Economics of Technology – Page 22

Xi Jinping Only Pays “Mere Lip Service” to “Private Enterprise and Innovation”

(p. A23) Ant Group, China’s biggest fintech conglomerate, was preparing last November for its initial public offering. Analysts projected it would raise $34 billion, the largest sale of shares in history. The company, founded by Jack Ma, had become synonymous with financial innovations, which are often risky.

In the run-up to the I.P.O., Chinese regulators trying to assess financial risks on Ant’s books had been brushed off by Mr. Ma. In an audacious speech, he criticized regulators as too cautious and pilloried state-owned banks for their “pawnshop” mentality of providing loans only to borrowers who could post collateral.

Even oblique attacks on China’s government rarely go unpunished. This was a direct provocation. Yet such was Mr. Ma’s aura, and his apparent imperviousness to government strictures, that domestic and foreign investors were unconcerned.

. . .

Then it all fell apart. Two days before Ant’s shares were to begin trading on the Hong Kong and Shanghai exchanges, the government blocked the I.P.O.

. . .

It seemed that, in bringing the hammer down on the company, the government aimed to limit its growing economic and political power.

But in so doing, the government spooked investors. Suddenly, President Xi Jinping’s pledges to encourage private enterprise and innovation looked like mere lip service.

For the full commentary, see:

Eswar Prasad. “Jack Ma Paid for Taunting China.” The New York Times (Friday, April 30, 2021): A23.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 28, 2021, and has the title “Jack Ma Taunted China. Then Came His Fall.”)

“If It’s Consensus, It Isn’t Science”

(p. C9) . . . science itself is not conducted by polls, regardless of how often we are urged to heed a “scientific consensus” on climate. As the science-trained novelist Michael Crichton summarized in a famous 2003 lecture at Caltech: “If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period.” Mr. Koonin says much the same in “Unsettled.”

. . .

As for “denying,” Mr. Koonin makes it clear, on the book’s first page, that “it’s true that the globe is warming, and that humans are exerting a warming influence upon it.”

The heart of the science debate, however, isn’t about whether the globe is warmer or whether humanity contributed. The important questions are about the magnitude of civilization’s contribution and the speed of changes; and, derivatively, about the urgency and scale of governmental response. Mr. Koonin thinks most readers will be surprised at what the data show. I dare say they will.

As Mr Koonin illustrates, tornado frequency and severity are also not trending up; nor are the number and severity of droughts. The extent of global fires has been trending significantly downward. The rate of sea-level rise has not accelerated. Global crop yields are rising, not falling. And while global atmospheric CO2 levels are obviously higher now than two centuries ago, they’re not at any record planetary high—they’re at a low that has only been seen once before in the past 500 million years.

. . .

Mr. Koonin’s science credentials are impeccable—unlike, say, those of one well-known Swedish teenager to whom the media affords great attention on climate matters. He has been a professor of physics at Caltech and served as the top scientist in Barack Obama’s Energy Department. The book is copiously referenced and relies on widely accepted government documents.

. . .

Never have so many spent so much public money on the basis of claims that are so unsettled.

For the full review, see:

Mark P. Mills. “The ‘Consensus’ On Climate.” The Wall Street Journal (Monday, April 26, 2021): C9.

(Note: ellipses added.)

(Note: the online version of the review has the date April 25, 2021, and has the title “‘Unsettled’ Review: The ‘Consensus’ On Climate.”)

The book under review is:

Koonin, Steven E. Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters. Dallas, TX: BenBella Books, 2021.

Some Oil and Gas Landmen Seamlessly Transition to Being Wind and Solar Landmen

(p. A1) Carter Collum used to spend mornings shoulder to shoulder with competitors in the record rooms of East Texas courthouses, hunting for the owners of underground natural-gas deposits. At night, he made house calls, offering payments and royalties for permission to drill.

Mr. Collum worked as a landman, tracking the owners of oil and gas trapped in rock layers thousands of feet beneath the earth’s surface and getting their signatures, a job about as old as the American petroleum industry.

. . .

These days, the jobs are going dry. Landmen, after riding the highs of the boom, face weakened demand for fossil fuels and investor indifference to shale companies after years of poor returns. Instead of oil and gas (p. A10) fields, some landmen are securing wind and solar fields, spots where the sun shines brightest and the wind blows hardest.

The difference is shale wells eventually empty and, in good times, that keeps landmen on the prowl for new land and new contracts. Wind and solar energy never run out, limiting demand for new leases as well as landmen.

For the full story, see:

Rebecca Elliott. “Oil-and-Gas Landmen Now Hunt for Wind and Sun.” The Wall Street Journal (Monday, April 19, 2021): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 18, 2021, and has the title “Landmen Who Once Staked Claims for Oil and Gas Now Hunt Wind and Sun.”)

Musk Confronts or Ignores Regulators Who Block Innovation

(p. A1) He’s become one of the world’s most successful entrepreneurs by reinventing industries from electric cars to rockets. Along the way, he’s also rewritten the rules of engagement with U.S. regulators.

Elon Musk has emerged a winner in a series of run-ins with a range of regulatory agencies that have watched as he sidestepped rules or ignored enforcement attempts. He has overmatched an alphabet-soup of agencies that oversee financial markets and safety in the workplace, on highways and in space flight.

Most chief executives try to avoid regulators—or at least stay in their good graces. Many accused of overstepping have paid fines or agreed to make improvements.

Mr. Musk, revered by some investors for his iconoclastic approach, has taken a different tack on his way to becoming one of the richest men in the world, not letting regulations hinder his goals to revolutionize transportation with Tesla Inc.’s electric cars or colonize Mars using SpaceX rockets.

Federal agencies say he’s breaking the rules and endangering people. Mr. Musk (p. A10) says they’re holding back progress.

. . .

The Federal Aviation Administration criticized SpaceX for launching a rocket in December [2020] without a proper FAA license. Mr. Musk ridiculed the FAA space division in a tweet as “fundamentally broken.”

. . .

When asked to comment on the specifics of this article, Mr. Musk replied with a “poop” emoji. Asked to elaborate, Mr. Musk declined to provide any input on his interactions with federal agencies or his view toward regulation. In a tweet Tuesday, Mr. Musk said he agrees with regulators “99.9% of the time.” He added that when they disagree, it “is almost always due to new technologies that past regulations didn’t anticipate.”

. . .

After the FAA delayed a January [2021] test launch, Mr. Musk accused the agency of holding back progress and argued that its regulations were outdated. “Their rules are meant for a handful of expendable launches per year from a few government facilities,” he tweeted on Jan. 28. “Under those rules, humanity will never get to Mars.”

. . .

The National Labor Relations Board ruled in March that Tesla had violated U.S. labor law by hindering unionization and ordered Mr. Musk to delete a tweet discouraging employees from unionizing. Tesla this month appealed the decision, saying the NLRB’s ruling was “contrary to law.”

Mr. Musk’s tweet remains online. The NLRB declined to comment.

For the full story, see:

Ben Foldy, Rebecca Elliott, Susan Pulliam. “Elon Musk’s War With Regulators.” The Wall Street Journal (Thursday, April 29, 2021): A1 & A10.

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

(Note: the online version of the story has the date April 28, 2021, and has the title “Elon Musk’s War on Regulators.”)

“The Bad Boy of Silicon Valley” Advises We “Do Nothing and Let the Invisible Hand Fix the Problem Free of Charge”

The author of the comments quoted below was the founder and CEO of Cypress Semiconductor Corporation.

(p. A17) In the late 1970s cars became computerized. My first Silicon Valley employer, American Microsystems, once “lost the recipe” and cut off the supply of memory chips to a Lincoln Continental plant. Without our chips, cars couldn’t be started. Ford later dropped us as a vendor, the penalty for shutting down an auto plant.

Soon the automotive industry created an extensive repertoire of reliability and sourcing qualifications that prevented many such problems but also mired the industry in bureaucracy. Today, the qualification process for a new chip vendor takes 18 to 24 months or more. That’s why automotive companies can’t simply buy a scarce chip from another vendor in a crunch to keep the lines running.

. . .

Auto companies slashed their chip orders at the pandemic’s outset, and supply responded accordingly. But when auto demand surprised everybody by staying strong, and auto makers suddenly needed more chips, the semiconductor industry couldn’t respond quickly enough. Even with robotic factories, it takes 12 weeks on average to make a silicon wafer—longer if advanced processes are required—and that’s before back-end assembly and shipping around the world. President Biden says he is “studying” supply chains, but every knowledgeable person in the industry knows that politics and subsidies are irrelevant. The market players will fill this chip shortage before the Democrats and Republicans finish arguing about whose fault it is.

. . .

There is no need to give taxpayers’ money to some of the smartest and richest corporations in the world. Chip companies thrive in free markets and barely survive in controlled economies. This message shouldn’t be controversial, but in 1991 my distaste for pork-barrel spending got me labeled “The Bad Boy of Silicon Valley” on the cover of BusinessWeek. My proposed solution to the current chip problem? Do nothing and let the invisible hand fix the problem free of charge.

For the full commentary, see:

T.J. Rodgers. “Government Won’t Fix Chip Shortage.” The Wall Street Journal (Thursday, April 29, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 28, 2021, and has the title “Government Won’t Fix the Semiconductor Shortage.”)

Hundreds of Thousands at Risk From Blackouts That Shut Off Air Conditioning

(p. A15) Because both heat waves and blackouts are becoming more frequent, “the probability of a concurrent heat wave and blackout event is very likely rising as well,” Dr. Stone said.

So Dr. Stone, along with a team of eight other researchers — from Georgia Tech, Arizona State, the University of Michigan and the University of Guelph in Ontario, Canada — set out to gauge the human health consequences when power failures coincide with heat waves.

. . .

Crucially, the researchers wanted to know how hot the insides of homes would get under those conditions — something that Dr. Stone said had never been tried before.

. . .

The results were alarming. In Atlanta, more than 350,000 people, or about 70 percent of residents, would be exposed to indoor temperatures equal to or greater than 32 degrees Celsius (89.6 degrees Fahrenheit), the level at which the National Weather Service’s heat classification index says heat exhaustion and heat stroke are possible.

In Detroit, more than 450,000, or about 68 percent, would be exposed to that indoor temperature. In Phoenix, where a vast majority of residents rely on air-conditioning, the entire population would be at risk — almost 1.7 million people.

Even without a blackout, some residents in each city lack access to air-conditioning, exposing those residents to dangerous indoor temperatures during a heat wave. Those numbers range from 1,000 people in Phoenix to 50,000 in Detroit, based on the characteristics of their homes, the authors found.

That exposure is most pronounced for the lowest-income households, who are 20 percent less likely to have central air-conditioning than the highest-income households.

For the full story, see:

Christopher Flavelle. “Blackouts Are Growing Threat to U.S. Cities.” The New York Times (Tuesday, May 4, 2021): A15.

(Note: ellipses added.)

(Note: the online version of the story was updated May 5, 2021, and has the title “A New, Deadly Risk for Cities in Summer: Power Failures During Heat Waves.”)

The research co-authored by Stone and mentioned above was described in:

Stone, Brian, Jr., Evan Mallen, Mayuri Rajput, Carina J. Gronlund, Ashley M. Broadbent, E. Scott Krayenhoff, Godfried Augenbroe, Marie S. O’Neill, and Matei Georgescu. “Compound Climate and Infrastructure Events: How Electrical Grid Failure Alters Heat Wave Risk.” Environmental Science & Technology (published online in advance of print on April 30, 2021).

Maple “Sugaring Is a Sticky Business,” but Has Low Barriers to Entry and Is Highly Scalable

If you were a long-term maple sugarer, you might have expected the pandemic to boost your business. People at home under stress would be likely eat a lot of comfort food. And you would have been right about that–the average American has gained more pounds than usual over the pandemic. But as you were congratulating yourself for your foresight, you might have noticed that the supply of maple sugar was increasing because many staying at home during the pandemic decided that collecting maple sap outdoors was a safe, relaxing, and edifying way to bond during a pandemic.

Who can foresee all of the exogenous events, and the decisions of others, that will influence the success or failure of our dreams? The best we can do is to be broadly curious, to be always alert, and to make nimble adjustments. (A great relevant book is Adner’s The Wide Lens.)

(p. D4) Stress-baking and panic shopping. Vegetable regrowing and crafting. Now we can add another hobby to a year of quarantine trends: backyard maple sugaring.

Among the many indicators that it’s on the rise: a run on at-home evaporators and other syrup-making accouterments. A surge in traffic and subscriptions to maple-syrup-making websites and trade publications. And, of course, lots and lots of documentation on social media. (The Facebook group Backyard Maple Syrup Makers added some 5,000 members, almost doubling the number of people in its community, in the past year.)

Tapping maple trees and boiling the sap into syrup — known as sugaring — isn’t a new hobby. What’s unique about this year is the influx of suburban and urban backyard adventurers fueling these maple sugaring highs.

. . .

Because sugaring is a sticky business — and boiling sap indoors can mean resin all over the walls — many backyard amateurs turn to small-scale, hobby-size evaporators like the ones sold by Vermont Evaporator Company in Montpelier, Vt. The company said its number of customers had doubled in the past year.

. . .

Peter Gregg, the founder of The Maple News and the maple sugaring classifieds, The Maple Trader, isn’t surprised that sugaring supplies have been selling out. He saw his print subscription increase over 14 percent, he said, and his website traffic increase by 50 percent this year — a quite uncommon phenomenon for a maple-themed newspaper.

“The biggest sugarers in Vermont started in their backyards,” Mr. Gregg said. “Sugaring is great because you can start out doing it in your kitchen but you get the bug and you keep growing and growing, adding more and more taps, buying more and more equipment, and trying to get bigger and more efficient.”

For the full story, see:

Colman, Michelle Sinclair. “Maple Syrup Making Also Boomed as a Pandemic Hobby.” The New York Times (Thursday, April 8, 2021): D4.

(Note: ellipses added.)

(Note: the online version of the article has the date April 7, 2021, and has the same title as the print version. Where the wording in the online version differs from the wording in the print version, the passages quoted above follow the print version.)

The Adner book that I mention above is:

Adner, Ron. The Wide Lens: A New Strategy for Innovation. New York: Portfolio, 2012.

Deregulation of Hearing Aids Will Lower Cost and Increase Innovation

(p. B5) Hearing aids typically cost thousands of dollars, require multiple visits to specialists and often aren’t covered by health insurance. Untreated hearing loss is associated with cognitive decline, dementia and other harms. Overcoming barriers to hearing treatment may significantly improve Americans’ health.

The federal government is poised to help. Congress in 2017 passed legislation that would let anyone buy hearing aids approved by the Food and Drug Administration without a prescription from an audiologist. The F.D.A. has missed a deadline to release draft guidelines for this new category of over-the-counter hearing aids.

Experts told me that when the F.D.A. moves ahead, it’s likely to lead to new products and ideas to change hearing aids as we know them.

. . .

It is already possible to buy a hearing helper — they can’t legally be called hearing aids — without a prescription. These devices, called personal sound amplification products or PSAPs, vary wildly in quality from excellent to junk.

. . .

Nicholas Reed, director of audiology at the Johns Hopkins Cochlear Center for Hearing and Public Health, told me that the F.D.A. process should provide a path for the best PSAPs to be approved as official over-the-counter hearing aids. He expects new companies to hit the market, too.

You may doubt that a gadget you buy next to the toilet paper at CVS could be a serious medical device. Dr. Reed’s research, however, has found that some hearing helpers for $350 or less were almost as good as prescription hearing aids for people with mild-to-moderate hearing loss.

Dr. Reed described the best lower-cost devices as the Hyundai of hearing help. (This was a compliment.) They aren’t flashy, but they will get many people safely and effectively where they need to go. He also imagines that the F.D.A. rules will create the conditions for many more people to buy hearing aids — both over the counter and by prescription.

. . .

Health care in the United States can often feel as if it’s stuck, and technology is usually not the solution. But with hearing aids, technology and a change in government policy could bring helpful health innovation.

For the full commentary, see:

Shira Ovide. “ON TECH; Affordable and Accessible Hearing Aids.” The New York Times (Monday, April 19, 2021): B5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 12, 2021, and has the title “ON TECH; Hearing Aids for the Masses.”)

Reed’s research mentioned above is documented in:

Reed, Nicholas S., Joshua Betz, Nicole Kendig, Margaret Korczak, and Frank R. Lin. “Personal Sound Amplification Products Vs a Conventional Hearing Aid for Speech Understanding in Noise.” JAMA 318, no. 1 (July 4, 2017): 89-90.

Automation Tools Assist, but Do Not Replace, Surgeons

(p. D4) Using many of the same technologies that underpin self-driving cars, autonomous drones and warehouse robots, researchers are working to automate surgical robots too. These methods are still a long way from everyday use, but progress is accelerating.

. . .

The aim is not to remove surgeons from the operating room but to ease their load and perhaps even raise success rates — where there is room for improvement — by automating particular phases of surgery.

Robots can already exceed human accuracy on some surgical tasks, like placing a pin into a bone (a particularly risky task during knee and hip replacements). The hope is that automated robots can bring greater accuracy to other tasks, like incisions or suturing, and reduce the risks that come with overworked surgeons.

During a recent phone call, Greg Hager, a computer scientist at Johns Hopkins, said that surgical automation would progress much like the Autopilot software that was guiding his Tesla down the New Jersey Turnpike as he spoke. The car was driving on its own, he said, but his wife still had her hands on the wheel, should anything go wrong. And she would take over when it was time to exit the highway.

“We can’t automate the whole process, at least not without human oversight,” he said. “But we can start to build automation tools that make the life of a surgeon a little bit easier.”

. . .

. . . the Berkeley researchers have been working to automate their robot, which is based on the da Vinci Surgical System, a two-armed machine that helps surgeons perform more than a million procedures a year. Dr. Fer and his colleagues collect images of the robot moving the plastic rings while under human control. Then their system learns from these images, pinpointing the best ways of grabbing the rings, passing them between claws and moving them to new pegs.

But this process came with its own asterisk. When the system told the robot where to move, the robot often missed the spot by millimeters. Over months and years of use, the many metal cables inside the robot’s twin arms have stretched and bent in small ways, so its movements were not as precise as they needed to be.

Human operators could compensate for this shift, unconsciously. But the automated system could not. This is often the problem with automated technology: It struggles to deal with change and uncertainty. Autonomous vehicles are still far from widespread use because they aren’t yet nimble enough to handle all the chaos of the everyday world.

. . .

Many obstacles lie ahead, scientists note. Moving plastic pegs is one thing; cutting, moving and suturing flesh is another. “What happens when the camera angle changes?” said Ann Majewicz Fey, an associate professor at the University of Texas, Austin. “What happens when smoke gets in the way?”

For the foreseeable future, automation will be something that works alongside surgeons rather than replaces them.

For the full story, see:

Cade Metz. “When the Robot Wields the Scalpel.” The New York Times (Tuesday, May 4, 2021): D4.

(Note: ellipses added.)

(Note: the online version of the story has the date April 30, 2020, and has the title “The Robot Surgeon Will See You Now.”)

Bipartisan Central Planners Support $50 Billion Subsidy to Semiconductor Industry

“Industrial policy” is a misleadingly soothing phrase meaning “central planning.” Just because China is making the mistake of pursuing industrial policy, doesn’t imply that U.S. worries about China should lead us to make the same mistake. In fact, their following industrial policy should lead us to worry less.

(p. A4) Lurking just behind the domestic debate breaking out over President Biden’s $2.3 trillion infrastructure plans is a powerful foreign force: China.

. . .

. . . elements of the plan are clearly constructed with an eye toward better competing with China, and in ways generally supported in both parties:

—Providing $50 billion for semiconductor manufacturing and research. This proposal would put oomph and dollars behind a bipartisan initiative Congress pushed into a defense bill late last year, called the CHIPS Act, authorizing research and subsidies to increase domestic manufacturing of semiconductors and lessen dependence on China for the computer chips now essential to all manner of products.

The leaders of the congressional push to help the semiconductor industry include Sen. Tom Cotton of Arkansas, a conservative who agrees with the Biden administration on very little. The current shortage of chips plaguing the American auto industry underscores the arguments for this piece of the package. This is one of several areas where traditional conservative arguments against federal “industrial policy,” in which the government picks specific industries to boost with support from Washington, have fallen by the wayside in the face of Chinese advances.

For the full commentary, see:

Gerald F. Seib. “CAPITAL JOURNAL; China Looms Over Infrastructure Plan.” The Wall Street Journal (Tuesday, April 6, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 5, 2021, and has the title “CAPITAL JOURNAL; China Looms Large in Biden Infrastructure Plan.”)

Salt Lake City’s ‘Robustly Redundant Labor Market’

(p. B1) As the pandemic raged through the U.S. in 2020, no metropolitan area in the country expanded the size of its labor force more on a percentage basis than Utah’s capital. It also had the lowest average unemployment rate and the highest share of people working or looking for jobs. These signs of strength helped it rank first among 53 large metro areas in an annual examination of U.S. labor markets conducted by The Wall Street Journal, after ranking No. 4 in 2019.

Other cities that emerged as beacons to job seekers and businesses during the pandemic were, like Salt Lake City, located far from the coasts. Hubs in the Southwest and Midwest such as Austin, Denver, Indianapolis and Kansas City minimized employment losses, kept unemployment relatively low and retained and attracted workers in a year when the U.S. lost more than 9 million jobs.

Some benefited from technology jobs that became even more critical during a time of isolation for many Americans, while others relied on older corners of the economy that were also in high demand. Workers gravitated to these places due to the job opportunities, lower costs and a quieter lifestyle that appealed to some migrants from bigger population centers who were now allowed to work remotely.

The losers were tourist hot spots such as Las Vegas or densely-populated cities such as New York, Los Angeles and Chicago that lost workers as the coronavirus spread. Even once-hot tech hubs of San Francisco, Raleigh, N.C., and Boston suffered de-(p. B8)clines. Some of these laggards were more aggressive with their business lockdowns, allowing rival metros with fewer restrictions and lower costs to capitalize on the chaos.

. . .

Salt Lake City wasn’t immune from the spread of Covid-19, but it was able to avoid multiple shutdowns that crippled other cities. It did so partly because of a shared local effort to keep businesses open. The local chamber of commerce and state health department partnered on a campaign where participating local companies committed to having their employees maintain distance from others, wear masks and stay home when they are sick.

. . .

“It appears to be exceptionally friendly to business here,” Mr. Mulligan said. His company, Pubtelly LLC, sells software to sports bars and similar establishments to manage content playing on their TVs. The Salt Lake area has a healthy (p. B9) mix of growing startups and well-established companies, he said, plus a strong local university network that serves as a pipeline for younger talent.

If his current venture doesn’t pan out, Mr. Mulligan said he would be happy to stay in the Salt Lake area, either working for a local company or launching another business. “I don’t see a challenge with either going to work for someone else, or forming a company with others,” he said.

For the full story, see:

Danny Dougherty, Hannah Lang, and Kim Mackrael. “The New American Boomtowns.” The Wall Street Journal (Saturday, April 10, 2021): B1 & B8-B9.

(Note: ellipses added.)

(Note: the online version of the story has the date April 9, 2021, and has the title “Where Can You Find a New Job? Try These U.S. Cities.”)