Category: Economics of Technology

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.”

For the full story, see:

Peter Eavis and Mark Abramson. “California Is Pushing E.V.s As the Future of Freight.” The New York Times (Saturday, December 30, 2023): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 29, 2023, and has the title “California Pushes Electric Trucks as the Future of Freight.”)

Tom Watson, Jr. Managed IBM’s Rare and Successful Self-Disruption by “Transitioning the Firm to Electronic Computing”

(p. 9) Thomas J. Watson Jr. seemed, from a young age, to be destined for failure.

. . .

“He played with fire, shot animals in the nearby swamps and pilfered things from neighbors’ houses,” Ralph Watson McElvenny and Marc Wortman write in “The Greatest Capitalist Who Ever Lived,” a compelling new biography of Watson Jr.

. . .

This is far from the first book about IBM.

. . .

But this is probably the most theatrical book about IBM ever published. McElvenny, who happens to be Watson Jr.’s eldest grandson, is privy to “personal and corporate papers” and, as the endnotes mysteriously specify, many “family sources.”

. . .

“The Greatest Capitalist Who Ever Lived” is about the challenges of corporate and family succession, an essential topic given that IBM itself was the father figure to most of the computing and tech industry. Watson Sr., “the old man,” was a type familiar to our times: the tech titan who runs a large company as an extension of himself. (The IBM machine that beat the “Jeopardy!” champion Ken Jennings bears his name.) For four decades, IBM was Watson Sr.’s fief. The company “was run entirely out of one man’s breast pocket,” McElvenny and Wortman write. Watson Sr. “made all strategic decisions and most minor ones” and “delegated almost no authority.”

To his lasting credit, he did truly take care of his employees and their families in a manner that bred a strong loyalty. That said, Watson Sr. demanded conformity and could be erratic and cruel.

. . .

IBM faced a classic version of what the Harvard Business School professor Clayton Christensen has termed the “innovator’s dilemma” and what the Nobel Prize-winning economist Kenneth Arrow described as a monopoly’s disinclination to innovate. IBM was making plenty of profit on punched cards and accounting machines, its customers were happy, so why rock the boat?

Watson Jr.’s intense antipathy toward his father ended up saving IBM. Just before the United States entered World War II, Junior gained self-confidence the old-fashioned way: by joining the Army Air Corps and flying a B-24. When he eventually returned to IBM (pushed to do so by his commanding officer, Maj. Gen. Follett Bradley, who thought Watson would be wasted as an airline pilot), he became the internal champion of transitioning the firm to electronic computing. He was perhaps the only person who could oppose his father in a company built on yes men.

While the book’s title calls him “the greatest capitalist,” it might more accurately, if less ringingly, call him “the greatest manager,” for Watson Jr. was much better at delegating and using his employees’ talents.

For the full review, see:

Tim Wu. “Next-Gen.” The New York Times Book Review (Sunday, December 17, 2023): 9.

(Note: ellipses added.)

(Note: the online version of the review was updated Dec. 15, 2023, and has the title “The Father-Son Struggle That Helped Ensure IBM’s Success.”)

The book under review is:

McElvenny, Ralph Watson, and Marc Wortman. The Greatest Capitalist Who Ever Lived: Tom Watson Jr. and the Epic Story of How IBM Created the Digital Age. New York: PublicAffairs, 2023.

Intel Was a Feared Monopoly but Now “Is in a Fight for Its Life”

(p. B3) It might not look like it yet, but Intel is in a fight for its life.

. . .

The threats to Intel are so numerous that it’s worth summing them up: The Mac and Google’s Chromebooks are already eating the market share of Windows-based, Intel-powered devices. As for Windows-based devices, all signs point to their increasingly being based on non-Intel processors. Finally, Windows is likely to run on the cloud in the future, where it will also run on non-Intel chips.

. . .

It wasn’t always this way. For decades, Intel enjoyed PC market dominance with its ride-or-die partner, Microsoft, through their “Wintel” duopoly.

. . .

I asked Dan Rogers, vice president of silicon performance at Intel, if all of this is keeping him up at night. He declined to comment on Intel’s past, but he did say that since Pat Gelsinger, who had spent the first 30 years of his career at Intel, returned to the company as CEO in 2021, “I believe we are unleashed and focused, and our drive in the PC has in a way never been more intense.”

. . .

Geopolitical factors, for one, have the potential to change the entire chip industry virtually overnight. Intel could suddenly become the only game in town for the most advanced kind of chip manufacturing, if American tech companies lose access to TSMC’s factories on account of China’s aggression toward Taiwan, says Patrick Moorhead, a former executive at Intel competitor AMD, and now head of tech analyst firm Moor Insights & Strategy.

When it comes to Intel, he adds, “Never count these guys out.”

For the full commentary, see:

Christopher Mims. “KEYWORDS; Is This the End of ‘Intel Inside’? Not If Intel Has Anything to Say About It.” The Wall Street Journal (Saturday, Dec. 2, 2023): B13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 1, 2023, and has the title “KEYWORDS: CHRISTOPHER MIMS; Is This the End of ‘Intel Inside’?”)

Elon Musk Wants to Go to Mars, But He Wants Freedom Even More

The video clip above is embedded through YouTube’s “share” feature. It is a clip from the annual DealBook Summit of The New York Times. Andrew Ross Sorkin interviewed Elon Musk on November 29, 2023 at the Lincoln Center in New York City.

A year earlier at the 2022 DealBook Summit, Netflix co-founder Reed Hastings said: “Elon Musk is the bravest most creative person on the planet.”

Musk’s dream is for humanity to go to Mars. He is trying to privately fund his dream with billions of dollars he hoped to earn from Tesla. His investment of 44 billion dollars to buy Twitter may end his dream. But he bought Twitter to defend free speech, and free speech is required for the fast advance of science and technology. So if we ever make it to Mars we will owe much to Elon Musk. And even if we never make it to Mars we still will owe much to Elon Musk.

To Succeed as an Engineer, “All You Have to Be Is a Capitalist Who Wants to Make Better Things and Sell More of Them”

(p. B9) Dr. Wulf made a career in computer science when the field barely existed. As the importance of computers grew, his career became a road map of the developing field: first in academic research, next as an entrepreneur and then as a policymaker.

. . .

He and his wife, Anita K. Jones, also a computer science professor at Carnegie Mellon, left the university in 1981 to found Tartan Laboratories, which specialized in compilers. (It was named for the university’s athletic teams.)

. . .

Dr. Wulf and Dr. Jones moved to faculty positions at the University of Virginia, but Dr. Wulf took a leave of absence to join the Directorate for Computer and Information Science and Engineering at the National Science Foundation. There, he worked with Al Gore, then a senator, to craft legislation to make the military’s computer network, Arpanet, available to civilian researchers through the foundation’s NSFnet. That model gave way eventually to widely accessible, commercially operated networks.

. . .

Ed Lazowska, a computer scientist at the University of Washington, said of Dr. Wulf in an interview, “I don’t mean to diminish his technical contributions” — both he and Dr. Jones “are giants in the field,” he said — but Dr. Wulf, he believes, will be most remembered for his inspiring leadership in engineering.

In particular, he said, Dr. Wulf was “a huge champion of broadening participation in the field” by not only women and members of other underrepresented groups, but also by people who did not necessarily come from “big research universities, mostly on the coasts.”

Dr. Wulf called engineering “problem-solving under constraints” — time, money or other practical issues. Bringing diverse experiences and points of view to problems, he said, raises the odds of success. Without diverse views, he told an academy meeting in 1998, “we pay an opportunity cost — a cost in products not built, in designs not considered, in constraints not understood, in processes not invented.”

Or, as Dr. Lazowska put it: “You don’t have to have a social conscience. All you have to be is a capitalist who wants to make better things and sell more of them.”

For the full obituary, see:

Cornelia Dean. “William A. Wulf, 83, Who Helped Pave the Way to the Internet, Dies.” The New York Times (Saturday, March 25, 2023): B9.

(Note: ellipses added.)

(Note: the online version of the obituary was updated March 23, 2023, and has the title “William A. Wulf, Pioneering Computer Scientist, Dies at 83.” Where there is a difference in wording in versions, the passages quoted above follow the online version.)

“Serendipitous” Discoveries Related to Two “Odd-Looking” Animals Was Source of Weight-Loss Drugs

(p. A1) The blockbuster diabetes drugs that have revolutionized obesity treatment seem to have come out of nowhere, turning the diet industry upside down in just the past year. But they didn’t arrive suddenly. They are the unlikely result of two separate bodies of science that date back decades and began with the study of (p. A2) two unsightly creatures: a carnivorous fish and a poisonous lizard.

In 1980, researchers at Massachusetts General Hospital wanted to use new technology to find the gene that encodes a hormone called glucagon. The team decided to study Anglerfish, which have special organs that make the hormone, simplifying the task of gathering samples of pure tissue.

. . .

After plucking out organs the size of Lima beans with scalpels, they dropped them into liquid nitrogen and drove back to Boston. Then they determined the genetic sequence of glucagon, which is how they learned that the same gene encodes related hormones known as peptides. One of them was a key discovery that would soon be found in humans, too.

It was called glucagon-like peptide-1 and its nickname was GLP-1.

After they found GLP-1, others would determine its significance. Scientists in Massachusetts and Europe learned that it encourages insulin release and lowers blood sugar. That held out hope that it could help treat diabetes. Later they discovered that GLP-1 makes people feel fuller faster and slows down emptying of food from the stomach.

. . .

The key to the first drug would come from a serendipitous discovery inside another odd-looking animal.

Around the time Goodman was cutting open fish, Jean-Pierre Raufman was studying insect and animal venoms to see if they stimulated digestive enzymes in mammals.

“We got a tremendous response from Gila monster venom,” he recalled.

It was a small discovery that could have been forgotten, but for a lucky break nearly a decade later when Raufman gave a lecture on that work at the Bronx Veterans Administration. John Eng, an expert in identifying peptides, was intrigued. The pair had collaborated on unrelated work a few years before. Eng proposed they study Gila monsters.

. . .

Eng isolated a small peptide that he called Exendin-4, which they found was similar to human GLP-1.

Eng then tested his new peptide on diabetic mice and found something intriguing: It not only reduced blood glucose, it did so for hours. If the same effect were to be observed in humans, it could be the key to turning GLP-1 into a meaningful advance in diabetes treatment, not just a seasickness simulator in an IV bag.

Jens Juul Holst, a pioneering GLP-1 researcher, remembers standing in an exhibit hall at a European conference next to Eng. The two had put up posters that displayed their work, hoping top researchers would stop by to discuss it. But other scientists were skeptical that anything derived from a lizard would work in humans.

“He was extremely frustrated,” recalled Holst. “Nobody was interested in his work. None of the important people. It was too strange for people to accept.”

After three years, tens of thousands of dollars in patent-related fees and thousands of miles traveled, Eng found himself standing with his poster in San Francisco. This time, he caught the attention of Andrew Young, an executive from a small pharmaceutical company named Amylin.

“I saw the results in the mice and realized this could be druggable,” Young said.

When an Eli Lilly executive leaned over his shoulder to look at Eng’s work, Young worried he might miss his chance. Not long after, Amylin licensed the patent.

They worked to develop Exendin-4 into a drug by synthesizing the Gila monster peptide. They weren’t sure what would happen in humans. “We couldn’t predict weight loss or weight gain with these drugs,” recalled Young. “They enhance insulin secretion. Usually that increases body weight.” But the effect on slowing the stomach’s processing of food was more pronounced and Young’s team found as they tested their new drug that it caused weight loss.

To get a better understanding of Exendin-4, Young consulted with Mark Seward, a dentist raising more than 100 Gila monsters in his Colorado Springs, Colo., basement. The lizard enthusiast’s task was to feed them and draw blood. One took exception to the needle in its tail, slipped its restraint and snapped its teeth on Seward’s palm—the only time he’s been bitten in the decades he’s raised the animals. “It’s like a wasp sting,” he said, “but much worse.”

Nine years after the chance San Francisco meeting between Eng and Young, the Food and Drug Administration approved the first GLP-1-based treatment in 2005.

The twice-daily injection remained in the bloodstream for hours, helping patients manage Type 2 diabetes. Eng would be paid royalties as high as $6.7 million per year for the drug, . . .

For the full story, see:

Rolfe Winkler and Ben Cohen. “Two Monsters Spawned Huge Drugs.” The Wall Street Journal (Friday, June 24, 2023): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 23, 2023, and has the title “Monster Diet Drugs Like Ozempic Started With Actual Monsters.” The sentence about “a serendipitous discovery” appears in the online, but not the print, version of the article. The passages quoted above also include several other sentences that appear in the more extensive online version, but not in the print version.)

Temple Grandin Admires Elon Musk and Long Knew He Was on the Autism Spectrum

Professor Temple Grandin identifies as autistic and has written on what we can learn from the cognitively diverse. In the passages quoted below, she refers to the May 2021 Saturday Night Live hosted by Elon Musk in which he said he had Asperger’s syndrome.

(p. C7) I have always admired Elon Musk’s engineering of rockets and cars. I loved his cool space suits and how he made a rocket booster land upright. My must-read book is Walter Isaacson’s “Elon Musk.” Previously I had read Ashlee Vance’s book about Mr. Musk. It still has Post-it Notes stuck on it: I marked the pages that made me sure he was on the autism spectrum. I had to keep it to myself until he made his announcement on “Saturday Night Live.”

For the full review, see:

Temple Grandin. “12 Months of Reading: Temple Grandin.” The Wall Street Journal (Saturday, December 9, 2023): C7.

(Note: ellipsis added.)

(Note: the online version of the review has the date December 8, 2023, and has the title “Who Read What in 2023: Leaders in Business, Science and Technology: Temple Grandin.”)

The Elon Musk books Temple Grandin praises are:

Isaacson, Walter. Elon Musk. New York: Simon & Schuster, 2023.

Vance, Ashlee. Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. New York: Ecco, 2015.

Global Warming Can Allow a “Sudden Efflorescence” of Adaptation from Dormant “Sleeping Beauties”

Above the title of the book review quoted below, the Wall Street Journal printed a few lines from a poem by Baudelaire:

Many a jewel of untold worth
Lies slumbering at the core of Earth
In darkness and oblivion drowned . . .
–Charles Baudelaire, “Le Guignon”

(p. C12) In his new book, Mr. [Andreas] Wagner, a professor at the Department of Evolutionary Biology and Environmental Studies at the University of Zurich, showcases biological “sleeping beauties”: animals, plants, even bacteria that for generations plugged along with modest evolutionary success, only to later flourish spectacularly. “Sleeping Beauties: The Mystery of Dormant Innovations in Nature and Culture” explains how evolutionary adaptations sometimes go from dormancy to full flowering, while also suggesting that an analogous process applies to human innovations, including science, technology and the arts.

. . .

First we need to recall that not every biological trait an organism possesses is optimal for its current environment. The swim bladder, for example, evolved in fish as an aid to adjusting buoyancy, only later becoming the basis for lungs when their descendants became terrestrial. And the human appendix currently appears to be more an evolutionary liability than an asset, although it may well have conveyed immunologic benefits in the past—and could even prove adaptive in the future. Certain traits may develop that are not immediately adaptive, in the sense of contributing directly to the reproductive success of the genes responsible for the trait and of the individuals carrying them.

If an organism develops a characteristic maladapted to its environment, it and the genes responsible for the trait are selected away into oblivion. But if the novelty is not particularly harmful, or even somewhat helpful, the trait may simply hang around through the generations—until a descendant organism finds a welcoming environmental niche.

The natural world is filled with solutions awaiting a problem.  . . .  But when environments change (and they always do), a wonderful and lively explosion can ensue.

Mr. Wagner refers to this sudden efflorescence as “adaptive radiation”—“only with a key innovation,” he writes, “can a species exploit existing opportunities, such as a warmer climate, a new source of food, or a superior form of shelter. In this view, any one adaptive radiation has to wait, possibly for a long time, until the right innovation arises. And the need to wait holds evolution back.”

In regard to evolutionary developments that at first seem to bear no fruit, Mr. Wagner could have quoted from Thomas Gray’s “Elegy Written in a Country Churchyard”:

Full many a gem of purest ray serene,
The dark unfathom’d caves of ocean bear:
Full many a flow’r is born to blush unseen,
And waste its sweetness on the desert air.

In the world of human creativity, “full many” a terrific creation has been neglected or ignored in its time.

For the full review, see:

David P. Barash. “In Praise of Late Bloomers.” The Wall Street Journal (Saturday, April 29, 2023): C12.

(Note: ellipses, and bracketed name, added, except for first one at the end of quoted passage from Baudelaire.)

(Note: the online version of the review has the date April 28, 2023, and has the title “‘Sleeping Beauties’ Review: Nature’s Late Bloomers.”)

The book under review is:

Wagner, Andreas. Sleeping Beauties: The Mystery of Dormant Innovations in Nature and Culture. London: Oneworld Publications, 2023.

CEO Ackerman Sold Corning’s Cookware to Focus on Fiber Optics

(p. A8) When Roger Ackerman was named chairman and chief executive of Corning Inc. in 1996, the company depicted him as a technologically savvy leader who would guide the company into the internet age.

“I’m absolutely ready to take over at Corning, and have no fear or trepidation,” he told The Wall Street Journal.

Mr. Ackerman sold Corning’s housewares division, featuring cookware and such brands as Pyrex, to focus on making optical fibers, liquid-crystal-display glass and other high-tech marvels. Optical fibers were in hot demand as telecom companies rushed to lace the globe with voice and data networks.

For the full obituary, see:

James R. Hagerty. “Corning CEO Put Focus on Technology.” The Wall Street Journal (Saturday, Aug. 20, 2022): A8.

(Note: the online version of the obituary has the date August 18, 2022, and has the title “Corning CEO Shifted Focus From Cookware to Photonics.”)

Wolfspeed Startup Survived Because “We Were Small, We Were Nimble, We Were Crazy”

(p. A12) As a graduate student in materials science in the early 1980s, John Palmour took a chance on an unproven way to make semiconductors, substituting silicon carbide for the usual pure silicon.

. . .

In 1987, Dr. Palmour and other researchers at NC State were among the co-founders of Cree Research, now known as Wolfspeed Inc.

. . .

In a sign of the technology’s strategic importance, the Committee on Foreign Investment in the U.S. in 2017 blocked the sale of a large part of the company to Infineon Technologies AG of Germany.

As Wolfspeed flourished over the past five years, Dr. Palmour remained chief technology officer, even while being treated for lymphoma.

. . .

Frugality was a helpful trait at a tech company that was slow to blossom. Wolfspeed was able to keep going because “we were small, we were nimble, we were crazy,” Dr. Edmond said.

. . .

Of his early days as an entrepreneur, Dr. Palmour wrote: “We were full of big plans and high hopes, but we were too young and stupid to know how hard it was going to be, how long it would take, or if it was even possible.”

For the full obituary, see:

James R. Hagerty. “Scientist Changed Recipe For Making Microchips.” The Wall Street Journal (Saturday, Dec. 3, 2022): A12.

(Note: ellipses added.)

(Note: the online version of the obituary has the date December 2, 2022, and has the title “John Palmour Changed Recipe for Making Microchips.”)

“Adding Manpower to a Late Software Project Makes It Later”

(p. 24) Dr. Brooks had a wide-ranging career that included creating the computer science department at the University of North Carolina and leading influential research in computer graphics and virtual reality.

But he is best known for being one of the technical leaders of IBM’s 360 computer project in the 1960s.

. . .

Until the 360, each model of computer had its own bespoke hardware design. That required engineers to overhaul their software programs to run on every new machine that was introduced.

But IBM promised to eliminate that costly, repetitive labor with an approach championed by Dr. Brooks, a young engineering star at the company, and a few colleagues. In April 1964, IBM announced the 360 as a family of six compatible computers. Programs written for one 360 model could run on the others, without the need to rewrite software, as customers moved from smaller to larger computers.

. . .

The hard-earned lessons he learned from grappling with the OS/360 software became grist for his book “The Mythical Man-Month: Essays on Software Engineering.” First published in 1975, it became recognized as a quirky classic, selling briskly year after year and routinely cited as gospel by computer scientists.

The tone is witty and self-deprecating, with pithy quotes from Shakespeare and Sophocles and chapter titles like “Ten Pounds in a Five-Pound Sack” and “Hatching a Catastrophe.” There are practical tips along the way. For example: Organize engineers on big software projects into small groups, which Dr. Brooks called “surgical teams.”

The most well known of his principles was what he called Brooks’s law: “Adding manpower to a late software project makes it later.”

Dr. Brooks himself acknowledged that with the “law” he was “oversimplifying outrageously.” But he was exaggerating to make a point: It is often smarter to rethink things, he suggested, than to add more people. And in software engineering, a profession with elements of artistry and creativity, workers are not interchangeable units of labor.

In the internet era, some software developers have suggested that Brooks’s law no longer applies. Large open-source software projects — so named because the underlying “source” code is open for all to see — have armies of internet-connected engineers to spot flaws in code and recommend fixes. Still, even open-source projects are typically governed by a small group of individuals, more surgical team than the wisdom of the crowd.

For the full obituary, see:

Steve Lohr. “Frederick P. Brooks Jr., an Innovator of Computer Design, Dies at 91.” The New York Times, First Section (Sunday, November 27, 2022): 24.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Nov. 25, 2022, and has the title “Frederick P. Brooks Jr., Computer Design Innovator, Dies at 91.”)

The Brooks’s book mentioned above is:

Brooks, Frederick P., Jr. The Mythical Man-Month: Essays on Software Engineering. 2nd ed. Boston, MA: Addison-Wesley, 1995.