Economics of Technology – Page 58

Tech Replaces Labor When Government Raises Labor Costs

(p. A11) In late 2013, Chili’s and Applebee’s announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.
. . .
So why the increased use of technology? The major reason is consumer preference. Research shows that many appreciate the speed, order accuracy, and convenience of touch screens. This is particularly so among millennials who already do so much on smartphones and tablets. I’ve watched people–young and old–waiting in line to use the touch screens while employees stand idle at the counter.
The other reason is costs. While the technology is becoming much cheaper, government mandates have been making labor much more expensive.
In 2015, 14 cities and states approved $15 minimum wages–double the current federal minimum. Additionally, four states, 20 cities and one county now have mandatory paid-sick-leave laws generally requiring a paid week of time off each year per covered employee. And then there’s the Affordable Care Act, which further raises employer costs.

For the full commentary, see:
ANDY PUZDER. “Why Restaurant Automation Is on the Menu; Forget about robot waiters, but technology helps cut government-imposed costs. And consumers like it.” The Wall Street Journal (Fri., March 25, 2016): A11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date March 24, 2016.)

Obama Says Stimulus Worked at Battery Plant Where CEO Remains “Frustrated” at Losses

(p. A12) JACKSONVILLE, Fla. — President Obama on Friday [February 26, 2016] used a visit to a high-technology battery plant in Florida to argue that the hundreds of billions of dollars in federal subsidies he signed into law during his first days in office had bolstered the economy, transformed the nation’s energy sector, and positioned the United States for a strong rebound.
But Mr. Obama’s trip to the Saft America factory here, opened in 2011 with a $95.5 million investment from the Department of Energy, also highlighted the challenges that have tempered the economic recovery and the difficulty that the president has had in claiming credit for it.
. . .
After touring the facility and watching a large robot named Wall-E assembling one of the batteries, the president called the factory “tangible evidence” that his stimulus package had worked and said that the economy was better off for it. “We took an empty swamp and turned it into an engine of innovation,” he said.
That engine, though, has sputtered as it has struggled to start here. Saft, based in Paris, announced last week that it was reducing the factory’s value because it had still not gained profitability in the competitive lithium-ion battery market. Saying he was “frustrated,” the company’s chief executive projected the plant might not be profitable for a few more years.

For the full story, see:
JULIE HIRSCHFELD DAVIS. “Obama Praises Stimulus at Battery Plant.” The New York Times (Sat., FEB. 27, 2016): A12.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date FEB. 26, 2016, and has the title “Obama Points to Florida Factory as Evidence That Stimulus Worked.”)

“Ordinary People Should Have a Go”

(p. A11) The classical archaeologist and now big-picture historian Ian Morris, whose last book argued that war is good for you, now explains why coal is too. In “Foragers, Farmers, and Fossil Fuels,” Mr. Morris puts “energy capture” at the center of human values since the Ice Age, through three eras: the Foragers to begin with; the Farmers after about 8,000 B.C.; and, in the past few centuries, the Fossil Fuelers.
. . .
A culture favorable to liberty and dignity for commoners came out of the Reformation and 16th-century Holland, spread to Britain and Britain’s colonies in the 18th century, and resulted after 1800 in an explosion of ingenuity.
This Great Enrichment, which Mr. Morris acknowledges but does not explain, increased income per head not by the 100% or 200% of earlier efflorescences but by anything from 2,000% to 10,000%. Routine materialism of Mr. Morris’s sort can’t explain the most important secular event in human history. He wants to pin it all on energy capture. The correct story is one of ideas of human equality changing, starting with a conviction novel in the 17th century in northwestern Europe that ordinary people should have a go. This led to massive innovation, among which was energy capture. We do not have a fossil-fuel civilization. We have a free and ingenious one.

For the full review, see:
DEIRDRE MCCLOSKEY. “BOOKSHELF; Oil on Troubled Waters; In this telling, progress is explained by the rising use of fossil fuels. Yet the Industrial Revolution was powered by water, not coal..”The Wall Street Journal (Mon., July 6, 2015): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 5, 2015.)

The book under review, is:
Morris, Ian. Foragers, Farmers, and Fossil Fuels: How Human Values Evolve, The University Center for Human Values Series. Princeton, NJ: Princeton University Press, 2015.

New Middle-Skill Jobs Combine Technical and Social Skills

Source of graph: online version of the NYT article quoted and cited below, based on Deming paper cited further below.

(p. 4) For all the jobs that machines can now do — whether performing surgery, driving cars or serving food — they still lack one distinctly human trait. They have no social skills.

Yet skills like cooperation, empathy and flexibility have become increasingly vital in modern-day work. Occupations that require strong social skills have grown much more than others since 1980, according to new research. And the only occupations that have shown consistent wage growth since 2000 require both cognitive and social skills.
The findings help explain a mystery that has been puzzling economists: the slowdown in the growth even of high-skill jobs. The jobs hit hardest seem to be those that don’t require social skills, throughout the wage spectrum.
“As I’m speaking with you, I need to think about what’s going on in your head — ‘Is she bored? Am I giving her too much information?’ — and I have to adjust my behavior all the time,” said David Deming, associate professor of education and economics at Harvard University and author of a new study. “That’s a really hard thing to program, so it’s growing as a share of jobs.”
. . .
“If it’s just technical skill, there’s a reasonable chance it can be automated, and if it’s just being empathetic or flexible, there’s an infinite supply of people, so a job won’t be well paid,” said David Autor, an economist at the Massachusetts Institute of Technology. “It’s the interaction of both that is virtuous.”
Mr. Deming’s conclusions are supported by previous research, including that of Mr. Autor. Mr. Autor has written that traditional middle-skill jobs, like clerical or factory work, have been hollowed out by technology. The new middle-skill jobs combine technical and interpersonal expertise, like physical therapy or general contracting.
James Heckman, a Nobel Prize-winning economist, did groundbreaking work concluding that noncognitive skills like character, dependability and perseverance are as important as cognitive achievement. They can be taught, he said, yet American schools don’t necessarily do so.

For the full commentary, see:
Claire Cain Miller. “The Upshot; The Best Jobs Require Social Skills.” The New York Times, SundayReview Section (Sun., OCT. 18, 2015): 4.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date OCT. 16, 2015, and has the title “The Upshot; Why What You Learned in Preschool Is Crucial at Work.”)

The Deming paper referred to above, is:
Deming, David J. “The Growing Importance of Social Skills in the Labor Market.” National Bureau of Economic Research, Inc., NBER Working Paper # 21473, Aug. 2015.

The Autor paper referred to above, is:
Autor, David. “Polanyi’s Paradox and the Shape of Employment Growth.” National Bureau of Economic Research, Inc., NBER Working Paper # 20485, Sept. 2014.

The Heckman paper referred to above, is:
Heckman, James J., Jora Stixrud, and Sergio Urzua. “The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior.” Journal of Labor Economics 24, no. 3 (July 2006): 411-82.

Technology Extends Capabilities of Older Japanese

(p. A1) TOKYO–At an office-building construction site in the center of Japan’s capital, 67-year-old Kenichi Saito effortlessly stacks 44-pound boards with the ease of a man half his age.
His secret: a bendable exoskeleton hugging his waist and thighs, with sensors attached to his skin. The sensors detect when Mr. Saito’s muscles start to move and direct the machine to support his motion, cutting his load’s effective weight by 18 pounds.
“I can carry as much as I did 10 years ago,” says the hard-hatted Mr. Saito.
Mr. Saito is part of an experiment by Obayashi Corp. , the construction giant handling the building project, to confront one of the biggest problems facing the company and the country: a chronic labor shortage resulting from a rapidly aging population. The exoskeleton has allowed Mr. Saito to extend his working life–and Obayashi to keep building.
. . .
(p. A14) The Fujisawa Aikoen nursing home about an hour outside Tokyo started leasing the “hybrid assistive limb,” or HAL, exoskeletons from maker Cyberdyne Inc. in June.
In Hokkaido, 60-year-old potato-pickers use rubber “smart suits” making it easier to bend over. Baggage handlers at Tokyo’s Haneda airport employ similar assistance.
In cases where older people simply can’t do the job or aren’t available, Japanese manufacturers are turning to robots, which help them keep costs down and continue growing.
Bank of Tokyo Mitsubishi UFJ, Japan’s largest bank, employs a small robot speaking 19 languages to greet customers, while a Nagasaki hotel staffed mainly by robots opened in July. Komatsu Ltd. is developing self-driving vehicles for construction sites, while industrial robot maker Fanuc Corp. is designing machines that repair each other.
Toyota Motor Corp. is testing in homes its “human support robot,” a videophone/remote-controlled android that allows family and friends to perform tasks for distant elderly people as if they were in the same home. In one demonstration, a young man uses a tablet to look around a bed-bound older man’s room, then directs the robot to open the curtains and bring the older man a drink.
SoftBank Group Corp. earlier this year drew global attention when it put on sale in Japan an automaton called Pepper, which it called the world’s first robot capable of understanding emotions. One of the earliest uses for the 4-foot-tall white humanoid is as a nursing helper.
In a Kanagawa Prefecture test, Pepper entertained a room of 30 80- to 90-year-olds for 40 minutes. He led them in light exercises and tested their ability to recognize colors and letters. Women patted his head like a grandchild.
Showing a video of Pepper with a dementia patient on another occasion, Shunji Iyama, one of the developers, says the robot may sometimes work better than people. “That man keeps repeating himself over and over again,” Mr. Iyama said. “If Pepper were human, he’d get fed up, but he just repeats the same reaction and doesn’t get tired.”

For the full story, see:
Jacob M. Schlesinger and Alexander Martin. “Graying Japan Tries to Embrace the Golden Years.” The Wall Street Journal (Mon., Nov. 30, 2015): A1 & A14.
(Note: ellipsis added.)
(Note: the online version of the story has the date Nov. 29, 2015, and has the title “Graying Japan Tries to Embrace the Golden Years.”)

To Get the High-Hanging Fruit, Grow Shorter Trees

Dr. Gennaro Fazio, a plant breeder and geneticist with the USDA’s Agricultural Resource Service tells us . . . :

“In taller apple trees, the fruit that is high up, exposed to the sun, ripens the fastest. Low-hanging fruit doesn’t get much sun, and it’s not as ripe — not so delectable, you could say — as the higher fruit. You want to pick the low-hanging fruit last, so it has more time to develop.”

But according to Fazio none of this ultimately matters: the idiom “low-hanging fruit” has been rendered totally and utterly irrelevant by the changing nature of apple tree genetics.
When “low-hanging fruit” became a metaphor in the late 1960s, the majority of apple trees in the U.S. were 25- to 30-foot tall goliaths–and the only fruits within reach were those that lingered on lower branches. Today, however, the majority of apple trees are what arborists refer to as “dwarfs.”
. . .
Once hesitant that the smaller trees wouldn’t produce as much fruit, apple growers realized dwarf trees were actually far more profitable. “Farmers get a higher yield per acre,” says Heather Faubert, of the Rhode Island Fruit Growers Association. “With the taller trees, you could only plant about 20 trees per acre; now, you can get as many as 2,000 in the same space.”
The result of these smaller trees is that the lowest-hanging fruits are actually no longer the easiest to pick. In fact, picking them requires repeatedly bending over to knee-level, a maneuver that can prove incredibly straining on the lower back.
“The ergonomics of picking apples have completely changed,” says Fazio. “It really no longer makes sense to go for the low-hanging fruit. The phrase is irrelevant.”

For the full story, see:
Priceonomics.com, “Should You Literally Pick the Low-Hanging Fruit?,” Feb. 5, 2016, URL: http://priceonomics.com/should-you-literally-pick-the-low-hanging-fruit/.
(Note: ellipses added.)

The web page was excerpted in:
“Notable & Quotable: ‘Low-Hanging Fruit’.” The Wall Street Journal (Weds., Feb. 10, 2016): A11.
(Note: the online version of the article has the date Feb. 9, 2016.)

Innovators Need Time for Tedious Tasks

(p. 3) Innovation isn’t all about eureka moments. In fact, the road to creative breakthroughs is paved with mundane, workaday tasks. That’s the message of a recent study that might as well be titled “In Praise of Tedium.”
In the study, researchers sought to examine how extended periods of free time affect innovation. To do this, they analyzed activity on Kickstarter, the crowdfunding website, in nearly 6,000 American cities.
. . .
Over a period of about nine months, the researchers found a sharp increase in the number of new projects posted during the first few days of school break periods. The spike, they suggest, is tied to people having more time to perform the administrative aspects of Kickstarter projects — working on a manufacturing plan, say, or setting up a rewards schedule. While people may be using some stretches of free time to nurture those much lauded light bulb moments, the process of innovation also appears to require time to carry out execution-oriented tasks that are not particularly creative but still necessary to transform an idea into a product, the study indicates.

For the full story, see:
PHYLLIS KORKKI. “Applied Science; Good Ideas Need Time for Tedious Legwork.” The New York Times, SundayBusiness Section (Sun., AUG. 16, 2015): 3.
(Note: ellipsis added.)
(Note: the online version of the story has the date AUG. 15, 2015, and has the title “Applied Science; Looking for a Breakthrough? Study Says to Make Time for Tedium.”)

The academic paper summarized in the passages quoted above, is:
Agrawal, Ajay, Christian Catalini, and Avi Goldfarb. “Slack Time and Innovation.” Rotman School of Management Working Paper #2599004, April 25, 2015.

Serendipitous Fix for Colorblindness

(p. 3) The eyeglass lenses that Don McPherson invented were meant for surgeons. But through serendipity he found an entirely different use for them: as a possible treatment for colorblindness.
Mr. McPherson is a glass scientist and an avid Ultimate Frisbee player. He discovered that the lenses he had invented, which protect surgeons’ eyes from lasers and help them differentiate human tissue, caused the world at large to look candy-colored — including the Frisbee field.
At a tournament in Santa Cruz, Calif., in 2002, while standing on a grassy field dotted with orange goal-line cones, he lent a pair of glasses with the lenses to a friend who happened to be colorblind. “He said something to the effect of, ‘Dude, these are amazing,’ ” Mr. McPherson says. “He’s like, ‘I see orange cones. I’ve never seen them before.’ ”
Mr. McPherson was intrigued. He said he did not know the first thing about colorblindness, but felt compelled to figure out why the lenses were having this effect. Mr. McPherson had been inserting the lenses into glasses that he bought at stores, then selling them through Bay Glass Research, his company at the time.
Mr. McPherson went on to study colorblindness, fine-tune the lens technology and start a company called EnChroma that now sells glasses for people who are colorblind. His is among a range of companies that have brought inadvertent or accidental inventions to market. Such inventions have included products as varied as Play-Doh, which started as a wallpaper cleaner, and the pacemaker, discovered through a study of hypothermia.
. . .
EnChroma was still struggling to solve its marketing conundrum when another serendipitous event occurred: A paint company wanted to finance an ad campaign featuring the glasses. The idea was to introduce color to the colorblind. To that end, videos were made of EnChroma users wearing the glasses for the first time while looking at things like sunsets, colorful artwork and, of course, paint samples.
The ad campaign increased EnChroma’s sales and spurred a trend: New EnChroma customers began filming and sharing their experiences online. The company placed inserts in its eyeglass boxes encouraging customers to participate.
Prompted by the insert, Bob Balcom, a 60-year-old retired high school science teacher and labor relations specialist in Chatham, N.Y., uploaded his first YouTube video in March. Shot by his wife, it shows Mr. Balcom putting the glasses over his own eyeglasses and staring up at the sky quietly for several seconds. “The blue sky is deeper than I’ve ever seen,” he says. “It reminds me of Colorado. And the pine trees, they’re just so green.” Tears stream down his cheeks and into his gray beard.

For the full story, see:
CLAIRE MARTIN. “Finding a Niche for the Accidental Spectacles.” The New York Times, SundayBusiness Section (Sun., AUG. 16, 2015): 3.
(Note: ellipsis, and bracketed dates, added.)
(Note: the online version of the story has the date AUG. 15, 2015, and has the title “EnChroma’s Accidental Spectacles Find Niche Among the Colorblind.” )

Private Start-Ups Pursue Fusion Approaches Ignored by Government

(p. B5) Fusion reactions release no carbon dioxide. Their fuel, derived from water, is abundant. Compared with contemporary nuclear reactors, which produce energy by splitting atoms apart, a fusion plant would produce little radioactive waste.
The possibilities have attracted Jeffrey P. Bezos, founder of Amazon.com. He has invested in General Fusion, a start-up in British Columbia, through Bezos Expeditions, the firm that manages his venture capital investments. Paul Allen, a co-founder of Microsoft, is betting on another fusion company, Tri Alpha Energy, based in Foothill Ranch, Calif., an hour south of Los Angeles, through his venture arm, Vulcan Capital.
Peter Thiel — the co-founder of PayPal, who once lamented the superficiality of the technology sector by saying, “We were promised flying cars and we got 140 characters” — has invested in a third fusion start-up, Helion Energy, based near Seattle, through Mithril Capital Management.
Government money fueled a surge in fusion research in the 1970s, but the fusion budget was cut nearly in half over the next decade. Federal research narrowed on what scientists saw as the most promising prototype — a machine called a tokamak, which uses magnets to contain and fuse a spinning, doughnut-shape cloud of hydrogen.
Today’s start-ups are trying to perfect some of the ideas that the government left by the wayside.
After earning his doctorate from the University of California, Irvine, in the mid-1990s, Michl Binderbauer had trouble securing federal funds to research an alternative approach to fusion that the American government briefly explored — one that adds the element boron into the hydrogen fuel. The advantage of the mixture is that the reaction does not fling off neutrons that, like shrapnel, can wear down machine parts and make them radioactive.
Mr. Binderbauer, along with his Ph.D. adviser, Norman Rostoker, founded Tri Alpha Energy, eventually raising money from the venture capital arms of Mr. Allen and the Rockefeller family. The company has raised over $200 million.

For the full story, see:
DINO GRANDONI. “Start-Ups Take on Challenge of Fusion.” The New York Times (Mon., OCT. 26, 2015): B1 & B5.
(Note: the online version of the story has the date OCT. 25, 2015, and has the title “Start-Ups Take On Challenge of Nuclear Fusion.”)

North Dakota Plans a Drone Silicon Valley

For many years state governments and universities have been trying to plan the creation of new Silicon Valleys in their own backyards. Success has been elusive. Now North Dakota is tying to create a drone Silicon Valley. My take: Silicon Valleys cannot be planned, though they can be encouraged by low taxes and limited regulations.

(p. A1) FARGO, N.D. — “California and New York want what we’ve got,” said Shawn Muehler, a 30-year-old Fargo resident, gazing at a horizon of empty fields, silos, windbreak trees and hardly any people. A winged craft traces the air, mapping a field with pinpoint accuracy for his start-up, a drone software company called Botlink. “They like drones, but they’ve got a steep learning curve ahead.”

For years, entrepreneurs have come here to farm and to drill for oil and natural gas. Now a new, tech-savvy generation is grabbing a piece of the growing market for drone technology and officials want to help them do it here, where there is plenty of open space and — unlike in other sparsely populated states — lots of expertise already in place.
Silicon Valley has the big money and know-how, Mr. Muehler and others say, but North Dakota can take unmanned aerial vehicles, as the officials prefer to call drones, from a fast-growing hobby to an industry. And just as Silicon Valley got its start with military contracts, entrepreneurs and cooperative universities, they believe they can do the same with drones.
“The potential up here is tremendous,” said Jack Dalrymple, the state’s governor. “It’s not about supporting a company or two; it’s creating the leading edge of an industry.”
North Dakota has spent about (p. B7) $34 million fostering the state’s unmanned aerial vehicle business, most notably with a civilian industrial park for drones near Grand Forks Air Force Base. The base, a former Cold War installation, now flies nothing but robot aircraft for the United States military and Customs and Border Protection.

For the full story, see:
QUENTIN HARDY. “A Silicon Valley for Drone Craft in Great Plains.” The New York Times (Sat., DEC. 26, 2015): A1 & B7.
(Note: the online version of the story has the date DEC. 25, 2015, and has the title “A Silicon Valley for Drones, in North Dakota.”)

How to Monopolize a Dead Technology

(p. C3) LOS ANGELES — When Quentin Tarantino’s “The Hateful Eight” is released in a special roadshow version (with overture, intermission and additional footage) on Dec. 25, it will represent a feat worthy of the heist in the director’s “Jackie Brown.”
The film is scheduled to open on 96 screens in the United States and four in Canada, all in 70-millimeter projection, a premium format associated with extravaganzas of the 1950s and 1960s.
Yet from a theatrical standpoint, the technology is nearly obsolete. Last year, “Interstellar” opened in 70 millimeter at only 11 comparable locations. There were only 16 in 2012 for “The Master,” which renewed interested in the format. No film has opened with 100 70-millimeter prints since 1992. According to the National Association of Theater Owners, 97 percent of the 40,000 screens in the United States now use digital projection.

. . .
“We looked around for anybody who was selling them,” said Erik Lomis, Weinstein’s president of theatrical distribution and home entertainment. “We tried to keep it as quiet as possible as to why. Eventually word leaked out why we were looking for them, and then the price went up.”
. . .
“We’ve been accused of actually cornering the market on 70-millimeter projectors,” Mr. Cutler said. “It’s probably pretty true. There probably aren’t too many out there that we didn’t find.” Most of them were destroyed, he added, during the conversion to digital projection.
. . .
Ultra Panavision also produces subtle aesthetic effects, unusual even to viewers familiar with 70 millimeter. The lens “for lack of a better word is a softer lens,” Mr. Sasaki said. During a screening of test footage for the film, he pointed out the impressionistic qualities of the focus and explained how the image catered to our eyes’ natural depth cues.
With projectors found and lenses made, the next hurdle is labor: Most theaters no longer have projectionists with a working knowledge of these machines. Mr. Cutler’s company will provide training for each site. “One way or the other, we will fulfill this need,” he said. “It will be a combination of house staff that we can train, professional projectionists that we can bring in, projectionists that we can find locally, and potentially some technical staff that we’ll bring in.” Every theater showing the film will get a spare set of belts, fuses and light bulbs, and instructions. Mr. Cutler’s staff will also be standing by for calls.

For the full story, see:
BEN KENIGSBERG. “In a World Gone Digital, Room for a Lost Format.” The New York Times (Thurs., NOV. 12, 2015): C3.
(Note: ellipses added.)
(Note: the online version of the story has the date NOV. 11, 2015, and has the title “Tarantino’s ‘The Hateful Eight’ Resurrects Nearly Obsolete Technology.”)