Wednesday, January 2, 2013

The Economist on Innovation and the Illusion of Stasis

Getting bored with this stuff? I am.
The only reason I would waste my time on this earth trying to figure out the future is to make a buck off it. Otherwise it seems like mental masturbation. If you have some time to spare why not do some good in the world?
To quote myself:
...the "gangs roving the countryside" scenarios don't happen until financial collapse which itself is a ways down the road.
It ends not with a bang but a whimper.

For now the best advice probably comes from the founder of Methodism, John Wesley:

Make all you can, save all you can, give all you can.
Following up on our previous "...I think the key sentence in Gordon's paper is this:

'Both the first two revolutions required about 100 years for their full effects to percolate through the economy.'"
From the Economist's Free Exchange blog:
I WILL have a lot to say about the current discussion on techno-pessimism in coming weeks. For now, I want to address one aspect of the phenomenon that strikes me as curious. In recent weeks, I've seen Tyler Cowen* comment on the potential of 3D printing by writing:
Maybe I’m blind, but I don’t yet see this as a technological game-changer. It seems more like a way of saving on transportation costs. To put it another way, what’s the huge gain of making everyone a manufacturing locavore? Perhaps there will be some new flurry of home-based innovation, based on tinkering from what these printers can drum up, but that seems to me quite speculative.
And Robert Gordon, foremost among the pessimists, declaring:
Can economic growth be saved by Google's driverless car? This is bizarre ground for optimism, but it is promoted not just by Google's Eric Schmidt but by the Massachusetts Institute of Technology's Erik Brynjolfsson. People are in cars to go somewhere, whether from home to work or from home to shop. Once they are inside the car, there is relatively little difference between driving the car on their own or having it drive itself. Greater safety? Auto fatalities per million miles traveled have already declined by a factor of 10 since 1950.
A useful corrective comes from Kevin Kelly:
I think the key sentence in Gordon's paper is this: "Both the first two [industrial] revolutions required about 100 years for their full effects to percolate through the economy." Repeat: it took a century for the full benefits of the innovations to show up.
In general, a very good way to underestimate the potential impact of a new innovation is to consider its possible contributions all other things equal, that is, assuming that nothing in the economy changes to accommodate or complement the new discovery. Consider the automobile, for instance. Back in the late 19th century, it would have been easy to dismiss the potential importance of the car. Cars weren't very good, for one thing. But more importantly, it wasn't at all clear how they might be of much advantage. Cities were dense places, with tangles of streets crowded by pedestrians and horse-drawn wagons and omnibuses. Cars were expensive and offered little in the way of travel-time advantages. Petrol was very expensive in real terms, and there was no infrastructure available to deliver it to would-be drivers. It was hard to see a market for cars outside of the realm of playthings for the rich.

But the world changed. Traffic laws changed. Road construction changed and exploded, ultimately prioritising automobile traffic above all other modes. An energy infrastructure sprang up to support cars. The physical geography of cities began to evolve, with new housing and retail patterns ever more specialised around the needs of a driving public. New business models appeared, from the production and sale of cars themselves, to rental car businesses, to trucking and then on to container-shipping. Culture itself changed to complement the technology. Institutions, infrastructure, and culture evolve very slowly, but it is through this evolution that society extracts the greatest possible gain out of innovations. What was true for cars was true for railways in an earlier age, for electricity, for telephones....MORE