Category: Economics

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””

“Only 5% to 10% of Jobs Can Have the Human Element Removed Entirely”

(p. A15) Careful studies using a task-based view of this sort find that, although substantial parts of many jobs can be automated—that is, technology can help still-needed workers become more productive—only 5% to 10% of jobs can have the human element removed entirely. The rate of productivity growth implied by the coming wave of automation would thus look similar to historical rates.

. . .

. . . the best insights into the future of work may be found in the trenches of everyday management. Take “Human + Machine,” by Accenture leaders Paul Daugherty and Jim Wilson, which opens in a BMW assembly plant where “a worker and robot are collaborating.” In their view, “machines are not taking over the world, nor are they obviating the need for humans in the workplace.”

The authors explain, for instance, why making robots operate more safely alongside humans has been critical to factory deployment—the very breakthrough emphasized by Dynamic’s CEO, but ignored by Mr. West. They describe AI’s role alongside existing workers in decidedly unsexy fields like equipment maintenance, bank-fraud detection and customer complaint management. And they illuminate the promise and pitfalls of implementing new processes that allocate some tasks to machines, requiring new forms of oversight and coordination.

Even in their overuse of acronyms and the word “reimagine,” the authors bring to life the realities of modern management. Readers gain a tactile sense of how technology changes business over time and why “the robots are coming” is no scarier an observation than ever before.

For the full review, see:

Oren Cass. “BOOKSHELF; Reckoning With the Robots; Automation rarely outright destroys jobs. It instead augments—taking over routine tasks while humans handle more complex ones.” The Wall Street Journal (Monday, June 25, 2018): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date June 24, 2018, and has the title “BOOKSHELF; ‘The Future of Work’ and ‘Human + Machine’ Review: Reckoning With the Robots; Automation rarely outright destroys jobs. It instead augments—taking over routine tasks while humans handle more complex ones.”)

The book under review, in the passages above, is:

Daugherty, Paul R., and H. James Wilson. Human + Machine: Reimagining Work in the Age of AI. Boston, MA: Harvard Business Review Press, 2018.

The “Amazon Effect”: Customers Now Expect Other Sellers to Deliver Reliably Fast

(p. B4) Many Amazon.com Inc. customers have become accustomed to reliable two-day shipping, forcing other retailers to offer similar service. Businesses are making new demands of their suppliers as they trim inventories and reduce supply-chain costs. Wal-Mart Stores Inc. in July said it would penalize companies that made deliveries too late or too early.

“It’s the Amazon effect—customers are putting more pressure on their supplier to know where their product is,” said Bart De Muynck, a supply chain analyst with Gartner Inc.

For the full story, see:

Jennifer Smith. “‘Amazon Effect’ Engenders Deals for Tracking Firms.” The Wall Street Journal (Wednesday, Aug. 30, 2017): B4.

(Note: the online version of the story has the date Aug. 29, 2017, and the title “‘Amazon Effect’ Sparks Deals for Software-Tracking Firms.” Where there are minor differences in wording, the passages quoted above follow the online version.)

Stephen Moore Was a Threat to Groupthink at Fed

(p. A15) The following declaration may shock many of my academic colleagues: I support the nomination of Stephen Moore to the Board of Governors of the Federal Reserve.

I say so despite being immersed in the “professor standard” Herman Cain recently decried. I received my doctorate in economics from the Massachusetts Institute of Technology and did postdoctoral work at Harvard, was a professor of business economics at the University of Chicago, and for the past 43 years have taught finance at the University of Pennsylvania’s Wharton School.

The truth is that “professor standards” change. Early models of gross domestic product emphasized John Maynard Keynes’s model of aggregate demand—the amount of goods consumers and businesses’ desire to buy—as the source of national prosperity. Today, the vast majority of economists recognize that it is the supply side—increases in productivity driven by technological innovation—that creates long-term economic growth.

. . .

I’ve been supportive of Fed policy since the financial crisis. But any organization, even a great one, can easily fall victim to groupthink. Continue reading “Stephen Moore Was a Threat to Groupthink at Fed”

With Tariffs, What Goes Around Comes Around

(p. A1) CLYDE, Ohio—After the Trump administration announced new tariffs on imported washing machines in January, Marc Bitzer, the chief executive of Whirlpool Corp., celebrated his win over South Korean competitors LG Electronics Inc. and Samsung Electronics Co.

“This is, without any doubt, a positive catalyst for Whirlpool,” he said on an investor conference call.

Nearly six months later, the company’s share price is down 15%. One factor is a separate set of tariffs on steel and aluminum, imposed by the U.S. in March and later expanded, that helped drive up Whirlpool’s raw-materials costs. Net income, even with the added benefit of a lower tax bill, was down $64 million in the first quarter compared with a year earlier.

. . .

(p. A10) Whirlpool had campaigned for protection from what it called unfair foreign competition. Things became more complicated as the trade conflict spread beyond its industry.

“Raw-material costs have risen substantially,” Mr. Bitzer said on the April investor call, primarily blaming steel and aluminum tariffs. Most of the 200-pound weight of a washing machine is in its steel and aluminum parts.

For the full story, see:

Andrew Tangel and Josh Zumbrun. “From Washer Tariffs to Trade Showdown.” The New York Times (Tuesday, July 17, 2018): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date July 16, 2018, and has the title “Whirlpool Wanted Washer Tariffs. It Wasn’t Ready for a Trade Showdown.”)

Leapfrogged Technologies, with a Few Traits Some Value, Often Persist in Small Numbers

(p. A1) Magnus Jern was sitting around with some programmers at Google headquarters when he remembered he needed to answer an email. But when he pulled out his phone and started tapping, the room grew silent.

“What is that?” one woman asked.

The reaction was no surprise to Mr. Jern, part of a die-hard band devoted to a device that was once a status symbol, then was ubiquitous, and now is almost an endangered species: the BlackBerry. Continue reading “Leapfrogged Technologies, with a Few Traits Some Value, Often Persist in Small Numbers”

Amish Embrace Smartphones and Internet, at Least for Entrepreneurship

(p. 6) A young woman, wearing a traditional full-length Amish dress and white bonnet, stepped away from a farmer’s market, opened her palm and revealed a smartphone. She began to scroll through screens, seemingly oblivious to the activity around her.

Not far away, a man in his late 60s with a silvery beard, wide-brimmed straw hat and suspenders adjusted the settings on a computer-driven crosscut saw. He was soon cutting pieces for gazebos that are sold online and delivered around the country.

The Amish have not given up on horse-drawn buggies. Their rigid abstinence from many kinds of technology has left parts of their lifestyle frozen since the 19th century: no cars, TVs or connections to electric utilities, for example.

But computers and cellphones are making their way into some Amish communities, pushing them — sometimes willingly, often not — into the 21st century.

New technology has created fresh opportunities for prosperity among the Amish, just as it has for people in the rest of the world. A contractor can call a customer from a job site. A store owner’s software can make quick work of payroll and inventory tasks. A bakery can take credit cards.

But for people bound by a separation from much of the outside world, new tech devices have brought fears about the consequence of internet access. There are worries about pornography; about whether social networks will lead sons and daughters to date non-Amish friends; and about connecting to a world of seemingly limitless possibilities.

“Amish life is about recognizing the value of agreed-upon limits,” said Erik Wesner, an author who runs a blog, Amish America, “and the spirit of the internet cuts against the idea of limits.”

. . .

Referring to technology, Mr. Smucker said, “You have to do what you have to do to stay in business. People are starting to understand that.”

There are probably 2,000 successful Amish businesses in the Lancaster area, many of them multimillion-dollar enterprises, said Donald B. Kraybill, a retired professor at Elizabethtown’s Young Center for Anabaptist and Pietist Studies.

This “very entrepreneurial, very capitalistic” tendency, he said, was all the more remarkable because it was channeled through a “culture of restraint.”

Many Amish people draw a bright line between what is allowed at work — smartphones, internet access — and what remains forbidden at home.

For the full story, see:

Kevin Granville and Ashley Gilbertson. “In Amish Country, the Future Is Calling.” The New York Times, SundayBusiness Section (Sunday, Sept. 17, 2017): 6-7.

(Note: ellipsis added.)

(Note: the online version of the story has the date Sept. 15, 2017, and has the same title as the print version.)

Bill Gates Spending $400 Million to Develop Expensive High-Tech Toilets for Poor Countries

(p. B1) BEIJING — Bill Gates believes the world needs better toilets.

Specifically, toilets that improve hygiene, don’t have to connect to sewage systems at all and can break down human waste into fertilizer.

So on Tuesday in Beijing, Mr. Gates held the Reinvented Toilet Expo, a chance for companies to showcase their takes on the simple bathroom fixture. Companies showed toilets that could separate urine from other waste for more efficient treatment, that recycled water for hand washing and that sported solar roofs.

It’s no laughing matter. About 4.5 billion people — more than half the world’s population — live without access to safe sanitation. Globally, Mr. Gates told attendees, unsafe sanitation costs an estimated $223 billion a year in the form of higher health costs and lost productivity and wages.

The reinvented toilets on display are a culmination of seven years of research and $200 million given by the Bill and Melinda Gates Foundation, which the former software tycoon runs with his wife, since 2011. On Tuesday [Nov. 6, 2018], Mr. Gates pledged to give $200 million more in an effort get companies to see human waste as a big business.

. . .

(p. B5) . . . China’s toilet revolution has led to excesses — a problem that critics say could plague the Gates effort as well.

To win favor with Beijing, local officials have tried to outgun one another with newfangled latrines, many equipped with flat-screen televisions, Wi-Fi and facial-recognition toilet paper dispensers. (Thieves have been known to make off with entire rolls.) There were even refrigerators, microwave ovens and couches, prompting China’s tourism chief at the time to instruct officials in January to rein in their “five-star toilets” and avoid kitsch and luxury.

Though the products on display on Tuesday were nowhere as flashy, Mr. Gates has drawn criticism for giving thousands of dollars to universities in developed countries to create high-tech toilets that will take years to pay off — if they ever do.

“Sometimes doubling down is necessary, but you’ve got to be reflective,” said Jason Kass, the founder of Toilets for People, a Vermont-based social business that provides off-grid toilets. “Has any of the approaches done in the last five years created any sustainable lasting, positive impact vis-à-vis sanitation? And the answer, as far as I can see, is no.”

. . .

Mr. Gates acknowledged that some reinvented toilets, in small volumes, could cost as much as $10,000, but added, “That will pretty quickly come down.”

“The hard part will be getting it from $2,000 to $500,” he said. “I’d say we are more confident today that it was a good bet than where we started, but we are still not there.”

For the full story, see:

Sui-Lee Wee. “Bill Gates Wants to Build A Better Toilet.” The New York Times (Friday, Nov. 9, 2018): B1 & B5.

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

(Note: the online version of the story has the date Nov. 6, 2018, and has the title “In China, Bill Gates Encourages the World to Build a Better Toilet.”)