Economics of Technology – Page 40

Inventor of Fiber Optics “Didn’t Believe What Experts Said”

(p. A9) In the 1960s, Charles Kao often annoyed his wife, Gwen, by coming home late for dinner.
Dr. Kao, a refugee from the Chinese Communist revolution, told her his research for a British subsidiary of International Telephone & Telegraph Corp. could change the world one day.
. . .
In a 1966 paper written with George Hockham, he outlined the potential for using pulses of light to carry huge volumes of voice and data signals long distances through strands of glass that became known as optical fibers. Few took him seriously until several years later, when Corning Glass Works found ways to do just that.
. . .
Dr. Kao was once asked how long fiber optics would be used. Nothing better was likely to come along for 1,000 years, he said. “But don’t believe what I say,” he added, “because I didn’t believe what experts said either.”

For the full obituary, see:
James R. Hagerty. “‘Early Bet on Optical Fibers Yielded Pipes for Internet.” The New York Times (Saturday, Sept. 29, 2018): A9.
(Note: ellipses added.)
(Note: the online version of the obituary has the date Sept. 28, 2018, and has the title “‘Chinese Refugee Developed Fiber-Optic Technology That Made the Internet Possible.”)

In 10 Years after iPhone, Apple Added Almost 100,000 Jobs

Source of graph: online version of the WSJ article quoted and cited below.

(p. B1) SAN FRANCISCO–Since Apple Inc. launched the iPhone in June 2007, the smartphone revolution it unleashed has changed the way people work and socialize while reshaping industries from music to hotels.
It also has transformed the company in ways that co-founder Steve Jobs could hardly have foreseen.
Ten years later, the iPhone is one of the best-selling products in history, with about 1.3 billion sold, generating more than $800 billion in revenue. It skyrocketed Apple into the business stratosphere, unlocking new markets, spawning an enormous services business and helping turn Apple into the world’s most valuable publicly traded company.
. . .
(p. B8) . . . , Apple didn’t open the device to application developers until 2008, when it added the App Store and began taking 30% of each app purchase.
Since then, app sales have generated roughly $100 billion in gross revenue as Apple has registered more than 16 million app developers world-wide.
. . .
As sales surged, Apple staffed up. The company hired about 100,000 people in the 10-year span, bringing its global workforce to 116,000 from 18,000 in 2006. New workers were brought on to manage relationships with cellphone carriers, double the number of retail stores and maintain an increasingly complex supply chain.

Source of graph: online version of the WSJ article quoted and cited below.

For the full story, see:
Tripp Mickle. “‘How iPhone Decade Reshaped Apple.” The Wall Street Journal (Wednesday, June 21, 2017): B1 & B8.
(Note: ellipses added.)
(Note: the online version of the story has the date June 20, 2017, and has the title “Among the iPhone’s Biggest Transformations: Apple Itself.”)

Steve Jobs’s Apple Is First U.S. Company Valued at $1 Trillion

(p. B1) Apple Inc. on Thursday [August 2, 2018] became the first U.S. company to surpass $1 trillion in market value, underscoring the iPhone maker’s explosive growth and its role in the technology industry’s ascent to the forefront of the global economy and markets.
. . .
Apple’s rise has been propelled by the sustained success of the iPhone developed under late co-founder Steve Jobs, a product visionary who helped revive the company from a death spiral in the late 1990s.

For the full story, see:
Tripp Mickle and Amrith Ramkumar. “Apple Value Surges to $1 Trillion.” The Wall Street Journal (Friday, August 3, 2018): B1 & B5.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date Aug. 2, 2018, and has the title “Apple’s Market Cap Hits $1 Trillion.”)

A.I. Frees Workers from Drudgery More Than It Eliminates Jobs

(p. B1) New software is automating mundane office tasks in operations like accounting, billing, payments and customer service. The programs can scan documents, enter numbers into spreadsheets, check the accuracy of customer records and make payments with a few automated computer keystrokes.
The technology is still in its infancy, but it will get better, learning as it goes. So far, often in pilot projects focused on menial tasks, artificial intelligence is freeing workers from drudgery far more often than it is eliminating jobs.
. . .
(p. B4) The recent research has examined jobs as bundles of tasks, some of which seem ripe for replacement and others not. So the technology’s immediate impact will resemble the experience to date with robotic software, changing work more than destroying jobs.

For the full story, see:
Lohr, Steve. “Menial Tasks Ease A.I.’s Way Into Workplace.” The New York Times (Monday, Aug. 6, 2018): B1 & B4.
(Note: ellipsis added.)
(Note: the online version of the story has the date Aug. 5, 2018, and has the title “‘The Beginning of a Wave’: A.I. Tiptoes Into the Workplace.”)

Visionary Manifesto for Driverless Cars

(p. A13) Not surprisingly, optimism leaps off the pages of Lawrence D. Burns’s “Autonomy: The Quest to Build the Driverless Car–and How It Will Reshape Our World,” a combination of memoir and visionary manifesto. In contrast to “the personally owned, gasoline-powered, human-driven vehicles that have dominated the last century,” Mr. Burns writes, “we’re transitioning to mobility services based on electric-powered and driverless vehicles, paid for by trip or through subscriptions.” These services, he says, will get us around “safely and conveniently.” Meanwhile, we will avoid the “hassles of car ownership” and the time lost in parking and pumping gas, not to mention the costs that having a car entails.
. . .
After leaving GM during its 2009 bankruptcy, Mr. Burns became an ever-more emphatic advocate for the reinvention of the automobile, soon teaming up with Mr. Urmson and other technology pioneers at Google. This front-row seat at the project that popularized autonomous cars informs some of the most lively parts of “Autonomy.” At one point, a milestone goal is thought to be needed, with a payout bonus, so when Larry Page (Google’s co-founder) says, “I want this thing on any street in California to drive one hundred percent autonomous,” the Larry1K challenge is launched. The development of Waymo’s “Firefly” low-speed driverless car takes longer than expected and teaches the Silicon Valley team a new respect for Detroit’s skills. In turned out that “designing a vehicle was comparatively easy,” Mr. Burns writes. What was difficult was ” ‘hardening’ the vehicle’s various components”–making every part work under every driving condition. This was “the process at which Detroit engineering talent excelled.” A deal with Ford Motor Co. fails, but an investment banker and analyst, inspired by one of Mr. Burns’s visionary papers, does join Ford on a driverless-car project. As Mr. Burns recounts, personality clashes eventually blew up Google’s dream team and led to a lawsuit over intellectual-property theft against Uber, which had bought a driverless-trucking company founded by a Waymo veteran.

For the full review, see:
Edward Niedermeyer. “BOOKSHELF; Fast-Tracking A Driverless Car.” The Wall Street Journal (Tuesday, August 28, 2018): A13.
(Note: ellipsis added.)
(Note: the online version of the review has the date Aug. 27, 2018, and has the title “BOOKSHELF; ‘Autonomy’ Review: Fast-Tracking a Driverless Car; A period of remarkable progress seems to be giving way to a host of challenges that can’t be solved with engineering talent alone.”)

The book under review, is:
Burns, Lawrence D., and Christopher Shulgan. Autonomy: The Quest to Build the Driverless Car–and How It Will Reshape Our World. New York: Ecco, 2018.

Natural Experiment on Consumer Effects of Net Neutrality

(p. A25) TORONTO — The Federal Communications Commission is planning to jettison its network neutrality rules, and many Americans are distraught. Such a move, the Electronic Frontier Foundation warned, “invites a future where only the largest internet, cable and telephone companies survive, while every start-up, small business and new innovator is crowded out — and the voices of nonprofits and ordinary individuals are suppressed.”
Critics worry that getting rid of neutrality regulation will lead to a “two-tier” internet: Internet service providers will start charging fees to websites and apps, and slow down or block the sites that don’t pay up. As a result, users will have unfettered access to only part of the internet, with the rest either inaccessible or slow.
Those fears are vastly overblown.
. . .
So why am I not worried? I worked for a telecommunications company for 25 years, and whatever one may think about corporate control over the internet, I know that it simply is not in service providers’ interests to throttle access to what consumers want to see. Neutral broadband access is a cash cow; why would they kill it?
. . .
The good news is that we will soon have a real-world experiment to show who is right and who is wrong. The United States will get rid of its rules, and the European Union and Canada will keep their stringent regulations. In two years, will the American internet be slower, less innovative and split into two tiers, leaving Canadians to enjoy their fast and neutral net?
Or, as I suspect, will the two markets remain very similar — proving that this whole agonized debate has been a giant waste of time? Let’s check back in 2019.

For the full commentary, see:
Ken Engelhart. “Losing Net Neutrality: Nothing to Be Afraid Of.” The New York Times (Tuesday, Dec. 5, 2017): A25.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 4, 2017, and has the title “Why Concerns About Net Neutrality Are Overblown.” The online version says that the New York edition ran the commentary on p. A27, instead of the A25 page on which it appeared in my National Edition copy.)

Wrecking Ball for Bureaucracy That “Is Killing the Country”

(p. B4) America’s big tech companies are facing some of their toughest political challenges as they flirt with or surpass trillion-dollar valuations. Before lawmakers try to rein them in, Reid Hoffman argues government officials better be careful what they wish for.
Mr. Hoffman was chief operating officer of PayPal while it was still a small payments startup before he co-founded the professional social-network LinkedIn.
. . .
WSJ: You’re vociferously opposed to President Trump and even commissioned an anti-Trump card game. Does Silicon Valley have a problem with liberal bias?
Mr. Hoffman: I do think that there is a reflexive bias to liberalism that causes discomfort. I think you have that kind of left bias within the Silicon Valley culture, too, which is, “I’m so convinced that’s idiotic, I’m not listening to anything about it.” And that’s the problem. The problem is not actively listening. But that’s human. It’s not only here. Part of the reason [for strong negative reactions] to Trump is the flat-out lies.
WSJ: When you talk politics with Peter Thiel, PayPal’s co-founder and a well-known Trump supporter, what are those conversations like?
Mr. Hoffman: He’s a friend of mine, but we’ve disagreed about politics since we were college undergraduates. One thing we argue about is how much does Trump lie? I’ve been trying to advance him the case that there’s always been some lying around politicians, but Trump is one or two orders of magnitude worse than ever before. He says Obama is a bigger liar than Trump–based on, for example, the claim that under Obamacare you’d be able to spend as much time with your primary doctor as you did before Obamacare.
Peter thinks that the bureaucracy is killing the country and that you need a wrecking ball to shake it up, and maybe Trump is the only wrecking ball you get. His pro-Trump arguments are that someone needed to stand up to China. Trump at least is, [while] everyone else gave it lip service.

For the full interview, see:
Rolfe Winkler, interviewer. “A Silicon Valley Warning.” The Wall Street Journal (Thursday, Sept. 27, 2018): B4.
(Note: ellipsis added; bolded and bracketed words in original.)
(Note: the online version of the interview has the date Sept. 26, 2018, and the title “LinkedIn’s Co-Founder Warns of Perils in Regulating Big Tech.” The last question and answer quoted above, is included in the online, but not the print, version of the interview.)

Kilby Invented Transistor While Flouting Mandated Summer Vacation

(p. A15) Sixty years. But how much longer? In 1958 Jack St. Clair Kilby–from Great Bend, Kan.–created one of the greatest inventions, a great bend, in the history of mankind. Kilby recently had started at Texas Instruments as an electrical engineer. Most everyone left on a mandated summer break, but he stayed in the lab and worked on combining a transistor, capacitor and three resistors on a single piece of germanium. On Sept. 12, he showed his boss his integrated circuit. At a half-inch long and not very wide, it had ugly wires sticking out, resembling an upside-down cockroach glued to a glass slide.
. . .
Brace yourself. When Moore’s Law finally gives up the ghost, productivity and economic growth will roll over too–unless. The world needs another Great Bend, another Kilbyesque warp in the cosmos, to drive the economy.
. . .
Let’s hope the next Jack Kilby skipped this summer’s vacation.

For the full commentary, see:
Kessler, Andy. “INSIDE VIEW; The Chip That Changed the World; Jack Kilby built the first integrated circuit 60 years ago. We need a new Moore’s Law.” The Wall Street Journal (Monday, Aug. 27, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Aug. 26, 2018.)

“Regulatory Humility” Enabled 4G “Entrepreneurial Brilliance”

(p. A15) America dominated 4G because the government largely got out of the way of risk-takers. U.S. regulators, unlike their European counterparts, didn’t try to mandate technical standards or require forced sharing of their wireless networks with competitors. Regulatory humility produced one of the greatest explosions of entrepreneurial brilliance in human history, the mobile internet.
Today the FCC is helping speed 5G deployment by modernizing regulations. Last December it removed utility-style regulations placed on wireless broadband by the Obama administration. On Sept. 26, it pre-empted localities from charging outrageous fees for 5G deployment. It is also gearing up to auction more spectrum in November to help connect the Internet of Things. Tax reform and the Trump administration’s broader deregulatory agenda have also created a more business-friendly environment.
But more should be done. Antitrust officials should update their definitions of markets to give more clarity to 5G entrepreneurs. As T-Mobile and Sprint argue in their merger filings, 5G and free Wi-Fi will compete head-to-head with cable broadband for in-home use.
Regulators also need to recognize that as 5G emerges, old categories are becoming scrambled. Consumers don’t necessarily know, or care, if their content comes from an online provider, a broadcaster, a cable channel or a “tech” company, so long as they can get it on their phone or tablet. Regulations must allow companies to invest, innovate, and merge in this new ecosystem.

For the full commentary, see:
Robert M. McDowell. “To Boost 5G, Keep the Industry Free.” The Wall Street Journal (Friday, Sept. 28, 2018): A15.
(Note: the online version of the commentary has the date Sept. 27, 2018.)

“Machines Are Not Capable of Creativity”

(p. A11) New York
“I rarely have an urge to whisper,” says George Gilder–loudly–as he settles onto a divan by the window of his Times Square hotel room. I’d asked him to speak as audibly as possible into my recording device, and his response, while literal, could also serve as a metaphor: Nothing Mr. Gilder says or writes is ever delivered at anything less than the fullest philosophical decibel.
. . .
Citing Claude Shannon, the American mathematician acknowledged as the father of information theory, Mr. Gilder says that “information is surprise. Creativity always comes as a surprise to us. If it wasn’t surprising, we wouldn’t need it.” However useful they may be, “machines are not capable of creativity.” Human minds can generate counterfactuals, imaginative flights, dreams. By contrast, “a surprise in a machine is a breakdown. You don’t want your machines to have surprising outcomes!”
The narrative of human obsolescence, Mr. Gilder says, is giving rise to a belief that the only way forward is to provide redundant citizens with some sort of “guaranteed annual income,” which would mean the end of the market economy: . . .
. . .
For all the gloom about Silicon Valley that appears to suffuse his new book, Mr. Gilder insists that he’s not a tech-pessimist. “I think technology has fabulous promise,” he says, as he describes blockchain and cryptocurrency as “a new technological revolution that is rising up as we speak.” He says it has generated “a huge efflorescence of peer-to-peer technology and creativity, and new companies.” The decline of initial public offerings in the U.S., he adds, has been “redressed already by the rise of the ICO, the ‘initial coin offering,’ which has raised some $12 billion for several thousand companies in the last year.”
It is clear that Mr. Gilder is smitten with what he calls “this cryptographic revolution,” and believes that it will heal some of the damage to humanity that has been inflicted by the “machine obsessed” denizens of Silicon Valley. Blockchain “endows individuals with control of their data, their identity, the truths that they want to assert, their transactions, their visions, their content and their security.” Here Mr. Gilder sounds less like a tech guru than a poet, and his words tumble out in a romantic cascade.

For the full interview, see:
Tunku Varadarajan, interviewer. “Sage Against the Machine; A leading Google critic on why he thinks the era of ‘big data’ is done, why he opposes Trump’s talk of regulation, and the promise of blockchain.” The Wall Street Journal (Saturday, Sept. 1, 2018): A11.
(Note: ellipses added.)
(Note: the online version of the interview has the date Aug. 31, 2018.)

The “new book” by Gilder, mentioned above, is:
Gilder, George. Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy. Washington, D.C.: Regnery Gateway, 2018.

E-Commerce Creates “More and Better Jobs than It Destroys”

(p. A17) . . . , the men and women who go to work each day in e-commerce fulfillment centers are much better-equipped with information technology–and therefore more productive and better-paid. Our research shows that fulfillment center weekly wages are 31% higher on average than brick-and-mortar retail in the same area.
. . .
But does e-commerce destroy more jobs than it creates? So far the answer seems to be no. From the third quarter of 2015 to the third quarter of 2017, brick-and-mortar retail full-time-equivalent jobs fell by roughly 123,000, or about 1%, according to my think tank’s analysis of the latest Labor Department data.
Over the same two-year stretch, the e-commerce industry has added some 178,000 jobs in fulfillment centers and electronic shopping firms. In addition, express delivery companies and other local couriers boosted their full-time-equivalent workers by another 58,000.
. . .
The Internet of Goods–our term for the fast-growing digitization of the production, sorting and movement of physical products–will be the next major step in the internet’s evolution.
If e-commerce is any guide, the jobs created for the Internet of Goods will require workers who have a good mix of physical and cognitive skills, just like the industrial jobs of the early-20th century. Moreover, they will be more evenly spread around the country, boosting growth in America’s heartland as well as the coasts.

For the full commentary, see:
Michael Mandel. “Get Ready for the Internet of Goods; Already, e-commerce has been creating more and better jobs than it destroys.” The Wall Street Journal (Monday, Oct. 15, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Oct. 15, 2017.)