Category: Economics

“If You Lower the Hurdles to Innovation . . . , You’ll Get More of It”

(p. A2) You’d think from the debate raging in Washington that taxes are the key to economic growth. They aren’t. In the long run, innovation matters way more, and that depends on inspiration, experimentation and luck, not tax-law changes.

Yet presidents matter for promoting innovation even if it’s less glamorous than taxes. Their support often takes the form of directing money toward basic research or favored industries such as defense or renewable energy.

Under President Donald Trump the place to look is the regulators. Two of his appointees in particular, Food and Drug Administration Commissioner Scott Gottlieb and Federal Communications Commission Chairman Ajit Pai, have prioritized reducing regulatory hurdles to private investment as a way of boosting innovation. It’s too early to gauge their success, but the efforts merit more attention at a time when the growth debate is focused on steep, deficit-financed tax cuts.

. . .

At the FCC, Mr. Pai has targeted the “digital divide,” the gap in broadband access between some communities, especially in rural areas, and others. The share of U.S. households with a fixed broadband connection has stalled at roughly a third in recent years. Mr. Pai thinks the solution is “setting rules that maximize private investment in high-speed networks.”

Controversially, that includes a proposed rollback of his predecessor’s imposition of utility-like regulation so that internet service providers (ISPs) adhere to “net neutrality”—charging all content providers the same to access their networks. Without those limitations, he reckons ISPs will have more incentive to expand capacity and thus access; critics worry this will favor rich, established content providers over innovative newcomers.

. . .

. . . , Mr. Gottlieb’s and Mr. Pai’s theory is that if you lower the hurdles to innovation in specific sectors, you’ll get more of it. It offers a potentially more tangible payoff than fiddling with the tax code.

For the full commentary, see:

Greg Ip. “CAPITAL ACCOUNT; Why Innovation Tops Tax Cuts.” The Wall Street Journal (Thursday, October 26, 2017): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Oct. 25, 2017, and the title “CAPITAL ACCOUNT; Trump’s Regulators Aim to Boost Growth by Lowering Hurdles to Innovation.”)

Robots Relieve Restaurant Workers of Small, Mundane, Tedious Tasks

(p. A1) John Miller, chief executive and founder of CaliBurger LLC, finds it harder to find employees these days. His solution is Flippy, a robot that turns the burgers and cleans the hot, greasy grill.

The chain plans to install Flippy in up to ten of its 50 restaurants by year end. CaliBurger doesn’t intend to kick humans to the curb as a result. Flippy will handle the gruntwork, freeing employees to tidy the dining rooms and refill drinks, less arduous work that might make it easier to recruit and retain workers.

“We’re a long way from teaching a robot to walk the restaurant and do those things,” Mr. Miller said.

Experts have warned for years that robots will replace humans in restaurants. Instead, a twist on that prediction is unfolding. Amid the lowest unemployment in years, fast-food restaurants are turning to machines—not to get rid of workers, but because they can’t find enough.

. . .

(p. A10) Dunkin’ conducted focus groups with former employees to pinpoint the mundane tasks that made them want to leave and geared automation around that.

Workers used to create thousands of hand-written labels daily for everything from coffee to cheese expirations. Last year, Dunkin’ installed small terminals that print out expiration times.

Brewing a single pot involved grinding and weighing coffee and comparing its fineness and coarseness to a perfect sample. Now, some Dunkin’ shops use digital refractometers to determine if coffee meets specifications.

. . .

Alexandra Guajardo, the morning shift leader at a Dunkin’ Donuts shop in Corona, Calif. said she’s likely to stick with the job longer now than she otherwise would have.

“I don’t have to constantly be worried about other smaller tasks that were tedious,” she said. “I can focus on other things that need my attention in the restaurant.”

Mr. Murphy said he can’t see a time when a Dunkin’ Donuts shop is fully automated. The company experimented with a robot barista nearly two years ago at an innovation lab in Massachusetts. The robot did fine at making simple drinks, but couldn’t grasp custom orders, such as “light sugar.”

The machine also required a lot of cleaning and maintenance, and at up to $100,000 per robot, Mr. Murphy said he couldn’t see a return on the investment.

For the full story, see:

Julie Jargon and Eric Morath. “Short of Workers, Robots Man the Grill.” The Wall Street Journal (Monday, June 25, 2018): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date June 24, 2018, and the title “Short of Workers, Fast-Food Restaurants Turn to Robots.”)

More Workers Satisfied with Jobs Than in Recent Years

(p. B6) Just more than half of U.S. workers—51%—said they were satisfied with their jobs in 2017, the highest level since 2005, according to a new report from The Conference Board, a business-research group.

Over the past seven years, Americans report feeling better about their pay along with a greater sense of job security, both features of an economy with a low unemployment rate and a long decline in layoffs. In July [2018], jobless claims continued an extended post-recession slide and hit their lowest level in nearly 50 years.

For the full story, see:

Weber, Lauren. “Fewer Workers Move for New Jobs.” The Wall Street Journal (Thursday, August 30, 2018): B6.

(Note: bracketed year added.)

(Note: the online version of the story has the date Aug. 29, 2018, and the title “Fewer Americans Uproot Themselves for a New Job.”)

Job-Related Relocations Declining

(p. A1) Fewer U.S. workers are moving around the country to seek new job opportunities, as changing family ties and more openings near home make people less willing to uproot their lives for work.

About 3.5 million people relocated for a new job last year, according to U.S. census data, a 10% drop from 3.8 million in 2015. The numbers have fluctuated between 2.8 million and 4.5 million since the government started tracking annual job-related relocations in 1999—but have been trending lower overall, even as the U.S. population grew by nearly 20% over that stretch.

Experts cite a number of factors that in some periods have kept people in one place, including a depressed value for their home or limited job openings. In the current strong economy, real-estate values have rebounded, but that has made housing costs prohibitively high in some regions where jobs are abundant, such as major East and West Coast cities.

For the full story, see:

Rachel Feintzeig and Lauren Weber. “Fewer Workers Move for New Jobs.” The Wall Street Journal (Monday, August 20, 2018): A1-A2.

(Note: the online version of the story did not give a date, and has the title “Fewer Americans Uproot Themselves for a New Job.”)

If You Have Lost Your Spouse, Chatbot Asks: “What’s Your Tracking Number?”

(p. B4) When LivePerson Inc. started piloting chatbots in early 2018, one of them made an embarrassing faux pas, assuming a client’s customer was talking about a lost package after mentioning losing a spouse.

“And the bot goes, ‘All right, great, I can help you with that. What’s your tracking number?’” said Malik Jenkins, an employee at the artificial-intelligence software company who was involved in the pilots. He said the issue was immediately flagged by someone at the client company and his team tweaked the bot to avoid such responses in the future.

For the full story, see:

Jared Council. “A Human Touch Is Given to Chatbots.” The Wall Street Journal (Thursday, June 13, 2019): B4.

(Note: the online version of the story has the date June 12, 2019, and the title “When Chatbots Falter, Humans Steer Them the Right Way.”)

Clayton Christensen Wrongly Predicted Bombardier Would Disrupt Boeing

Clayton Christensen and co-authors predicted in Seeing What’s Next that Bombardier was well-positioned to use disruptive innovation to leapfrog Boeing and Airbus.

(p. B8) Mitsubishi Heavy Industries Ltd. said it would acquire Bombardier Inc.’s regional-jet business for $550 million in a transaction that puts the companies on different paths in the aviation sector.

The deal unveiled Tuesday [June 25, 2019] marks the Canadian company’s exit from the commercial passenger-aircraft business following failed bets that it could compete with Airbus SE and Boeing Co. in the 100-seat single-aisle plane category.

Bombardier has restructured its aviation division over the past two years, highlighted by its joint venture with Airbus that put the European plane maker in charge of the production and sales of the 110- to 130-seat planes that the Montreal company had originally conceived as the CSeries. Those jets are now rebranded as the Airbus A220.

For the full story, see:

Vieira, Paul. “Bombardier to Sell Jet Unit.” The Wall Street Journal (Wednesday, June 26, 2019): B8.

(Note: bracketed date added.)

(Note: the online version of the story has the same date June 25, 2019, and has the title “Mitsubishi to Acquire Bombardier’s Regional Jet Unit for $550 Million.”)

The Christensen book mentioned above, is:

Christensen, Clayton M., Scott D. Anthony, and Erik A. Roth. Seeing What’s Next: Using Theories of Innovation to Predict Industry Change. Boston, MA: Harvard Business School Press, 2004.

In Batteries We Don’t Need Perfect; We Need Goodenough

(p. B5) In the race to make the next leap in battery technology, there is a 96-year-old who won’t give up.

Four decades ago, John Goodenough helped invent the battery that is used to charge cellphones, iPads and many other of today’s electronic goods. His work made batteries more powerful and portable by introducing lithium cobalt oxide to their inner workings.

Now Dr. Goodenough wants to kill off that creation by removing the cobalt that meant his lithium-ion battery could charge faster and last longer. In April [2018], the World War II veteran published research with three co-authors that he said is being used to develop a prototype of a liquid-free and cobalt-free battery.

“My mission is to try to see if I can transform the battery world before I die,” Dr. Goodenough says. “When I’m no longer able to drive and I’m forced to go into a nursing home, then I suppose I will be retiring.”

. . .

“He is driven by scientific curiosity, and he really wants to do something for society with the science he does,” says Arumugam Manthiram, a professor of engineering at the University of Texas at Austin who has worked with Dr. Goodenough for 33 years.

. . .

Dr. Goodenough arrives at the university between 8 and 8.30 a.m. and leaves around 6 p.m., working from home throughout the weekend, Dr. Manthiram says.

. . .

Despite having dyslexia, Dr. Goodenough excelled and went to study mathematics at Yale University.

. . .

. . . , Dr. Goodenough is supervising what he says is his final doctoral candidate, a 24-year-old materials science and engineering student.

“Dr. Goodenough says I’m going to be his last Ph.D. student, but apparently he says that every couple of years and then takes on new candidates,” says student Nick Grundish.

For the full story, see:

Sarah McFarlane. “Meet the 96-Year-Old Battery Pioneer Who Keeps Going and Going.” The Wall Street Journal (Saturday, Aug. 11, 2018): B5.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Aug. 9, 2018, and the title “The Battery Pioneer Who, at Age 96, Keeps Going and Going.”)

Technological Progress Often Involves Minor Regress of Some Feature

(p. A1) The same types of electric-powered motors that propel Teslas past 150 mph and the Chevy Bolt as far as 238 miles on a charge, are a total buzz kill for AM reception. Instead of sports, oldies or news, it’s more like all-static, all-the-time radio.

As auto makers race headlong into an electrified future, AM radios are getting kicked to the curb, joining cassette decks, eight-track players and ashtrays.

. . .

(p. A14) One web developer offers a smartphone app that, when used with a diagnostic port adapter, can activate the dormant AM radio reception in a BMW i3 EV.

The German auto maker warns that may void the warranty, but using the app is easy, said Art Isabell, 74, a 2014 BMW i3 owner. He retired from Apple as a software support engineer and lives in Honolulu.

Even though the AM reception in his electric vehicle is sketchy, Mr. Isabell said, he wants the option: “I rarely listen to AM radio, but I want to have it available as another potential source of information during emergency situations such as severe weather, tsunamis or North Korean missile attacks.”

For the full story, see:

Chester Dawson. “Electric Cars Get Static on AM Radio.” The Wall Street Journal (Wednesday, Nov. 7, 2018): A1 & A14.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 6, 2018, and the title “Your Tesla Can Go Zero to 60 in 2.5 Seconds But Can’t Get AM Radio.”)

iPhone Made Internet “Almost Ubiquitous”

(p. B3) By essentially compressing a powerful, networked computer into a pocket-size device and making it easy to use, Steve Jobs made the internet almost ubiquitous and fundamentally altered decades-old consumer habits in areas like music and books. What’s more, the functionality packed into the iPhone made it a digital Swiss Army knife, supplanting existing tools from email to calendar to maps to calculators.

. . .

Along the way, smartphones disrupted communication. By offering faster, easier ways to communicate—text, photo, video and social networks—“the iPhone destroyed the phone call,” says Joshua Gans, professor at the University of Toronto and author of the book, “The Disruption Dilemma.” “It’s funny we even call it a phone.”

For the full story, see:

Betsy Morris. “What the iPhone Wrought.” The Wall Street Journal (Saturday, June 24, 2017): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 23, 2017, and the title “From Music to Maps, How Apple’s iPhone Changed Business.”)

The Gans book mentioned above, is:

Gans, Joshua. The Disruption Dilemma. Cambridge, MA: The MIT Press, 2016.

IBM’s Watson AI Platform Is Not Curing Cancer

(p. B1) Can Watson cure cancer?

That’s what International Business Machines Corp. IBM 0.03% asked soon after its artificial-intelligence system beat humans at the quiz show “Jeopardy!” in 2011. Watson could read documents quickly and find patterns in data. Could it match patient information with the latest in medical studies to deliver personalized treatment recommendations?

“Watson represents a technology breakthrough that can help physicians improve patient outcomes,” said Herbert Chase, a professor of biomedical informatics at Columbia University, in a 2012 IBM press release.

Six years and billions of dollars later, the diagnosis for Watson is gloomy. Continue reading “IBM’s Watson AI Platform Is Not Curing Cancer”

Huawei “Spent All Their Resources Stealing Technology”

(p. B1) On a summer evening in 2004, as the Supercomm tech conference in Chicago wound down, a middle-aged Chinese visitor began wending his way through the nearly abandoned booths, popping open million-dollar networking equipment to photograph the circuit boards inside, according to people who were there.

A security guard stopped him and confiscated memory sticks with the photos, a notebook with diagrams and data belonging to AT&T Corp. , and a list of six companies including Fujitsu Network Communications Inc. and Nortel Networks Corp.

The man identified himself to conference staff as Zhu Yibin, an engineer. The word on his lanyard read “Weihua”—an accidental scramble, he said, of his employer’s name: Huawei Technologies Co.

. . .

(p. B6) A review of 10 cases in U.S. federal courts, and dozens of interviews with U.S. officials, former employees, competitors, and collaborators suggest Huawei had a corporate culture that blurred the boundary between competitive achievement and ethically dubious methods of pursuing it. Continue reading “Huawei “Spent All Their Resources Stealing Technology””