Economics of Technology – Page 80

Internet Companies Respect the Value of Your Time

“Arvind Jain, a Google engineer, pointed out the loading speed of individual elements of a website on a test application used to check efficiency, at Google offices in Mountain View, Calif.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) Wait a second.

No, that’s too long.
Remember when you were willing to wait a few seconds for a computer to respond to a click on a Web site or a tap on a keyboard? These days, even 400 milliseconds — literally the blink of an eye — is too long, as Google engineers have discovered. That barely perceptible delay causes people to search less.
“Subconsciously, you don’t like to wait,” said Arvind Jain, a Google engineer who is the company’s resident speed maestro. “Every millisecond matters.”
Google and other tech companies are on a new quest for speed, challenging the likes of Mr. Jain to make fast go faster. The reason is that data-hungry smartphones and tablets are creating frustrating digital traffic jams, as people download maps, video clips of sports highlights, news updates or recommendations for nearby restaurants. The competition to be the quickest is fierce.
People will visit a Web site less often if it is slower than a close competitor by more than 250 milliseconds (a millisecond is a thousandth of a second).
“Two hundred fifty milliseconds, either slower or faster, is close to the magic number now for competitive advantage on the Web,” said Harry Shum, a computer scientist and speed specialist at Microsoft.
. . .
(p. A3) The need for speed itself seems to be accelerating. In the early 1960s, the two professors at Dartmouth College who invented the BASIC programming language, John Kemeny and Thomas Kurtz, set up a network in which many students could tap into a single, large computer from keyboard terminals.
“We found,” they observed, “that any response time that averages more than 10 seconds destroys the illusion of having one’s own computer.”
In 2009, a study by Forrester Research found that online shoppers expected pages to load in two seconds or fewer — and at three seconds, a large share abandon the site. Only three years earlier a similar Forrester study found the average expectations for page load times were four seconds or fewer.
The two-second rule is still often cited as a standard for Web commerce sites. Yet experts in human-computer interaction say that rule is outdated. “The old two-second guideline has long been surpassed on the racetrack of Web expectations,” said Eric Horvitz, a scientist at Microsoft’s research labs.

For the full story, see:
STEVE LOHR. “For Impatient Web Users, an Eye Blink Is Just Too Long to Wait.” The New York Times (Thurs., March 1, 2012): A1 & A3.
(Note: ellipsis added.)
(Note: the online version of the article is dated February 29, 2012.)

Source of graph: online version of the NYT article quoted and cited above.

The Impact of Cheap Smart Phones on Africa

Jimbo Wales

Source of photo: online version of the NYT article quoted and cited below.

(p. 2) PHONING: A friend of mine bought me an Ideos phone on the street in Kenya for about $80. This is an Android phone that’s a bit smaller than an iPhone, but a lot cheaper. This is really exciting because at that price point, hundreds of thousands and soon millions of smartphones are going to be sold across Africa. The impact for people’s access to knowledge in some very difficult places is enormous.

For the full interview, see:
Jimmy Wales as interviewed by KATE MURPHY. “DOWNLOAD; Jimmy Wales.” The New York Times, SundayReview (Sun., February 12, 2012): 2.
(Note: the online version of the interview is dated February 11, 2012.)

Paul Allen Uses Microsoft Profits for Bold Private Space Project

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

(p. B1) Microsoft Corp. co-founder Paul Allen indicated he is prepared to commit $200 million or more of his wealth to build the world’s largest airplane as a mobile platform for launching satellites at low cost, which he believes could transform the space industry.

Announced Tuesday, the novel, high-risk project conceived by renowned aerospace designer Burt Rutan seeks to combine engines, landing gears and other parts removed from old Boeing 747 jets with a newly created composite craft from Mr. Rutan and a powerful rocket to be built by a company run by Internet billionaire and commercial-space pioneer Elon Musk.
Dubbed Stratolaunch and funded by one of Mr. Allen’s closely held entities, the venture seeks to meld decades-old airplane technology with cutting-edge booster-rocket designs in an unprecedented way to assemble a hybrid that would offer the first totally privately funded space transportation system.

For the full story, see:
ANDY PASZTOR And DIONNE SEARCEY. “Paul Allen, Supersizing Space Flight; Billionaire’s Novel Vision Has Wingspan Wider Than a Football Field, Weighs 1.2 Million Pounds.” The Wall Street Journal (Weds., December 5, 2011): B1 & B5.

“What Success Had Brought Him, . . . , Was Freedom”

(p. 5) The success of Pixar’s films had brought him something exceedingly rare in Hollywood: not the house with the obligatory pool in the backyard and the Oscar statuettes on the fireplace mantel, or the country estate, or the vintage Jaguar roadster–although he had all of those things, too. It wasn’t that he could afford to indulge his affinity for model railroads by acquiring a full-size 1901 steam locomotive, with plans to run it on the future site of his twenty-thousand-square-foot mansion in Sonoma Valley wine country. (Even Walt Dìsney’s backyard train had been a mere one-eighth-scale replica.)
None of these was the truly important fruit of Lasseter’s achievements. What success had brought him, most meaningfully, was freedom. Having created a new genre of film with his colleagues at Pixar, he had been able to make the films he wanted to make, and he was coming back to Disney on his own terms.

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: ellipsis in title was added.)
(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

Pixar as a Case Study on Innovative Entrepreneurship

Source of book image: http://murraylibrary.org/2011/09/the-pixar-touch-the-making-of-a-company/

Toy Story and Finding Nemo are among my all-time-favorite animated movies. How Pixar developed the technology and the story-telling sense, to make these movies is an enjoyable and edifying read.
Along the way, I learned something about entrepreneurship, creative destruction, and the economics of technology. In the next couple of months I occasionally will quote passages that are memorable examples of broader points or that raise thought-provoking questions about how innovation happens.

Book discussed:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

The Tasmanian Technological Regress: “Slow Strangulation of the Mind”

(p. 78) The most striking case of technological regress is Tasmania. Isolated on an island at the end of the world, a population of less than 5,000 hunter-gatherers divided into nine tribes did not just stagnate, or fail to progress. They fell steadily and gradually back into a simpler toolkit and lifestyle, purely because they lacked the numbers to sustain their existing technology. Human beings reached Tasmania at least 35,000 years ago while it was still connected to Australia. It remained connected – on and off – until about 10,000 years ago, when the rising seas filled the Bass Strait. Thereafter the Tasmanians were isolated. By the time Europeans first encountered Tasmanian natives, they found them not only to lack many of the skills and tools of their mainland cousins, but to lack many technologies that their own ancestors had once possessed. They had no bone tools of any kind, such as needles and awls, no cold-weather clothing, no fish hooks, no hafted tools, no barbed spears, no fish traps, no spear throwers, no boomerangs. A few of these had been invented on the mainland after the Tasmanians had been isolated from it – the boomerang, for instance – but most had been made and used by the very first Tasmanians. Steadily and inexorably, so the archaeological history tells, these tools and tricks were abandoned. Bone tools, for example, grew simpler and simpler until they were dropped altogether about 3,800 years ago. Without bone tools it became impossible to sew skins into clothes, so even in the bitter winter, the Tasmanians went nearly naked but for seal-fat grease smeared on their skin and wallaby pelts over their shoulders. The first Tasmanians caught and ate plenty of fish, but by the time of Western contact they not only ate no fish (p. 79) and had eaten none for 3,000 years, but they were disgusted to be offered it (though they happily ate shellfish).
The story is not quite that simple, because the Tasmanians did invent a few new things during their isolation. Around 4,000 years ago they came up with a horribly unreliable form of canoe-raft, made of bundles of rushes and either paddled by men or pushed by swimming women (!), which enabled them to reach offshore islets to harvest birds and seals. The raft would become waterlogged and disintegrate or sink after a few hours, so it was no good for re-establishing contact with the mainland. As far as innovation goes, it was so unsatisfactory that it almost counts as an exception to prove the rule. The women also learnt to dive up to twelve feet below the water to prise clams off the rocks with wooden wedges and to grab lobsters. This was dangerous and exhausting work, which they were very skilled at: the men did not take part. So it was not that there was no innovation; it was that regress overwhelmed progress.
The archaeologist who first described the Tasmanian regress, Rhys Jones, called it a case of the ‘slow strangulation of the mind’, which perhaps understandably enraged some of his academic colleagues. There was nothing wrong with individual Tasmanian brains; there was something wrong with their collective brains. Isolation – self-sufficiency – caused the shrivelling of their technology. Earlier I wrote that division of labour was made possible by technology. But it is more interesting than that. Technology was made possible by division of labour: market exchange calls forth innovation.

Source:
Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

Creative Destruction Creates as Many New Jobs as It Destroys

(p. 113) It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making (p. 114) his product obsolete. As Kodak and Fuji slugged it out for dominance in the 35mm film industry in the 1990s, digital photography began to extinguish the entire market for analogue film – as analogue records and analogue video cassettes had gone before. Creative destruction, Schumpeter called it. His point was that there is just as much creation going on as destruction – that the growth of digital photography would create as many jobs in the long run as were lost in analogue, or that the savings pocketed by a Wal-Mart customer are soon spent on other things, leading to the opening of new stores to service those new demands. In America, roughly 15 per cent of jobs are destroyed every year; and roughly 15 per cent created.

Source:
Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

Krim Saw Use for Noisy CK722 Transistors

Norman Krim holding some early transistors. He first put transistors into hearing aids. Source of caption and photo: online version of the NYT obituary quoted and cited below.

(p. B11) Mr. Krim, who made several breakthroughs in a long career with the Raytheon Company and who had an early hand in the growth of the RadioShack chain, did not invent the transistor. (Three scientists did, in 1947, at Bell Laboratories.)

But he saw the device’s potential and persuaded his company to begin manufacturing it on a mass scale, particularly for use in miniaturized hearing aids that he had designed. Like the old tube, a transistor amplifies audio signals.
As Time magazine wrote in 1953: “This little device, a single speck of germanium, is smaller than a paper clip and works perfectly at one-tenth the power needed by the smallest vacuum tube. Today, much of Raytheon’s transistor output goes to America’s hearing aid industry.” (Germanium, a relatively rare metal, was the predecessor to silicon in transistors.)
. . .
Thousands of hearing-disabled people benefited from Mr. Krim’s initial use of the transistor in compact hearing aids. But not every transistor Raytheon made was suitable for them, he found.
“When transistors were first being manufactured by Raytheon on a commercial scale, there was a batch called CK722s that were too noisy for use in hearing aids,” said Harry Goldstein, an editor at IEEE Spectrum, the magazine of the Institute of Electrical and Electronics Engineers.
So Mr. Krim contacted editors at magazines like Popular Science and Radio Electronics and began marketing the CK722s to hobbyists.
“The result was that a whole generation of aspiring engineers — kids, really, working in their garages and basements — got to make all kinds of electronic projects,” Mr. Goldstein said, among them transistor radios, guitar amplifiers, code oscillators, Geiger counters and metal detectors. “A lot of them went on to become engineers.”
Mr. Ward called Mr. Krim “the father of the CK722.”

For the full obituary, see:
DENNIS HEVESI. “Norman Krim, 98, Dies; Championed the Transistor.” The New York Times (Weds, December 21, 2011): B11.
(Note: ellipsis added.)
(Note: the online version of the article is dated December 20, 2011 and has the title “Norman Krim, Who Championed the Transistor, Dies at 98.”)

Ridley Argues that Our Future Can Be Bright

Source of book image: http://1.bp.blogspot.com/_cheRMv1X2oI/TAOvTFTnoeI/AAAAAAAAAgU/WAp7q0I_5mw/s1600/Ridley+Rational+Optimist.jpg

Ridley’s book is very well-written, well-argued and well-documented. He takes on all the main arguments against a happy future for humans. I agree with most of what he writes. (One exception is that I think he underestimates the importance of patents in enabling a broader group of inventors to continue inventing.)
In the coming weeks, I will be quoting some of the more memorable, thought-provoking, or useful passages.

Book discussed:
Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

Federal Subsidies Create Few Green Jobs

(p. F2) . . . solar power, which makes extensive use of robots in fabricating the cells, and has no moving parts to service once it is up and running, may be an odd choice for job creation.
“It’s just not that labor-intensive,” said Howard Axelrod, an engineer and economist. And as for the jobs it creates, there may be a price elsewhere, Dr. Axelrod said.
. . .
Build enough solar plants and some coal plants will shut down; that would amount to firing Peter to hire Paul.
. . .
And, economists point out, some of the work that renewable energy creates goes to people who already have jobs — roofers who install the panels or truck drivers who move them around, or steel workers who make towers for new wind machines.
Some of the jobs could eventually go elsewhere. Two years ago, Evergreen Solar, which got $58 million in aid from Massachusetts for a factory in Devens, said it would shift production to China instead.
. . .
The debate is part of a larger discussion of what constitutes a “green” job. In October 2009, Congress gave the Bureau of Labor Statistics a special appropriation to count them.
. . .
“Driving a bus is driving a bus, right?” said Connie Mack, Republican of Florida. Hilda Solis, the secretary of labor, said they were “green buses.” But aides later clarified that the bureau counted any bus driving job as green because it preserved natural resources.
None of this suggests that green is bad, just that it is not particularly job-heavy. In December 2010, Susan Combs, the comptroller of Texas, reported that school districts in her state were giving tax abatements to lure new jobs, but had to give $1.6 million for every wind energy job. Manufacturing jobs could be created for $166,000 each.

For the full story, see:
MATTHEW L. WALD. “Solar Power Industry Falls Short of Hopes in Job Creation.” The New York Times (Weds., October 26, 2011): F2.
(Note: ellipses added.)
(Note: the online version of the article has the date October 25, 2011.)

More Firms Adopt ‘Bring Your Own Device’ (BYOD) Policies to Empower Workers and Cut Costs

“At Citrix Systems, Berkley Reynolds, left, uses his Alienware laptop, and Alan Meridian, his MacBook Pro, paid for with stipends.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) SAN FRANCISCO — Throughout the information age, the corporate I.T. department has stood at the chokepoint of office technology with a firm hand on what equipment and software employees use in the workplace.

They are now in retreat. Employees are bringing in the technology they use at home and demanding the I.T. department accommodate them. The I.T. department often complies.
Some companies have even surrendered to what is being called the consumerization of I.T. At Kraft Foods, the I.T. department’s involvement in choosing technology for employees is limited to handing out a stipend. Employees use the money to buy whatever laptop they want from Best Buy, Amazon.com or the local Apple store.
“We heard from people saying, ‘How come I have better equipment at home?’ ” said Mike Cunningham, chief technology officer for Kraft Foods. “We said, hey, we can address that.”
Encouraging employees to buy their own laptops, or bring their mobile phones and iPads from home, is gaining traction in the workplace. A survey published on Thursday by Forrester Research found that 48 percent of information workers buy smartphones for work without considering what their I.T. department supports. By being more flexible, companies are hoping that workers will be more comfortable with their devices and therefore more productive.
“Bring your own device” policies, as they are called, are also shifting the balance of power among electronics makers. Manufacturers good at selling to consumers are increasingly gaining the upper hand, while those focused on bulk corporate sales are slipping.
. . .
(p. B6) Letting workers bring their iPhones and iPads to work can . . . save companies money. In some cases, employees pay for equipment themselves and seek tech help from store staff rather than their company’s I.T. department. “You can basically outsource your I.T. department to Apple,” said Ben Reitzes, an analyst with Barclays Capital.
A similar B.Y.O.D. program at Citrix Systems, a software maker that also helps its clients implement such programs, saves the company about 20 percent on each laptop over three years. Of the 1,000 or so employees in Citrix’s program, 46 percent have bought Mac computers, according to Paul Martine, Citrix’s chief information officer. “That was a little bit of a surprise.”

For the full story, see:
VERNE G. KOPYTOFF. “More Offices Let Workers Choose Their Own Devices.” The New York Times (Fri., September 23, 2011): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the article is dated September 22, 2011.)