Tag Archives: innovation

March 2016 in Review

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3 most frightening stories

3 most hopeful stories

3 most interesting stories

measuring productivity

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There was a recent Wall Street Journal (which I don’t subscribe to) article arguing that productivity has not really slowed down, that we are just not measuring it correctly. This Brookings paper argues against that idea.

After 2004, measured growth in labor productivity and total-factor productivity (TFP) slowed. We find little evidence that the slowdown arises from growing mismeasurement of the gains from innovation in IT-related goods and services. First, mismeasurement of IT hardware is significant prior to the slowdown. Because the domestic production of these products has fallen, the quantitative effect on productivity was larger in the 1995-2004 period than since, despite mismeasurement worsening for some types of IT—so our adjustments make the slowdown in labor productivity worse. The effect on TFP is more muted. Second, many of the tremendous consumer benefits from smartphones, Google searches, and Facebook are, conceptually, non-market: Consumers are more productive in using their nonmarket time to produce services they value. These benefits do not mean that market-sector production functions are shifting out more rapidly than measured, even if consumer welfare is rising. Moreover, gains in non-market production appear too small to compensate for the loss in overall wellbeing from slower market-sector productivity growth. Third, other measurement issues we can quantify (such as increasing globalization and fracking) are also quantitatively small relative to the slowdown. Finally, we suggest high-priority areas for future research.

“Non-market” eh? I think some of the twisted sentences in there are arguing that we may have reached a point in richer countries where we value things that are not measured in money. Bradford Delong kind of agrees with me, saying:

Isn’t “measuring consumer welfare” the point? We (a) arrange atoms (b) in forms we find pleasing and convenient, and then use them in combination with (c) information and (d) communication to accomplish our purposes. That our measures of economic growth are overwhelmingly “market” measures that capture the value of (a), much of the value of (b), and little of the value of (c) and (d) is an indictment of those measures, and not an excuse for laziness by shrugging them off as “non-market” and claiming that measuring the shifting-out of market-sector production functions is our proper business.

Finally, I got on this growth and productivity kick after reading this article in FiveThirtyEight, which links to a lot of the above sources.

None of this economic commentary ever talks about links to the physical world or ecosystem services. I will puzzle that out one day.

Robert Gordon

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Robert Gordon has expanded his argument that innovation and growth are over into a book. Here’s the description from Princeton University Press.

In the century after the Civil War, an economic revolution improved the American standard of living in ways previously unimaginable. Electric lighting, indoor plumbing, home appliances, motor vehicles, air travel, air conditioning, and television transformed households and workplaces. With medical advances, life expectancy between 1870 and 1970 grew from forty-five to seventy-two years. Weaving together a vivid narrative, historical anecdotes, and economic analysis, The Rise and Fall of American Growth provides an in-depth account of this momentous era. But has that era of unprecedented growth come to an end?

Gordon challenges the view that economic growth can or will continue unabated, and he demonstrates that the life-altering scale of innovations between 1870 and 1970 can’t be repeated. He contends that the nation’s productivity growth, which has already slowed to a crawl, will be further held back by the vexing headwinds of rising inequality, stagnating education, an aging population, and the rising debt of college students and the federal government. Gordon warns that the younger generation may be the first in American history that fails to exceed their parents’ standard of living, and that rather than depend on the great advances of the past, we must find new solutions to overcome the challenges facing us.

A critical voice in the debates over economic stagnation, The Rise and Fall of American Growth is at once a tribute to a century of radical change and a harbinger of tougher times to come.

Here’s an interview with Gordon where he talks about the book.

teaching creativity

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Here are some ideas on teaching kids to be creative. The main idea seems to be to focus on values rather than rules. The article talks about risk taking, but the way I would put this is, encourage them to think about the “why” of good behavior and let them figure out the “what” for themselves. I’m not sure I see the risk in that, other than the risk of not going with the crowd.

There are a few paragraphs on brainstorming research.

…there a few things that happen that make brainstorming groups less than the sum of their parts.

One is called production blocking, and it’s the basic idea that we can’t all talk at once. And as a result, some ideas and some students just don’t get heard. Two, there’s ego threat, where kids are nervous about looking stupid or foolish, so they hold back on their most original ideas. And then, three is conformity. One or two ideas get raised that are popular. Everyone wants to jump on the majority bandwagon, as opposed to bringing in some radical, different ways of thinking.

You put kids in separate rooms, what you get is all of the ideas on the table, and then you can bring the group together for what the group does best, which is the wisdom of crowds. The evaluating. The idea selecting. The figuring out which of these ideas really has potential to be, not only novel, but also useful.

Greyhound in the 21st Century

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Here’s an interesting article in The Dallas Morning News on Greyhound’s technology strategy.

The 101-year-old company stands at a nexus these days. Uber, car-sharing services and autonomous vehicles will likely thoroughly rearrange ground transportation over the next decade. And young millennials continue their migration to downtown areas — sometimes without cars…

Now Greyhound sells at least 60 percent of its tickets through mobile digital devices like cellphones and tablets, Leach said. And over the next few years, the company wants to become part of a loose urban-mobility network built around ride-sharing and autonomous vehicles…

Despite their Old World aura, buses are a solid part of the modern transportation industry, and Greyhound is still the largest player, with an estimated 31.2 percent share of the market.

Well, if by “Old World” you mean Europe, they have had an efficient inter-city train system for about 50 years. We don’t have that in the U.S. for at least two reasons. First, because we have an enormous investment in a highway system that benefits the auto, oil and finance industries. That system is not optimal by any stretch of the imagination, but now that we’ve built it, we are stuck maintaining it and it would be extremely difficult to abandon it in favor of a better system like an efficient inter-city train network. There isn’t enough money to do both at the same tie. Second, the current approach is further entrenched by our federal political system which gives disproportionate votes and funds to the empty spaces between cities.

Now, if you’re a bus service, you benefit from that sunk investment in the highway system because you don’t have to pay anything near its true cost. Your customers are paying those costs in taxes and blood, but your prices appear cheap to them. Add in a few perks like wireless and clean comfortable seats, and your service becomes a near optimal way to navigate a very suboptimal transportation system.

the man’s intellectual property rights

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The founder of the Creative Commons license committed suicide after being threatened with 95 years in prison over a copyright violation. The article goes through some of the arguments against standard copyright.

‘Open access’ is an anodyne term for a profoundly transformative idea. Advocates argue that academic research should be made freely available to the world at the time of publication, and that access should not be contingent on an individual’s or institution’s ability to afford a subscription to a given journal or database. Academic authors do not usually write for profit; rather, their work aims to augment the common store of knowledge. What’s more, since the government often funds their research, it’s not a stretch to claim that the fruits of that research should belong to the public. So why should this material be subject to the same access restrictions as a mystery bestseller or a Hollywood film? As with many other inexplicable policies, the blame belongs to a vestigial middleman.

When a university professor finishes a research project, she typically records her results in an academic paper, which she submits for publication in a peer-reviewed journal. These journals—the reputable ones, at least—operate via volunteers, with authors, editors, and peer reviewers all working for free. Nobody gets paid, or expects to get paid, except the publisher. In exchange for the publisher’s services, which include coordinating the publication and peer-review processes, formatting, and distribution, the author concedes the copyright to her article in perpetuity. It’s a simple trade: the academic publisher assumes the financial risk of preparing and distributing an esoteric work for which there’s a limited audience and in exchange retains all the profits that might come from its sale.

In commercial trade publishing, publishers realise profit by selling a book for a relatively low price to a wide audience. Since no wide audience exists for academic papers, academic publishers realise profit by selling them at high prices to the few entities who can’t do without them—libraries and scholars, mostly—which renders these papers functionally inaccessible to the casual or impoverished user.

The Knowledge: How to Rebuild Civilization in the Aftermath of a Cataclysm

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I’d like to share a passage from The Knowledge: How to Rebuild Civilization in the Aftermath of a Cataclysm by Lewis Dartnell. This is a clever book, because it is basically a book on the history of technology. That could be a dry and boring book that appeals only to a few history nerds, obviously, but what Mr. Dartnell has done is put a clever spin on that and write the book as though it were giving us instructions on how to “reboot” civilization after some disaster like a plague or catastrophic war. This is about two alternative designs for refrigeration.

If history is just one damn thing after another, then the history of technology is just one damn invention after another: a succession of gadgets each beating off inferior rivals. Or is it? Reality is rarely that simple, and we must remember that the history of technology is written by the victors: successful innovations give the illusion of a linear sequence of stepping stones, while the losers fade into obscurity and are forgotten. But what determines the success of an invention is not always necessarily superiority of function.

In our history both compressor and absorption designs for refrigeration were being developed around the same time, but it is the compressor variety that achieved commercial success and now dominates. This is largely due to encouragement by nascent electricity companies keen to ensure growth in demand for their product. Thus the widespread absence of absorber refrigerators today (except for gas-fueled designs for recreation vehicles, where the ability to run without an electrical supply is paramount), is not due to any intrinsic inferiority of the design itself , but far more due to contingencies of social or economic factors. The only products that become available are those the manufacturer believes can be sold at the highest profit margin, and much of that depends on the infrastructure that already happens to be in place. So the reason that the fridge in your kitchen hums – uses an electric compressor rather than a silent absorption design – has less to do with the technological superiority of that mechanism than with the quirks of the socioeconomic environment in the early 1900s, when the solution became “locked in.” A recovering post-apocalyptic society may well take a different trajectory in its development.

what’s whiter than white?

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Here’s an article that is interesting for at least a couple reasons. First, the efforts of the Chinese (government? companies?) to steal the “trade secrets” of U.S. companies. For some types of knowledge, like how to program computers, a lot of the potential economic value to be captured exists inside the minds of people who have gained skills only through years of painful education and experience. Stealing a computer program written by one of these people doesn’t really steal that much of the value, because in order to reverse-engineer and use it you basically need someone just as knowledgeable and skilled as the person who created it in the first place. On the other hand, with a substance or material that has a “recipe”, like a chemical or drug, stealing the recipe does mean you have stolen most of the value. So you can understand why companies that develop substances and chemicals go to great lengths to protect their “intellectual property”. I still think there is a legitimate question though whether it is morally wrong to steal something like this. Developing countries can improve the lives of their people by quickly “catching up” to countries with more advanced technology. Is this wrong? Should they have to buy the knowledge? You can argue that if there are no protections for knowledge, there is less incentive for firms to take the risk of looking for new knowledge, and therefore progress will be held back. But I would ask whether if a country like China did not “steal” the knowledge, would it otherwise buy it or would it just go without. If it is the latter nobody benefits – neither the companies with the knowledge or the people that could benefit from it.

The second reason I find this interesting is that it is an example of an incredibly advanced industrial technology that really has no practical purpose, and yet seems to have immense economic value anyway. The value we place on useless and even harmful things could be a practical measure of our flaws as a species. I was shocked to hear that the filling of Oreos contains titanium dioxide just to make it appear more brilliant white. And whether the product is safe or not, the process involves toxic chemicals that have to be manufactured and trucked or trained around at some risk to the public. I really don’t think I want to be eating that. When a product is useful and there is no readily available substitute, you can justify taking some risk to bring it to market. When it is not useful, there is no risk justified in my opinion. Long-term we should be looking for 100% safe alternatives to toxic chemicals.

There’s white, and then there’s the immaculate ultrawhite behind the French doors of a new GE Café Series refrigerator. There’s white, and then there’s the luminous-from-every-angle white hood of a 50th anniversary Ford Mustang GT. There’s white, and then there’s the how-white-my-shirts-can-be white that’s used to brighten myriad products, from the pages of new Bibles to the hulls of superyachts to the snowy filling inside Oreo cookies…

The basics are public knowledge. First, the ore is fed into a large ceramic-lined vessel—the chlorinator. There it’s mixed with coke (pure carbon) and chlorine and heated to at least 1,800F. “The material inside here resembles lava. This is like running a big volcano,” Daniel Dayton, a former top executive at DuPont, told jurors about the chlorinator in 2014. (Chemours and DuPont declined to comment for this story.)

Hot gas in the chlorinator gets piped out and condensed into a new compound called titanium tetrachloride, or “tickle,” as engineers call it. The tickle is heated again, subjected to various purifying chemical reactions, and cooled. Now a yellowish liquid, the tickle is inserted into a second vessel, called the oxidizer. It’s again heated to very high temperatures and mixed with oxygen; the reaction knocks the chlorine molecule off the titanium, and two oxygen molecules attach to the titanium in its place. The resulting particles are so fine that the white stuff has the consistency of talcum powder.

 

January 2016 in Review

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I’m going to try picking the three most frightening posts, three most hopeful posts, and three most interesting posts (that are not particularly frightening or hopeful) from January.

3 most frightening posts

  • Paul Ehrlich is still worried about population. 82% of scientists agree.
  • Thomas Picketty (paraphrased by J. Bradford Delong) says inequality and slow growth are the norm for a capitalist society. Joseph Stiglitz has some politically difficult solutions: “Far-reaching redistribution of income would help, as would deep reform of our financial system – not just to prevent it from imposing harm on the rest of us, but also to get banks and other financial institutions to do what they are supposed to do: match long-term savings to long-term investment needs.”
  • Meanwhile, government for and by big business means the “Deep State” is really in control of the U.S. In our big cities, the enormous and enormously dysfunctional police-court-prison system holds sway over the poor.

3 most hopeful posts

3 most interesting posts

  • There are some arguments in favor of genetically modified food – they have increased yields of some grains, and there is promise they could increase fish yields. 88% of scientists responding to a Pew survey said they think genetically modified food is safe, but only 37% of the U.S. public thinks so. In other biotech news, Obama’s State of the Union announced a new initiative to try to cure cancer. In other food news, red meat is out.
  • Not only is cash becoming obsolete, any physical form of payment at all may become obsolete.
  • The World Economic Forum focused on technology: “The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.”

 

the fourth industrial revolution

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Reporting fro Davos…er…Philadelphia – the theme of this World Economic Forum is “the fourth industrial revolution”.

The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.

The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.