Macro-Innov 8: Dimension 2 - Social issues

I am not going to spend much time on the social dimensions of macro-innovation (just 1 blog for the moment) but clearly the social issues are increasingly important.  Open a newspaper 10 years ago and there may be the occasional article on one of these issues. Today, because of the rise of the digital world, some or many of these topics may appear on any given day in a leading newspaper or in any issue of a news magazine like the Economist.

These topics should not be just left to sociological sidelines, they are indeed front and centre to the new world. They are issues of importance for innovation policy. If entrepreneurship, technology and innovation matter then the following issues are critical for national / regional attention - although it will probably be a long time before they are.

• Cyber (everything digital) crime;
• privacy issues (re Snowden);
• distrust of government;
• possibility of the breakdown of the internet due to insecurities;
• distrust of science findings (growing social movements that distrust government and science - vaccinations for example);
• the role of terrorism in halting or causing huge defensive innovation budgets - not national Defence necessarily but cyber defence etc;
• resource constraints - food, water, energy;
• middle income disparities - it is one thing to discuss the new possibilities of robot and 3D additive manufacturing technologies but who is going to buy the merchandise - the economics of new technologies is not being discussed yet;
• re-emergence of tax shelters GLOBALLY; 
• and modern digital corporations reinventing the transfer pricing of the bad old multinationals, playing off jurisdictions so where is home (recent stories on Candy Crush , Google pays little tax etc).

And this list ignores the growing controversial topics of whether game playing is addictive, reduces attention span is bad for social manners, bad generally .....

The social dimensions of technology have been obscure and little understood for too long. , Apart from big names like Marshall Mcluhan it has often been the domain of obscure sociology researchers who would claim that technology and its uses are 'socially constructed', most of whom where never interviewed on radio or television. This is changing for the better, leaving aside the modern McLuhan like prognosticators, social dimensions get more airplay now and that is good because it undermines the technological determinism of past ages and implants a sense of uncertainty over technological trajectories, use and interpretation. 

Innovation studies take note Hall and Martin[i] point out that an innovation must pass four hurdles: technical feasibility, commercial viability, organizational capability, and social acceptability. What is true at the micro level of products and companies is also true for techno-economic ecosystems. The social is important and getting bigger. What the society wide issues with technological acceptance and usage. 

The social dimensions of technology still has some way to go to be truly mainstream but it is on the way.

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[i] Hall, J.K., Martin, M.J.C., Disruptive technologies, stakeholders and the innovation value-added chain: a framework for evaluating radical technology development. R&D Management (2005) 35, 3, 273 -284.

Macro-Innov 7: Kevin Kelly's 'Technium'

The first dimension of my analysis of macro-innovation introduced the concept of the technosphere, in contrast to The Technium a concept introduced by Kelly, K. (2010) What technology Wants. Viking, New York

The Technium, the 7th Kingdom of life.

This book is for the popular market, it argues from basic analogies that technology has a number of characteristics that are similar to biological evolution and from there it takes this logic to its full ultimate conclusion - that technology is its own kingdom of life.

Although I agree with many of the facts presented in the book, the overall argument construction is unconvincing, but is yet still enough to light a candle of doubt.  Despite appropriately making mention of contingencies, cautions and limitations the book is definitely not an academic treatment of the concept.

One of my frustrations with the book is the use of digital technologies as the proxy for all technologies and the speed of technological change. But digital world is not a proxy for the rest of the 'technology kingdom'. For example, there is no supersonic passenger flight transporters at present. Even while Concorde flew, it was uneconomic. In the January 2013 issue of The Economist ran a lead article on how innovation is stalling across a number of non-digital domains. Moving physical stuff through space is hard - the physics of mechanical objects such planes, trains, autos or of energy creation and use move very slowly in comparison. More recognition of this would have been welcome.

Essentially the book makes a rather simple argument, that has a number of facets. Kelly summarises biological life in the following diagram.

He then argues that technological 'life'  has many similarities.

In the book What Technology Wants, Kelly in a number of places produces diagrams such as these.

The point of these is to impress upon the reader the speed of change and from that imply the evolutionary processes now at play in technology.

A recent interview

In a recent article on Kelly here at The Edge, the evolutionary argument is summarised clearly. The ideas discussed above were covered. One point of significance was this one.

There are two strands in technology: There's evolutionary change and there's developmental change, just like in our own bodies most of what we experience as individuals is developmental. So while we're growing up we start off as an egg and we become a blastocyst and then we become an embryo and then become a fetus and then newborn. That trajectory is very determined and developmental. And then there is also within us, these other forces of mutation in our genes, which are more evolutionary. A lot of what we see in technology is not evolutionary, it's developmental, meaning that if we were to look at a thousand or a million different planets with sentient life and civilizations, we would find that there's a general developmental course for the course of technology on a planet, in the sense that you would have a natural occurrence of pottery before you have electronics, whatever it is. There are certain precursors to certain technologies, and the same thing is happening right now on the growth of this connected world. There are certain developmental stages, and part of this is a cyclic thing where there's a period of openness, then a period of consolidation, and then the next rev of that is open while things kind of settle, and then that becomes consolidated and there are respiration cycles.

What is present in the interview and not the book is the sense of the linkages between technologies.

The ordinary pen you use every day seems very simple but it probably took 100 different technologies to make this pen technology, technologies of plastic, ink, ball bearing, metal, and each of those different technologies probably themselves required another 100 sub-technologies to support it and, of course, there's kind of a circular way in which pens might be necessary to make a ball bearing in the same way that electricity is necessary to make a generator, and a generator may be necessary to make the wires of an electrical system. A hammer requires a handle and a head, and the saw requires the hammer to make the saw that cuts the handle, so there is a sense in which all of this is very recursive and that there is a network of different supporting technologies, and that the whole web of all these things I call the technium. The technium is that largest network of all the technologies working together to support each other, and while this pen is definitely not alive, there is a sense in which the technium as a whole exhibits life-like behaviors in the same way that your neuron doesn't really think, but the network of neurons in your brain can make an idea. And so I look at the network of all the technology in the world, past and present, as forming a system that seems to have its own urges and tendencies.

Problems

The book What Technology Wants doesn't ignore some of the subtler points of the human use of technology although in the end it paints over these somewhat with the rather singular point it is hammering home. While Brian Arthur's 'The Nature of Technology' leave much understated or unsaid at all, by leaving open space the reader starts to work out the implications for themselves. In the way Arthur writes in an open sketchy style. Kelly on the other hand writes in rather slow moving style with the end always clearly insight.

This book is disturbing in one important respect. While anybody with a sense of history and being literate in the innovation studies of the last twenty years will fight with the book for most of the journey, it does nonetheless leave the reader with an uneasy feeling. That uneasy feeling is that despite all the problems with the technicalities of the argument, Kelly's bigger point is probably more accurate than inaccurate.

I don't naturally gravitate to evolutionary arguments because the focus tends to be on change and the mechanism (carriers like DNA) of those changes rather than the interdependencies that interlock with those changes. That is why I have started playing around with the 'technosphere' concepts.

But as an initial sketch and a call to take technology more seriously than we have been to this point, Kelly is worth paying serious attention to. Whether you call it the Technium, the Technosphere or something more intelligent it is time to work on technology as an integrated subject matter.

Macro-Innov 6: Strategy in the Technosphere

Following the suggestions in my December 2013 blog on the possible strategy of Google Inc, I had an interesting discussion with a friend and colleague - twitter @GordonBrianR who is a keen observer of the strategy literature and the strategy of firms. His point in simple terms was that I was arguing that Google was pursuing a strategy in non-related activities. For me, I don't have a problem with that if 'related' is conventionally understood. It then occurred to me that it is was the perfect point in the blog cycle to discuss corporate strategy in the technosphere and in doing so help give more depth to the concept. All that said, the ideas here are rough sketches, there is the tip of an idea but they are not well developed.


However, I am happy to point out that in my blog on Google I suggested it was positioning itself as the new GE, a conclusion that the Economist came to as well in a recent print edition 2014 Jan 18. 

Strategy

There are many different academic 'takes' on strategy. Mintzberg has come up with a list of 10 different perspectives on what the study of strategy focuses on. This comes from his book Strategy Safari.

• The environmental school
• The cognitive school
• The entrepreneurial school
• The power school
• The positioning school
• The cultural school
• The planning school
• The learning (or emergent) school
• The design school
• The configuration (or transformation) school

Currently, the Resource Based View of the firm and the Dynamic Capabilities concepts are both popular issues in the strategy literature. Both look for some core attribute of the organisation that give it the edge through time. Of course defining those capabilities and even what capabilities are is proving to be tricky even in abstract academic terms.

Traditionally, strategy modelling were built around ideas that seems less nebulous like industry or markets. 

Classically we have Porter's five forces

• Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are.
• Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.
• Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.
• Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.
• Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
• - See more at: http://www.mindtools.com/pages/article/newTMC_08.htm#sthash.VBfemOvV.dpuf

Such strategy methods are often written rather abstractly, away from place and time. Who are your competitors for example? Even this is rather problematic sometimes. For me the 4Ps of marketing has often been the most clear for defining the issues - Product, Price, Promotion and Place. Obviously, this is not without problems either and can be extended in multiple ways but for simplicity its still hard to beat.

But the 4Ps is probably not helpful for giving a perspective on overall corporate strategy particularly if we talking Google at the moment. The first problem is to define the current economic structures, not as easy as it sounds.

Techno-Economic Structures

We often speak of economies as though they are an object that we can measure and visualise, a idea that is not undermined by texts that rarely present multiple views of the economy side by side. But economies are like ecologies they have multiple layers. There industries, transport routes, resource supplies, component supplies, 

Industrial Interdependencies


Fig 1. An Econscape Image of the the World Economy 2008 (approx) 

The data for this econscape comes from the WIOD database y2008. http://www.wiod.org/new_site/home.htm
It's an approximation because Excel is limited to 255C*255R whereas the full dataset is 1435*1435 so some averaging of 6*6 cells was done. When I find some software that can do the full dataset I will create a blog about the global economy.

This image is constructed from the industrial interactions within and across 41 economic regional (40 nation-states + 1 rest of world). The diagonal in this image is national economies - ordered alphabetically. The large cluster at the bottom right is the USA visually merged with the Rest of the World as the last two economic blocks in the table). Within each economy (the diagonals) there is in the original data interactions between 35*35 industries).

The interactions of industries is one perspective but it is but no means the only one.

Economic Geography

Fig 2. Geography of GDP (geo cells)

http://gecon.yale.edu/

If you go to William Norhaus' homepage at Yale you will discover economic geography images for most countries on the planet and on the home page you will see a rotating gif image of a globe (economic activity) - unfortunately they didn't create a flat version. So the industries interacting (Fig 1.) do so in particular places (Fig 2.). Mostly economic style value is captured in cities and more value is captured perhaps disproportionately in strategic 'global cities'.

Natural Resources
The curious thing about the economy is that it is measured in money - obviously D'uh. But the economy is also stuff. So for example cities are the interstices - those places where transactions occur, but the stuff can come from elsewhere - the geography of raw stuff looks different.

Fig 3. Metal Ores Extraction 2007

http://www.materialflows.net/visualisation-tools/worldmapper/

This map morphs the globe to emphasise the source of metal ores - it would be fabulous to have a geo cell (AKA Nordhaus image) for raw materials - ie where are the mines and the fields.

Transportation
To move this stuff (Fig 3) in between industries (Fig 1.) requires transportation routes

Roads, Shipping and Air routes. Taken from an article http://www.dailymail.co.uk/sciencetech/article-2134979/Video-lights-road-shipping-route-flight-path-Earth.html#ixzz1t9b1tHmv accessed 13 Jan 2014.

Fig 4. Just Cargo shipping

Published  Pablo Kaluza, Andrea Kölzsch, Michael T. Gastner and Bernd Blasius Journal Royal Society Interface 2010.

While money moves electronically between global cities (an entire literature in its own right but visible in the Nordhaus images) goods flow on road/rail/shipping and air routes between nodal gateway cities. Global financial capitals are rarely the nodal gateways although many were once the important trade cities. 

Product complexity

U.S. Product complexity map

THE ATLAS OF ECONOMIC COMPLEXITY MAPPING PATHS TO PROSPERITY
AUTHORS: Ricardo Hausmann | César A. Hidalgo | Sebastián Bustos | Michele Coscia Sarah Chung | Juan Jimenez | Alexander Simoes | Muhammed A. Yıldırım 


The big point

Read up on ancient history and the organisation of the economy bears remarkable similarities to today. The ancient Greeks moved 100s of thousands of litres of wine around Europe and the Mediterranean basin. Individual vineyards had their own brands and were known for their quality.

Or if you think product complexity and modularity are new, read the history of Bolton and Watt before they built their factory. At this point in their history they only built specialised parts - the main components of the steam engines well built by standard producers. Everything was shipped as components to the site for assembly.

Operating Systems

So the technosphere for any particular point in time is the accumulation of the ability to extract resources move them and transform them into the stuff that gives human life a certain standard of living. But we are moving from the the industrial technosphere to the digital technosphere - one where the linkages shown above can take on new dimensions. At this point I could show a map of the internet traffic but that would not show the digital technoshere IMHO, it would only show physical linkages or at best the flow of bytes and bites.

 But many feel that something different is happening, not just a change in extensiveness but qualitative difference. What I am thinking is the idea is that economies run on operating system principles.


Perhaps and analogy might help.

Computers OS v1. Direct input. To program the original computers you had to know machine code and directly tell the computer what to do.  If you want to runs some stats you had to know the code and would not know there was an error till it had printed out.

Computers OS v2 WYSIWYG what you see is what you get. The Mac introduced a new thing; it was an operating system that took care of the machine language. Then there were programs that sat of top of that. People could then interface somewhat normally typing and drawing on the computer so that what you see is what you get. But this was rather limited traditional programs no matter how good they get are kinda clunky.

Computers OSv3 Apps. Apple much later then marketed the next great innovation; Apps. Combined with the internet they can be like old programs (games, wordprocessors, drawing etc) or more importantly they can interact with the real world - start your car, turn on the heating in your house etc. Apps can be static but they can be dynamic - controlling and integrating with real world objects - this is where the digital technoshpere is evolving to an Internet of Things as it is called, where everything is online and therefore app-able.

So the digital world needs Operating Systems....

If we stand back we could say that the economy works on operating system models. Pre-industrial agriculture was direct machine language - humans and animals did all the work.

The Industrial Revolution was OS 2 - carbon energy freed up the ability for machine power and industries developed - large clunky blocks of activity with large orgnsations of scale and scope at there centres (a bit like word processing or spreadsheet programs on a computer).

As I can conceive of it at the moment Technosphere Operating Systems are kind of the rules of the system operating at multiple levels. Now usually Rules of the Systems means institutions but I am meaning here the actual physical connectedness - even if that is digital.

Strategy in the Digital Technosphere (OS3)

So here is a picture of the U.S. Economy.

Lets discuss some peaks.

Many of the peaks are still basic industries - mining, metals, agriculture/food - which digital technology is certainly getting a strong foothold but is perhaps a little harder to explain.

The services complex - bottom right.
Over the last couple of decades governments and service industries have faced the problem of inter-operability - data transfer. I suspect that the problem is still not solved but it is obviously getting better. It is a big deal moving data between banks and governments and other services is hugely important.

But those issues will move into the rest of the economy.

The auto Industry
At the recent Consumer Electronics Show, the auto industry was more represented that usual. The big news Apple and Google moving inside the car to connect the car to the world with their Operating Systems. I suspect Apple does not actually have much of a strategy here - except that lots of people use their tech so Apple should give them access in their cars. Google, I think has a bigger strategy. This is the first step in connecting their technologies up. They can auto pilot a car but that is distant from the normal car - the intermediate step is to get Android inside the car and then introduce full car control systems, which if successful would leave Google as the Mircosoft of auto transport. The car makers will just be sophisticated metal bashers.

The Electronics hardware industry
Curiously, the interactions in the matrix of electronics equip buying from electronics equip is quite small in the USA, presumably because manufactures are mostly imported now. But the hardware, computers, mobile devices etc which is where Apple is happy to focus is only the tip of the iceberg of the digital technoshere. the real money will be in the Internet of Things operating systems.

Google's strategy

So here is my point, digital connectiveness links up real devices, objects and entire industries. Thus what links up Google's diverse unrelated activities is its operating system relatedness. Back here I discussed the changes 3D printing could make to global manufacturing structures. Google is not just an advertising company although that is where it is getting its revenue. It isn't just a company with some strange auto industry technology, it will introduce an electronic operating system for cars and it will own the technology. Just as we see it buying Nest that links the home to the owner, we will see it own technology that brings digital control and operating systems to the industrial sector.

Think of the all those existing layers of the economy as a piece of hardware, the box and the bus and circuit board, the chips and harddrive - what will really make the digital technosphere fly are the operating systems that makes it run. Google, won't be the only company and in the end maybe it going too fast, but if it wins the prize it will be the mega-goliath corporation of the 21st Century.

Google: just call us "U.S. Robots and Mechanical Men"

Just taking a brief interlude in my macro-innovation series, but this is an important breaking story.

It has been all over the press recently that Google is buying robotics companies. This of course has led to the now common speculative pieces, whenever Google does anything unexpected: What is Google Up To?

There is good coverage on the BBC website of the latest move.
http://www.bbc.co.uk/news/technology-25395989
http://www.bbc.co.uk/news/technology-24427821 a robot that does not fall easily.

If the video below doesn't work go here. http://www.channel4.com/news/google-buys-robot-firm-boston-dynamics-cheetah-wildcat



Robotics for making stuff - maybe, but you don't need humanoid technology for that. You need more advanced versions of the industrial robots we already have - except ones with fine motor movements. Delivering parcels - not likely, what's wrong with a person for that task? The economics don't seem to add up for that one. No I think there is something bigger, grander in mind.

So my guess is as good as anybody else's right? So here is my take.

Google wants to be the first 21st Century corporation. Not just incrementally twiddle this or that or even disrupt the status quo. I think they want to disrupt disruption. These are guys and they are mostly guys that have read science fiction and they want to be 'that' kind of company. As huge as the digital economy is, life is still the interaction of stuff in meat space. We live in homes, we need transport, we need food and metals etc etc. I think Google understands the future is the intersection of digital and hard technologies.

Key executives in Google are personally investing in off-planet mining opportunities and presumably research. What to you need to get involved in those kind of heavy duty activities - robots. If NASA really does get serious about Mars, companies are going to be lining up to provide technologies (read Red Mars). Google with is growing suite of technologies could be an important player. Robotics, autonomous vehicles - what they don't have is the engineering companies yet. Before you get to outer space, undersea mining is opening up as an important near term opportunity - robotics again. Both applications undersea and off-planet are seriously dangerous/difficult and costly for humans, but the human body is remarkably well designed for difficult and dexterous tasks. Humanoid robots will be well suited to these kinds of tasks.

Think of Google as the next Apple/GM/GE.

If this is their strategy, their challenge, alongside those companies that have gone down this path before them, is the valley between today's costs and future profits. Will the timelines of markets and technology merge with elegant synchronicity, or will the technologies still take too long and be more costly than expected. Google is has waited for the technologies to mature, has it waited long enough?

Marco-Innov 5: The technosphere & slowing innovation

In my previous blog I tried to argue that technologies have complex interdependencies - not always with what we think of as technologies. Economics has always promoted the idea that what matters is change - mostly focussed on economic growth. Innovation studies has taken up the same view and focus on Δ (Delta - change) mostly in regard to technologies but more recently the introduction of new products. But I want to make the argument that this was always insufficient and certainly now needs urgent revision.

The Frontier View of Change

There are two ways of looking at what the frontier 'curve' is:

• New products; and
• Product frontier.

New Products. In my previous blog, I included the product diffusion / sales growth curves, with its typical S shape.

Product frontier. In traditional economics there are a series trade-offs that make it difficult to account for the new. 

Where does innovation fit? Take note for example of the capitalisation of R&D expenditures. Is R&D really capital in the same way a factory is or an office block for a KIBS or purchasing computer equipment - I'm not sure.

At present there is a debate going on about slowing innovation.

Slowing Technological Change: The Bernanke view

Back in May this year (2013) Ben Bernanke chairman of the Fed Reserve made an interesting speech on economics, growth and technology

The speech reads in part

Fifty years ago, in 1963, I was a nine-year-old growing up in a middle-class home in a small town in South Carolina. As a way of getting a handle on the recent pace of economic change, it's interesting to ask how my family's everyday life back then differed from that of a typical family today. Well, if I think about it, I could quickly come up with the Internet, cellphones, and microwave ovens as important conveniences that most of your families have today that my family lacked 50 years ago. Health care has improved some since I was young; indeed, life expectancy at birth in the United States has risen from 70 years in 1963 to 78 years today, although some of this improvement is probably due to better nutrition and generally higher levels of income rather than advances in medicine alone. Nevertheless, though my memory may be selective, it doesn't seem to me that the differences in daily life between then and now are all that large. Heating, air conditioning, cooking, and sanitation in my childhood were not all that different from today. We had a dishwasher, a washing machine, and a dryer. My family owned a comfortable car with air conditioning and a radio, and the experience of commercial flight was much like today but without the long security lines. For entertainment, we did not have the Internet or video games, as I mentioned, but we had plenty of books, radio, musical recordings, and a color TV (although, I must acknowledge, the colors were garish and there were many fewer channels to choose from).

The comparison of the world of 1963 with that of today suggests quite substantial but perhaps not transformative economic change since then. But now let's run this thought experiment back another 50 years, to 1913 (the year the Federal Reserve was created by the Congress, by the way), and compare how my grandparents and your great-grandparents lived with how my family lived in 1963. Life in 1913 was simply much harder for most Americans than it would be later in the century. ....



Firstly; lets deal with the purely ridiculous understanding of the past and present.

• "Commercial flight was much like today" 
• Look at ANY cost estimates and air travel is massively cheaper now than in the 1960s. Australia due to its isolated island but reasonably wealthy status seems to be a good test case for the Bernake view. For example, in 2012 there were 8.1Million overseas trips by Australians. That is the equivalent of more than 1/3 of the population making one international trip in the year (pop in 2010 =22.3m . The Australian Bureau of Statistics reported that for 2010 there were 13.4m outbound passenger movements in total [equivalent to 60% of the pop] (YearBook 2012).
• In 1962-63 (a decade before the 747) there were 247,827 passengers that left Australia for overseas by aircraft - that is 2.36% of the population for that year (Year Book 1967).
• The change in commercial flight is simply massive. The planes may look somewhat similar but the change is beyond transformational - Aust air traffic as % of pop has got up close to not 10X but close to 30X.

• "For entertainment, we did not have the Internet or video games" 
• - spoken like a retiree - the internet is primarily not about entertainment, and in the immediate future with the 'internet of things' a substantial proportion of it will not be websites, which is true even now. Modern international supply chains or international finance would simply be impossible without existing digital infrastructure.

So Bernanke is putting forward the idea that we haven't seen much transformative change in the last fifty years. Even if you ignore such obvious flaws as those above, if you look both at form (how things look not function) and the frontier (the curve as you might call it) then that view maybe persuasive, and depending on the circumstances I might make a similar case, but it is missing some very major underlying changes.

An argument for the Technosphere

To examine the idea of change behind the curve let's take a closer look at Bernanke's perspective.

It can be difficult to comprehend just how far life really has changed. So I offer this. It was filmed in 1964 (close to Bernanke's date) but in Brisbane Australia and close enough to the time I was born in the town I was born in, so this video brings back a number of memories. Obviously, it is a government propaganda piece for advertising outside of Australia but it does give a feeling for life in the sixties for the middle class.





So you tell me, does this video support the Bernanke view? Okay, there is a tv and cars but; has there been little innovation? The point that captures my imagination about this film is not the state of the technology not the cars, trams, telephone etc but the disconnectedness of it all. Every piece of technology is a separate individual entity.

The blokes sanding timber have no computer controlled cutting equipment. and the stevedores are working with their hands. Everywhere you look there is something that is hard to put your finger on.

What we are fast moving to a grid of technologies where the internet of things has everything wired together.

Change behind the curve

The technological productivity frontier is not enough to explain how changes in the very wiring of the economy is changing. The problem is that we tend to take a business / industry focus to innovation not an economy wide perspective. Much of the academic literature will focus on the patenting in x product classification in a particular country or increasing globally.

But take one just one example from the little film above, the loading of a ship. Notice that it was being done by hand. No containers. Containerisation has facilitated not just a change in the volume of trade, but also the nature of the products that could be traded (delicate products), but also the port city configuration of the global economy has grown stronger.

Why have companies been able to improve the efficiency of aircraft so much; two answers; computing power in design and electronics controls in the planes.

In academic circles, the big movement in the 1990s was to move from the heroic innovator to the innovation systems idea. Innovation is not developed by businesses in isolation. We need a similar transformation in the 21st century. It matters less how an individual technology moves forward than how those technological changes will facilitate changes throughout the economy.

Marco-Innov 4: Technology Accounts

Every reader of this blog is, I'm sure, at least somewhat familiar with economic accounts. But what would technology accounts look like? There have been many concepts trying to account for the structure of technology. I start with a scattered sample, move onto discuss Brian Arthur's notions of technology and then introduce what this got me thinking about.

Standard accounts of technology

There is the life cycle perspective and the famous S adoption curve. One version that is famous although it seems to deliberately leave off TV is from the New York Times.

Like anything there are problems with this graph including the comparisons but its not bad. It gives an idea of how technologies were adopted across the 20th century. But there are other perspectives.

Autio and Hameri 1995 present a kind of hierarchical view that finishes for some unknown reason at national political borders, which for technology I have to say is a bit odd but consistent with 1990s and the blurring of innovation, technology and political jurisdictions.

This paper focuses on the construction of an integrated model of technological systems. The model has two purposes: (I) to clarifv the scope and relations of various concepts in this peld, especially the concepts of technology, of national systems of innovation, and of technological systems; and (2) to pro- vide a framework in which to study the conceptualization and construction of evolving technological systems. These purposes require the creation of new concepts and the redefinitions of some familiar ones. The model is structured at four levels of aggregation: (1) the individual; (2) the organizational; (3) the sectoral; and (4) the national. From within this structure we can identify parallaxes, or changes in the appearance of each of the four levels as the level from which observation takes place is changed. The structure of the model and the concept of parallax serve to clarify some important complexities of the dynamics of the system within which technological change takes place. 

Richard Lipsey Kenneth Carlaw, and Clifford Bekar constructed a detailed historical view of General Purpose Technologies in their book  Economic Transformations:General Purpose Technologies and Long Term Economic Growth.

1)The domestication of plants. 10000 BC 

2)The domestication of animals  8000 BC

3) the smelting of ore 7000-6000

4) Pottery 6000 BC

5) The wheel 5000 BC

6) Writing 3400 BC 

7) Bronze 2800 BC

8) Iron 1200 BC

9) The water wheel - Early medieval period, The heavy plough - Early Medieval period

10) The three masted sailing ship 13th century AD

11) Printing 14th century

12) The steam engine 18th century

13) The factory system 18th century

14) The railway 19th century

15) The internal combustion engine 19th century

16) Electricity 19th century

17) Mass production late 19th early 20th century

18) New GPT - computer and digital revolution.

The concept of GPT ended up being too limited for all the technologies being contemplated in the list so GPT includes organisational technologies, product technologies and process technologies. My problem with the notion of GPT is that unwinding what is a GPT and why seems unendingly complex every technology is a web of co-dependencies - but that perspective always seems to be missing from technology studies.

The Nature of Technology (2009)

Okay so that is three completely different perspectives. Then a couple of years ago I found something that really got me thinking and took me back to my studies of ecological systems and which got me interested in innovations systems at the start.

Brian Arthur (p41) The standard view - I am talking about the one most technology thinkers have taken - sees a technology as something largely self-sufficient and fixed in structure, but subject to occasional innovations. But this is true of technologies only if we think of them in the abstract, isolated in the lab, so to speak. "In the wild' - meaning in the real world - a technology rarely is fixed. It constantly changes its architecture, adapts and reconfigures as purposes change and improvements occur. A [aircraft] carrier's jet fighters may act as more or less  independent components one day. The next they may be assigned to the protection of a radar surveillance aircraft, becoming part of a new temporary grouping. New structures, new architectures, at any level can form quickly and easily, as needs require. In the real world, technologies are highly reconfigurable; they are fluid things, never static, never finished, never perfect. We also tend to think of technologies as existing at a certain scale in the economic world. If the technology is a traditional processing one (the basic oxygen process for producing steel), this is largely at the scale of factories; if it is a device (a mobile phone), this is largely the scale of products.

Arthur has the order differently - the following text precedes the text above butfor the story rvesing it makes more sense.

Following a lengthy breakdown of the technologies within the F35 fighter Arthur writes. We could follow the hierarchy of executables upwards as well. The F-35C is an executable within a larger system, a carrier air wing. This consists of several fighter squadrons along with other support aircraft, whose purpose is to provide both striking power  and electronic warfare capabilities. The air wing is a part of a larger system; it deploys aboard a carrier. The carrier is an executable too: its purpose is (among others) to store, launch, and retrieve aircraft. It in turn typically will be an executable within a larger system, a carrier battle group. This, as the name suggests, is a combination of ships - guided missile cruisers and frigates, destroyers, escorts and supply ships, and nuclear submarines - grouped around the carrier. And it has varying purposes .... Therefore the carrier group is an executable....

and on and on up the scale....

All of this is built to support Arthur's three definitions of technology

1 - a means to fulfil a human purpose (an executable).
2 - technology as an assemblage of practices and components
3 - technology as the entire collection of devices and engineering practices available to a culture.

I must admit that, and as any reader of my blog will understand, this book has revolutionised my understanding of technology. Not what I had an intuition for but it gave it detailed expression, a language for it. I have been surprised how little reference to the work I have seen in the academic literature. For me it has been mind expanding and fired my imagination. For a couple of years now I have been trying to figure out how to illustrate the above concepts even for a simple thing like the car through time.

For example the car (a technology) reconfigured the world geo-politically due to the need for petroleum products ( so we have companies, ships oil refineries etc etc), spatially (city structures) spurred many new technologies (road management, health systems - spinal care) etc etc. That gets wildly complex very quickly.

What will the Google car do - maybe just as much. By linking the digital world and cars why not redesign the car all together - put a desk in it (thanks for whichever blog suggested this), car parking spaces on streets can disappear, multistorey car parking can become vastly more efficient, police enforcement will change, hospital ERs potentially will change over time ...etc etc. I gave up trying to illustrate this one example when another my scribblings led me to another idea - every major technological era has been accompanied by institutional, spatial, and soft innovations.

Constructing National (?) Technology Accounts

It has been popular amongst statistical agencies for more than a decade to collect internet sales data, but this about the only 'technology' data being collected. In an age emerging where advanced technology is at once ubiquitous and second fundamental to the economy we need to start thinking about technology like we think of basic economic data. But there are challenges, technology has twin processes - changes in artefacts are preceded by and followed by soft technologies.

Fig 1. Technology Through Time - Till The Digital Revolution.

At any point with any technological era, technologies reshaped the politics, the urban structures, the organisational landscape and the connectedness of the technologies themselves. In this diagram I left off the digital technologies.

In the 1960s Galbraith talked of the Technostructure - the technocrats of large corporations, but the nature of corporations is changing who is in them and who is not. Just as likely today companies are linked together in tight or loosely coupled networks - product networks and chains.

I want to draw the distinction between traditional mechanical, chemical and biological systems because they have proved to be difficult to manipulate. Progress in these technologies is slow, not for some conspiracy but because they are really hard to improve. Getting an object through space takes a lot of energy and the physics of that are a problem for us.



Fig 2: Technology to the Present.

However, we have discovered that we can manipulate technologies that send information signals much more easily. Although obviously the digital has evolved from and remains embedded in many ways in traditional industries it is revolutionising industries, products and space so if we separate it off it helps us look for what might happen.

So far, most energy has been spent examining what the digital revolution means for industries, (incl universities etc), or humans themselves (the arguments over "what this is doing to us"). But it is and will continue changing the institutional identity of our society.

I'll make one argument - this is the cause (not the GFC) for macro-economics as a discipline being in so much trouble. Macro-economics emerged as a necessary technology when other technological changes (globalisation) meant that economic shocks were transmitted between economic zones (continents). With new wave technological change - we need to invent new modes of thinking - a mode I am calling Marco-Innovation in this current series until a better name turns up.

I have not discussed here biotechnology or nanotechnology as I think both of these are still in the hype stage.  I know biotech has some wins but I don't think it has really arrived as a technology so I will reserved judgement for now.

Macro-Innov 3: Society, economy, technology

As I start on this macro-innovation series, I first want to make a case that we need genuinely macro-notions.

Societies and economies are not separate worlds, they are interlinked but we have become obsessed with the economy. Indeed, while I generally laud the change from a focus on technology to innovation at the firm and industry level, it is now becoming obvious that a key element of the emerging macro puzzle is not coming together in a coherent way. It will be increasingly important, I believe to study technology coherently, like we have studied economics in the past. A good economics degree can bring together various elements of how we think about economic behaviour - history of economic thought and philosophy, the neo-classical rules, policy, behaviour economics and hopefully geography. But technology studies today are scattered across philosophy and communications, business, economics (hopefully though no guarantees), ethnography, engineering schools etc. It is not possible generally to do a degree in technology studies. 

The nature of discipline based research

Every discipline in the natural sciences, engineering and social sciences has and has to develop a particular perspective and a group of methodologies for conducting its analysis. ‘Holistic’ studies are a nice idea but simply impossible. We can do better at finding linkages between them however. Lets look at a few examples.

Earth Processes (geology, biology and ecology) 

For scientists interested in the processes of life on earth there are three inter-related but separate fields of study.  If for example you are simply interested in geology for mining then there is no need to worry about biology, but geology is very important for understanding ecosystem development and evolutionary biology because, as the earth changes through plate tectonics so the terrestrial systems have had to adapt with them.

But for the purposes here I will focus on two disciplines, biology and ecology. Here again there are components that clearly relate to each other but remain distinct. In a sweeping generalisation we can say that biology is interested in the construction and operation of particular animals or plants (individuals, species etc) and how they evolve across aeons   Ecology is interested in how populations of animals and plants in a particular place interact at a particular point in time. All life in a particular location is interdependent on the other biota and the natural resources (including sunlight).

What is fascinating about ecosystems is that the concept is based in geography but it is scaleable. From ecotopes (the smallest ecologically distinct landscape) through to the biosphere – the entirety of life on Earth, there is a myriad of types of ecologies let alone the huge number of individual ecological patches on Earth. What is important for the discussion here is that there are two disciplines which are co-dependant yet focus on different aspects of the animals or plants. Biology is more straightforward and is easier to conduct in a lab. Ecology because of the complexity of data collection has tended in the past to be more theory driven with some very complex modelling. Gradually, more and more empirical studies are appearing but it is slow.

Society [sociology], (sociologists)

For most of our time as a species that could communicate we have understood ourselves as living in societies (families, tribes, language groups, political empires and political nation-states). The idea of society comes very naturally to us we are relational beings, we are dependent on particular people (carers - mothers, grandmothers etc) for a very long time as we grow up. For most of human history humans stayed within very small geographic places for most of their lives. Not surprisingly we have an academic discipline called sociology. It focusses primary on power and relationships. Power is a universal idea. In every organisation of society, in fact anything above hunter and gather societies there will be leaders.  Likewise relationships, is so universal to human identity it needs no explanation.

Economy [economics], (Economists)

In recent decades we have begun to do away with the notion of society and the language has turned more and more towards economics and business. Thatcher once reportedly said there is no society, confusing governments with societies. 

"I think we've been through a period where too many people have been given to understand that if they have a problem, it's the government's job to cope with it. 'I have a problem, I'll get a grant.' 'I'm homeless, the government must house me.' They're casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It's our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There's no such thing as entitlement, unless someone has first met an obligation."

In the 2000s there was a small movement with the slogan we live in societies not economies.

The truth is we live in both. Economies have always existed, even in the most ancient of societies there was usually complex trading systems. But, while I do not want to live in a communist economy neither do I want to live is in a pure market society with minimal justice and no compassion.

Economic change [innovation studies], (neo-Schumpeterians, innovationists)

In the early years after WWII, particularly after the OECD was established there was growing interest in how first science and then technology impacted the development of economies. As computerisation grew in the 1970s and 1980s there was growing concern over the positive and negative impacts of change. By the end of the 1980s there was a realisation that innovation as it was progressively called rather than technological change had a geographic element. At that point the term ‘innovation systems’ was coined, and ever since the innovation field has focussed on every aspect of geography (nation-states, cities, regions, clusters, industries etc). But as this has become more methodologically focussed it has become narrower and narrower resulting in the emphasis on business competitiveness. At the same time innovation studies has moved from multi-disciplinary research centres such as SPRU to the business schools.

Although conventional economics does not deal well with innovation there are many economists who study innovation. 

Multi-disciplinarity

The way forward is not generalists researching everything but a university structure that supports a matrix organisational operation. In this way teaching by experts can be utilised to form new teaching units out of the specialisations of the existing disciplinary base.

One area where such capability would be helpful is with technology. The emphasis remains on change but what is happening behind the curve is as much changing as what is happening at the frontier.  

Technology [technosphere], (Techneists)

In the 1960s and 1970s there was great interest in the technological society by sociologists and philosophers but almost all of it was prospective. As the changes were slower and less than expected, there was less and less interest in the topic. Today, as ethnographers have run out of conventional unstudied primitive societies to work on more and more are researching the use of technology (in particular digital technology). 

Kevin Kelly in his book “What Technology Wants” coined the term “The Technium’ to give expression to his idea that technology was the 7^th kingdom of life on earth.

Brian Arthur in his book “The Nature of Technology” lays out the following definition of technology.

(1) a means to fulfill a human purpose,
(2) an  assemblage of practices and components(3) a collection of devices and engineering practices available to a culture.  

Arthur seems uncomfortable with the idea of the Technium, yet I think his book lays out an excellent series of reasons why we need to get more serious about the study of technology. The hierarchical  nested, and connected nature of technology is a topic for 21st century exploration.

While I am also uncomfortable with the notion of the Technium, I think there is an itch that is important. We need a biology and ecology of technology.  Just as in biology and ecology there are two disciplines that are closely related it is possible to conceive of two topics innovation studies and technospherics that are different but related.