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To: Elroy Jetson who wrote (17758)	2/24/2004 9:22:46 AM
From: Elroy Jetson	Respond to of 306849

The news of Putin's removal of his government in exchange for his trusted aide, Viktor Khristenko, is another example of the risks of off-shoring investments - to nations that may or may not respect property right. As part of his move against the Oligarchs he has also been rescinding the privatization of state properties. Some of these situation may be properly correcting assets which were sold without proper compensation or through bribery. But other nationalizations may be the result of strategic interests which dismiss the rights of investors. themoscowtimes.com Friday, Jan. 30, 2004. Page 1 '93 Tender Won by Exxon Annulled By Valeria Korchagina Staff Writer Raising new fears about foreign investor rights, the government on Thursday canceled the results of a 1993 tender for the Sakhalin-3 gas and oil project that was won by a consortium led by the world's largest oil company, ExxonMobil. But the decision announced by Deputy Prime Minister Viktor Khristenko appears to be a one-off case because Sakhalin-3 is one of only a handful of projects that has barely been developed since being put up for tender in the early 1990s. . .

To: Elroy Jetson who wrote (17758)	2/24/2004 11:11:19 PM
From: Amy J	Read Replies (2) \| Respond to of 306849

Elroy, RE: "The real risk is the loss of the business and thus all future jobs related to it. Andy Grove of Intel has discussed this. Many nations do not respect property rights" Good post. RE: " Many American business are run by people whose short-term interests are not aligned with their shareholders or their country." Think VCs. According to the spouse of a VC, the VCs operate like sheep (or lemmings), "you can't get fired for investing in the same category as John Doerr" (so they all jump onto the same one thing and over invest.) Initially, many VCs thought offshoring was 100% bad. Now, many VCs have swung the other way, and have no measure of caution that's actually required. It's almost as if some are black and white thinkers that can only follow rather than lead, which means if one person does it, they all jump in and do it. Monkey see, monkey do. But even a monkey needs to stop and think independently and make proper assessments. Never follow a lemming off a cliff. RE: " It amazes me that there, in spite of the occasional magazine article, that there is such a low level of recognition of this problem." Me too. This really should get more publicity. The problem though, there appears to be a couple of cases where IP was stolen overseas but the startups didn't complain to the media. However, if you look at the govt reports, approximately 600 cases of IP theft are reported annually, I believe, and this definitely doesn't include some of the IP theft entrepreneurs have experienced in China (some apparently don't report it, because there's nothing to be gained if you report it and they make themselves look foolish for getting fooled so they avoid the bad PR and keep it quiet, I think.) RE: "Maybe it's just due to the naive American trait which always expects the best of others and expects things to always work out for the best - like in the movies." That's cute. I like this trait about us Americans, but you are definitely correct in saying that our business people are too easily naive with international IP issues. There are certain govts that aren't taking action against IP theft (and there are some that fortunately are.) A Turkish corporation took $1.5B from Motorola in stolen IP theft (fortunately, the Turkish judge ruled in favor of Motorola.) Motorola also had some copy-cat chip companies crop up around it when engineers stole their stuff overseas. And the list goes on. RE: " Many would argue that the solution is an emphasis on R&D, but the U.S. increasingly finds R&D an uneconomic pursuit" I'd have to disagree with you on this tiny point about RND being an uneconomic pursuit. I can think of more than a dozen companies that have gone public due to their core RND. It's very feasible to commercialize research and make it productive. Regards, Amy J