Economics of Technology – Page 97

“The No. 1 Need that Poor People Have is a Way to Make More Cash”

Moving water is easier with the 20-gallon rolling drum. Source of photo: online version of the NYT article quoted and cited below.

(p. D3) . . . , the Cooper-Hewitt National Design Museum, . . . , is honoring inventors dedicated to “the other 90 percent,” particularly the billions of people living on less than $2 a day.

Their creations, on display in the museum garden until Sept. 23, have a sort of forehead-thumping “Why didn’t someone think of that before?” quality.

. . .

Interestingly, most of the designers who spoke at the opening of the exhibition spurned the idea of charity.

“The No. 1 need that poor people have is a way to make more cash,” said Martin Fisher, an engineer who founded KickStart, an organization that says it has helped 230,000 people escape poverty. It sells human-powered pumps costing $35 to $95.

Pumping water can help a farmer grow grain in the dry season, when it fetches triple the normal price. Dr. Fisher described customers who had skipped meals for weeks to buy a pump and then earned $1,000 the next year selling vegetables.

For the full story, see:

DONALD G. McNEIL Jr. "Design That Solves Problems for the World’s Poor." The New York Times (Tues., May 29, 2007): D3.

(Note: ellipses added.)

The photo on the left shows a woman safely drinking bacteria-laden water through a filter. The photo on the right shows a "pot-in-pot cooler" that evaporates water from wet sand between the pots, in order to cool what is in the inner pot. Source of photos: online version of the NYT article quoted and cited above.

Big is Not Always Better

It is an enduring puzzle why the West has been so much more succesful than China in achieving economic growth over the past several centuries. The puzzle arises because there is considerable evidence of early Chinese acheivements in technology.

One example would be the exploratory voyages of Zheng He. The Chinese ships were much, much larger than those of Christopher Columbus. But as Clayton Christensen has shown in a more modern context, size does not always matter as much as nimbleness and motivation.

(And another part of the story involves culture and institutions.)

The most complete account of Christensen’s thinking, so far, is his book with Raynor:

Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

(Note: I am grateful to Prof. Yu-sheng Lin for first informing me of the large difference in size between the ships. I am also grateful to Prof. Salim Rashid, and Liberty Fund’s Mr. Leonidas Zelmanovitz, for my having the opportunity to encounter Prof. Lin.)

Regular Employees Migrate to Pink’s “Free Agent Nation”

“Luis H. Rodriguez, an I.B.M. executive, with his children, Alec, 5, and Evia, 2, often works from his home or on the road.” Source of photo: online version of the NYT article quoted and cited below.

Daniel Pink in his Free Agent Nation argued that a growing number of American workers would want the control, challenge and freedom of working for themselves as entrepreneurs, or “free agents.” To attract workers who have the option of being free agents, it is plausible that employers increasingly will have to offer jobs that provide workers with greater autonomy. The article quoted below, suggests that this may in fact be happening, at least in information technology firms.

(p. A1) SOMERS, N.Y. — It’s every worker’s dream: take as much vacation time as you want, on short notice, and don’t worry about your boss calling you on it. Cut out early, make it a long weekend, string two weeks together — as you like. No need to call in sick on a Friday so you can disappear for a fishing trip. Just go; nobody’s keeping track.

That is essentially what goes on at I.B.M., one of the cornerstones of corporate America, where each of the 355,000 workers is entitled to three or more weeks of vacation. The company does not keep track of who takes how much time or when, does not dole out choice vacation times by seniority and does not let people carry days off from year to year.

Instead, for the past few years, employees at all levels have made informal arrangements with their direct supervisors, guided mainly by their ability to get their work done on time. Many people post their vacation plans on electronic calendars that colleagues can view online, and they leave word about how they can be reached in a pinch.

“It’s like when you went to college and you didn’t have high school teachers nagging you anymore,” said Mark L. Hanny, I.B.M.’s vice president of independent software vendor alliances. “Employees like that we put more accountability on them.”

. . .

(p. 18) Aided by broadband connections, cellphones and video conferencing software, 40 percent of I.B.M.’s employees have no dedicated offices, working instead at home, at a client’s site, or at one of the company’s hundreds of “e-mobility centers” around the world, where workers drop in to use phones, Internet connections and other resources.

. . .

Luis H. Rodriguez, the director of market management in I.B.M.’s software group, said he visits his office here in Somers about once a week, working the rest of the time on the road or at his home in Ridgefield, Conn., where he sat one recent afternoon at the kitchen table with his laptop open.

He said that in six years at I.B.M. he can recall only one time when he asked a co-worker not to take a long weekend off — when their group was about to buy another company — and that calling colleagues or checking e-mail while visiting relatives in Texas or Illinois is a fair trade for being able to work from home so he can spend more time with his children, Alec, 5, and Evia, 2.

. . .

“If you look at the organizations that have done more radical things, they tend to be technology companies with salaried people,” where flexibility in job performance “is embedded into the culture of the place,” noted Max Caldwell, a managing principal in the work force effectiveness area at Towers Perrin, a human resources consultant.

Indeed, I.B.M.’s Mr. Calo said that the flexibility has helped the company compete with the more freewheeling atmosphere at start-up rivals in the technology world that have lured away some of its talent over the years.

For the full story, see:

KEN BELSON. “At I.B.M., a Vacation Anytime, Or Maybe No Vacation at All.” The New York Times (Fri., August 31, 2007): A1 & A18.

(Note: ellipses added.)

The reference for the Pink book, is:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

Innovative New Products Often Expensive at First, But Price Soon Falls

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

(p. 14) To understand why consumption is a better guideline of economic prosperity than income, it helps to consider how our lives have changed. Nearly all American families now have refrigerators, stoves, color TVs, telephones and radios. Air-conditioners, cars, VCRs or DVD players, microwave ovens, washing machines, clothes dryers and cellphones have reached more than 80 percent of households.
As the second chart, on the spread of consumption, shows, this wasn’t always so. The conveniences we take for granted today usually began as niche products only a few wealthy families could afford. In time, ownership spread through the levels of income distribution as rising wages and falling prices made them affordable in the currency that matters most — the amount of time one had to put in at work to gain the necessary purchasing power.
At the average wage, a VCR fell from 365 hours in 1972 to a mere two hours today. A cellphone dropped from 456 hours in 1984 to four hours. A personal computer, jazzed up with thousands of times the computing power of the 1984 I.B.M., declined from 435 hours to 25 hours. Even cars are taking a smaller toll on our bank accounts: in the past decade, the work-time price of a mid-size Ford sedan declined by 6 percent.

For the full commentary, see:
W. MICHAEL COX and RICHARD ALM. “You Are What You Spend.” The New York Times Company, Week in Review section (Sun., February 10, 2008): 14.

Private Airlines “Are Pulling Along a Slow-Moving Government Agency”

"Delta Air Lines uses G.P.S. technology to reduce the time its planes spend on the runway." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C1) WASHINGTON, Sept. 4 — At Hartsfield-Jackson Atlanta International Airport, Delta Air Lines said its jets take off an average of 10 minutes after pushing back from the gate — three minutes faster than in previous years.

Using new technology, planes take off following a narrow route, so that that jets right behind them taking different routes do not have to wait as long. That makes the system move a bit faster.

“The pilots say, ‘Wow, this is kind of neat,’ ” said Joseph C. Kolshak, executive vice president for operations at Delta.

Delta, and also Alaska Airlines and U.P.S., is demonstrating pieces of the possible future of the nation’s air traffic system, hinting at what aviation might be like — if the airlines and the federal government can get the details worked out.

All three airlines use refinements based on the constellation of G.P.S., or global positioning system, satellites. Many of these save at most a few minutes. But in a crowded system plagued by delays, that may be enough to help smooth out bottlenecks.

The carriers’ use of satellite navigation and other tools and techniques represents a step toward replacing a 50-year-old system of radar and radio beacons.

In the process, they are pulling along a slow-moving government agency, the Federal Aviation Administration, that is eager for better air traffic control systems but short on money and the authority to put changes in place.

It is a revolution in technology, but also in politics. Previously, the F.A.A. usually bought new systems on the ground and told airlines to equip themselves to use them; now the airlines are taking the initiative to outfit their planes, with safety regulation from the F.A.A.

Airlines are even developing their own approach patterns for airports, which has almost always been a government job.

U.P.S. Airlines, working with Aviation Communications and Surveillance Systems, based in Phoenix, is developing a landing pattern based on separating planes by time, not distance, so they land at the briefest safe interval.

“We’re going to create the future, because we think we know (p. C5) where it’s going to go,” said Karen Lee, director of operations at U.P.S. This is in contrast to the traditional way of doing business, typified by “the F.A.A. tells us what the roadmap is,” she said, then “we’ll start building the stuff to do it.”

For the full story, see:

MATTHEW L. WALD. "For Airlines, Hands-On Air Traffic Control." The New York Times (Weds., September 5, 2007): C1 & C5.

"A device that U.P.S. installed in the cockpit of one of its cargo planes to display traffic information." Source of caption and photo: online version of the NYT article quoted and cited above.

High-Tech Meters Increase Parking Efficiency

"Fred Mitschele with his high-tech meter." Source of photo: online version of the NYT article quoted and cited below.

Hight-tech parking meters like the ones described in the article quoted below, could be used to make real-time changes in parking prices. Higher rates during busier periods, would assure available spaces, which would reduce wasted time searching for parking spaces, thereby reducing congestion, and pollution.

(p. 14) If drivers want to use cash, the meters, which connect to a wireless network, can send text messages to the drivers’ cellphones to remind them to add more money.

The meters also communicate with traffic officials who can track which meters are being used and which ones need to be ticketed and serviced. To ensure that drivers do not skip out without paying, sensors the size of hockey pucks buried in the asphalt detect when cars pull in. A camera inside the meter takes pictures of license plates to help with enforcement.

. . .

The meters are just one example of how telecommunications are increasingly being integrated into toll and fee collection. E-ZPass, for instance, relies on radio frequency tags, cameras and networks to transmit data.

For the full story, see:

KEN BELSON. "MOTORING; Wait a Minute. My Parking Meter Is Calling." The New York Times, SportsSunday Section (Sun., September 9, 2007): 14.

(Note: ellipsis added.)

Puzzle: Entrepreneurial Silicon Valley Donates Mainly to Democrats

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

Entrepreneurship thrives when government is small, so it puzzles me when the entrepreneurs in Silicon Valley embrace the Democrats, who generally advocate bigger government.
Of course, my Wabash professor Ben Rogge used to point out that there are always cross-currents that go in a different direction from the mainstream. And among the Democrats, there are what used to be called “new Democrats” who appreciate Schumpeter, and entrepreneurship, and dynamism.
Plus, some Democrats are more respectful of personal, lifestyle choices, and in Silicon Valley, that may be what is given the most weight.
Or, more cynically, maybe there’s a public choice explanation—that Silicon Valley donates to Democrats as a form of ‘insurance,’ in the hope that if the Democrats are elected, they will refrain from over-regulating and over-taxing Silicon Valley. (Even more cynically, compare the case of Florida’s sugar-subsidy-rich Fanjul brothers, one of whom donated huge bucks to the first Bush, while another donated huge bucks to Bill Clinton.)
(Another factor is that, alas, entrepreneurs often do not pay much attention to what conditions encourage entrepreneurship.)

(p. C4) In a flip from the primary season for the 2000 presidential election, 60 percent of the contributions so far from people in the technology field here are going to Democrats. The Democratic candidates raised $1.4 million from the industry in the first half of this year, while Republican candidates raised $890,000. That total is up from $1.2 million in the first six months of each of the last two presidential primary races.

For the full story, see:

LAURIE J. FLYNN. "In Primary, Tech’s Home Is a Magnet." The New York Times (Fri., August 24, 2007): C1 & C4.

Bill Gates Reads Julian Simon

(p. A15) A core belief of Mr. Gates is that technology can erase problems that seem intractable. That belief was deepened, Mr. Gates says, by his study of Julian Simon, a now-deceased business professor who argued that increases in wealth and technology would offset shortages in energy, food and other global resources.
Pacing in his office last week, Mr. Gates retold the story of a famous $10,000 wager between Mr. Simon and Paul Ehrlich, a Stanford University professor who predicted that human population growth would outstrip the earth’s resources. Mr. Simon bet that even as a growing population increased demand for metals such as tin and copper, the price of those metals would fall within the decade ending in 1990. Mr. Simon won the bet. “He cremated the guy,” says Mr. Gates. Mr. Ehrlich’s administrator at Stanford University said he was out of the country and couldn’t comment on the wager.

For the full story, see:

ROBERT A. GUTH. “Bill Gates Issues Call For Kinder Capitalism; Famously Competitive, Billionaire Now Urges Business to Aid the Poor.” The Wall Street Journal (Thurs., January 24, 2008): A1 & A15.

3-D Printers Promise Big Benefits for Consumers

“Lower-price 3-D printers like this one from Z Corp. are spawning new businesses.” Source of caption and photo: online version of the WSJ article quoted and cited below.

Neil Gershenfeld has argued that in the not-too-distant-future, ordinary people will have the ability fabricate objects of their own design, in their own home. His lab at MIT has been developing prototypes to fulfil this vision. The 3-D printers discussed in the article quoted below, are the earliest exemplars of this vision, to make it to the market.

If this vision is realized, the benefits to consumers could be immense, in terms of variety of products, speed in obtaining products, and consumer control over what is consumed.

(p. B1) The expansion by 3-D printers into manufacturing is happening thanks to a steady drop in the price of printers, improvements in the materials they can handle and a proliferation in the amount of 3-D data that can be turned into objects.

Historically, the printers cost hundreds of thousands of dollars and were made by a handful of small companies including Z Corp. and Stratasys Inc. But now those and other new companies are producing more-affordable machines priced below $20,000, a change that has radically expanded sales.

The 3-D printing industry is about 20 years old, and in the past two years alone, it has sold around 8,000 machines, or 36% of the industry’s two-decade world-wide sales total of 22,000, according to consulting firm Wohlers Associates.

And sales are likely to increase further: A Pasadena, Calif., venture called Desktop Factory Inc. has already taken 350 pre-orders for a $5,000 3-D printer it plans to roll out next year, says Cathy Lewis, CEO of the company. About 40% of those orders are from universities and 35% from small businesses, she says. The company predicts printers could start finding their way into homes in five years or so.

For the full story, see:

ROBERT A. GUTH. “How 3-D Printing Figures To Turn Web Worlds Real.” The Wall Street Journal (Weds., December 12, 2007): B1.

The reference to the Gershenfeld book is:

Gershenfeld, Neil. Fab: The Coming Revolution on Your Desktop–from Personal Computers to Personal Fabrication. New York: Basic Books, 2005.

“World of Warcraft figure made with a 3-D printer.” Source of caption and photo: online version of the WSJ article quoted and cited above.

Information Technology Increases Choices on Where to Live

Stephanie and Bill Faunce moved their marketing company from Los Angeles to Steamboat Springs, Colorado. Source of photo: online version of the NYT article quoted and cited below.

Information technology is making life better by providing greater choice on where to live. There is still a lively debate about which regions and cities will prosper.

One popular take on this issue is Richard Florida’s The Rise of the Creative Class.

(p. A1) As technology enables people to live and work wherever they want, increasingly they are clustering in resort playgrounds like Steamboat Springs (pop. 9,315) that have natural amenities, good weather — and, now, lots of people like themselves.

In places like Nantucket, the Upper Peninsula of Michigan and Teton County, Idaho, the migrants are creating hybrid communities, implanting urban incomes, tastes, careers, ambitions, restaurants, cultural activities and networking opportunities into small towns that un-(p. A15)til recently could support none of these, and for which there has been little planning and still no consensus.

“You are seeing a transformation of rural communities,” said Jonathan Schechter, executive director of the Charture Institute in Jackson, Wyo., a nonprofit organization that studies small recreational towns.

Into quiet resort spots the migrants have come, laptops on their knees: fund managers from New York, software developers from California, consultants, proofreaders, engineers, inventors. “The same processes that led to the suburbanization of the United States after World War II,” Mr. Schechter said, “are now producing a virtual suburbanization in places like Jackson or Steamboat Springs.”

From 2000 to 2006, population in the 297 counties rated highest in natural amenities by the United States Department of Agriculture grew by 7.1 percent, 10 times the rate for the 1,090 rural counties with below-average amenities, the department reported.

In towns that once emptied after the ski season or the beach season, these “location-neutral” migrants are complicating the traditional dynamic between tourists and locals. Here as elsewhere, average homes have become unaffordable for teachers, firefighters and others — the people who created the good schools and community closeness that newcomers said drew them. The rate of change “is causing a whiplash,” Mr. Schechter said, “because the towns don’t have the political and economic systems in place to deal with them.”

Routt County, which includes Steamboat Springs, is one of the first places to identify these new émigrés as a source of economic growth and, paradoxically, community stability. A 2005 survey found that as many as 1 in 10 year-round households was involved in a location-neutral business. Unlike retirees and second-home buyers, who are also roosting in vacation towns, they send children to the local schools. “Without kids, you don’t have a community,” said Scott Ford, a counselor at the Small Business Resource Center at Colorado Mountain College.

Cloistered in home offices, isolated from the local economy, location-neutrals are often invisible even to one another, except when they appear on local committees.

Many work as hard as their urban counterparts, often juggling commitments in several time zones, but can step from their offices to a hiking trail or mountain stream.

. . .

For Bill and Stephanie Faunce, who run a marketing company for cable operators, small-town life often means starting work at 7 a.m. and quitting at 11 p.m., but with breaks to hike, ski or be with their two young children. Their goal in coming here was not to slow down but to eliminate urban distractions and pressures.

“There are no stressors here,” said Mr. Faunce, 43. “In L.A., it took 90 minutes to get to the office, so we had a Mercedes and a Land Rover. Now we drive a Suburban. In three years we’ve put 15,000 miles on it.”

For the full story, see:

JOHN LELAND. "Off to Resorts, and Carrying Their Careers." The New York Times (Mon., August 13, 2007): A1 & A15.

(Note: ellipsis added.)

The reference for Florida’s book, is:

Florida, Richard. The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life. New York: Basic Books, 2002.

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

Marconi Matters

Source of book image: http://palmaddict.typepad.com/photos/uncategorized/big_larsonthunderstruckdrm_1.jpg

Larson’s book plays off a murder mystery against Marconi as the innovator who brought us communication through the air.

I’m most enthused about hte Marconi part. It shows how he proceeded against the theorists of the day, whose theories told them that what he was trying to do was impossible. He was more entrepreneur, than scientist. And it turned out that it was a good thing that the theoretical scientists did not rule, as they might if all decisions about technology were made by the government.

What happened here is an example of what Taleb would call a Black Swan.

Source:

Larson, Erik. Thunderstruck. New York: Crown, 2006.