Tag Archives: innovation

a career in ice delivery

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Apparently, not only was ice delivery a pretty good business early in the 20th century, but ice delivery men also did okay with the ladies. I guess not too many ladies could afford a pool boy back then. But in all seriousness, the transition from ice to refrigeration is a pretty interesting case of a new technology displacing an old. It took about 10 years for sales of the new technology to exceed the old, and about 30 years for the ice box to go away entirely.

In Philadelphia, one major ice company, Knickerbocker, had massive plants, one with 125 employees and storage capacity for a million tons throughout the city. With the help of 1,200 horses and mules, Knickerbocker drivers kept more than 500 delivery wagons mobile on the streets. At the start of the 20th century, America seemed to need every last one its 1,320 ice plants. And the nation’s iceboxes multiplied. Between 1889 and 1919, the value [of] iceboxes manufactured in the United States increased from $4.5 million to $26 million…In 1920, a household refrigerator cost $600 (more than $7,500 in today’s dollars) and broke down about every tenth week…

Between 1920 and 1925, the number of refrigerators in American kitchens rose from 4,000 to 75,000. In 1926 they boomed to 248,000 units and by 1928, 468,000. The following year, Frigidaire manufactured its millionth refrigerator. By 1930, the sales of electric household refrigerators surpassed those of iceboxes…By 1940, 63 percent of all households had refrigerators—13.7 million of them. Four years later, 85 percent of America’s kitchens were equipped…

By 1953, when the last U.S. icebox manufacturer went out of business, the young, virile delivery man carrying dripping, often dirty, blocks of ice into millions of clean American kitchens, the man whose proximity to wives and daughters fueled countless rumors, would-be scandals and jokes on stage and screen, that man, the iceman, finally found a new home—and new purpose—in nostalgia purgatory.

And now , just because, the relevant Top Gun clip:

August 2016 in Review

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3 most frightening stories

3 most hopeful stories

3 most interesting stories

  • Bokashi is a system that essentially pickles your compost.
  • There is an unlikely but plausible scenario where Gary Johnson, the Libertarian candidate, could become President of the United States this fall. Speaking of implausible scenarios, I learned that RIchard Nixon made a serious attempt to pass a basic income bill in 1969.
  • Here is a short video explaining the Fermi Paradox, which asks why there are no aliens. Meanwhile Russian astronomers are saying there might be aliens.

financial technology

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Here is an article about new “financial technology” by the author of a book called Money Changes Everything: How Finance Made Civilization Possible.

For example, even as we debate the relevance and usefulness of traditional financial institutions such as banks, another revolution is underway in the world of money. A mere decade after we thought we had mastered the intricacies of asset securitization, shadow banking and credit default swaps, an entirely new financial phenomenon has emerged. It is called FinTech – short for financial technology. FinTech involves the plumbing and wiring of the financial system. It is changing how we borrow, how we save, how we raise money for companies even how we assess our future; its possibilities, risks and relationships.

Some of these innovations you may already know: PayPal, Bitcoin, Financial Engines, Kickstarter, Prosper.com and Venmo. They are apps, payment systems, crowdfunding vehicles and peer to peer lending sites. Their use has spread rapidly along with other technological improvements in how we get things done. However these companies are the tip of a very large iceberg.

Many of the innovations in finance are buried in the complex, business to business infrastructure of the economy. These include new ways of detecting fraud, recording transactions, routing orders, valuing assets and even discovering hidden patterns in big data; massaging the fast, continuous flow of news, trades, tweets, satellite images, and Facebook posts. Financial companies – from the big players like Goldman Sachs and Blackrock down to your local bank and financial advisor believe FinTech will fundamentally alter their businesses — and they are rushing to get out ahead of competitors. This is because FinTech innovation tends to disrupt the existing structure. It disintermediates customers and providers of financial services, replacing them with peer-to-peer lending, instant money transfers, loans without loan officers, and investment without investment banks. These innovations are transformative, empowering and create a new infrastructure for exploring even greater opportunities but they threaten the status quo in ways that the securitization wave of the 2000’s never approached. Securitization mostly involved the same big players that ruled the markets in prior decades. FinTech brings a different cast of characters who are defining new communities of investors, new sources of knowledge and unfortunately new kinds of scams and risks. The top FinTech companies today include a lot of new names. How many of us have been following the likes of Credit Karma, Market Axcess, Square, Stripe and SoFi?

I’m all for cutting out the middlemen trying to rip us off. And I’m still looking for the perfect app for splitting a restaurant bill among a large party.

June 2016 in Review

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3 most frightening stories

  • Coral reefs are in pretty sad shape, perhaps the first natural ecosystem type to be devastated beyond repair by climate change.
  • Echoes of the Cold War are rearing their ugly heads in Western Europe.
  • Trump may very well have organized crime links. And Moody’s says that if he gets elected and manages to do the things he says, it could crash the economy.

3 most hopeful stories

  • China has a new(ish) sustainability plan called “ecological civilization” that weaves together urban and regional planning, environmental quality, sustainable agriculture, habitat and biodiversity concepts. This is good because a rapidly developing country the size of China has the ability to sink the rest of civilization if they let their ecological footprint explode, regardless of what the rest of us do. Maybe they can set a good example for the rest of the developing world to follow.
  • Genetic technology is appearing to provide some hope of real breakthroughs in cancer treatment.
  • There is still some hope for a technology-driven pick-up in productivity growth.

3 most interesting stories

the productivity puzzle

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Nouriel Roubini has a nice run-down on the technologies that theoretically might be having some impact on productivity, but aren’t:

  • ET (energy technologies, including new forms of fossil fuels such as shale gas and oil and alternative energy sources such as solar and wind, storage technologies, clean tech, and smart electric grids).
  • BT (biotechnologies, including genetic therapy, stem cell research, and the use of big data to reduce health-care costs radically and allow individuals to live much longer and healthier lives).
  • IT (information technologies, such as Web 2.0/3.0, social media, new apps, the Internet of Things, big data, cloud computing, artificial intelligence, and virtual reality devices).
  • MT (manufacturing technologies, such as robotics, automation, 3D printing, and personalized manufacturing).
  • FT (financial technologies that promise to revolutionize everything from payment systems to lending, insurance services and asset allocation).
  • DT (defense technologies, including the development of drones and other advanced weapon systems).

He also runs through the various possible explanations for why the data do not show any progress in productivity:

  1. These technologies are just not as game-changing as the ones that sparked the revolutions of the past.
  2. The measurements of productivity that worked in the past are outdated.
  3. There is a lag between innovation and its effects on productivity.
  4. The current recession has been so bad it has caused a permanent reduction in capital investment, skills of the work force, and consumer confidence.

I was waiting for Roubini to tell us which combination of these factors is the right one, but he doesn’t so I will speculate myself. #1 is just wrong, although I can see an argument that the new technologies are still in an early stage. Although the plow, the printing press, the steam engine, electricity, etc. were game changing, the game didn’t change as soon as they were invented. They had to catch on, infrastructure had to be built, resistance to change had to be overcome, and it took awhile. Each successive revolution happened faster though, which is why I am skeptical that this time is different.

#2 doesn’t make much sense to me. You can tell people who are poor, unemployed, starving, and angry that their condition is just being measured and reported incorrectly, but they are not going to buy that

#4 probably has some validity in the short to medium term, but hopefully it won’t last forever.

My money is on #3. I think there is a lag, and it just hasn’t hit yet. If and when there is a sharp technology-driven surge in productivity, it doesn’t mean everything is going to instantly be great for everybody. As we produce more with less effort, there will be winners and losers, haves and have nots. And there will be a lag between when that starts and when it gets resolved. And just to beat a dead horse, we can’t just keep producing and consuming more forever unless we figure out a way to do that without growing our ecological footprint. And, we need to watch out for those defense technologies.

electric cars

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This article argues that electric cars could be about to take off in a big way, and draws an analogy to the disruption of the cell phone industry caused by the iPhone.

In 2007, Nokia was the biggest and most fashionable name in cell phones, with an unassailable lead in hand-held technology. Things had been so good for so long that company executives saw little chance for any competitive challenge–phones were a tough business, they said, and Nokia was reaping the harvest of decades of hard work that no one else could hope to match.

That June, Steve Jobs introduced the iPhone. And seven years later, Nokia—worth a quarter of a trillion dollars at its apex—abjectly sold off its much-diminished phone division to Microsoft. The price was $7 billion, less than 3% of its former value…

On March 31, his Tesla Motors unveiled its long-promised Model 3, a $35,000 electric car that will go 215 miles per charge… In addition to GM’s Chevy Bolt, Nissan will produce a second-generation Leaf with the same 200-mile range and approximately $35,000 price; it will come in 2017. Before that, Toyota will deliver its Prius Prime, a plug-in hybrid; and BMW already has its pure electric i3. The other major carmakers are piling in as well by the end of the decade.

Before the iPhone, some of the best recent examples of disruption are the digital camera displacing the film camera (much to Kodak’s surprise) and the internet all but destroying the newspaper industry. And you could argue that these are no more revolutionary than the advent of automobiles, electricity, steam, and so on back through history. But the point is big technological advances happen in fits and starts on a regular basis, and will continue to do so however surprised and complacent we may continue to be.

the path to water innovation

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Brookings has a new paper called The Path to Water Innovation. Here’s an excerpt:

The primary barriers to innovation are related to the way that the many layers of governmental agencies and water entities manage the nation’s water sector. Among the main management and policy barriers are (1) unrealistically low water pricing rates; (2) unnecessary regulatory restrictions; (3) the absence of regulatory incentives; (4) lack of access to capital and funding; (5) concerns about public health and possible risks associated with adopting new technologies with limited records; (6) the geographical and functional fragmentation of the industry; and (7) the long life expectancy, size, and complexity of most water systems. Although the last three factors are inherent to the water sector and hard to change, substantial policy reforms are feasible that could alter pricing, regulation, and finance in the water sector—all in ways that would encourage innovation.

We focus on several recommendations: (1) pricing policies that would both better align with the full economic cost of supplying water and decouple revenues from the volume of water supplied; (2) regulatory frameworks to create an open and flexible governance environment that is innovation friendly and encourages valuable new technologies; and (3) financing and funding mechanisms, such as a public benefit charge on water, that can help raise sufficient funds to implement innovative solutions. As has been demonstrated in the clean energy sector, implementation of these policy reforms would facilitate greater innovation in the water sector. In addition, we recommend the creation of a state-level water innovation vision that would identify state-specific innovation opportunities and policies, along with state innovation offices to help implement the vision across the many varied agencies and firms relevant to the sector. While we expect these state water innovation offices would become common, a small group of states with the greatest water challenges—such as California, Florida, and Texas, or a consortium of like-challenged states in a region such as the West—would begin the process. Based on the lessons learned, other states could follow.

Runaway Inequality

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Les Leopold is a guy who wrote a book called Runaway Inequality: An Activist’s Guide to Economic Justice. Here’s an excerpt from an interview about the book:

In the late ’70s, roughly, a new economic philosophy really caught hold in both political parties. It originally came from the right, from Milton Friedman and the free marketeers. Academics call it neoliberalism; in the book, we call it the “Better Business Climate.”

It basically was kind of a simple model. Cut taxes, cut regulations, cut back social spending so people will be more eager to find work and be less dependent on the government, and basically undermine the power of labor unions so the economy would run more on market principles and have less inefficiencies in it. There would be more investment and profits, and therefore, all boats would rise. It would lead to kind of a boom economy. That was the theory. I was in graduate school when that was going on, and it was pretty strong, even more liberal economists were sort of giving up on Keynesianism and going in this direction.

What they didn’t teach us and what they never discussed is that it’s one thing to deregulate trucking or airlines or telecommunications, but it’s quite another thing to deregulate the financial sector… In 1980, about two percent of a company’s profits were used for stock buybacks. By 2007, 75 percent of all corporate profits were used to buy back their own shares. Forget about R&D, forget about workers’ wages, forget about all that kind of stuff. All that matters to a CEO today is raising the prices of the shares through stock buybacks.

The mantra makes some logical sense – capitalism is about competition to create better products at better prices and operate efficiently in the short term, and a necessity to innovate if you want to compete in the long term. Consumers are supposed to win. Profit and stock price are supposed to be the score card that determines which companies are winning, and the possibility of winning is the incentive to play the game. This all makes some sense, unless and until people are gaming the system to such an extent it is not really competition any more.

Oculus Rift

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Here’s an interview with the creator of the Oculus Rift, Palmer Luckey:

Luckey argues that virtual reality is a bigger turning point in technology than Apple II, Netscape or Google. VR, he says, is the final major computing platform that’s not a transitional step to the next big thing.

“If you have perfect virtual reality eventually, where you’re be able to simulate everything that a human can experience or imagine experiencing, it’s hard to imagine where you go from there,” Luckey tells NPR’s Kelly McEvers. “If you have perfect virtual reality, what else are you supposed to perfect?” …

Things like email, and Twitter, and Facebook, and text messaging — they all work reasonably well. But we use them because they’re convenient, and cheap, and easy, not because they’re the best way to communicate with somebody. Today, the best way to communicate with someone is still face-to-face. Virtual reality has the potential to change that, to make it where VR communication is as good or better than face-to-face communications, because not only do you get all the same human cues of face-to-face communication, you can basically suspend the laws of physics, you can do whatever you want, you can be wherever you want.