Slowing Rate of Change and Tech Innovation

Posted inWeb/Tech34 Comments on Slowing Rate of Change and Tech Innovation

"We flatter ourselves by imagining that we live in an age of endless invention and innovation," says Paul Kedrosky. A classic approach is applying Moore's Law to…everything, and then leaping to claims about unprecedented change in society more generally. I'm reading a number of commentators call bullshit. They are arguing that the number of new important innovations has been steadily declining and that the pace of change is slowing.

Here's Philip Longman in U.S. News & World Report:

There is a distinction to be made between inventions that are merely sophisticated–such as, say, personal digital assistants–and those that fundamentally alter the human condition. The invention of the light bulb created more useful hours in each day for virtually every human being. The electric motor directly raised the productivity in every sphere of life, from speeding up assembly lines to creating so many labor-saving devices in the home that millions of housewives were able to join the paid work force. The internal combustion engine allowed for mass, high-speed transportation of both people and freight while also opening up vast regions of cheap land to suburban development. The materials revolution that brought us petroleum refining, synthetic chemicals, and pharmaceuticals involved learning to rearrange molecules in ways that made raw materials fundamentally more valuable. Without the genetically improved seeds that brought us the "Green Revolution" of the late 1960s and '70s, there would be mass starvation.

Can we make any parallel claim about the single greatest technology of our own time? It remains possible that networked computers and other new information technologies will one day create similar, societywide bursts in productivity, health, and wealth. Yet to date, the marginal gains computers have brought to communications are modest even compared with the improvements made by the telegraph. The first trans-Atlantic telegraph cable in 1866 reduced the time required to send a message from New York to London from about a week to a few minutes. Notes economist Alan Blinder: "No modern IT innovation has, or I dare say will, come close to such a gain!"

Here's Scott Sumner with a personal observation in a post about economic growth rates:

My grandmother died at age 79 on the very week they landed on the moon. I believe that when she was young she lived in a small town or farm in Wisconsin. There was probably no indoor plumbing, car, home appliances, TV, radio, electric lights, telephone, etc. Her life saw more change than any other generation in world history, before or since. I’m already almost 55, and by comparison have seen only trivial changes during my life. That’s not to say I haven’t seen significant changes, but relative to my grandma, my life has been fairly static. Even when I was a small boy we had a car, indoor plumbing, appliances, telephone, TV, modern medicine, and occasional trips in airplanes.

Michael Lind makes similar points in his Time magazine piece called "The Boring Age."

Here's Peter Thiel:

The question about what sorts of innovations we are likely to see in the next 10 or 20 years depends a great deal on what people do. The pessimistic view is that we are living in a society that depends on innovation and science and technology, but that is actually not focusing on these things nearly enough and that as a result, we are headed towards an extended period of stagnation and very slow growth throughout all the nations of the developed world.

The more optimistic view is that we somehow figure out a way to restart the innovative engine that's probably gotten stalled. And my version of this would be that we go back to where the '50's and '60's ended and look back at the great technologies people were pursuing at the time; space, robots, artificial intelligence, the next generation of biotechnology and sort of look at where people thought the future of the world was going to be in 1968 and we try to take off from where things got detoured at that time.

Here's a different 10 min video of Peter Thiel in which he talks about the lack of innovation in the context of financial markets. There is an attitude that "someone else is doing it" but in fact no one is doing it. "There is a lot less going on than people think," he says.

So: Why is this happening?

Tyler Cowen once said, "If we had to build today's energy infrastructure working under the current regulatory and NIMBY burden, it probably could not be done." Can we extract from this a larger claim that a bloated government and burdensome regulatory environment are significantly dampening innovation? An ever-powerful bureaucratic class strangling creativity? Or is it that the government is not doing enough in funding basic research toward big innovation (as it did with Darpa and space program of the past)? Are there cultural norms around conformity that are causing too many to be too deferential to the status quo? Are too many smart young people going to school? (In the past boy-geniuses had more unconventional educations which helped lead to extreme innovation, perhaps.) What are other reasons?

One counter-argument to all of the above is that there is indeed accelerating change and new innovation, it's just that we don't yet see it. As David Dalrymple said to me in a tweet, "The exponential trend only applies directly to enabling technologies, not to technologically-enabled milestones like flight."

(thanks to Michael Vassar for helping brainstorm some of these ideas.)

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The Values at Your Funeral

Posted inRandom3 Comments on The Values at Your Funeral

Classic Robin Hanson:

I attended a memorial service today, for someone I hardly knew. His family was wealthy and full of energy and passion and creativity. At the service folks wore nice clothes, and were pleasant and polite. Nice food was served in a scenic setting, beautiful music played, and idealistic speeches given, talking about family, dedication, caring, bonding, and intelligence. It was noted, for example, that he did the crossword puzzle daily, in ink.

Such services seem designed to affirm the shared far values of attendees, and to affirm the status of those who achieve such values. But the idea of service like the one I attended appeals less to me, since I put less weight on the values it affirmed. So what kind of service might better affirm the values I hold high, raising the status of people like me who most affirm those values?

Well one thing I value greatly is insight. So I’d like it if service attendees would each share an insight they’d had that day, or perhaps in the last week. Anything about themselves or the world around them they hadn’t quite understood as clearly before.

Another thing I value is honesty. So I’d like it to be clear to everyone that they need not say only nice things about the deceased.  Finally, I value grand ambition, so I’d like folks to talk about how exactly they hope to have a huge impact on the world….

The emphases are mine. Here is the best comment on Robin's post, which only regular readers of his will appreciate. Robin is probably the most original thinker I read.

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Next time you're in an argument, use this line if appropriate: "Your statement is technically true, but I disagree with the connotations. If you state them explicitly, I will explain why I think they are wrong."

Here's a smart way to make a PB&J.

Chris Dixon is characteristically insightful when analyzing Google and Amazon strategy (links within the post are good too).

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Fall Becomes Winter in Chile

Posted inChile6 Comments on Fall Becomes Winter in Chile

Santiago-chile-downtown-night-lights

You only know a city if you've seen it change.

Cities change like any living organism. For the change to be welcome and invigorating — and not jarring — it needs to happen at a pace that allows you to witness and process it and yet through it all still feel like most of what's around you is familiar.

This is what is happening to me in Santiago. Most things feel the same. The same panhandlers in the same places. Same metro stops, same doormen, same American 80's music played at the supermarket. There are churrascos, empanadas, sopaipillas, jugos naturales. The mountains still envelop the city on a clear day.

But there is just enough change that I cannot forget this is a city with a pulse in a part of the world with four seasons. When I arrived in November I lived in shorts and sandals and sat at my desk shirtless. A good Saturday would be ice cream in Plaza de Armas in the sun, followed by lying around Parque Santa Lucia watching the stray dogs wander about, and perhaps a McPollo at McDonald's before las once. Campaign ads for Frei and Piñera and Marco covered the streets. My go-to lunch placed served a good menú ejecutivo for 2,200 pesos.

Now the shorts are gone and sweatpants in. It's too cold to sit outside for long periods of time. Many dogs, even the homeless ones, wear sweaters, which is cute. Piñera is president. The lunch place has raised their price to 2,600 pesos so I've found a new joint. McDonald's is now advertising the Big Mac not the McPollo.

The "Earthquake of February 27th" doesn't dominate the news, and the cars no longer have spray painted patriotic messages of "¡Fuerza Chile!" as was the case in the weeks after the quake. Chile's spot in the international news scene came and went in about a week's time. It's back to being that long skinny country in South America that makes wine.

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I still learn new things about this culture almost every day.

I learn about maids / cleaning ladies. Everybody has maids. Even poor college kids. The maid comes once or twice a week for a full day even if your tiny apartment could be cleaned in two hours. She cooks and washes your clothes. My gym has two full-time maids who clean and clean and clean the same floor over and over. A combination of cheap labor and culture? I hear it's this way throughout Latin America.

I learn about how small this country is. 16 million people in total! I feel like every other person I talk to knows the President personally.

I learn that general low trust among the people manifests in different ways. Every house is behind a gate or fence. Nobody moves to the center of the train on the subway. Landlords prefer to rent to foreigners.

I learn that Chile is both modern and advanced (the most competitive economy in the region) but also backwards. It has the lowest percentage of women in the workforce of any Latin America country — 48%. Abortion remains illegal. As says the guidebook cliche for virtually every country in the world: "It's a fascinating contrast of old and new."

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I'm sitting in a hotel room in La Serena on a mini-vacation, in norte chico, about 5.5 hours north of Santiago. Tyler Cowen told me before I left that he was in La Serena 20 years ago and it was a very nice town. It's true. I'm now experiencing a weird kind of flash-forward nostalgia, envisioning the day when I tell someone that I visited La Serena 20 years ago and that it was a very nice town.

I leave Chile at the end of July and I'm already getting wistful.

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Man and Movement Overturn the Natural Order of Things

Posted inBooks9 Comments on Man and Movement Overturn the Natural Order of Things

Stalin“He was a self-creation. A man who invents his name, birthday, nationality, education and his entire past, in order to change history and play the role of leader, is likely to end up in a mental institution, unless he embraces, by will, luck and skill, the movement and moment that can overturn the natural order of things. Stalin was such a man. The movement was the Bolshevik Party; his moment, the decay of the Russian monarchy. After Stalin’s death, it was fashionable to regard him as an aberration but this was to rewrite history as crudely as Stalin did himself. Stalin’s success was not an accident. No one alive was more suited to the conspiratorial intrigues, theoretical runes, murderous dogmatism and inhuman sternness of Lenin’s Party. It is hard to find a better synthesis between a man and a movement than the ideal marriage between Stalin and Bolshevism: he was a mirror of its virtues and faults.”

— Stalin: The Court of the Red Tsar by Simon Montefiore, which is a long, excellent biography I am working my way through.

Last August, while eating dumplings at the Beijing beer gardens, I was talking to a couple people about Russia and China. I was the least informed at the table about both Stalin and Mao and that limited my ability to talk about either country’s history. I ordered biographies of each. Next time I’ll be a little less ignorant.

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Here are my lessons and impressions from China based on my most recent trip. Here is what modern Russians and Chinese have in common, based on my travels to Russia a couple years ago.

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Seven Thoughts on the Airline Industry

Posted inTravel15 Comments on Seven Thoughts on the Airline Industry

Airline-experience

Here are seven assorted thoughts on one of my main side interests: the airline industry.

1. Free market needed. Imagine if Americans could only drive cars in America that were designed/made in America. Horrible! The Japanese are the best carmakers. Now imagine if Americans could only fly domestically on airlines run by Americans. Horrible! Yet that's what we have today. The single best way to improve the domestic U.S. flying experience would be to open up the market to competition and allow foreign carriers to service domestic routes. Here's my previous post on making the Open Skies Agreement truly global.

2. Three hour tarmac rule. The new three hour tarmac rule means the government can fine airlines that keep passengers on the tarmac for more than three hours. Generally, when it comes to these kinds of consumer protection laws, I would rather the market determine real need — let consumers vote with their dollars in favor of companies that offer certain protections. Apply this philosophy to airlines: if a certain airline felt consumers would value this "feature" (a guarantee that they would be able to access the gate area after three hours), they would offer it, and consumers would pay a premium for it. But this case is more complicated.

Let's review a typical flight delay situation. Before a plane departs, as passengers wait in the gate area, everybody's priorities are aligned: passengers and airlines want to get to the destination as quickly as possible. Remember, airlines lose money when flights are delayed or canceled. Before boarding, if the consumer wants to go to the bathroom, buy food, meander, or even choose not to board the flight, he can do so.

Once he boards the plane and the plane doors close, he becomes captive to the airline. He has no freedom until he's out at the gate area at his destination. As the plane readies for departure and taxis on the runway, passenger and airline priorities are still aligned: fly to destination as quickly as possible. Now suppose there's a delay on the runway. The plane has pushed back from the gate, but can't take off. The airlines at this point still want to get the plane off the ground as quickly as possible. Some passengers, however, no longer care about making it to their destination. After three stinkin' hours on a cramped plane, they want to stretch their legs, buy food, go to a full-size bathroom, etc. So their priorities have changed but they cannot act on them. This lack of freedom and the discomfort that can result (most recently a full night on a regional jet in Minnesota with no food and a broken bathroom) makes me reluctantly support the three hour tarmac rule.

3. Government subsidizing unprofitable routes. Someone who's keen on stimulating entrepreneurship in Chile told me, "We should lobby airlines to get them to start a San Francisco-Santiago non-stop flight." Make it easier for Silicon Valley folks to go to Chile. I replied, "If the route were profitable, it would already exist." He replied, "What kind of entrepreneur are you? Do you know how many things would never have been built if the attitude was, 'If it were good it would already exist'?"

The difference in the airline industry is that airlines can mine hoards of data around passenger traffic. For example, American Airlines can easily see how many of its passengers who leave SFO are bound for SCL (Santiago). I'm not sure but I presume it's also possible to see aggregated passenger traffic from other airlines. If the airlines saw a tremendous number of passengers departing San Francisco and connecting via Atlanta, Dallas, Los Angeles, or Miami (the four non-stop gateways) to Santiago, they would introduce the route.

By the way, I think this is an easy way for a government to increase possible entrepreneurship: subsidize airlines to service an unprofitable route to the Bay Area.

4. Environmentalists and runways. Efforts to protect the environment ought to be subjected to a cost-benefit test. It's not always easy to do this, of course. (How to calculate the benefit of a pristine national park or clean air?) Generally, I am pro-environment and pro-conservation. I love the outdoors. But I think the environmental movement has gone too far in their effort to protect endangered plants and animals around airports and limit carbon emissions from more planes. A third runway in Heathrow would allow an extra 140 million trips a year by 2050.

5. Why not use the regional airline model in the whole industry? For regional flights, a brand airline like Delta will outsource the operation of the aircraft to a regional carrier like SkyWest. The plane says Delta, the ticket is booked on Delta.com, and the pricing / scheduling is run by Delta. But another company operates the aircraft and hires/fires the ground and flight personnel. It seems bizarre that a single company handles front-end marketing, reservations, customer service, aircraft operation, ground operations, baggage, maintenance, etc. Delta outsources food service to Gate Gourmet, for example. Why doesn't it outsource other aspects of its overall operation?

6. Eight hour workday too long for pilots? I recently spoke with the head of a major pilots union who told me management is trying to force pilots to fly more than eight hours a day and that this constitutes a serious safety risk. The union is lobbying congress. Should lawmakers force airlines to cap pilot workdays at eight hours? How many hours do pilots actually spend flying? My understanding is that 98% of the time the plane runs on auto-pilot. We should let one of the two pilots nap during the flight. Then allow them to fly up to 10-12 hours a day — just like the rest of us — or simply let management and pilots negotiate a fair work day with corresponding compensation.

7. Consolidation such as Delta-Northwest and United-Continental is good for the airlines, bad for consumers (less competition = higher prices), but perhaps long-run good for price insensitive consumers inasmuch as these companies will be able to offer better service, joint facilities / lounges, etc.

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