Economics of Technology – artdiamondblog.com

SpaceX Embraces Fast Failures as the Best Path to Fast Fixes

(p. B1) SpaceX’s Starship spacecraft pulled off an extended flight through space on its third test mission, marking major progress for a vehicle that could one day transport astronauts to the moon and beyond.

Shortly after launching the nearly 400-foot-tall rocket Thursday [March 14, 2024], SpaceX successfully separated the booster from the spacecraft, which proceeded to fly for around an hour before it was lost while re-entering Earth’s atmosphere, according to a company livestream.

The mission advanced much farther than the company’s previous two Starship test flights. It was a milestone for a vehicle that is a centerpiece of SpaceX’s commercial ambitions, NASA’s space exploration plans, and company founder Elon Musk’s goal of one day sending humans to Mars.

. . .

(p. B4) Current and former SpaceX leaders have said the company embraces failing fast to try to rapidly identify fixes and improve. The company took 63 corrective actions to address issues that emerged during the initial launch, and an additional 17 following the second, according to the FAA.

For the full story, see:

Micah Maidenberg. “SpaceX Starship’s Third Test Mission Marks Major Progress Before Explosion.” The Wall Street Journal (Friday, March 15, 2024): B1 & B4.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story was updated March 14, 2024, and has the title “SpaceX’s Starship Makes Major Progress in Third Flight Test.”)

Federal and State Regulatory Thicket Thwarts “Permitting, Siting, Construction and Operation” of New Energy Infrastructure and Technology

(p. C5) Environmentalists have long argued that tackling climate change will require regulations to discourage fossil-fuel use, such as a carbon tax or a cap-and-trade program. In reality, there is no plausible path to a low-carbon economy without a serious deregulatory program. Today’s thicket of environmental regulation at the federal and state levels thwarts permitting, siting, construction and operation of virtually every class of new infrastructure and technology. There are simply too many veto points and opportunities for obstruction, at too many procedural and jurisdictional levels, to conceivably embark on a rapid mission to remake the nation’s energy economy.

. . .

The U.S. can no longer continue to neglect its compounding infrastructure and clean-energy needs. We aren’t going to regulate our way to a thriving low-carbon economy and a more stable climate. America needs to get back to building again.

For the full commentary, see:

Ted Nordhaus. “For a Clean-Energy Future, We Need Deregulation.” The Wall Street Journal (Saturday, February 19, 2022 [sic]): C5.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date February 17, 2022 [sic], and has the same title as the print version.)

Musk Fights for Right of Individuals in Sweden to Enter into Contracts

(p. A15) Sweden is the West’s most corporatist society. Powerful interest groups, often described as “social partners,” use collective bargaining to set rents for apartments and wages earned in labor markets.

This model is being challenged by Tesla CEO Elon Musk, who is refusing to enter into collective wage agreements with Swedish trade unions. The unions have responded with strikes and blockades on Tesla operations in the country.

. . .

Liberal democracy presupposes fundamental rights and freedoms. Some of these, such as the freedoms of opinion, press and expression, are enshrined in the Swedish constitution. But the right of the individual to enter into contracts isn’t similarly guaranteed.

. . .

Liberal democracy is being threatened globally by growing populist and illiberal movements. The government in Stockholm should counteract this threat by strengthening people’s individual rights and freedoms in the Swedish constitution. If this happens, Mr. Musk will have given Sweden a great gift.

For the full commentary, see:

Lars Jonung. “Musk Fights Sweden’s Unions.” The Wall Street Journal (Wednesday, February 14, 2024): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date February 13, 2024, and has the same title as the print version.)

Apple’s Bold “1984” Super Bowl Ad, Had Failed Marketing Test

(p. C4) Conceived by the Chiat/Day ad agency and directed by Ridley Scott, then fresh off making the seminal science-fiction noir “Blade Runner,” the Apple commercial “1984,” which was intended to introduce the new Macintosh computer, would become one of the most acclaimed commercials ever made. It also helped to kick off — pun partially intended — the Super Bowl tradition of the big game serving as an annual showcase for gilt-edged ads from Fortune 500 companies.

. . .

FRED GOLDBERG The original idea was actually done in 1982. We presented an ad [with] a headline, which was “Why 1984 Won’t Be Like ‘1984,’” to Steve Jobs, and he didn’t think the Apple III was worthy of that claim.

. . .

HAYDEN Steve Jobs was excited but frightened by it. Steve Wozniak offered to pay to run the commercial himself.

SCULLEY Before the commercial ran, we had to take it to the board of directors. The board sees the commercial, and then there’s just dead silence in the boardroom. They turn and look at me, and [a board member] says, “You’re not really going to run that thing, are you?”

HAYDEN As the closing credits scrolled up, the chairman, Mike Markkula, put his head in his hands and kind of folded over the conference table, and then slowly straightened up and [proposed hiring a different ad agency].

SCOTT I made it. I thought it was pretty good. But I was thinking, “Really? They’re going to run this on the Super Bowl? And we don’t know what it’s for?”

GOLDBERG I had them do a theater test. We get back the results, and it’s the worst business commercial that they’ve ever tested, in terms of persuasiveness.

SCULLEY The board said, “We don’t think you should run it. Try to sell the time.”

GOLDBERG And it was Jay Chiat who told us to drag our feet, basically, when we were told to sell off the time on the Super Bowl.

HAYDEN At long last, it came down that we would run the “1984” commercial once.

For the full story, see:

Saul Austerlitz. “The Super Bowl’s Big Ad Touchdown.” The New York Times (Saturday, February 10, 2024): C4.

(Note: ellipses, and bracketed year, added. The bracketed words in comments from Goldberg, Sculley, and Hayden were in the original.)

(Note: the online version of the story was updated Feb. 5, 2024, and has the title “40 Years Ago, This Ad Changed the Super Bowl Forever.” In the print and online versions, the names of panelists were in capitalized and bold fonts.)

Apple’s bold and famous “1984” Super Bowl ad could only be understood by those who were familiar with:

Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1st published in 1949].

A PC Industry Run “By Middle-Manager Types” Is No Longer “Fun”

(p. B10) John Walker, a groundbreaking, if reclusive, technology entrepreneur and polymath who was a founder and chief executive of Autodesk, the company that brought the ubiquitous AutoCAD software program to the design and architecture masses, died on Feb. 2 [2024] in Neuchâtel, Switzerland.

. . .

AutoCAD — the “CAD” stands for computer-aided design — was based on a program called Interact created by Michael Riddle, another company founder. With the contributions of Mr. Walker as well as Greg Lutz, who was also a founder, and the rest of the team, AutoCAD would go on to revolutionize industries including architecture, graphic design and engineering by allowing design professionals to ditch their pencils and paper and render their creations on a screen using an inexpensive personal computer.

“To him goes the credit for the Second Design Revolution,” the California software executive Roopinder Tara wrote in a tribute to Mr. Walker on the site Engineering.com. The “First Design Revolution,” as Mr. Tara called it, was the creation of earlier CAD programs that ran on expensive mainframes or minicomputers. But, he wrote, it was with AutoCAD, which “burst onto the scene in 1982, after the advent of the IBM PC, that the computer actually started to deliver on the promise.”

. . .

“In 1977, this business was fun,” Mr. Walker wrote in a book-length history of Autodesk that he published on his site. “The sellers and the buyers were hot-shot techies like ourselves, everybody spoke the same language and knew what was going on.”

“Today,” he added, “the microcomputer industry is run by middle-manager types who know far more about P/L statements than they do RAM organization.”

For the full obituary, see:

Alex Williams. “John Walker, 74, Recluse Who, as a Tech Mogul, Popularized AutoCAD.” The New York Times (Thursday, March 7, 2024): B10.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date March 6, 2024 and has the title “John Walker, Tech Executive Who Popularized AutoCAD, Dies at 74.” In both the online and print versions, the word fun is in italics.)

FDA Delays Apple Offering Consumers Quick and Convenient Blood Pressure Readings

Doesn’t the FDA do harm by requiring that Apple watch blood pressure monitor be equal in accuracy to a standard clinical blood pressure monitor? Many people will not take the time and effort to get frequent readings from a standard blood pressure monitor in a clinic. But many of them would check their blood pressure conveniently on their watch. Isn’t a less accurate reading better than no reading at all?

(p. A1) Apple’s widening effort to turn its nine-year-old watch from a luxury timepiece into the ultimate all-in-one medical device is taking it into territory that is legally treacherous as well as potentially profitable.

. . .

(p. A2) “The studies that we’ve seen are not yet reassuring that they’re ready for prime time or for clinical use,” said Jordana Cohen, associate professor of medicine and epidemiology at the University of Pennsylvania.

To secure Food and Drug Administration clearance for selling a blood-pressure monitor, companies must demonstrate through the FDA’s 510(k) process that their device’s accuracy is comparable to an existing, already cleared device, she added.

Similarly, tracking glucose through noninvasive skin sensors is generally less precise than direct blood analysis, with factors such as skin tone and temperature affecting accuracy.

For the full story, see:

Dalvin Brown and Aaron Tilley. “Tech and Legal Hurdles Hinder Apple’s Quest for Medical Watch.” The Wall Street Journal (Friday, Dec. 29, 2023): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 28, 2023, and has the title “Apple Keeps Chasing the Ultimate Health-Tracking Watch—but It Could Take Years.”)

Akio Toyoda Had the Courage to Predict the Current EV Debacle

On Nov. 25, 2022, I ran a blog entry that reported on the severe criticism that then-Toyota-President Akio Toyoda [sic] was receiving for his skepticism that charging infrastructure and consumer preferences were ready for an immediate full switch to electric vehicles. Because he had the courage to keep Toyota focused on hybrids, consumers now have more of what they need and want. As a result Toyota prospers. In a capitalist system, firms run by executives with foresight and courage receive their just reward.

(p. B1) TOKYO—Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.

Toyota on Tuesday [February 6, 2024] forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.

Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.

Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.

For the full story, see:

River Davis. “Toyota Is Cashing In As Hybrid Sales Boom.” The Wall Street Journal (Wednesday, February 7, 2024): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date February 6, 2024, and has the title “Toyota Cashes In on Booming Hybrid Sales.”)

A Miraculous Machine in the Middle-Ages That Did Nothing to Improve the Lives of the Masses

Before the industrial revolution clever inventors sometimes devised elaborate and amazing machines. The Antikythera mechanism is a famous example. Though these machines amaze us, they usually did little to improve the lives of those who lived at the time of invention. Why? Maybe the answer is that just before the industrial revolution, entrepreneurs were encouraged and enabled (through property rights and patents) to apply amazing inventions to the betterment of the people.

(p. C9) What kind of a book do we have in “Miracles and Machines: A Sixteenth-Century Automaton and Its Legend”?

. . .

The authors call the book a “clockwork”; its many disparate parts are joined in scrupulous devotion to a 16th-century automaton—an object, they write, which is at once “a sculpture, a machine, an icon, and a messenger.”

The figure is of a Franciscan friar, about 16 inches tall, carved out of wood, cloaked in a modern replica of the garb he once wore. His 5-pound weight is due to an intricate iron mechanism that fits inside his wooden body; it is wound with a key.

. . .

Imagine, Ms. King and Mr. Todd suggest, what it would have been like to see this automaton at the time of its creation. He is placed upon a candlelit table. His feet take steps under his tunic—but he actually glides on three wheels, making his movement seem ethereal. He is deliberately slow. This is not a mechanism meant to thrill us with speed and virtuosity. His movements are graceful, solemn.

As he moves, the friar raises and lowers a cross in his left hand and strikes his chest with his right, as if declaring “mea culpa.” He also lifts the cross to his lips and fixes his gaze steadily, perhaps at an observer at the opposite end of the table. He looks down at the cross, up at the observer, and begins to turn: “You let out half a breath,” the authors tell us, “but as his full body pivots on the table, feet in motion, head forward, his eyes slide left in their sockets to stay fixed on you!” Then he changes direction, staring at what might be another observer. There is no doubt about his seriousness; the impact on believers, in the half-light, would have been considerable.

. . .

In seeking to learn more about the friar’s provenance, Ms. King contacted Servus Gieben, a Dutch-born Franciscan who served as the director of the Franciscan Museum in Rome. In his correspondence with Ms. King, Gieben, who died in 2014, reaffirmed his theory that it may have been commissioned by Philip for his son Carlos. In 1562, at the age of 17, Carlos fell down a flight of stairs and so gravely injured his skull that he was not expected to survive (either the injury or the era’s “treatments”).

. . . The corpse of a Franciscan friar, Diego de Alcalá (ca. 1400-63), had remained free of decay after his death that it was thought to have healing powers. And behold: Once it was laid upon the dying prince, Carlos soon began to recover. Philip II spent 26 years petitioning four consecutive popes to recognize the miracle and declare Diego a saint. (He ultimately was, as the city of San Diego now affirms.)

Gieben suggested that the facial resemblance between the automaton and Diego was evident. And what better way, he thought, for Philip to honor Diego than by providing his often wayward son with an admonitory reminder in the form of the penitential friar himself, created by the most brilliant clockmaker in the empire. As Don Carlos was brought back to life, so an inanimate automaton would turn animate.

Even today, the authors suggest, the friar remains “a small miracle. Or the image of a small miracle. Or the metaphor of a large miracle. Or an artificial miracle.”

For the full review see:

Edward Rothstein. “A Wonder of Another Age.” The Wall Street Journal (Saturday, December 23, 2023): C9.

(Note: ellipses added.)

(Note: the online version of the review has the date December 22, 2023, and has the title “‘Miracles and Machines’ Review: Mystery of the Clockwork Man.”)

The book under review is:

King, Elizabeth, and W. David Todd. Miracles and Machines: A Sixteenth-Century Automaton and Its Legend. Los Angeles: Getty Publications, 2023.

Zuckerberg Praises Musk for Not Being Too Shy to Reduce Staff at X

(p. R3) At the beginning of the year, many were quick with predictions of X’s demise, in part because of the dramatic staff cuts made by Musk.

. . .

Perhaps the biggest impact of Musk’s staff reductions was provoking a broader conversation about staffing needs and overall productivity throughout Silicon Valley.

Even rival Mark Zuckerberg praised Musk for removing layers of management. “I also think that it was probably good for the industry that he made those changes because my sense is that there were a lot of other people who thought that those were good changes but who may have been a little shy about doing them,” the Facebook co-founder said.

For the full commentary, see:

Tim Higgins. “Elon Musk as Technoking? More Like DramaKing.” The Wall Street Journal (Monday, Dec. 18, 2023): R3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date December 16, 2023, and has the title “In the Year of a DramaKing: Elon Musk.”)

Slow Regulatory Approval Is “A Pretty Big Barrier to Entry” for Smaller and Safer Innovative Nuclear Reactors

(p. B1) . . ., the great hope for the future of nuclear power is to go small.

Nearly a dozen companies are developing reactors that are a fraction of the size of those at Vogtle, betting that they will be quicker and cheaper to build. As the United States looks to transition away from fossil fuels that have underpinned its economy for 150 years, nuclear power is getting renewed interest, billions of dollars from the Biden administration and support from Republicans.

One reason is that nuclear plants can run at all hours, in any season. To those looking to replace coal and gas with wind and solar energy, nuclear power can provide a vital backstop when the air is calm or the sky is cloudy.

“The United States is now committed to trying to accelerate the deployment of nuclear energy,” John Kerry, President Biden’s climate envoy, said in September. “It’s what we believe we absolutely need in order to win this battle.”

. . .

(p. B4) One recent Pew survey found that 57 percent of Americans favor more nuclear plants, up from 43 percent in 2016. Republicans have traditionally backed atomic energy, but the survey found rising support among Democrats.

While many environmental groups still oppose nuclear power, some skeptics are softening.

. . .

For nearly five decades, the Nuclear Regulatory Commission has regulated large light-water reactors. Now it has to consider a dizzying array of new technologies and their safety characteristics.

The approval process can be slow. To date, the N.R.C. has certified only one small reactor design, developed by NuScale Power. NuScale’s light-water technology is similar to existing plants, but the company argued that smaller reactors required different safety rules, such as smaller evacuation zones in case of accidents. Securing approval took a decade and cost $500 million.

“It’s a pretty big barrier to entry,” said Jose Reyes, NuScale’s chief executive. “And this was for a technology that regulators are already familiar with.”

At a recent House hearing, Republicans and Democrats alike complained that a draft rule meant to help license advanced reactors was 1,173 pages long and largely unworkable.

“Everyone agrees that reactors need to be safe,” said Adam Stein, director of nuclear innovation at the Breakthrough Institute, a pronuclear research organization. “But it’s also possible for a regulator to be too conservative and too risk-averse.”

For the full story, see:

Brad Plumer and Ivan Penn. “Going Small to Confront a Big Problem.” The New York Times (Tuesday, Nov. 28, 2023): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 12 [sic], 2023, and has the title “U.S. Bets on Small Nuclear Reactors to Help Fix a Huge Climate Problem.”)

California Regs Requiring Electric Trucks at Ports, Raise Supply Chain Costs, Fueling Inflation for Consumers

(p. B1) Neri Diaz thought he was ready for a crucial juncture in California’s ambitious plans, closely watched in other states and around the world, to phase out diesel-powered trucks.

His company, Harbor Pride Logistics, acquired 14 electric trucks this year to work alongside 32 diesel vehicles, in anticipation of a rule that says diesel rigs can no longer be added to the list of vehicles approved to move goods in and out of California’s ports. But in August the manufacturer of Mr. Diaz’s electric vehicles, Nikola, took back the trucks as part of a recall, saying it would return them in the first quarter of the new year.

“It’s a brand-new technology, first generation, so I knew things were going to happen, but I wasn’t expecting all my 14 trucks to be taken back,” he said. “It is a big impact on my operations.”

. . .

(p. B5) Large companies, with deep pockets and big facilities, are best positioned to make the green transition. Mike Gallagher, a California-based executive at Maersk, the Danish shipping giant, said the company had a fully electric fleet, comprising some 85 vehicles made by Volvo and BYD, the Chinese automaker, for transporting goods up to 50 miles out of the ports of Southern California. And it has worked with landlords to install scores of chargers at its depots.

“We’re well ahead of the curve,” he said.

But smaller trucking fleets do most of the port runs — accounting for some 70 percent at the Los Angeles port — and they are going to find the transition hard. The California Trucking Association has filed a federal lawsuit against the state’s trucking rules, including the one focused on port trucks, contending that they represent “a vast overreach that threatens the security and predictability of the nation’s goods movement industry.”

Matt Schrap, the chief executive of the Harbor Trucking Association, another trade group, said the port truck rules lacked exemptions that would help smaller businesses survive the transformation. Getting access to chargers is particularly difficult for smaller fleets, he said: They are expensive, and the truck yard landlords may be reluctant to install them, forcing the operators to rely on a public charging system that is only just getting built.

“The landlord is, like, ‘There’s not a snowball’s chance in Bakersfield that you’re going to tear up my parking lot to put in some heavy-duty charging,’” Mr. Schrap said.

Concern exists beyond the trade groups. Mr. Gallagher, the Maersk executive, said that if the clean truck rules caused serious problems for smaller operators, it could be “a significant disruption to the supply chain.”

. . .

Mr. Diaz, the operator whose Nikola trucks were recalled, said that charging the trucks cost roughly 40 percent less than diesel, and that he was impressed with their performance. Even with the help of state grants, he estimates that the electric trucks cost him as much as 50 percent more than diesel models. During the recall, Nikola has been covering the payments on the loans Mr. Diaz took out to buy the trucks, but he said he was concerned about the truck maker’s financial situation.

. . .

Rudy Diaz, president of Hight Logistics, said the new regulations had pushed up some of his costs as his company brought drivers onto its payroll and reduced its reliance on contract drivers using their own diesel trucks.

“It’s extra headaches, extra costs,” he said. “But consumers are asking for products that are more sustainable, and they’re willing to pay the price.”