Thursday, March 9, 2017

Economics of Digital Age 5: Technologies of the world unite

While the singularity focusses on AI it is a distraction from what is clearly happening every day at the moment and which wasn't present even a decade ago. That is a technological advance in one place is enabling technological advance somewhere else.

'Innovation systems' has now been replaced by 'innovation ecosystems' in the academic literature. Do we really know more - not really it is mostly just an exercise in talking about ' innovation systems' sounds dated so 70s. I am going to be pointed - I truly do not believe you can have an innovation ecosystem - you can have technology ecosystems but not innovation ecosystems in the geographic sense it is most often used. Clusters is also out of fashion, so we can't use that term either.

The point of ecosystems if anybody bothered to read the ecology literature is that they are so multidimensional. There are population dynamics, energy cycles nutrient cycles food web dynamics, shock and resilience dynamics. When it is used in innovation circles it typically means "do we have the right institutional blocks' in place.

If we were really interested in ecosystems we would be trying to figure out how AI is fuelling autonomous cars and how autonomous cars will rewire cities. Now to be fair this is happening - MIT labs and others have been doing some incredible modelling of possible scenarios with autonomous cars. But that is because it is such an obvious example - the problem is we need more and we need to think how to build an idea of the whole - how do different technologies possibly interact at the economic level.

What is clearly coming is multiple waves of change crashing in on us almost simultaneously. However, publishing cycles remain slow and policy makers are trained in ways that are now decades out of date.

It gets mighty complicated. In a recent article The Economist pointed out that  while renewable energy is coming online there are design problesm with the grid itself and as renewables drive down cost it gets less attractive to build the new grids. If you are temped to blow this off as "The Economist" then you should read this by the ABC in Australia on the South Australia power grid situation.

 So while the electricity grids are not built for significant amounts of renewable power, electricity demand will only increase because of new technologies increasing the viability of using batteries/ electricity in an ever wider range of products (IoT, cars, trucks, drones, robots etc etc.)

Monday, January 23, 2017

Economics of Digital Age 4: Measuring the Technology Transformed Economy

Of late I have been struggling to come to terms with the modern technology economy.

A bit of a history lesson

Back when I started in this game there was data on:

  • R&D by business, governments, universities and non-profits
  • R&D personnel by same classification
  • Patent data
  • Publication data

....and then we would mine economic structure data to create information on trade patterns and clusters etc. This is what I have specialised in for 25 plus years. All of the data was supplied by official agencies.

But over the last three years the landscape, it seems to me, has changed dramatically. Back in the 1990s, if we looked at high technology industries (high R&D intensive activities) aerospace rolled out a new aircraft every decade or so and pharmaceuticals companies were and still are notoriously slow to move products from research to market.

IT/computers and mobile phones was thus the sexiest thing to watch - and the number of articles reflects this. Search Research Policy for these terms and any other phrase you care to think of and the results will not surprise you

This is all very fine up until about 2008. The IPhone came out in 2007, Uber launched in 2009. The autonomous mining equipment in Australia, that I have already posted about elsewhere, really started to become a serious game changer in 2008.

Today, there is AI, block chain, big data, translation software etc etc.

I've compiled the following list.

The OECD has published this:

What we are seeing is a revolution in technology that is changing the very structure of the economy. These are not always obvious changes. For example renewable energy is beginning to make a different and contribute to energy grids around the world. Consumers can become producers of energy in smart micro-energy based grids.

It seems that our national accounts based view of economic activity just cannot take account of what is happening.

So What do I suggest?

I think we need to focus data collection and analysis, at least for the near future, on three aspects of the thing formerly called the economy.

1. The tech itself
2. the companies
3. skills, employment and income

The tech

For decades now we have ignored the development of actual technologies, preferring instead to think of 'innovation'. The result is today while there is avalanche of stuff coming, or as Richard Florida tweeted in 2016 a series of 'nested transformations' - for the most part we are all at sea because we don't know what is going on. 

So therefore, let us go back to basics and make things concrete again - let's analysis and compile technology statistics and work out how to compare them. So for example how fast are solar technology efficiency rates changing, how fast is new load capacity being added and what share of the total is this.

Autonomous cares - how fast are they being developed and as soon as they hit the road what is their share vs the installed base share - as we might call it.


The companies

I think it is clear now that the new mega technology companies are something out of science fiction - we need better data on these companies. But we also need better data on organisational platforms of the economy.  I do not think this needs further justification, it is obvious.


The trouble we are seeing in the world with Brexit and Trump reminds us that people matter. We have been so focused on GDP and industries we have forgotten that humanity still craves a "good life". A sense of worth and value, a sense of contributing to the whole.

Take that away and there will again be mass conflict. We must return to being interested in the lives of real people.


Please stop talking about innovation and return again to focus on what changes are happening to whom and on what scale. Policy frameworks depend upon it.