. First off, the incentives were misaligned for GE’s managers. Its own leaders became hyperfocused on maintaining their market position in a given industry instead of thinking about how to expand into a new one. Expansion would mean growing their addressable market, of course, which could bump GE’s rank down a notch or two.

There was absolutely no incentive to grow outside of the box, per se, even if it made sense from a product or customer perspective. To use an analogy, it’s as if a traditional motorcycle manufacturer refused to enter the growing market for off-road dirt bikes because this would grow the arena in which it competed and would mean relinquishing its “No. 1 or No. 2″ position. While this might sound ridiculous, it was a prime example of how GE’s bureaucracy was creating perverse incentives.

And, in the worst-case scenarios, GE managers were given leeway to define their own markets. When this happened, they would often manipulate (read: shrink) their “industry size” in an attempt to look like they had a dominant market presence. Since GE’s underperformers could be shown the door at any moment, this move was a self-preservation no-brainer. But it was highly counterproductive for the company.

At the end of the day, the overriding focus on being first or second prevented managers from tackling new, promising opportunities in which GE might be the underdog at the outset. And the services business was one of these markets.

A “punch in the nose”

At the time, the business of maintaining and servicing heavy industrial equipment was loaded with entrenched players dispersed across the globe. In fact, GE’s potential competitors in this arena numbered in the thousands. One could compare the scenario to a major car manufacturer trying to nudge its way into an auto maintenance industry overpopulated with established, local mechanics.

Taking a backseat to entrenched players — even if it was in the best interests of GE’s customers — was simply unacceptable. It also seemed like small potatoes for a company of GE’s size.

But here was GE selling hundreds of proprietary products like gas turbines that would inevitably need regular maintenance and upgrades. Services might not have seemed glamorous, but it was an area in which GE had a unique and potentially durable advantage.

By 1995, Welch relented; ironically, it was his middle managers who convinced him that this market was too crucial to be overlooked. Welch did an about-face on his long-standing management mantra, and GE began to aggressively pursue services.

In 2000, Welch recalled how the light bulb went off and why he reversed course on services:

Rather than the increasingly limited market opportunity that had come from this number-one or number-two definition that had once served us so well, we now had our eyes widened to the vast opportunity that lay ahead for our product and service offerings. This simple but very big change, this punch in the nose, and our willingness to see it as “the better idea,” was a major factor in our acceleration to double-digit revenue growth rates in the latter half of the ’90s.

Welch’s refusal to set foot in industries in which he couldn’t dominate would be like Michael Jordan refusing to take some lower-percentage perimeter shots. It might make sense for a short stretch of time, but ultimately it underutilized the company’s talent and limited its ability to attack areas where the competition could be outmaneuvered.

The rise of services

Welch called his realization a “punch in the nose,” but he took it in stride. Within three years time, revenue from GE services reached $10 billion, and Welch was singing its praises in his annual letter to shareholders:

The opportunity for growth in product services is unlimited. We have the ability, using high-technology services, to make our customers’ existing assets (e.g., power plants, locomotives, airplanes, factories, hospital equipment and the like) more productive, and by doing so reduce their capital outlays. This growing capability, much of it information technology-based, will enable us to increase our revenues from product services by more than 30% in 1998 — to $13 billion.

What began as a maintenance-focused exercise was unfolding as a productivity-enhancing opportunity for GE customers. And that has continued behind the scenes for the last 15 years. Welch’s successor, Jeff Immelt, has carried the torch.

Under Immelt’s leadership, GE’s services capabilities have evolved and multiplied. Today, GE can actually diagnose problems in the company’s products in advance of a breakdown. For gas turbines and rail locomotives, it’s like a “check engine” light flashing on in your car, but with a real-time response from one of GE’s engineers connected via the industrial Internet.

The probability that a customer will actually have to visit the repair shop is greatly reduced — a big win for around-the-clock energy, airline, or rail operations.

For GE, it’s also a win. Long-term contractual service agreements deepen GE’s relationship with major clients. They enable engineers to better understand how their products are being used in the field, which can, in turn, influence the design process.

It’s also a highly lucrative business.

I’ve compared the equipment-and-services relationship to a razor-and-blade business model. This means the initial sale of GE equipment (the razor) is often accompanied by an even more profitable service relationship (the blade).

The following chart shows how much more profitable services are for General Electric relative to the operating margins of the company as a whole:

Services as reported in third-quarter 2014. Overall business as of 2013 year-end. Source: GE 10-Q, 10-K.

What’s more, services are growing. Once again, this segment is outpacing the rest of GE’s business, making up ground at a company that was hit hard by the financial crisis:

Source: GE's Services and Industrial Internet Presentation on Oct. 9, 2014 and SEC 10-K filings.
Source: GE’s Services and Industrial Internet Presentation on Oct. 9, 2014 and SEC 10-K filings.

Finally, services are scaling across the business. This means it’s starting to make a significant impact on the revenue and earnings of this massive conglomerate.

For instance, from 2011 to 2013, services accounted for 28% of revenue but 40% of earnings on average. Investors can expect services to be an even larger piece of the revenue and earnings pie going forward due to a huge pipeline of work.

Right now, the most important chart for GE investors is one of its $250 billion order backlog. Look at how GE’s backlog has ballooned and transformed from services-light to services-heavy over the past 13 years:

As of 2000 year-end and third-quarter of 2014. Source: GE's 2000 10-K and 2014 Q3 10-Q filing.
As of 2000 year-end and third-quarter of 2014. Source: GE’s 2000 10-K and 2014 Q3 10-Q filing.

What you need to know about the new GE

For investors, it’s important to recognize GE for what it is today.

It’s no longer a bank. In fact, GE expects to derive only 25% of operating earnings from lending by 2016. Lending, too, will be a services-driven business, with GE providing financial expertise — as well as money — to clients in a variety of industries.

It’s no longer an old-school manufacturer, either. Gone are the days of trying to win based on having the absolute lowest costs in the business.

Today, it’s all about enhancing products through services. How can customers reduce downtime? How can real-time data, robots, and connectivity make machines more efficient? Here’s how Immelt put it in a recent presentation on services and GE’s industrial Internet:

[T]his is the new battlefield. This is the new basis for competition. No matter who you invest in, if you are in the industrial space … this is the game of the future.

After two decades in the making, the future has arrived in the form of high-tech services at GE. Although it has generally flown under the radar in the mainstream financial press, the story of services is one that long-term GE investors simply can’t afford to ignore.

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