Economics of Technology – Page 27

More Blacks Die of Covid-19 Partly Due to Greater Use of Public Transit

(p. A7) African-Americans may be dying at higher rates than white people from Covid-19, the disease caused by the novel coronavirus, in part because of black people’s heavier reliance on public transportation for commuting, two new studies by economists suggest.

One of the studies, by University of Virginia economist John McLaren, found that the racial discrepancy remained even after controlling for income or insurance rates. Instead, Mr. McLaren found the gap was due in part to the fact that black workers are more likely to get to work via public transit, including subways and buses.

About 10.4% of black commuters take public transit, versus 3.4% of white commuters, according to the Census. After controlling for the use of public transit, Mr. McLaren finds the racial disparity in Covid-19 deaths is less pronounced.

. . .

The other study, by Christopher Knittel and Bora Ozaltun, both of the Massachusetts Institute of Technology, found that a 10% increase in the share of a county’s residents who use public transit versus those who telecommute raised Covid-19 death rates by 1.21 per 1,000 people when looking at counties around the U.S.—or by 0.48 per 1,000 people when focusing only on counties within individual states. In their analysis, the researchers controlled for race, income, age, climate and other characteristics.

For the full story, see:

David Harrison. “Virus Deaths Linked to Transit.” The Wall Street Journal (Monday, June 29, 2020): A7.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 28, 2020, and has the title “Public Transit Use Is Associated With Higher Coronavirus Death Rates, Researchers Find.”)

The first academic study mentioned above, is:

McLaren, John. “Racial Disparity in Covid-19 Deaths: Seeking Economic Roots with Census Data.” National Bureau of Economic Research, NBER Working Paper #27407, June 2020.

The second academic study mentioned above, is:

Knittel, Christopher R., and Bora Ozaltun. “What Does and Does Not Correlate with Covid-19 Death Rates.” National Bureau of Economic Research, NBER Working Paper #27391, June 2020.

Covid-19 Caused Mass Transit Use to “Plummet by 80%” or More

(p. D1) Fears of being exposed to germs in cramped underground spaces have reportedly caused mass transit ridership to plummet by 80% in urban centers such as Milan and San Francisco—and by up to 96% in hot spots including New York, Washington, D.C., and Paris. When they head back to their corner offices, car-shunning members of the C-suite set might be more likely to commute in prudent solitude on electric bikes than to trudge up subway steps.

“No one wants to be in a dirty cab. We don’t want to be on a bus or subway. People want their own mode of transportation that they control,” said Michael Burtov, author of “The Evergreen Startup.” Mr. Burtov, who works with entrepreneurs as part of MIT’s Enterprise Forum, also noted a severe dip in usage of shared bikes and scooters; who yearns to spend an afternoon wiping down handlebars or riding in gloves? “For individualized modes of transportation, which are affordable and really efficient, it’s a renaissance.”

To wit, Seattle’s Rad Power Bikes recently announced that sales had leapt nearly 300% this April compared with the same period in 2019. Its Dutch competitor VanMoof claimed a similar growth of 264% for the first half of 2020 compared with the same six months last year.

For the full story, see:

Matthew Kitchen. “Wanted: A Safer Commute.” The Wall Street Journal (Saturday, June 27, 2020): D1.

(Note: the online version of the story has the same date as the print version, and has the title “Wary of Subways? 6 Electric Options for a Solo Work Commute.”)

The book by Burtov, mentioned above, is:

Burtov, Michael. The Evergreen Startup: The Entrepreneur’s Playbook for Everything from Venture Capital to Equity Crowdfunding. Hypercritical Publishing, 2020.

Capital-Intensive Toilet Paper Firms, Already Near Capacity, Unable to Quickly Fill 600% Surge in Demand

(p. 4) As the chief executive of a company that makes toilet paper, Joey Bergstein has been through an intense few months.

. . .

You’ve mentioned that you anticipated some demand, but nothing like what was about to come.

The week of March 8 [2020] we saw a surge in demand of somewhere between 600 and 750 percent. When you build a supply chain and package, you normally have about a 30 percent buffer to be able to meet a surge in demand. Nobody built a supply chain to be able to respond to that kind of surge in demand. So the team has been in a constant state of triage ever since, and we’re still in that.

. . .

What was it about toilet paper that made it so hard to come by?

First of all, nobody anticipated the level of stocking up you would see on toilet paper. That shocked everybody. But any of these paper businesses are very capital-intensive businesses. You only make money in that business if you’re running your machines pretty close to capacity. So when you have a big surge in demand, it’s hard to increase more than you’re already producing, because you’re generally producing pretty close to capacity. You don’t have the kind of flexibility that you would normally expect to have in another business.

For the full interview, see:

David Gelles, interviewer. “Selling 2-Ply in a Pandemic (It’s Harder Than You Think).” The New York Times, SundayBusiness Section (Sunday, June 7, 2020): 4.

(Note: ellipses, and bracketed year, added; bold in original.)

(Note: the online version of the interview has the date June 5, 2020, and the title “Selling Toilet Paper and Paper Towels During the Pandemic.” The first sentence and the bold questions are from the interviewer David Gelles. The answers after the bold questions are from the interviewee Joey Bergstein.)

Houghton Shifted Corning from Cookware to Fiber Optics

(p. A13) When Amory Houghton became chief executive of Corning Glass Works in 1964, the company founded by his great-great grandfather was thriving. Known to the general public for Pyrex measuring cups and Corning Ware casseroles, it dominated the U.S. market for the glass used to encase TV tubes.

But the company, now known as Corning Inc., proved too reliant on those tubes, which accounted for as much as 75% of profit. In the mid-1970s, the company faced a recession and the loss of TV-related business as Japanese imports captured the U.S. market. Profits collapsed, and Mr. Houghton had to chop costs, including at the headquarters in Corning, N.Y. The global workforce dropped by more than one-third.

. . .

“It was tough making these cuts,” he said, “particularly when you lived in a small town where you knew a lot of these people.”

Corning bounced back, unlike many other U.S. manufacturing giants. That was partly because Mr. Houghton made a long-term commitment to development of fiber optics. He correctly saw that hair-thin strands of glass would replace copper wire in transmissions of voice and data. “It’s our turf, with our patents,” he said.

By the late 1990s, optical fiber and related telecommunications products accounted for more than half of Corning’s operating profits.

For the full obituary, see:

James R. Hagerty. “Executive Lifted Corning With Bet on Fiber Optics.” The Wall Street Journal (Saturday, March 14, 2020): A13.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date March 13, 2020, and the title “Amory Houghton’s Bet on Fiber Optics Helped Save Corning.”)

California Places the Regulatory “Final Straw” on Elon Musk’s Tesla

(p. A15) Informed by Democratic Gov. Gavin Newsom’s authorities that his factory in Fremont had to remain in lockdown, Mr. Musk tweeted: “Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately.”

The keyword here is “final straw,” suggesting that Mr. Musk’s cost-of-doing-business problems with California predate this virus. Hundreds of businesses already have relocated out of California, fleeing the uncountable regulatory straws the state has laid across the backs of anyone doing business there.

For the full commentary, see:

Daniel Henninger. “WONDER LAND; Elon Musk’s ‘Final Straw’.” The Wall Street Journal (Thursday, May 21, 2020): A15.

(Note: the online version of the commentary has the date May 20, 2020 and has the same title as the print version.)

Drugs Targeting Cytokines Tried Against Covid-19

(p. A9) Doctors have used the term “cytokine storm” to describe an overactive immune response triggered by external pathogens such as bacterial and viral infections.

Proteins called cytokines are part of the immune system’s arsenal for fighting disease. When too many are released into the bloodstream too quickly, however, it can have disastrous results, including organ failure and death.

As with other diseases, it is a mystery why cytokine storms are experienced by some but not all Covid-19 patients, doctors say. Genetics may be a factor.

. . .

Drugs called corticosteroids can be used to treat patients with cytokine storms, but studies are mixed on their effectiveness, with some studies indicating that Covid-19 patients may be at a higher risk of death when treated with steroids. Some doctors are reluctant to use steroids because they broadly dampen the immune response, which is risky in patients fighting infections.

Drugs targeting specific cytokines rather than the entire immune system may be more effective, doctors say.

Among the most promising targeted treatments, doctors say, is Roche’s rheumatoid-arthritis drug tocilizumab, which is marketed under the brand name Actemra. The drug was approved in 2017 to treat cytokine storms caused by cancer treatments known as CAR-T cell therapies.

For the full story, see:

Jared S. Hopkins, Joseph Walker. “Haywire Immune Reaction Linked to Most Severe Cases.” The Wall Street Journal (Friday, April 10, 2020): A1 & A9.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 9, 2020, and has the title “Haywire Immune Response Eyed in Coronavirus Deaths, Treatment.”)

“The Spontaneous, Uncoordinated Effort of Businesses, Entrepreneurs and Innovators”

(p. A1) True Value Co. heard from its more than 4,500 affiliated hardware stores last month that hand sanitizer was flying off the shelves, leaving store staff with none for themselves.

At the company’s factory in Cary, Ill., which makes cleaning products and paint, John Vanderpool, the company’s divisional vice president of paint, recalled asking, “What can we do to help here?” After a tip from his wife, a pharmacist, he consulted with the Food and Drug Administration, then huddled with his maintenance team and engineers over two weekends to retool two paint-filling lines to produce jugs of FDA-approved hand sanitizer.

Starting this week they are being shipped free to stores for their own use. The product will go on sale to the public eventually.

The changeover at True Value’s factory from paint to hand sanitizer is one of countless private-sector initiatives that represent an underappreciated asset in Americans’ fight against the coronavirus. It is a 21st-century version of the “Arsenal of Democracy,” the mobilization of industrial might that helped win World War II, only this time to make personal protective equipment, ventilators, tests and vaccines instead of uniforms, ammunition, tanks and bombers.

And where that arsenal was orchestrated by the federal government, this one has been largely the spontaneous, uncoordinated effort of businesses, entrepreneurs and innovators driven as much by the urge to contribute as by future profit.

. . .

(p. A9) Joel Mokyr, an economic historian at Northwestern University, said national crises such as wars and pandemics historically generate a hive of entrepreneurial innovation, from the late 18th-century search in England for a treatment for smallpox to a German drive in the run-up to World War I to use atmospheric nitrogen for explosives.

“We have this huge reservoir of creative energy spread around the economy. When you have an event like this all of a sudden, everyone says, ‘Oh wow let’s look at this problem—let’s see what I can do to solve it.’ ”

This time, innovators are exploiting tools and methods that didn’t exist in previous crises. In mid-March, Lennon Rodgers, director of the Grainger Engineering Design Innovation Lab at the University of Wisconsin in Madison, fielded a plea from the university’s hospital to make 1,000 face shields.

He often gets requests from around the campus to manufacture random items and “initially, I didn’t take it too seriously,” he recalled. But after his wife, an anesthesiologist, told him the shields were indispensable for dealing with highly infectious patients, he scoured hardware and craft stores for parts.

He teamed up with Delve, a local design firm, and Midwest Prototyping, a contract manufacturer, to design their own “Badger Shield,” named after the University of Wisconsin mascot. They expected to use 3-D printers, then concluded that wouldn’t achieve the necessary scale. They uploaded the design to their website along with the necessary parts for anyone to download. A few days later Ford Motor Co. did, and, with tweaks of its own, began turning out face shields for Detroit-area hospitals.

For the full story, see:

Greg Ip. “Health Crisis Awakens Spirit of Private-Sector Innovation.” The Wall Street Journal (Friday, April 17, 2020): A1 & A9.

(Note: ellipsis added.)

(Note: the online version of the story was updated April 16, 2020, and has the title “Shoes to Masks: Corporate Innovation Flourishes in Coronavirus Fight.”)

Engineering the Bar Code “Was Fun!”

(p. A13) If he had followed instructions from his boss, George Laurer might never have succeeded in designing the Universal Product Code.

In 1971, a supervisor at International Business Machines Corp. told the electrical engineer to devise a bar code based on previous models involving circular symbols resembling dart boards. While the boss was on vacation, Mr. Laurer concluded that little circles wouldn’t do, partly because smears of ink left by printing presses could scramble the code. Instead, he and others came up with a row of stripes, whose varying width and spacing conveyed a reliable code.

. . .

. . . , as he noted in the title of his memoir, “Engineering Was Fun!”

For the full obituary, see:

James R. Hagerty. “Bar Code Designer Defied Instructions.” The Wall Street Journal (Saturday, December 14, 2019): A13.

(Note: ellipses added.)

(Note: the online version of the obituary has the date Dec. 12, 2019 and has the title “George Laurer, Defying Instructions, Created Universal Bar Code.”)

Laurer’s memoir, mentioned above, is:

Laurer, George J. Engineering Was Fun! 3rd ed. Morrisville, NC: Lulu.com, 2012.

Firm Founders “Learned to Cope With a Lot of Adversity and Have a Lot of Resilience”

(p. B6) I’m a sucker for good stories about the founding of companies.

Yvon Chouinard started apparel maker Patagonia in a chicken coop; James Dyson went through 5,000 prototypes on his way to inventing a bagless vacuum cleaner; Steve Ellis opened Chipotle burrito shops simply to earn enough money to start a gourmet restaurant (he never got that far).

Airbnb Inc.’s story takes the cake. In 2008, a couple entrepreneurial types living on Ramen noodles in San Francisco cooked up an online home-sharing scheme. They recruited a computer scientist, funded their idea in the early days by maxing out credit cards and selling politically-themed cereal boxes, and held on until their company shook up the entire lodging industry.

. . .

“There’s this crazy idealism that founders have,” Brian Chesky, one of those Airbnb founders and the company’s chief executive, told me this week in a video chat. “They’ve learned to cope with a lot of adversity and have a lot of resilience.”

For the full commentary, see:

John D. Stoll. “ON BUSINESS; Airbnb Defied the Startup Odds. Will It Survive a Pandemic?” The Wall Street Journal (Saturday, April 18, 2020): B6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date April 17, 2020, and has the title “ON BUSINESS; Airbnb Defied the Odds of Startup Success. How Will It Survive a Pandemic?”)

Small Is Not Always Beautiful

(p. A16) Zaid Kurdieh has so many fava beans growing at his farm in upstate New York that he could send 4,000 pounds a week to the best chefs in New York City. In Kentucky, Robert Eversole and Thomas Sargent planted enough winter greens to fill the all the salad bars at the University of Kentucky and still have enough left over to feed fans at the state’s two major spring horse races.

But the coronavirus pandemic has postponed the Kentucky Derby and shut the university. And in New York, chefs who would normally be shelling Mr. Kurdieh’s fava beans for their spring menus have closed their restaurants.

So these small farmers, like many others across the country who spent decades building a local, sustainable agricultural system, are staring at their fields and wondering what to do now that the table has been kicked out from under the modern farm-to-table movement.

. . .

Farm-to-table — the term has become a fixture in the culinary lexicon — started in the 1970s, when Chez Panisse and a handful of other restaurants hatched what then seemed like a radical notion: Build menus from food grown by nearby farmers who are thoughtful about everything from the seeds they select and the soil they grow them in to the communities they feed.

That idea grew into a pipeline connecting farmers, ranchers and chefs that in 2019 had generated $12 billion in income for small-scale producers including cheesemakers and vintners. Governments, hospitals and schools have come to see the value in buying locally grown food. No Silicon Valley tech company worth its stock price would dare to design a cafeteria without local food.

Since the pandemic hit, that conduit has shut down. The loss in sales could run as high as $689 million, with much higher costs in jobs and other businesses that make up the farm-to-table economic ecosystem, according to a report compiled in March by the National Sustainable Agriculture Coalition.

For the full story, see:

Kim Severson. “Farm-to-Table Falters, and Growers Are in Limbo.” The New York Times (Friday, April 10, 2020): A16.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 9, 2020, and has the title “The Farm-to-Table Connection Comes Undone.”)

Low Quality Parts from Corrupt Contractors Endanger Russian Sailors in Deep-Diving Subs

(p. A22) OFF THE COAST OF NORWAY — There could hardly have been a more terrifying place to fight a fire than in the belly of the Losharik, a mysterious deep-diving Russian submarine.

. . .

A fire on any submarine may be a mariner’s worst nightmare, but a fire on the Losharik was a threat of another order altogether. The vessel is able to dive far deeper than almost any other sub, but the feats of engineering that allow it do so may have helped seal the fate of the 14 sailors killed in the disaster.

. . .

(p. A23) As for the accident itself, few expressed surprise that a jewel of the Russian submarine fleet might catch fire not very far from its home base — probably in water no more than 1,000 feet deep — leaving most of its crew dead. The Russians, some experts said, seem to have a greater tolerance for risk than the West.

. . .

Mr. Lobner, the former American submarine officer, said “we have nothing except unmanned vehicles” operating at such depths.

Still, while some see an engineering marvel, others see evidence that Russia may be unable to build the kind of sophisticated, autonomous underwater drones the United States appears to rely on.

“They would rather adapt existing systems, modernize them, and try to muddle through,” Mr. Boulègue said. “So, no wonder these things keep exploding,” he said. Mr. Boulègue believes accidents have been far more common than publicly known.

John Pike, director of the think tank GlobalSecurity.org, said the Losharik fire suggested that the Russian military was still contending with some longstanding issues: corrupt contractors, and problems with quality control in manufacturing, spare parts supply chains and maintenance.

“I assume that every other sub in the Russian fleet has similar problems,” Mr. Pike said. “I just think the whole thing is held together with a lot of baling wire and spit.”

For the full story, see:

James Glanz and Thomas Nilsen. “A Deep-Diving Sub, a Deadly Fire And Russia’s Secret Undersea Agenda.” The New York Times (Tuesday, April 21, 2020): A22-A23.

(Note: ellipses added.)

(Note: the online version of the story was updated April 21, 2020, and has the title “A Deep-Diving Sub. A Deadly Fire. And Russia’s Secret Undersea Agenda.”)