MARIAN SALZMAN commitment to get the job done. ‘And, unlike Sir Anthony, { believe that we will move forward with a clear sense of direction. Finally this: if can suggest what that sense of direction itis one that would pointus toward a retum to the most basic of concepts; where we prize and embrace what is the greatness of America; and where we resurrect what 147 the phrase “We, the Peopte” really means. So that, in the words of Abraham Lincoln, “this nation, under God, shall have a new birth of freedom; and that government of the people, by the people, for the people, shail not perish from the earth.” Thank you, again, for this wonderful and very meaning- ful honor. Pet Trends ‘THE STATE OF THE PET INDUSTRY Address by MARIAN SALZMAN, President, The Intelligence Factory Delivered to Global Pets Forum 2000, Barceiona, Spain, October 26, 2000 to talk with you about a topic that isnear and dear to my heatt: pets. in fact, more days than I'd like to think about, the “person’ I like best is my very own pet, a five-year-old Golden Retriever named Morgan, who's lived on two continents in her short fife, and who this week is relaxing at a doggie spa outside New York City. Both Ends of the Leash is not rustic like Yuppie Dogiis, east of Amsterdam, but it’s the best New York has to offer in torms of free-range boarding, (In fact, getting Morgan accepted to board there was tougher work than getting myselfadmitted to graduate school at Harvard, oh-so-many years ago. This admissions process required an interview, recommendations, « special medical examination, and an observational session to ensure Morg the Dog could so- cialize nicely with dogs of all sorts. And after all that, Morg, hhad to sit on a waiting list until such time as a slot could open up! Come to think of it, maybe I should have enrolied her at Harvard. ...) PETS ARE BIG BUSINESS Asyou weil know, over the past decade, pets have gone fom being cuddly companions io « booming business, In the U.S., nearly 60% of households own one or more pets, for a total of 212 million cats, dogs, and other household critters, Pet owners lavish U.S.$23 billion a year on their pets — a figure that’s increasing at a rate of 15% a year. So much for table scraps and sticks, { realize 1 am preaching to the converted, given how your industry is the prime beneficiary of the billions of Gollars we're spending on our pets. But have you consié- ered the other companies, far beyond the “pet business,” that also are beneficiaries of our love for our furry friends? Consider Burberry’s and Hallmark, KLM and the Four ‘Seasons in Palm Beach?!!! From herbal supplements to fashion, home furnishing to travel, few industries haven't, found some way get in on the windfall. ‘And now we're seeing the definition of “pets” expand T ‘hank you for inviting me to wonderful Barcelona beyond living, breathing animals to products both high tech (Sony's robotic dog) and low tech (the Beanie Babies now invading Europe’s high-street stores; Build-A-Bear Work- shops} BEYOND COMPANIONSHIP In a survey of present and former pet owners in the U.S., more than half said that if they were stranded on an island, they would preter a dog or cat to a human compan- ion, According to Adweek, the rise in pet spending is a re- flection of the fact that some 70% of pet owners see their pets as children, This has particularly significant implica tions for marketers. Because they're not able to spend as, much time as they'd like with their pets, guilt-idden own- ers lavish them with gourmet treats and upscale toys, (Sound familiar?) As lifestyles change, the marketplace is adapting to the new emphasis on “pets as peopie, too.” ‘And this isn’t just a Wester phenomenon: Statistics show that residents in Shanghai keep over ! million pets currently. It is estimated that residents of that city spend some 600 million yuan (over U.S.$72 million) on their pets, annuaily According to estimates from the American Pet Prod- uct Manufacturers Association, the market for U.S. pet supplies is projected to reach U.S.$29 billion by 2001, ériven in part by increases in the pet population and a trend to- ward providing improved pet care. And the American Vet- erinary Medical Association reports that Americans spent U.S.$1L.1 billion on pet health care in 1998, up 61% from 1991. For the next half hour or so, I'd like to review a number of megatrends, what we call “Big Nexts.” These trends highlight the macro shifts taking place in the pet industry. Many, most in fact, are byproducts of the broadest pos- sible changes in our society. [will also discuss “Nexts” — significant shifts we're observing, to ensure you recog- nize and can leverage the benefits of the implications of148 these movernents in the competitive landscape. And, fi- nally, Pil end with a handful of “What’s Nexts?” —specu- lative scenarios for the future. BIG NEXT: PETS AS FAMILY MEMBERS: As owners increasingly regard their pets as one of the family, niche marketers are providing products and ser- vices that allow pets to participate in family-oriented ac- tivities outside the home. For example, outdoors adventur- ers can now purchase life preservers, snowshoes, helmets, and other equipment specifically manufactured for their dogs. Dog owners in parts of North America and Europe also can attend human-canine summer camps, where owners anc their pets spend a week or more together, swimming, hiking, playing Frisbee, and generally enjoying abitof fun, in the company of other dogs and their owners. The Ani- mal Legal Defense Fund says that across the U.S.A.. there are at least 35 pet vacation resorts and 650 pet cemeter- ies. Ina sign of the role pets play within the household, a 1999 survey by the American Animal Hospital Associa- tion found that fully 72% of married pet owners say hello to pets first when they get home compared with the 13% who greet spouses first: 34% talk about their pet to friends and co-workers more than anything else; and 31% carry a picture of their pet in their wallet. Other findings include owners who: Consider themselves the pet's “mom” or “dad” 84% Consider pet “smart” or a “genius” 75% Sing or dance for a pet 65% Celebrate pet's birthday 63% ‘Take time off from work to care for a sick pet 53% Prepare special meals for a pet 52% “Take pet to work 44% Display a pet's photograph at work 43% TREND: HAPPY HOLIDAYS, FIDO! The AAHA survey also revealed that 87% of pet own- cers include their pet in their holiday celebrations, and, of those, almost 100% of those pets actually get a Christinas or Hanwkkah present. According to the PETsMART Nationwide Holiday Poll, 86% of consumers planned to purchase holiday gifts for their pets in 1999, And we're not just talking an extra bis- cuit or one of those cheapo stockings for pets you find in supermarkets. The PETSMART poll revealed that more than two- thirds of surveyed pet owners planned to spend, as much as 10% of their total holiday budget — an aver- age of U.S.895 (nearly double the 198 average) — on gifts for pets. While ontine sales were predicted to remain, strong, many pet owners planned to take their pets holiday shopping with them so the animals could select their own gifts. Certainly would cut down on the post-holiday ex- changes! TREND: QUALITY KIBBLE AND KITSCH. VITAL SPEECHES OF THE DAY From Baltimore to Barcelona to Beijing, pets are being given the royal treatment: In the U.K., Harrods purveys such posh pet wares as Burberry costs, cashmere rugs, and £10,500 (US.$17,350) handmade Louis XVI-style beds. Pet-pampering products are a mass, as well as class, phenomenon: High-street rutailer Bhs sells leopard print and bomber jackets for cats ‘and small dogs, says The Daily Telegraph. I China, pampered dogs and cats get their own clothes, kennels, and toys, despite the high cost of pet ownershi Ina country with an average per capita income of around 7,000 yuan, according to Business Weekly (China), a dog license costs 5,000 yuan {U.S.$600) and local registration fees run another 2,000 yuan a year. New York's priciest stores are going to the dogs, liter- ally. Pets are accompanying their owners to Raiph Lauren, Max Mara, Bloomingdale's, and the like. Long a Euro- pean custom, shopping with one’s dog is only just catching on in the States, where retailers are becoming more open to the idea. Dogs “are sometimes the best shopping com- panion,” notes Jason Weisenfeid, Bamey’s director of public relations. “They will never tell you you don’t need another pair of shoes.” This month, pet owners queued up to take the sting out of the phrase “You smeli like a dog!” A unisex fragrance, Oh My Dog! was launched in October at selected Saks Fifth Avenue stores in the U.S. Created with a careful eye to avoiding ingrediemts that could inarm dogs, the scent’s base notes are vanilia and sandalwood, topping out with freesia, rosewood, and orange leaves. The fragrance costs U.S.$35, and the shampoo sells for U.S.825. The pleasing cifactory effect is said to last at ieast a week. (Source: Hartford Courant, 4 Oct. 00) ‘The search for quality products isn’t limited to luxury ‘goods, however. The Social Survey Institute of China re- cently surveyed 500 pet owners in Beijing, Tianjin, Shang- hai, and Guangzhou to discover pet owners’ major wor- ries. The survey revealed that pet food quality was the key concem of 57% of pet owners. {45% also complained that they could hardly find coats, shoes, and shelter to help their pets through the winter. 69% said pet articles bought at shops were of no prac- tical use 74% complained that items for their pets were too ex- pensive 28% spend up to 100 yuan (U.S.$12) each month on their pets; 65% spend between 100 and 200 yuan (U.S. $12-24); and others spent more than 200 yuan (U.S.$24) each month. TREND: DOGGIE DAYCARE With people working longer hours and no one home to play with the pets, guilt has created a booming market inMARIAN SALZMAN doggy daycare. Doggie daycare centers range from basic to downright obscene ~- complete with limousine pickup and drop-off, massages, TVs, beds, classical music, and daily report cards. The competition is fierce; some cen- ters even require dogs to pass an “interview” and screen- ing process before being accepted. it’s just a matter of time before dogs are preregistered while still in the womb, As pets become even more pampered, owners witl hire “doggy nannies” to spend the day entertaining them. When my very own Morgan is in residence in New York City, she spends many a day romping at Paw’s Inn, where one of the many benefits of its puppy playschool is that owners like yours truly can log on and see kow our pets are socializing, via a Webcam set up in one of the playrooms. Interested? Log on to www.pawsinn.com! ‘TREND: PET PARTIES And, of course, one can't forget the pet’s birthdays! With many owners regarding their cats and dogs as surro- gate children, it’s become popular to send out birth/adop- tion announcements featuring the animal's picture, name, birthday, end vital statistics. Annual birthday parties also are de rigueur in some circles, with friends" pets invited cover for food and games. Some even costume their pets for the occasion. TREND: GREETINGS FROM FLUFFY ‘The celebration of other milestones in apet’s life also is becoming common. In the U.S., major greeting card com- panies are expanding their selection of pet cards, a trend that’s not surprising given that 62% of pet owners sign cards and fetters from their animals. USA Today (13 Sept. *00) reports that three greeting card companies recently began marketing sympathy cards “for the loss of animal companions.” In 1998, aftera hugely successful test in 12 markets, Hallmark Cards launched a line called Pet Love: greeting cards to be sent to and from pets and their own- ers, The tine includes 48 cards that cover just about every occasion ina pet’ life: birthdays, congratulations (on learn- ing how to “stay,” for example), even “adoption papers” for puppies and kitties rescued from the pound. BIG NEXT: LEGAL BEAGLES Only in America, folks, only in America; or should 1 say, invented in America? Who knows where this wilt hit next. in the past, pets have been named next of kin and have been the source of much bitterness in divorce settle- ments, in Colorado this summer the very title of “owner” .was up for redefinition: A controversial pet ordinance pro- posed to change references in city laws from pet “owner” to pet “guardian” —thereby adding, according to the defi- ition of the word, official legal responsibility for the care and management of their pets to “owners.” USA Today reports that, in courts across the U.S., pet law is evolving: 149 Jury verdicts for harm done to pets lately have run as high as U.S.$35,000, up from an average of a few hun- dred dollars each in the early 1990s. In the past four years, juries in six states have awarded large judgments to pet owners. ‘Twelve law schools, including Georgetown and Harvard, now offer courses in animal law. Courts have begun to allow owners of damaged or de- stroyed pets to sue for loss of companionship and their ‘own pain and suffering in addition to the animals’ cash value. “When courts began finding that a companion animal’s relationship with a human animal has intrinsic value, it moved us forward,” says Barbara Newell, an attorney for the Animal Legal Defense Fund in Rockville, Maryland, ‘TREND: BAN NOW, ASK QUESTIONS LATER, Dog-ownership fads come and go, often fueted by the media: The Disney live-action movie 101 Dalmatians caused a ran on the spotted companions; the U.S, ad cam- paign for Taco Bell featuring a talking Chihuahua report- edly set offa rash of puppy farms producing the tiny dogs under less-than-satisfactory conditions. Another dog fad is currently feeding a hot debate in Europe: In the 1986s, reports Commercial Appeal, pit bulls evolved as the attack dog of choice on both sides of the Ailantic, and Britain banned them in 1991. Now, despite a ban on their sale, France currently has at least 40,000 pit bull-type dogs, and breeders sei! clandestine litters at a fast clip. (13 Aug. °00) Because of several high-profite and extremely violent, attacks by attack dogs, Germany has announced plans to ban certain breeds of dogs and has begun to lobby for EU-wide legislation. Residents of the U.K. are not pleased to find one of their favorites on the list: According to the Daily Telegraph (London), there are 250,000 Staffordshires in Britain that would be under threat if the tough laws are extended across the EU. Other breeds at risk are 100,000, bull terriers and 50,000 bull mastifts. ‘Tory Eurc MP Struan Stevenson is seeking urgent ac- ‘ion from the British government to fight the inclusion of the Staffordshire, which, it is argued, was included in the banned dog list erroneously, based on a name similarity with the American Staffordshire terrier, an animal with a different end aggressive history. BIG NEXT: ABOLISHING TRAVEL HURDLES TREND: PET PASSPORTS Chalk one up for the pet lobby. As you know, bringing a pet into Britain used to mean a six-month quarantine for the animal (at an average cost of U.S.$2,400). This Febru- ary, that system was replaced with a scheme that allows animals from 22 countries (with 15 more soon to join} to travel with a “passport.” To qualify, the pets must be fitted150 with an identification microchip, vaccinated against rabies, and pass a blood test. Quarantine regulations will remain, on animals traveling from the United States, where rabies isepidemic. TREND: PET HOTELS If owners can’t bear to leave their pets unattended at home all day, what are the odds they’Ii put them in kennel “jail” while they vacation? Increasingly slim, as it tums ‘out. According to the results of a PETsMART survey, one- quarter of Americans plan vacations on which they can take their pets. Seeing the potential for profit, a growing number of hotels are allowing pets to stay with their own- ers. The American Automobile Association (AAA) even: publishes a guide to the 10,000 hotels that now accept pets Tn some cases, hotels even offer special treats and other pampering touches for their four-legged guests. In New Zealand, an Auckland hotel not only provides accommo- dation and meals but will also bathe dogs, play them sooth- ing music, and feed them homemade dog biscuits. A hotel in Wheatfield, New York offers pets a complete makeover, including manicure. It plays videos such as Lady and the Tramp in their rooms and will collect and drop off canine ‘guests by limo. For those owners who have truly gone to the dogs, there are now canine camps and other dog-focused vacation spots. The Dogtel Hotel, under construction in Maryland, will allow owners to romp on the beach with their dogs (or fearless cats) within the fenced-in property. There is also a dude ranch for dogs, where pets and their owners can learn to herd sheep together. (This vacation spot may close abruptly as soon as the first standard poodle shows up in designer chaps. ...) BIG NEXT: THE SINGLE PET OWNER ‘As marriage rates reach their lowest levels in modern history in many developed nations, a growing number of singles are redefining relationships so that community and friendship (rather than marriage or blood relatives) are their most important ties. Thus, in the future, “family” will take on a whole new set of possibilities as this term ex- tends beyond bloo¢ relations to include friends, pets, and even online virtual communities For some singles, caretaking minus the diaper stage and teenage rebellion is the ideal situation —as is companion- ship with endless unconditional love. Where, one might ask, would one find such a perfect relationship? Singles need look no further than their neighborhood animal she!- ter. That’s what millions of peopie are doing around the world today. And spending on pets is by no means limited to the female sex: According to the 1999 PETsMART Holiday Survey, men were predicted to outspend women by 10-20% on holiday gifts for their pets. VITAL SPEECHES OF THE DAY TREND: LOVE ME, LOVE MY DOG For singles, pets can provide not only companionship, but also an opening for human interaction, Never mind “What's your sign?” The opening line of the moment is “What kind of dog is that?” Parks in London, New York, Los Angeles, and else- where have become active singles zones. in Manhsttan, the café at the New York Dog Spa & Hotel holds singles nights where both owners and pets can find mates. In the wired world, Pet Lovers Unite Dating Services (www.petloversunite.com), one of several singles outfits ‘geared to animal lovers, has members whose pets run the gamut from ferrets to horses. On the flipside, pet owners in northern Spain who are searching for the perfect companion for their dog, cat, or bird now have a new option: matchmaking service. Whether they're looking for love (and a litter) or just a ‘buddy for their animal, owners can consult a detailed da- tabase containing pet photographs and a brief description of the qualities each pet is looking for in a partner. Man- ager Mari Carmen Melero hopes eventually to extend membership to snakes and other reptiles, as well TREND: FURRY CHILDREN With more people remaining single and childless (or “childfree,” depending on one’s mindset), pets have emerged as child replacements, being doted on to the same — or an even greater — degree. Pets are also serving major role in the homes of aging boomers whose human children have left the nest and who are looking to pets for companionship and protection. ‘Savvy marketers are playing into pet owners’ devotion, creating ati manner of new products, from stylish pet beds, to organic treats to fashionable water bowls and vacation. packages. We'll see even more of this in coming years, from “pet packages” offered as an option in new cars to destination retail spaces designed to dazzle dogs and open up the pocketbooks of their owners. ‘TREND: PET PERKS As four-legged family members gain in social stature, savvy employers are realizing that — on top of stock op- tions and a good benefits package — pet perks can carry a lot of weight. According to US News & World Report, some companies — such as Hewitt Associates — now pay for pet-sitting when workers leave town on assign- ment. In Tampa, Florida and Hampton, Virginia, the com- pany NetP@rk is converting shopping malis into “elec- tronic villages” with corporate office space and amenities, that include allowing tenant company employees to board the family pet at the on-site kennel. Take Our Kids to Work Day” has become conve tion of corporate America; in June 1999, the U.S. held the first-ever “Take Your Dog to Work Day,” in which 200,MARIAN SALZMAN companies across the country participated, According to Pet Sitters International, 24% of pet owners bring their dogs to work. The organization believes that having dogs in the workplace improves morale, camaraderie, and jo performance, and deters crime. Ray Browne, professor ‘emeritus in the Department of Popular Culture at Bowling Green State University, begs to differ: He considers bring- ing @ pet to work a sign of insecurity. (Morgan and I may need to have a litle talk with him. ..) BIG NEXT: PETS GO HIGH-TECH Tn cyberspace, piaying “follow the leader” seems to be the trend. While the bricks-and-mortar worid may be con- solidating and congiomerating, the realm of e-commerce is spawning ¢ dizzying array of“me-t00” vertical portals, that has been described by The Wall Street Journal as a “copycat population explosion.” Among the plethora of ¢- shops pet-care products and advice are pets.com, PETSMART.com, Petopia.com, Petstore.com. allpets.com, PETCO, Pet Warehouse, and PetPianet.com, According to The NPD Group and Media Metrix, awareness of Internet pets stores grew from 55% to 75% of pet owners in 1999. Moreover, NPD Online Research has found that some 30% of 2,000 people surveyed who hhad been to an online pet supplier bought something. And, some of these sites offer much more than the basics: PetsPyjamas.com, for instance, targets Europe’s 55 mil- lion pet owners and not oniy sells pet food, pet insurance, and accessories oniine, it also runs an online pet magazine with news and advice from a panel of experts and a chatroom where pet owners can get together and chat about — what else — their pets. ‘TREND: ROBO-PETS Not only are pet purchases going high tech, so are pets ‘themselves. A number of companies have released or are planning to release electronic pets for those who don’t have the time, energy, of inclination fora real one. Among tie offerings are Sony Corporation’s trainable robot dog, AIBO. For feline fans, the Omron Corporation has devel- ‘oped a robotic cat eatied Tama, which the Japanese elec tronics firm claims can develop a personality of sorts, de- pending on how itis treated, Another bonus: According to the Mainichi Daily News, the firm’s research found that 70% of women who stroked the psex:do-tabby for 30 min- utes said they developed a real sense of attachment to it. Those who prefer fins to paws might opt instead for “Aquazone,” from Umbrelia Software. This aquarium soft- ware program comes complete with four digital fish spe- cies: neon tetra, leopard catfish, angel fish, and black mollies. Each fish is programmed to have its ewn person ality, reflecting such qualities as strength or aggression. As with Tamagotchis, owners must feed and nurture their pets and maintain proper aquarium conditions — or they'll 151 find the carcasses of their loved ones floating to the top of the virtual tank BIG NEXT: PET HEALTH It’s not at all unusual these days to hear of dogs and cats having open-heart surgery, kidney transplants—even orthodontic braces to correct overbites. And for the de- pressed pooch? Why, Prozac, of course. Not surprisingly, this increased care has opened up a new market for medi- cal insurance and even for pet HMOs, Owners interested in preventive care are turing to natural foods and nutritional supplements for their dogs and cats. According to the Natura! Pet Products Associa- tion, the natural pet product category grew an astounding, 1,500% between 1992 and 1999, at which time itwas worth in excess of U.S.$65 million. The use of homeopathic rem- cedies, herbs, and other supplements is also growing. Pet owners are giving their pets glucosamine for aching joints, and echinacea to help boost their immune systems. TREND: BROAD-SPECTRUM INSURANCE Keeping a pet is an expensive business. According to Britain’s RSPCA, the basic cost of keeping a dog for 12 years (the average canine life span) is £7.324 (U.S.$12, 100), and that’s assuming no hefty vet bills —- mending a broken jeg costs around £1,600 for a dog and £450 for a cat. The National institute of Animal Heaith in the U.S, reports that dotlar sales of pet pharmaceuticals sold in veterinary offices jumped to U.S.$3 billion in 1998 from U.S.$2 billion in 1995. (Source: Supermarket Business, 15 June °00) To protect against such costs, pet owners can take out insurance, reports the Daily Mail. Most policies cover vet bills (fo # limit), and some pay for kenneling if the pet owner is hospitalized and advertising if the pet is lost or stolen and offer compensation if one’s vacation must be canceled because the pet is sick. Some also cover the cost of alternative therapies, such as treatment by a dog psychologist. While haif of the pet owners in Sweden and 11% of owners in the United Kingdom insure their pets, only 1% of U.S. pet owners do so despite the fact that they spend upwards of U.S.Si2 billion a year on veterinary care, ac- cording to a survey by the American Animal Hospital As- sociation, ‘TREND: EAST MEETS VETS Consumers are increasingly concerned about not only what they eat, but also what their pets eat, British pet- food company Pascoe’s has introduced organic, GM-free dog food, following a survey that revealed that one in three people care more about what they feed their dog than what they feed their partuer, A company spekesperson told the Sunday Mirror that consumers now want to buy organic food for the whole family — end that includes Fido.152 Natural health treatments for pets are also a growing industry. Supermarket News reports that herbal flea col- Jars and shampoos, herbs such as ginseng and St. John’s, ‘wort, and over-the-counter remedies such as glucosamine, an alternative therapy for joint ailments, are increasingly popular. According to Advertising Age, Ralston Purina Co. is introducing Purina Right Bites, aline of functional treats, for dogs and cats. The company claims the products can benefit canine and feline bones, teeth, and immune sys- tems, and can even serve as a treatment for hairballs. “Many human consumers translate what they would do for them selves onto their pets, which causes trends [such as functional foods} on the human food side to eventually reach pet foods,” commented « Raiston spokesperson. ‘Naturally, the holistic approach to pet hesith doesn’t stop at the grocery store. According to an articie in Good Housekeeping (Oct. 00), within the last five years an creasing number of pet owners have started seeking vets educated in alternative therapies. Craig Smith, D.V.M., of the American Veterinary Medical Association, says, ~There’s been a big increase in calls from vets who want training.” Such altemative therapies for pets as acupunc- ture, chiropractic work, massage, and even rolfing have experienced an increase in patronage. ‘TREND: THE REVERSE EFFECT When pets join the family, the relationship tends tobe 2 happily committed one, and today it’s growing more so: In addition to mutual love and companionship, pets are giving some owners a discount on their life insurance. Midland Life Insurance Co. in Columbus, Ohio has officially ree- ognized pet ownership as a “healthy lifestyle choice.” Midland offers lower rates to pet owners, noting that they tend to have lower blood pressure and less stress. And now a couple of downsides: TREND: ELDERLY CANINE CARE ‘The challenge of caring for aging family members can involved loved ones of all species. An epidemic of sickly older dogs who need constant attention may presenta new breed of elder-care crisis in Japan, where pet care is costly and caregivers are scarce At the root of the problem is the seemingly good news that dogs in Japan are living longer: The most recent avail- able statistics, from 1994, show them surviving an aver- age of 10.1 years, up from 8.6 years in 1990. At least one ‘Tokyo veterinarian attributes the change to better medical care and better living conditions for dogs. But with increased age comes a greater incidence of diseases such as diabetes, obesity, late-onset cancer — and senility. A 1997 study of 34 Japanese veterinary clin- ies found that one in every 200 canine patients brought in was senile. The symptoms, usually observed in dogs age included howling, sleepwalking, reversal of VITAL SPEECHES OF THE DAY day-night sleeping pattems, and getting stuck in comers, CULTURE CLASH: THROWAWAY PETS BBC radio reported in 1998 on an animal welfare scan- dal in Japan, where 800,000 domestic pets are being slaugh- tered each year after being abandoned by their owners, (In contrast, 17,000 stray dogs were put down in Britain that year.) The death rate has been attributed to the rap- idly changing popularity of various breeds, with pets being discarded once they go out of fashion. A similar situation has been reported in Spain, fueled by, of all things, vacation time. The Purina Foundation, a Bareelona-based animal rights advocacy group, reports that Spaniards abandoned 100,000 cats and 96,000 dogs in 1999 (up 17,006 from the year prior) — most of them during summer vacation months. Though some in this au- dience may disagree, Maria Sanz, director of the National Association for the Defense of Animals, commented: “People in Spain don’t consider owning a pet a long-term ‘commitment. They'll buy a puppy in September, abandon it in August, and they'll buy another puppy when they get, back from vacation.” Other countries have stray-pet problems, too. An esti- mated 100,000 pets are abandoned every year in France, and tens of thousands of pets are set loose in Italy every summer despite the annual “Don’t Abandon” advertising, campaign. Finally, to give you a flavor of developments we're en- visioning in the near term, and utilizing a bit of speculation, as we refine our forecasts, here’s several what’s nexts, for pets, the pets business, and us pet owners. WHAT'S NEXT Fido’s Fields Forever: Although popular in the U.S., pet cemeteries are just starting to take off in Germany. Ex- pect to see them spread across the rest of western Eu- rope (you can already find them in animal-loving Britain). Jellyfish: Trendsetting denizens of Tokyo — in this case, single women in their 20s and 30s — are discovering the joys offellytish. Think living lava lamp: slow, calm, gently floating. The pet species tend to be small and are trans~ parent, pale blue, or milky white. Pet jellyfish range in price from U.S.$14 to U.S.$38, but their special aquariums, cost upwards of U.S.$400. (Bubbles from standard aguari- ‘ums can prove fatal to delicate jellyfish.) Spiders And Snakes: As more and more people live alone, exotic, pocket-sized pets that take up little space, ed little care, and serve as conversation starters will become increasingly popular. downs on Doggie Dot-Coms: As pet e-commerce becomes more common, new laws regulating the sale of pets via the Internet will surface to protect the animals. welfare. ‘Travels with Flufly: The travel industry will offerJOHN C. GANNON breed of “family vacation” with transportation, accommo- dations, and activities designed for people and pets. ‘Man’s New Best Friend: In Western Europe, North ‘America, and Japan, cats aow outmumber dogs. Reasons for the shift include lack of space (more pet owners now live in apartments and flats), the perception that owning a cat is less expensive than owning a dog, and modem lifestyies that demand “lazy” pets, those that don’t require much care or exercise. ‘The Mother of All Markets: As peopte begin to take their pets everywhere they go, the newest breed of full- service supermarket features more amenities than you can shake a stick at. In Birmingham, Alabama, the latest Kroger Village Store features — in addition to a concierge, 153 sushi bar, wine steward, in-store coffee bar, and full-ser- vice bank — a pet-care center. Rover and Rover Again: Keeping a family pet healthy is the ultimate goal of every pet owner, but, in case you can’t, there are options. A Texan millionaire is paying a cloning laboratory at Texas A&M University U.S.$5 mil- Jion to produce a living replica of his pet dog Missy, ac- cording to the BBC. The laboratory has been given bwo years to produce a clone, The BBC reports that other laboratories and companies are hoping to move inte com- mercial cloning of pets and racehorses. So, there you have it: The state of the pet industry in October 2000. far ery from when pets fought for scraps out in the bamyard, isn’t it? Strategic Use Of Open Source Information ACORPORATE STRATEGY THAT LEVERAGE THE BEST PRACTICES Address by JOHN C. GANNON, Ciiairman, National Intelligence Council Delivered to the Washington College of Law, American University, Washington, D.C., October 6, 2000 ‘morning to address the Washington College of Law onthe subject of the “Strategic Use of Open-Source Information.” The open-source world represents a major challenge to the U.S. Intelligence Community, which is, in addition to being an espionage service, is one of the world’ T= you. Itis a particutar pleasure to be here this S biggest information-based businesses. The open-source challenge is a longstanding high priority for us, and our response to it is very much a dynamic work in progress. ‘Let me begin by saying that open-source information is not what it use to be. When I was working as a regional, analyst over a decade ago, “open source” largely meant information from foreign newspapers and the electronic ‘media, which was collected mostly by the Foreign Broad- cast Information Service (FBIS). “Open source” was “frosting on the cake” of source material dominated by clandestine collection, SIGINT, IMINT, and HUMINT. Today, open source has expanded well beyond “frost- ing” deep into the cake. It is indispensable to the produc- tion of authoritative analysis. It increasingly contains the best information to answer our most important questions. It is not just media reports, which are now just a small, decreasing piece of the open-source pie, Itis a vast array of documents and reports, which are publicly retrievable but, nonetheless, often hard to retrieve from today’s high- volume, high-speed information flow. And it is vital unre corded information in the heads of knowledgeable people we need fo engage. Accessing open-source information, in short, is a multi-faceted challenge that can only be met with a multi-front response or strategy. Let me begin by trying to encapsulate my remarks in five key points I would like to make this morning: Firs*, open-source information today is more important than ever in the post-Cold War world, in which intelligence targets are more diverse in complexity and more dispersed in geography. Closed societies in the Former Soviet Union and in Eastern Europe have opened up, and reliable infor~ mation now proliferates. The revolution in information tech- nology. atthe same time, has vastly increased the volume and speed of the information flow across the globe and across our computer screens. Open-source information now dominates the universe of the intelligence analyst, and this is unlikely to change for the foreseeable future, Seconé, technology is a major part of the answer but it iso substitute for the other essential part, people. To deal with the open-source challenge, the Intelligence Commu- nity must invest more in technology to give us the analyti- cal tools we need to access and exploit the vast informa- tion available to us, and in our people on whose expertise 1we must rely more than ever to prioritize ang interpret this information. My experience over the past decade has taught me that the greater the volume of information to assess, the stronger must be the expertise we bring te the effort to evaluate it.