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Gene Ellis

Productivity: Technology isn't working | The Economist - 0 views

www.economist.com/...higher-productivity-and-better

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Technology isn’t working
  • Technology isn’t working
  • n the 1970s the blistering growth after the second world war vanished in both Europe and America. In the early 1990s Japan joined the slump, entering a prolonged period of economic stagnation.
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  • Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries.
  • Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all.
  • And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.
  • A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag.
  • John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.
  • Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.
  • For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.
  • Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.
  • The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with. That meant firms were able to keep workers’ pay low.
  • By creating a labour glut, new technologies have trapped rich economies in a cycle of self-limiting productivity growth.
  • Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%,
  • A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers.
Gene Ellis

Nathan Myhrvold: The Wealthy Should Fund Innovation | MIT Technology Review - 0 views

www.technologyreview.com/...wealthy-should-fund-innovation

mit technology review

shared by Gene Ellis on 20 Dec 12 - No Cached
  • Let’s be clear: conventional nuclear energy has drawbacks, principally that it relies on enriched uranium. That’s problematic for several reasons. In the first place, there’s not that much uranium: if you tried to scale conventional nuclear energy to meet the world’s energy needs, you’d run out.
  • In the U.S., more than 700,000 metric tons of depleted uranium—the by-product of enrichment—sits in storage.
  • TerraPower’s technology is designed to use that depleted uranium as fuel, turning the cheap by-product of today’s reactors into enough electricity to power every home in America for 1,000 years.
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  • he technology would also virtually eliminate the need for new enrichment facilities, which is important because enriched uranium is a proliferation risk.
  • Gene Ellis on 20 Dec 12
     
    Nuclear fuel possibilities...
Gene Ellis

Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Webe... - 0 views

www.telegraph.co.uk/...-ECB-strongman-Axel-Weber.html

shared by Gene Ellis on 24 Jan 14 - No Cached
  • Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber
  • Harvard professor Kenneth Rogoff said the launch of the euro had been a "giant historic mistake, done to soon" that now requires a degree of fiscal union and a common bank resolution fund to make it work, but EMU leaders are still refusing to take these steps.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said.
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  • Mr Rogoff said Europe is squandering the "scarce resource" of its youth, badly needed to fortify an ageing society as the demographic crunch sets in.
  • "If these latent technologies are not realised, Europe will wake up like Rip Van Winkel from a long Japan-like slumber to find itself a much smaller part of the world economy, and a lot less important."
  • Mr Rogoff said debt write-downs across the EMU periphery "will eventually happen" but the longer leaders let the crisis fester with half-measures, the worse damage this will do to European society in the end.
  • Mr Weber, who resigned from the Bundesbank and the ECB in a dispute over euro debt crisis strategy, said new "bail-in" rules for bond-holders of eurozone banks will cause investors to act pre-emptively, aiming to avoid large losses before the ECB issues its test verdicts. "We may see that speculators do not wait until November, but bet on winners and losers before that," he said.
  • Sir Martin said the eurozone is pursuing a reverse "Phillips Curve" - the trade off between jobs and inflation - as if it were testing "what level of unemployment it is prepared to tolerate for zero inflation".
  • Pierre Nanterme, chairman and chief executive officer of Accenture, said Europe is losing the great battle for competitiveness, and risks a perma-slump where debt burdens of 100pc of GDP prevent governments breaking free by investing in skills and technology.
  • He said Europe is falling further behind as the US basks in cheap energy and pours funds into cutting-edge technology. "A lot is at stake. If in 12 to 24 months no radical steps are taken to break the curse, we might have not just five, ten, but twenty years of a low-growth sluggish situation in Europe," he said.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said
Gene Ellis

Economic Statistics Miss the Benefits of Technology - NYTimes.com - 0 views

www.nytimes.com/...he-benefits-of-technology.html

benefits of IT

shared by Gene Ellis on 10 Jan 14 - No Cached
  • “Pretty much every human on earth can access all human knowledge,” said Hal Varian, Google’s chief economist.
  • o how to measure the Internet’s contribution to our lives? A few years ago, Austan Goolsbee of the University of Chicago and Peter J. Klenow of Stanford gave it a shot. They estimated that the value consumers gained from the Internet amounted to about 2 percent of their income — an order of magnitude larger than what they spent to go online. Their trick was to measure not only how much money users spent on access but also how much of their leisure time they spent online.
  • Earlier this year, Yan Chen, Grace YoungJoo Jeon and Yong-Mi Kim of the University of Michigan published the result of an experiment that found that people who had access to a search engine took 15 minutes less to answer a question than those without online access.
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  • the consumer surplus from free online services — the value derived by consumers from the experience above what they paid for it — has been growing by $34 billion a year, on average, since 2002. If it were tacked on as “economic output,” it would add about 0.26 of a percentage point to annual G.D.P. growth.
  • The consumer surplus from television is about five times as large as that delivered by free stuff online, according to Mr. Brynjolfsson’s calculations.
  • As the economist Paul Samuelson once pointed out, if a man married his maid, G.D.P. would decline.
  • “We know less about the sources of value in the economy than we did 25 years ago,” wrote Mr. Brynjolfsson and Adam Saunders of the University of British Columbia. If we really want to understand the impact of information technology on our future well-being, we first need to find a consistent way to measure it.
Gene Ellis

Why China will not buy the world - FT.com - 0 views

www.ft.com/...ba-11e2-babb-00144feabdc0.html

China will not buy the world

shared by Gene Ellis on 10 Jan 14 - No Cached
  • At the heart of the new global economy are what Prof Nolan calls “systems integrator” companies – businesses with dominant brands and superior technologies, which are at the apex of value chains that serve the global middle classes. These global businesses, in turn, exert enormous pressure on their supply chains, creating ever-rising consolidation there, as well.
  • Using data from 2006-09, Prof Nolan concludes that the number of globally dominant businesses in the manufacture of large commercial aircraft and carbonated drinks was two; of mobile telecommunications infrastructure and smart phones, just three; of beer, elevators, heavy-duty trucks and personal computers, four; of digital cameras, six; and of motor vehicles and pharmaceuticals, 10. In these cases, dominant businesses supplied between half and all of the world market. Similar degrees of concentration have emerged, after consolidation, in many industries
  • Much the same concentration can be seen among component suppliers.
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  • Such a business “typically possesses some combination of a number of key attributes, among them the capability to raise finance for large new projects and the resources necessary to fund a high level of research and development spending to sustain technological leadership, to develop a global brand, to invest in state-of-the-art information technology and to attract the best human resources”.
  • Moreover, “one hundred giant firms, all from the high-income countries, account for over three-fifths of the total R&D expenditure among the world’s top 1,400 companies. They are the foundation of the world’s technical progress in the era of capitalist globalisation”.
  • This creates growing tension, as governments find “their” companies ever harder to tax or regulate.
Gene Ellis

The iEconomy - Nissan's Move to U.S. Offers Lessons for Tech Industry - NYTimes.com - 0 views

www.nytimes.com/...lessons-for-tech-industry.html

nissan u s offers lessons tech

shared by Gene Ellis on 29 Oct 13 - No Cached
  • Japanese and other foreign companies account for more than 40 percent of cars built in the United States, employing about 95,000 people directly and hundreds of thousands more among parts suppliers.
  • The United States gained these jobs through a combination of public and Congressional pressure on Japan, “voluntary” quotas on car exports from Japan and incentives like tax breaks that encouraged Japanese automakers to build factories in America.
  • The government could also encourage domestic production of technologies, including display manufacturing and advanced semiconductor fabrication, that would nurture new industries. “Instead, we let those jobs go to Asia, and then the supply chains follow, and then R&D follows, and soon it makes sense to build everything overseas,” he said. “If Apple or Congress wanted to make the valuable parts of the iPhone in America, it wouldn’t be hard.”
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  • Last year, Brazilian politicians used subsidies and the threat of continued high tariffs on imports to persuade Foxconn — which makes smartphones and computers in Asia for dozens of technology companies — to start producing iPhones, iPads and other devices in a factory north of São Paulo.
  • “Closing our border is a 20th-century thought, and it will only weaken the economy over the long term,”
Gene Ellis

Unemployed in Europe Hobbled by Lack of Technology Skills - NYTimes.com - 0 views

www.nytimes.com/...lack-of-technology-skills.html

shared by Gene Ellis on 03 Jan 14 - No Cached
  • Unemployed in Europe Hobbled by Lack of Technology Skills
Gene Ellis

Ricardo Hausmann explains why technological diffusion does not occur according to econo... - 0 views

www.project-syndicate.org/...r-according-to-economic-theory

shared by Gene Ellis on 05 Feb 15 - No Cached
  • The Mismeasure of Technology
  • As Moses Abramovitz aptly noted in 1956, this residual is not much more than “a measure of our ignorance.”
  • As the scientist and philosopher Michael Polanyi would say of such tacit knowledge, we know more than we can tell. CommentsView/Create comment on this paragraph
Gene Ellis

The third great wave | The Economist - 0 views

www.economist.com/...enty-pain-ultimately-benefited

shared by Gene Ellis on 05 Feb 15 - No Cached
  • The third great wave
  • A third great wave of invention and economic disruption, set off by advances in computing and information and communication technology (ICT) in the late 20th century, promises to deliver a similar mixture of social stress and economic transformation
  • Powerful, ubiquitous computing was made possible by the development of the integrated circuit in the 1950s
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  • Evidence of this is all around. Until recently machines have found it difficult to “understand” written or spoken language, or to deal with complex visual images, but now they seem to be getting to grips with such things.
  • concluded that 47% of employment in America is at high risk of being automated away over the next decade or two.
  • Now technology is empowering talented individuals as never before and opening up yawning gaps between the earnings of the skilled and the unskilled, capital-owners and labour.
  • The effect of technological change on trade is also changing the basis of tried-and-true methods of economic development in poorer economies.
Gene Ellis

IBM Wants to Invent the Chips of the Future, Not Make Them - NYTimes.com - 0 views

bits.blogs.nytimes.com/...ps-of-the-future-not-make-them

shared by Gene Ellis on 18 Feb 15 - No Cached
  • For several months, IBM has been seeking to sell its chip-manufacturing operations
  • The most likely buyer is GlobalFoundries, a large contract chip manufacturer, the person said, for a price of probably less than $2 billion.
  • Ms. Rometty stated that while IBM’s priorities were in fields like data analytics and cloud computing, and it had agreed to sell its industry-standard computer server business to Lenovo of China for $2.3 billion, she added: “But let me be clear — we are not exiting hardware.”
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  • Selling its semiconductor-manufacturing operations would mesh with IBM’s well-established course of shedding hardware businesses with lower profit margins. Over the years, the company has retreated from printers, personal computers and disk drives, as well as its pending sale of smaller server computers. Designing chips and licensing technology, without manufacturing, can be lucrative. Qualcomm, a maker of chips for mobile devices, is the showcase example.
  • IBM’s research agenda is a recognition that the end of the silicon era of computing, using complementary metal-oxide semiconductor technology, or CMOS, is finally on the horizon.
  • “IBM is not giving up on silicon, but it is saying it’s time to place an array of bets, and to move beyond silicon.”
Gene Ellis

Taiwan's information-technology industry: After the personal computer | The Economist - 0 views

www.economist.com/...-world-after-personal-computer

shared by Gene Ellis on 15 Feb 15 - No Cached
  • Information and communications technology now makes up one-third of GDP.
  • its companies make 89% of the world’s notebooks, as well as 46% of desktop PCs. These days they make them mainly with Chinese labour: 94% of their hardware, by value, is produced on the mainland.
  • It is moving into retailing and wants to develop its own technology, for which it intends to hire another 5,000-10,000 engineers in Taiwan.
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  • The leading ODMs have realised that they cannot rely on the PC for ever. One option is to go where the growth is: mobile devices.
  • Wistron spread into cloud computing, after-sales service (of which it already did plenty), medical equipment and recycling—which Patrick Lin now runs.
  • Taiwanese companies can adapt in a very short time,” says Chris Hung, an analyst at MIC. They have done so before, such as when they moved production to China to take advantage of its big, cheap labour force. Up against Chinese capital as well as labour, not to mention the South Koreans, they must do so again.
Gene Ellis

Wind Industry's New Technologies Are Helping It Compete on Price - NYTimes.com - 0 views

www.nytimes.com/...lping-it-compete-on-price.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • Wind Industry’s New Technologies Are Helping It Compete on Price
Gene Ellis

French Tax Proposal Tackles Data Harvest by Google and Facebook - NYTimes.com - 0 views

www.nytimes.com/...n-web-giants-data-harvest.html

shared by Gene Ellis on 26 Feb 13 - No Cached
  • Internet companies like Amazon.com, Facebook and Google stay largely out of reach of tax collectors in large European countries like Britain, France and Germany by routing their sales through smaller countries, like Ireland and Luxembourg, where corporate tax rates are lower. The companies insist that such practices are permitted under European Union law and international taxation treaties.
  • France and other countries have begun talks to change those conventions, so Internet companies could be taxed in the country where a sale takes place, rather than in the location where the transaction is recorded. But that could take many years, with no guarantee of any change.
  • A recent study by Ovum, a research firm in London, showed that 81 percent of Internet users in France would use a “do not track” feature on Web sites if it were readily available. That was the highest percentage in any of the 11 countries surveyed.
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