Category: Economics of Technology

As of January 2022, Koch Industries Had Invested $1.7 Billion into Renewable-Energy Infrastructure

(p. B10) Norwegian startup Freyr Battery and energy conglomerate Koch Industries Inc. are accelerating their plan to build a multibillion-dollar battery plant that will be among the largest to tap incentives in President Biden’s climate, tax and spending plan, Freyr said.

. . .

Koch has emerged as one of the biggest investors in batteries, a turnabout from its emphasis on fossil fuels. It has said it wants to benefit from the falling cost of renewable-energy technologies and help drive it down further. As of January [2022], it had invested a total of $1.7 billion into electric batteries, energy storage and solar-power infrastructure, according to its website.

The plan is unusual among battery projects in being dedicated primarily to the energy-storage market rather than electric vehicles.

For the full story, see:

Stephen Wilmot. “Koch Teams Up on Battery Plant.” The Wall Street Journal (Saturday, November 12, 2022): B10.

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

(Note: the online version of the story has the date November 11, 2022, and has the title “Koch Teams With Startup to Build Giant Battery Factory.”)

“Woke” Bankman-Fried’s FTX Played “Dumb Game” of Virtue Signaling

(p. A17) There was a time when people engaged in doing good addressed problems that, so to speak, you could get your arms around, such as improving school performance, providing potable water or preventing malaria. But at some point, the impulse to do good transformed into a combination of moral tendentiousness and grandiosity.

. . .

. . ., inside the Bankman-Fried fairy tale rests a smaller tipping point, which suggests his generation senses that their preachy elders may have led them down a moral garden path.

In an exchange with Mr. Bankman-Fried, a writer for Vox asserts, “You were really good at talking about ethics.” He replied that “I had to be” because of “this dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.”

He is describing what has come to be known in our time as virtue signaling, . . .

For the full commentary, see:

Daniel Henninger. “WONDER LAND; The Moral Vanity of FTX.” The Wall Street Journal (Thursday, December 1, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 30, 2022, and has the title “WONDER LAND; The Moral Vanity of Sam Bankman-Fried.”)

Entrepreneur Kerns’s Internal-Combustion-Engine Electric Generators Gave Power to the People

(p. A21) Robert D. Kern, a mechanical engineer who in the mid-1950s started a company in a garage making portable backup power generators and then transformed the business into an industry leader known as Generac, selling it in 2006 for an estimated $1 billion, died on Nov. 8 [2022] in Waukesha, Wis.

. . .

“The company is way beyond anything we dreamed about,” Mr. Kern said in an interview with the Grainger College of Engineering at the University of Illinois, his alma mater. “My vision was incredibly small compared to what it became, but tenacity is what it is all about.”

He and his wife and a few investors started the business after the rise of the airline industry had cost Mr. Kern his job making motors for railroad cars. Generac became a leading developer, manufacturer and marketer of portable and backup electric generators for homes and industry.

Today, Generac, based in Waukesha, about 18 miles west of Milwaukee, accounts for roughly 75 percent of standby home generator sales in the United States.

. . .

Mr. Kern was hired by the Waukesha Motor Company to design generators for combustion engines to be used on railway passenger cars. With the growth of the jet airline industry, rail travel in the United States plummeted, and Mr. Kern’s division was eliminated.

But remaining passionate about internal combustion engines, he decided to adapt developing technologies in generators for potential new markets and establish his own company to reach them.

In 1954, with his wife as the new company’s bookkeeper, he began making portable generators for recreational vehicles and for farmers and construction crews out of a garage in the village of Wales, Wis., about 28 miles west of Milwaukee. The business, originally called Electric Controls Inc., marketed the gear through Sears under the Craftsman brand. It became Generac in 1959, combining the word generation with AC.

. . .

Generac also developed an affordable backup generator for home emergencies and then expanded the business to produce permanent emergency generators for the commercial and industrial markets.

In 1967, the Generac factory in Waukesha burned to the ground, but with help from the local community, production resumed six days later, and the plant was rebuilt in seven weeks, without layoffs.

For the full obituary, see:

Sam Roberts. “Robert D. Kern, 96, Engineer Whose Idea For Portable Generators Produced Riches.” The New York Times (Thursday, November 24, 2022): A21.

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

(Note: the online version of the obituary has the date Nov. 22, 2022, and has the title “Robert D. Kern, 96, Whose Emergency Generators Produced Riches, Dies.”)

U.S. Chips+ Act Rewards Intel for Being Less Innovative Than TSMC


(p. A15) Intel, with huge profit margins on its Pentium microprocessors, could spend more than its competitors on state-of-the-art fabs, but innovation eventually was pushed aside for predictability. Intel would get one fab working and then “copy exactly” new cookie-cutter fabs. For smaller feature sizes, Intel looked at the new Extreme Ultraviolet technology from Dutch equipment company ASML and thought it too expensive and risky to use. TSMC embraced ExtremeUV and won, especially for lower-power chips for mobile devices. TSMC can now spend more than anyone else on fabs.

With the Chips+ Act chock full of $52 billion in subsidies and tax credits for chip makers, Congress is saying that real countries have fabs. The act also authorizes $1 billion for carbon removal—weird, because chips are made from silicon. Worse, the U.S. is rewarding Intel, which just announced a disastrous quarter, for coming in third place behind TSMC and Samsung.

Nothing is free. Even Commerce Secretary Gina Raimondo admitted “there’s a lot of strings attached” in the 1,054-page law. National Economic Council director Brian Deese endorsed command-and-control industrial policy: “The question should move from ‘Why should we pursue an industrial strategy?’ to ‘How do we pursue one successfully?’ ” This is as wrong as Soviet or Chinese five-year plans. Industrial policy eventually leads to disaster. Japan’s Ministry of International Trade and Industry micromanaged the country’s domestic semiconductor industry and ended up presiding over its decline. Today no Japanese semiconductor company sits in the global top 10. Because China doesn’t have access to ASML ExtremeUV equipment, it has made little progress in advanced chips.

Yes, we need domestic supplies of advanced chips in case China invades Taiwan. But subsidies are the wrong approach.

. . .

Instead, the U.S. could enable suppliers to place large orders for chips for the military, intelligence agencies, whatever. They could even prepay. Silicon Valley was originally built on orders for transistors for intercontinental missiles and the space program.

For the full commentary, see:

Andy Kessler. “INSIDE VIEW; The Semiconductor Boondoggle.” The Wall Street Journal (Monday, Aug. 15, 2022): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 14, 2022, and has the same title as the print version.)

Steve Case’s “Heroic Push” to Encourage Entrepreneurship Outside Silicon Valley, in “Surprising Places”

(p. C12) This is why one of the most energizing books I read this year was Steve Case’s “The Rise of the Rest.” It chronicles Steve’s journey to nurture tech startups in what some might consider “surprising” places. Think: Milwaukee vs. Silicon Valley.

. . .

Steve’s book is a heroic push encouraging us to widen the aperture. With the right investments and visibility, we can change the American landscape for the better, leveling the playing field and creating a more inclusive economy for years to come.

For the full review, see:

Asutosh Padhi. “12 Months of Reading; Asutosh Padhi.” The Wall Street Journal (Saturday, Dec. 10, 2021): C12.

(Note: ellipses added.)

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Political and Business Leaders.”)

The book praised by Asutosh Padhi is:

Case, Steve. The Rise of the Rest: How Entrepreneurs in Surprising Places Are Building the New American Dream. New York: Avid Reader Press, 2022.

Auto Experts Are Skeptical of EVs, but Are Afraid “So They Can’t Speak Out Loudly”

(p. A1) “People involved in the auto industry are largely a silent majority,” Mr. Toyoda said to reporters during a visit to Thailand. “That silent majority is wondering whether EVs are really OK to have as a single option. But they think it’s the trend so they can’t speak out loudly.”

. . .

(p. A6) The world’s biggest auto maker has said it sees hybrids, a technology it invented with the debut of the Toyota Prius in the 1990s, as an important option when EVs remain expensive and charging infrastructure is still being built out in many parts of the world. It is also developing zero-emission vehicles powered by hydrogen.

“Because the right answer is still unclear, we shouldn’t limit ourselves to just one option,” Mr. Toyoda said. Over the past few years, Mr. Toyoda said, he has tried to convey this point to industry stakeholders, including government officials—an effort he described as tiring at times.

Global car companies have made a sharp pivot to electric vehicles within the last few years, driven in part by the success of EV-only maker Tesla Inc.

. . .

At the same time, the legacy auto makers have a much broader base of customers, including many living in rural areas and developing economies with unreliable electricity supplies.

And their gas-engine businesses are still driving the bulk of profits needed to fund the costly shift to electric vehicles, which not only requires the development of new models but also construction of new facilities and battery plants.

The infrastructure to charge electric vehicles is meanwhile still lacking in the U.S. and many other parts of the world, making owning an EV still a challenge for many types of consumers.

. . .

Ryan Gremore, an Illinois-based dealer, who owns several brand franchises, said he gets a lot of customers inquiring about EVs, in part because of limited supplies.

That might give the impression of robust demand, but it is unclear how it will materialize when inventory levels at dealerships normalize, he added. “Is there interest in electric vehicles? Yes. Is it more than 10% to 15% of our customer base? No way,” Mr. Gremore said.

Mr. Toyoda’s long-held skepticism about a fully electric future has been shared by others in the Japanese car industry, as well.

Mazda Motor Corp. executives once cautioned that whether EVs were cleaner depends largely on where the electricity is produced. They also worried that EV batteries were too big and expensive to replace gas-powered models and better suited to the types of smaller vehicles that Americans didn’t want.

For the full story, see:

River Davis and Sean McLain. “Toyota Skeptical of Going All-EV.” The Wall Street Journal (Monday, Dec. 19, 2022 ): A1 & A6.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 18, 2022, and has the title “Toyota Chief Says ‘Silent Majority’ Has Doubts About Pursuing Only EVs.”)

Smil Shows How Fossil Fuels “Are Indispensable to Feeding the World”

(p. C6) In “How the World Really Works” the distinguished Canadian environmental scientist Vaclav Smil distills a lifetime of erudition.

. . .

Mr. Smil describes the massive extent to which fossil fuels are required to extract and produce the core materials—ammonia-based fertilizers, steel, cement and plastics—that are indispensable to feeding the world and building the machines and infrastructure on which modern economies depend.

. . .

Within the realm of the possible, he writes, “one thing remains certain” about transitioning to renewable energy: “It will not be (it cannot be) a sudden abandonment of fossil carbon, nor even its rapid demise—but rather its gradual decline.”

For the full review, see:

William Barr. “12 Months of Reading; William Barr.” The Wall Street Journal (Saturday, Dec. 10, 2021): C6.

(Note: ellipses added.)

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Political and Business Leaders.”)

The book praised by William Barr is:

Smil, Vaclav. How the World Really Works: The Science Behind How We Got Here and Where We’re Going. New York: Viking, 2022.

New Technology Creates More Jobs Than It Destroys

(p. 3) The pessimist’s basic mistake is to focus too much on what is lost to competition and technology, and too little on what is gained. Over the past 25 years, as McKinsey & Company, the consulting firm, has pointed out, about a third of the new jobs created in the United States were types that did not exist or barely existed 25 years ago.

. . .

In New York City the car replaced the horse carriage within the first 15 years of the 20th century, killing off the carriage trade and giving birth to the taxi trade — as well as to highly paid auto mechanics. Uber threatens the taxi trade, and the self-driving car threatens the Uber driver. But it has also brought multimillion-dollar signing bonuses for self-driving-car engineers and created new opportunities for mechanics. People tend to find a way to work with and profit from new technology.

. . .

In most cases, an industry without enough workers to meet customer demand would simply hire more, or at least raise wages to attract them.

Yet, according to the Bureau of Labor Statistics, neither of those things happened last year. The number of pharmacists employed in the United States dropped about 1 percent from 2020 to 2021. On balance, employers did not raise wages — in fact, median pay fell slightly, even without adjusting for inflation.

. . .

. . . there is no evidence so far to support forecasts of a nearly jobless future. If robots threatened human labor, human joblessness would be growing. But it’s not. In fact, since 2008, job growth has been strongest in countries like Germany and Japan, which deploy the most robots.

For the full commentary, see:

Ruchir Sharma. “No, That Robot Will Not Steal Your Job.” The New York Times, SundayReview Section (Sunday, October 8, 2017): 3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Oct. 7, 2017, and has the same title as the print version.)

If Apple and Google Ban Twitter from Their Phone App Stores, Musk Will Start Making Phones

Elon Musk said he would make his own smartphone if Google and Apple were to ban Twitter from their app stores.

Musk said in a tweet responding to conservative podcaster Liz Wheeler that he hopes the situation does not come to that but that he will make that decision if necessary.

“I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone,” he said.

Wheeler first proposed the idea, saying that half of the country would “happily ditch the biased, snooping iPhone and Android.”

“The man builds rockets to Mars, a silly little smartphone should be easy, right?” she tweeted.

For the full story, see:

JARED GANS. “Elon Musk says he would make his own smartphone if app stores ban Twitter.” THE HILL (Saturday, Nov. 26, 2022). URL: https://thehill.com/policy/technology/3750849-elon-musk-says-he-would-make-his-own-smart-phone-if-app-stores-ban-twitter/.

Cutting Out Time to Do Key Tasks on Vacation, Can Allow More Vacation Time and Choice

(p. A18) Loosening up the vacation vs. work binary opens up possibilities for living in new ways. Karen Raraigh, a Baltimore-based genetic counselor with a focus on research, gets a generous quantity of vacation days each year. But as with many professionals, her specialized projects won’t move forward in the same way if she’s not tending them — and she finds these projects quite meaningful.

“I like the work I do,” she told me. “The fact that I do a little work on vacation makes me feel a little better about taking more of it.” Her family spends multiple weeks visiting extended family in Maine, but she sometimes holes up for an afternoon to manage work matters while relatives play with her kids.

. . .

. . . if doing some work at the beach means you can be at the beach for two weeks instead of one, and moving work time around means you can play with your kids in the afternoons and still keep your clients happy, then those blurred boundaries might be working to your advantage.

For the full commentary, see:

Laura Vanderkam. “Go Ahead, Work While on Vacation and Vacation While at Work.” The New York Times (Tuesday, August 16, 2022): A18.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Aug. 13, 2022, and has the title “Don’t Feel Guilty About Working on Vacation — or About Vacationing at Work.”)

Entrepreneurs Harvest Useful Protein Collagens From “Precision Fermentation” Rather Than From Slaughter of Animals

(p. B4) The multibillion-dollar push to make animals obsolete in the food industry has already produced pea-protein “bratwurst,” fungus molded into “ham” and “leather,” and “meat” cultured from chicken cells. Geltor, a seven-year-old company based in the Bay Area, is taking a different tack: bioengineering bacteria cells to produce animal proteins you’ll likely never taste.

Geltor is producing forms of collagen they say are identical to the proteins extracted from skin and bones. For now, those vegan collagens can be found in high-end skin care creams. But as the company grows, it’s eyeing other ingredients few Americans associate with animal farming, such as the elastin in your shampoo, the collagen peptides in your smoothie, and even the gelatin (which is hydrolyzed, or slightly broken-down, collagen) in your marshmallows. Alex Lorestani, co-founder and chief executive of Geltor, likes to talk about how the company’s proteins impose a lighter burden on the environment than the meat industry. The challenge, however, is how the company gets to the scale necessary to exert that kind of impact.

In 2012, Dr. Lorestani and co-founder Nick Ouzounov, both 35, were both pursuing doctorates in molecular biology at Princeton University when the invention of Crispr turbocharged the field of bio-design. “We can bio-design medicine,” Dr. Lorestani recalled discussing with his labmates that summer. “Why can’t we bio-design everything?”

Dr. Ouzounov eventually came up with a method — which he and Dr. Lorestani, in typical Bay Area techspeak, call “a platform” — for genetically modifying bacteria cells to reproduce a wide variety of animal proteins, a process that biotech firms are calling “precision fermentation.” In 2015, the two scientists formed Geltor.

For the full story, see:

Jonathan Kauffman. “Going Beyond Vegan ‘Meat’ to Bio-Designed Collagen.” The New York Times (Wednesday, August 3, 2022): B4.

(Note: the online version of the story has the date August 2, 2022, and has the title “Is Bio-Designed Collagen the Next Step in Animal Protein Replacement?”)