Alex Tabarrok, author of the ebook Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast discusses America’s declining growth rate in total factor productivity, what this means for the future of innovation, and what can be done to improve the situation.
Accroding to Tabarrok, patents, which were designed to promote the progress of science and the useful arts, have instead become weapons in a war for competitive advantage with innovation as collateral damage. College, once a foundation for innovation, has been oversold. And regulations, passed with the best of intentions, have spread like kudzu and now impede progress to everyone’s detriment. Tabarrok outs forth simple reforms in each of these areas and also explains the role immigration plays in innovation and national productivity.
Today, Jerry Brito, Adam Thierer and I filed comments on the FAA’s proposed privacy rules for “test sites” for the integration of commercial drones into domestic airspace. I’ve been excited about this development ever since I learned that Congress had ordered the FAA to complete the integration by September 2015. Airspace is a vastly underutilized resource, and new technologies are just now becoming available that will enable us to make the most of it.
In our comments, we argue that airspace, like the Internet, could be a revolutionary platform for innovation:
Vint Cerf, one of the “fathers of the Internet,” credits “permissionless innovation” for the economic beneﬁts that the Internet has generated. As an open platform, the Internet allows entrepreneurs to try new business models and offer new services without seeking the approval of regulators beforehand.
Like the Internet, airspace is a platform for commercial and social innovation. We cannot accurately predict to what uses it will be put when restrictions on commercial use of UASs are lifted. Nevertheless, experience shows that it is vital that innovation and entrepreneurship be allowed to proceed without ex ante barriers imposed by regulators.
And in Wired today, I argue that preemptive privacy regulation is unnecessary and unwise:
Regulation at this juncture requires our over-speculating about which types of privacy violations might arise. Since many of these harms may never materialize, pre-emptive regulation is likely to overprotect privacy at the expense of innovation.
Frankly, it wouldn’t even work. Imagine if we had tried to comprehensively regulate online privacy before allowing commercial use of the internet. We wouldn’t have even known how to. We wouldn’t have had the benefit of understanding how online commerce works, nor could we have anticipated the rise of social networking and related phenomena.
Joshua Gans, professor of Strategic Management at the University of Toronto’s Rotman School of Management and author of the new book Information Wants to be Shared, discusses modern media economics, including how books, movies, music, and news will be supported in the future.
Gans argues that sharing enhances most information’s value. He also explains that the business models of traditional media companies, gatekeepers who have relied on scarcity and control, have collapsed in the face of new technologies. Equally important, he argues that sharing can revive moribund, threatened industries even as he examines platforms that have, almost accidentally, thrived in this new environment.
The project is looking at the emerging ecosystem for innovation based on disruptive technologies. It expands on work we have done separately and now together over the last fifteen years.
Our chief finding is that the nature of innovation has changed dramatically, calling into question much of the conventional wisdom on business strategy and competition, especially in information-intensive industries–which is to say, these days, every industry.
The drivers of this new ecosystem are ever-cheaper, faster, and smaller computing devices, cloud-based virtualization, crowdsourced financing, collaborative development and marketing, and the proliferation of mobile everything. There will soon be more smartphones sold than there are people in the world. And before long, each of over one trillion items in commerce will be added to the network.
The result is that new innovations now enter the market cheaper, better, and more customizable than products and services they challenge. (For example, smartphone-based navigation apps versus standalone GPS devices.) In the strategy literature, such innovation would be characterized as thoroughly “undiscplined.” It shouldn’t succeed. But it does. Continue reading →
For some time now I’ve been trying to teach myself how to program. I’m proficient in HTML and CSS, and and I could always tinker around the edges of PHP, but I really couldn’t code something from scratch to save my life. Well, there’s no better way to learn than by doing, at least when it comes to programming, so I gave myself a project to complete and, by golly, I did it. It’s called TechWire. It’s a tech policy news aggregator and I’m making it available on the web because I think it might be useful to other tech policy nerds.
Quite simply it’s a semi-curated reverse-chronological list of the most recent tech policy news with links to the original sources. And it’s not just news stories. You’ll also see opinion columns, posts from the various policy shops around town, new scholarly papers, and new books on tech policy. And you can also drill down into just one of these categories to see just the latest news, or just the latest opinions, or just the latest papers. Leave the page open in a tab and the site auto-refreshes as new items come in. Alternatively there is a Twitter feed at @TechWireFTW to get the latest.
Other features include the ability to look up the news for a particular day in the past, as well as clicking on a story to see what other stories are related. That’s especially useful if you want to see how different outlets are covering the same issue or if you want to see how an issue has developed over time. Just click on the linked timestamp at the end of a story to see related posts.
I hope TechWire (at http://techwireftw.com/) is as useful to you as it was fun for me to code. I’d like to thank some folks who really helped me along the way: Pete Snyder and Eli Dourado for putting up with my dumb questions, Cord Blomquist for great hosting and serene patience, Adam Thierer for being the best QA department I could wish for, and my wife Kathleen for putting up with me staring at the computer for hours.
Christopher Steiner, author of Automate This: How Algorithms Came to Rule the World, discusses his new book. Steiner originally set about studying the prevalence of algorithms in Wall Street stock trading but soon found they were everywhere. Stock traders were the first to use algorithms as a substitute for human judgment to make trades automatically, allowing for much faster trading. But now algorithms are used to diagnose illnesses, interpret legal documents, analyze foreign policy, and write newspaper articles. Algorithms have even been used to look at how people form sentences to determine that person’s personality and mental state so that customer service agents can deal with upset customers better. Steiner discusses the benefits–and risks–of algorithmic automation and how it will change the world.
Psychologists Daniel Simons and Christopher Chabris had an interesting editorial in The Wall Street Journal this weekendasking, “Do Our Gadgets Really Threaten Planes?” They conducted an online survey of 492 American adults who have flown in the past year and found that “40% said they did not turn their phones off completely during takeoff and landing on their most recent flight; more than 7% left their phones on, with the Wi-Fi and cellular communications functions active. And 2% pulled a full Baldwin, actively using their phones when they weren’t supposed to.”
Despite the widespread prevalence of such law-breaking activity, planes aren’t falling from the sky and yet the Federal Aviation Administration continues to enforce the rule prohibiting the use of digital gadgets during certain times during flight. “Why has the regulation remained in force for so long despite the lack of solid evidence to support it?” Simons and Chabris ask. They note:
Human minds are notoriously overzealous “cause detectors.” When two events occur close in time, and one plausibly might have caused the other, we tend to assume it did. There is no reason to doubt the anecdotes told by airline personnel about glitches that have occurred on flights when they also have discovered someone illicitly using a device. But when thinking about these anecdotes, we don’t consider that glitches also occur in the absence of illicit gadget use. More important, we don’t consider how often gadgets have been in use when flights have been completed without a hitch. Our survey strongly suggests that there are multiple gadget violators on almost every flight.
That’s all certain true, but what actually motivated this ban — and has ensured its continuation despite a lack of evidence it is needed to diminish technological risk — is the precautionary principle. As the authors correct note: Continue reading →
The National Transportation Safety Board recommended yesterday that states ban all non-emergency use of portable electronic devices while driving, except for devices that assist the driver in driving (such as GPS). The recommendation followed the NTSB’s investigation of a tragic accident in Missouri triggered by a driver who was texting.
Personally I don’t see how someone can pay attention to the road while texting. (I’m having a hard enough time paying attention to a conference presentation while I’m typing this!) But the National Transportation Safety Board’s recommendation is a classic example of regulatory overreach based on anecdote. The NTSB wants to use one tired driver’s indefensible and extreme texting (which led to horrific results) as an excuse to ban all use of portable electronic devices while driving – including hands-free phone conversations. Before states act on this recommendation, they should carefully examine systematic evidence – not just anecdotes — to determine whether different uses of handheld devices pose different risks. They should also consider whether bans on some uses would expose drivers to risks greater than the risk the ban would prevent.
The fundamental law of disruption he identifies is: “Technology changes exponentially, but social, economic, and legal systems change incrementally.” Downes says this law is “a simple but unavoidable principle of modern life” and that it will have profound implications for the way businesses, government, and culture evolve going forward. “As the gap between the old world and the new gets wider,” he argues, “conflicts between social, economic, political, and legal systems” will intensify and “nothing can stop the chaos that will follow.” He’s exactly right and I’ll be elaborating on that “law” in more detail in a new paper with Jerry Brito as well as in my next book, which I’m finishing up currently.
Anyway, with Larry’s “law” in mind, I couldn’t help but laugh out loud when I was reading this Reuter‘s summary of a recent editorial from the People’s Daily, the main newspaper of China’s ruling Communist Party. The commentary lambasted the Internet, social networking technologies, and online culture. It contained this gem of quote that proves the Chinese government has a firm grasp of the Law of Disruption: “We have failed to take into sufficient account just how much the Internet is a double-edged sword, and have a problem of allowing technology to advance while administration and regulation lag.” Continue reading →