The flood of cash into startups has allowed companies to stay private for far longer than in the past. On the positive side, companies have more time to develop and grow. But the lack of a public market valuation also raises the question of whether many companies are worth the $1 billion-plus values private investors have attached to them. [Justin Lahart, Wall Street Journal, Oct 30, 17]
The technology industry is now a playground for giants. ... The best start-ups keep being scooped up by the big guys (see Instagram and WhatsApp, owned by Facebook). Those that escape face merciless, sometimes unfair competition (their innovations copied, their projects litigated against). .... The Five run server clouds, app stores, ad networks and venture firms, altars to which the smaller guys must pay a sizable tax just for existing. For the Five, the start-up economy has turned into a heads-I-win-tails-you-lose proposition — they love start-ups, but in the same way that orcas love baby seals. [Farhad Manjoo, NY Times, Oct 18, 17]
How to succeed in science without really trying. [China] now has more laboratory scientists than any other country, outspends the entire European Union on research and development, and produces more scientific articles than any other nation except the United States. ... but a recent string of high-profile scandals over questionable or discredited research has driven home the point in China that to become a scientific superpower, it must first overcome a festering problem of systemic fraud. .... a government investigation highlighted the existence of a thriving online black market that sells everything from positive peer reviews to entire research articles. .... A search for the term “help publishing papers” on Taobao, a popular Chinese e-commerce site, yielded a long list of sellers who offered services ranging from faked peer reviews to entire scientific papers already written and ready to submit. [Amy Qin, New York Times, Oct 13, 17]
Immunotherapy worked. The science of using immunotherapy to treat cancer is advancing rapidly, marked by the National Cancer Institute’s recent disclosure that a metastatic breast-cancer patient is now cancer-free, regulators’ expected approval of a major lymphoma treatment this fall and the unveiling Thursday of a partnership between government researchers and drugmakers. [Thomas Burton, Wall Street Journal, Oct 12, 17]
companies are investing less in the U.S. than at the peak of every economic cycle since the mid-1970s ... Low [interest] rates tell chief executives that the economic outlook is grim .... investors discouraged from saving have sent a clear signal to CEOs, pushing up the shares of companies that give cash back to shareholders via dividends and buybacks. CEOs who want to maximize their bonuses shouldn’t go on an investment splurge. .... China has been overinvesting and accepting a low return on capital; why would a U.S. company invest when China is willing to do it more cheaply on their behalf? American consumers get cheaper products, and China gets factories. [James Mackintosh, Wall Street Journal, Oct 9, 17] The future for capital investment? Your guess.
“We have a lot of businesses... I don’t think any of them are non-competitive in the world because of the corporate tax rate,” [Warren] Buffett, the chairman and CEO of Berkshire Hathaway, told CNBC
Discovery miracle sought. The kind of [energy tech] miracles that [Bill] Gates seeks [with $2billion] are not to be found in the corporate R&D departments of Google, GM, Apple, or Monsanto, nor in the R&D budget of the U.S. Department of Energy [because] they do not leap over the miracle hurdle Gates describes. .... Google is nearly nineteen years old. Bell Labs was just a dozen years old when one of its scientists was awarded the 1937 Nobel Prize in physics along with George Thomson for confirming experimentally Louis de Broglie’s wave–particle theory of matter. ... But there is no evidence that any corporation, much less any corporation in the high-tech sector, is interested in returning to anything like the Bell Labs model. .... Randy Schekman’s Nobel Prize-winning discovery emerged from work he did on how molecules in yeast proteins operate. in his Nobel banquet speech, Schekman said he and his team had “no notion of any practical application” and were driven entirely by curiosity. Yet their research ended up providing a roadmap for the biotechnology industry to manufacture “commercially useful quantities of human proteins” — an especially useful result when one considers that “one-third of the world’s supply of recombinant human insulin is produced in yeast.” [Mark Mills, New Atlantis, Spring 2017]
How many scientists? “It’s getting harder and harder to make new ideas, and the economy is more or less compensating for that,” Nicholas Bloom, one of the authors and an economics professor at Stanford University, tells Stanford Insights’s May Wong. “The only way we’ve been able to roughly maintain growth is to throw more and more scientists at it.” How many scientists? Well, consider Moore’s Law. Maintaining the theorem’s promised pace of innovation has required a research force 75 times larger than what was required in 1971, Ms. Wong writes. [Tom Loftus, Wall Street Journal, Sep 29, 17] Meanwhile The driving force is now an audacious, talented and globally minded generation of entrepreneurs. Investors are placing big bets on them. Around $77bn of venture-capital (VC) investment poured into Chinese firms from 2014 to 2016, up from $12bn between 2011 and 2013. Last year China led the world in financial-technology investments and is closing on America, the global pacesetter, in other sectors [The Economist, Sep 23, 17]
Less innovation for the money. across the economy as a whole, the notion that the cost of ideas is rising holds true. Since the 1930s, the effective number of researchers at work has increased by a factor of 23. But annual growth in productivity has declined [The Economist, Sep 30, 17]
Whether the information is true or concocted, authoritative reporting or conspiratorial opinion, doesn’t really seem to matter much to Facebook. The crowd gets what it wants and deserves. ... The whole [Facebook algorithmic] effort is to make human beings predictable – to anticipate their behaviour, which makes them easier to manipulate. [Franklin Foer, The Guardian, Sep 22, 17]
Entrepreneurs jumping the border. “Numerous startups in the tech hub of Toronto say they have had steady, double-digit increases in job applications from the United States since last year’s presidential election,” online news site Axios reported Sept. 20. [San Jose Mercury News, Sep 11, 17]
“We’re still in a start-up funk,” said Robert Litan, an economist and antitrust lawyer who has studied the [decline of startups] issue. ... Many economists say the answer could lie in the rising power of the biggest corporations, which they argue is stifling entrepreneurship by making it easier for incumbent businesses to swat away challengers — or else to swallow them before they become a serious threat. .... The newly formed Center for American Entrepreneurship will conduct research on the importance of new businesses to the economy and push for policies aimed at improving the start-up rate. Its founding president, John Dearie, comes from big business — he was most recently the acting head of the Financial Services Forum, which represents big financial institutions. [Ben Casselman, New York Times, Sep 20, 17]
Fatal Innovation. the French biotech firm Cellectis announced that its clinical trials involving genetically modified immune cells to treat two different types of cancer had been halted by the FDA after a patient was killed (Cellectis's stock took a beating on the announcement). The trials aimed to prove that a more advanced version of CAR-T, known as "off the shelf" or "universal" CAR-T, could work. The treatment tweaks T cells from a donor to turn them into cancer-killers and then infuses them into a patient. [Michael Reilly, technologyreview.com, Sep 6, 17]
Mr.[Greg] Ip is correct is saying we are asking the wrong thing from economists—that is, predictive solutions for an unknowable future. I liken this to our often blind faith in elite experts of every stripe to solve our problems for us. Thomas Sowell had the best answer for setting our expectations for economists when he sagely noted, “Economics is not about solutions; it is about trade-offs.” Overlaying all economic pronouncements with this insight would give everyone a more reliable model of how the world actually works. [Jack Lochrie, Farmington Hills, Mich, WSJ Sep 2, 17]. Unfortunately, politicians predict the future,usually as more of the present.
How little we know. There’s only one definitive statement to make about economic growth: We understand very little about why it occurs. To be sure, we don’t lack for theories. More than a few ideologues would have us believe that government can create dynamism at will, if only it would lower tax rates/raise tax rates/build more public works/cut social programs/return to the gold standard/increase spending on research. In truth, though, the forces that accelerate growth and raise incomes are not so easily managed. [Marc Levinson, reviewing Harford's Fifty Inventions that shaped the Modern Economy, WSJ, Aug 25, 17]
Antengene (China) has gained a healthy $21 million series A just a few months after setting up a deal with Celgene. [Ben Adams, Fierce Biotech, Aug 16, 17]
Entrepreneur Incentive. As the one-child generation enters the marriageable age, young men face a very competitive marriage market. In order to attract potential brides, families with sons choose to work harder, save more, and take on more risks, including exhibiting a higher propensity to be entrepreneurs (Wei and Zhang 2011a, b; Chang and Zhang 2015; Wei, Zhang, and Liu forthcoming). It is estimated that increasing marriage market competition due to sex ratio imbalances has contributed to about two percentage points of economic growth per year (Wei and Zhang 2011b) [Shang-Jin Wei, Zhuan Xie, and Xiaobo Zhang, Journal of Economic Perspectives, Winter 2017]
A California state senator says she will introduce legislation to clarify legal protections for entrepreneurs facing sexual harassment. State Sen. Hannah-Beth Jackson says the proposal, which she revealed, is in response to “recent and stunning” allegations by women entrepreneurs of harassment by venture capitalists. The proposal would amend California’s Unruh Civil Rights Act, ... would amend California’s Unruh Civil Rights Act, which prohibits sexual discrimination at California businesses, to clarify that it covers sexual harassment in relationships between entrepreneurs and potential investors. [Nitasha Tiku, wired.com., Aug 18, 17]
Venture Atlanta announced today that it will partner with Techstars Atlanta for its 10th Annual Venture Atlanta Conference Oct 11-12. With Cox Enterprises as the headline sponsor, the conference will incorporate the Techstars Atlanta Demo Day, featuring presentations from the program's 2017 class of 10 startups..... More than 900 tech enthusiasts, entrepreneurs, premiere investors and key executives from across the country are expected to join the 2017 Venture Atlanta Conference. This year, the event is particularly notable as it marks Venture Atlanta's 10-year anniversary. [cellular-news.com, Jul 27, 17]
America Has Lost a Monopoly on Top-Tier Tech Firms China’s Alibaba and Tencent have rocketed this year to become global investor darlings, inching up on Facebook and Amazon. [By PAUL MOZUR New York Times, Aug 17, 17] More world competition for the business of billions of non-Americans. Having the best tech is only a partial source of business volume and profit. The huge American home market that powered American companies' advantages in world competition since WW II is still huge but shrinking as a fraction of world markets.
Unwanted innovation. Danish drug giant Novo Nordisk is living through a corporate nightmare that any CEO might recognize from business school. After the company concentrated on making essentially one product [insulin] better and better—and charging more and more—customers have suddenly stopped paying for all that improvement. The established versions are, well, good enough. ... In Europe, the company had hoped to price Tresiba at 60%-70% higher than its previous product. ... Executives are scrambling to diversify—pouring money into research outside its core insulin-focused science. The company announced 1,000 job cuts last fall [Denise Roland, Wall Street Journal, Aug 15, 17]
Middle-aged capitalism. Consider: 1. Companies have gotten older. In 1975, the average publicly traded business was 10.9 years old. In 2015, the average was 18 years. The implication is that surviving firms either are more efficient or have stronger market positions in their industries. 2. the number of publicly traded companies has dropped sharply, from 7,002 in 1995 to 3,766 in 2015. The main cause, say Kahle and Stulz, is mergers. Small and medium-sized firms — many of them younger — prefer to sell out to larger corporations rather than compete as free-standing firms. 3. Companies are paying out record amounts to their shareholders, either as dividends or share buybacks. In 2015, nearly half of corporate profits (47 percent) were returned to shareholders, almost double the rate in 1975 (27 percent). This suggests that companies either lack attractive investment opportunities or are too risk-averse to take them. [Robert Samuelson, citing findings in Journal of Economic Perspectives by Kathleen M. Kahle of the University of Arizona and René M. Stulz of Ohio State University.]
A Cancer Conundrum: Too Many Drug Trials, Too Few Patients Breakthroughs in immunotherapy and a rush to develop profitable new treatments have brought a crush of clinical trials scrambling for patients. ... there are more than 1,000 immunotherapy trials underway, and the number keeps growing. “It’s hard to imagine we can support more than 1,000 studies,” said Dr. Daniel Chen, a vice president at Genentech, a biotechnology company. [GINA KOLATA, New York Times, Aug 12, 17]
Avoiding investment. The median firm in the S&P 500 holds 62 cents of cash on its balance-sheet per dollar of gross operating profit, up from 45 cents in 2006 (this yardstick excludes America’s giant technology companies, which hoard money). [The Economist, Aug 12, 17]
U.S. worker productivity picked up modestly in the second quarter but showed little sign of breaking out of the sluggish trend that has prevailed for more than a decade, holding back economic growth and living standards. [Wall Street Journal, Aug 9, 17]
Desperate economics. Foxconn (China) announced it will be building its first U.S. plant in the former manufacturing hub of Kenosha, WI [which will pay] almost a quarter-million per job, which will pay an average of $54,000 per year. ... It’s 50 times as much as the previous record-holder, the motor and engine company Mercury Marine. [Adam Golenbeck, realclearmarkest.com, Jul 25, 17]
China’s Next Target: The semiconductor industry, a stalwart of the global economy, is succumbing to fierce nationalistic competition, as China aims to dominate the market as it did with steel and solar panels. [Wall Street Journal, Jul 27,17]
Scientists go digital. As part of its shift toward high-tech businesses, the 125-year-old [General Electric] company is threading artificial intelligence throughout its operations, starting with its scientists. ... Part chemist, part data scientist, [PhD chemistry Jason] Nichols is now exactly the type of hybrid employee crucial to the future of a company working to inject artificial intelligence into its machines and industrial processes. ... Many of these dual scientists help make cloud-hosted software models of GE’s machines that can be used to save money and improve safety for its customers. Or Else In January, the company laid off researchers in areas deemed peripheral to GE’s “digital industrial” strategy. [Elizabeth Woyke, technologyreview.com, June 27, 2017]
Repare Therapeutics (Canada) announced a $68 M Series A funding after more than 18 months in stealth. ... aiming to fight cancer with synthetic lethality [Corie Lok, xconomy.com, Jun 22, 17]
Merck KGaA (Germany) pharmaceutical and life sciences company, launched a digital information center where it will experiment with virtual and augmentsed reality. [Will Anderson, Austin Business Journal , Jun 12, 17]
The Kauffman Foundation’s recently updated Index of Startup Activity finds that startup activity has increased for the third consecutive year and has now reached pre-recession levels. Nationally, the index, which measures business startup activity from 1997 to 2016, increased moderately after two years of sharp growth. [SSTI, May 31, 17]
A watchdog site calling out academic publishers for incorrectly charging readers for open access papers is gaining momentum. The site, Paywall Watch, tracks papers published in open access (OA) journals that are supposed to make content freely available online but instead appear behind a paywall for readers. [Dalmeet Singh Chawla, the Scientist, May 31, 2017]
a golden rule: When the product is free, that means you are the product. Your privacy is the cost of a free social network, free tax prep or free photo storage. [Geoffrey A. Fowler, Wall Street Journal, May 31, 17]
If a new version of an antibiotic of last resort lives up to its promise, that date with doom may be averted. A study on this bolstered form of vancomycin by scientists at The Scripps Research Institute in La Jolla was released Monday. ... three modifications to vancomycin, all lethal to bacteria and independent of each other. ... The study was published in the Proceedings of the National Academy of Sciences. .... Once made available online, the report can be found at j.mp/bogervanco. [Bradley Fikes, San Diego Union Tribune, May 29, 17]
China is investing billions of dollars into growing its own biotechnology industry. ... Li Yan, general manager of Qilu Pharmaceutical was here to preside over her company’s opening of the area’s first Chinese-owned biotech incubator: the Qilu (pronounced chee-lew) Boston Innovation Center. The new 25,000-square-foot center in Brighton eventually could house up to 10 early-stage drug discovery companies in its sparkling first-floor labs [below] home office and research center of QLB Biotherapeutics startup that is an arm of the big Chinese drug maker. [Robert Weisman, Boston Globe, May 26, 17]
Only the best for only the richest. The first gene therapy treatment approved outside China is being pulled from the market because of a lack of demand. In 2012, European regulators approved Glybera to treat an ultrarare genetic disorder in which patients lack an enzyme called lipoprotein lipase that breaks down fats in the blood. But Glybera, which consists of viruses that insert a gene coding for the enzyme into muscle cells, cost $1 million a year, making it the most expensive drug in the world, and only one patient has had the treatment. Glybera's manufacturer, Amsterdam-based uniQure, said on 20 April that it would not seek to renew the drug's marketing approval when it expires later this year, noting that use “has been extremely limited.” Gene therapy observers say that more clearly effective gene therapies for diseases such as inherited immune disorders and hemophilia are still on track—although they, too, may come with eye-popping price tags. [Science, Apr 18, 17]
Giving the youngsters a break. NIH will start rationing grants to experienced investigators. In a May 2 announcement it plans to cap the number of grants an investigator can hold in order to free up funding for early-career scientists and those struggling to keep their labs afloat. It noted that numerous studies have found that as biomedical labs get bigger, their rise in productivity tapers off. The announcement did not touch on SBIR/STTR awards which may require Congressional action for such a change.
Making blood. Scientists at Boston Children’s Hospital in Massachusetts successfully turned human stem cells into the cells that produce red and white blood cells and platelets. A team at Weill Cornell Medical College in New York City achieved a similar feat starting with mouse cells. Results decades in the making, they may one day help create blood transfusions in the lab. [MIT Technology Review, May 18, 17]
Kasparov now believes computers will take over menial mental tasks and thus allow humans to pursue ‘creativity, curiosity, beauty, and joy.’ [Robin Hanson reviews “Deep Thinking: Where Machine Intelligence Ends and Human Creativity Begins” by Garry Kasparov, Wall Street Journal, May 18, 17] Of course, the humans will still need a means of support to affiord their enriching pursuits.
Juicero made the perfect punchline: a celebrated startup that had received a fawning profile from the New York Times and $120m in funding from blue-chip VCs ... was selling an expensive [$400 a copy] way to automate something you could do faster for free. ... another example of how profoundly anti-innovation America has become .... That’s because real innovation is very expensive to produce: it involves pouring extravagant sums of money into research projects that may fail, or at the very least may never yield a commercially viable product. In other words, it requires a lot of risk – something that, myth-making aside, capitalist firms have little appetite for. ... The economy becomes a mechanism for making the rich richer, and the money that might be used to finance the next internet is allocated to sports cars and superyachts. [Ben Tarnoff, The Guardian (UK), May 11, 17]
there are already lots of proven use-cases where AI is being used to augment the medical profession. One proven area is in medical imaging where AI and computer vision is helping with medical scan and imaging analysis to help support radiologists and other clinicians. One startup operating in this space is AIdoc Medical (Israel). ... solution is an AI system that can look at an [medical scan] anatomical area and detect high-level visual abnormalities, based on what the radiologist would like to see. [Steve O'Hear, techcrunch.com, Apr 26, 17]
The American economy is poised to embark on an innovation boom of historic proportions that will undermine incumbent players, transform everyday life, and make some alert investors very rich. .... The combination of advances in platforms and intolerable pain is about to result in an explosion in entirely new applications that are inexpensive to operate, are far less likely to fail, are far more secure, and easily accommodate unimagined advances in ease of use and effective output. This scenario will be seen in sector after sector. [John Michaelson, CEO of Michaelson Capital Partners, Wall Street Journal, May 10, 17]
I believe the accelerations set loose by Silicon Valley in technology and digital globalization have created a world where every decent job demands more skill and, now, lifelong learning. More people can’t keep up, and clearly some have reached for leaders who promise to stop the wind. [Tom Friedman, New York Times, May 10, 17]
"We were young and ignorant then; Now we're old and ignorant." -- Charlie Munger, Warren Buffet's 93-year-old alter-ego. Charlie's other gems from the annual meeting attended by 40,000.
Engineers at the AMRC (University of Sheffield Advanced Manufacturing Research Centre, Sheffield (England)) have developed a hybrid 3D printing process that allows electrical, optical and structural elements to be introduced throughout an additively manufactured component during the build process ... With the project currently at patent-pending status, [inventor of the technique, Mark] Cocking was tight-lipped on specific technical details but he did confirm that the process – which is fully automated – is able to embed strands – and potentially even tubes – of different materials groups such as copper, fibre optic, steel, and nitinol during the 3D printing process. He added that the technique also allows unbroken connectivity through X, Y and Z axis directions and that single or multiple strands can be embedded at a rate that does not effect the original build time of the component. [The Engineer, May 4, 17]
As [Drezner] tells it, three large-scale forces have remade the marketplace of ideas. The erosion of trust in prestigious institutions, the polarization of American politics, and the dramatic growth in economic inequality has made wealthy individuals and corporations into the primary buyers, dominating the market. [Noah Millman reviewing Daniel Drezner's The Ideas Industry, New York Times, May 6, 17]
“The causes of the current slowdown can be summed up as the Three Ds: depopulation, deleveraging and deglobalization. Between the end of World War II and the financial crisis of 2008, the global economy was supercharged by explosive population growth, a debt boom that fueled investment and boosted productivity, and an astonishing increase in cross-border flows of goods, money and people. Today, all three trends have begun to sharply decelerate: families are having fewer children . . . , banks are not expanding their lending [as before] . . . , and countries are engaging in less cross-border trade.” [Robert Samuelson quoting Ruchir Sharma, a top investment strategist at Morgan Stanley, Washington Post, May 7, 17] Beware of politicians' promises of big growth from their pet-rock, applause-tested ideas.
Why do we do it? Einstein famously noted that the “ground aim of all science is to cover the greatest number of empirical facts by deductions from the smallest possible number of hypotheses.” A comparable ethos is on display in “Behave,” and yet Mr. Sapolsky gives respectful as well as highly sympathetic and well-informed attention to the various “higher” levels of explanation—sociological, anthropological, economic—that contribute to a fully articulated explanation of complex human phenomena. ... It’s no exaggeration to say that “Behave” is one of the best nonfiction books I’ve ever read. [ David P. Barash reviewing Robert Sapolsky's Behave, Wall Street Journal, May 1, 17]
Sounds good, does little. Between 2000 and 2016, most of the U.S.’ largest trading partners cut their corporate rates. But. There is little compelling evidence any enjoyed substantially faster growth as a result, and certainly not on the scale of Mr. Trump’s ambitions; he wants to push the U.S. long-term growth rate from its current 2% to 3%. [Greg Ip, Wall Street Journal, May 1, 17]
Chemical discovery. Federica Bertocchini, a biologist at Spain's Institute of Biomedicine and Biotechnology of Cantabria and a hobbyist beekeeper, used [a plastic] bag to collect pests called wax worms. The caterpillars, the larvae of the mothGalleria mellonella , had infested her hives, chowing down on honey and wax. .... only to find “the worms all around and the plastic bag full of holes,” as Bertocchini said in an email to The Washington Post. ... three scientists reported Monday in the journal Current Biology, the wax worms aren't simply chewing the plastic into tiny bits. Instead, it appears that the animals — or something inside them — can digest polyethylene, a common plastic, producing ethylene glycol. ... The new report did not prove that the caterpillars were the responsible organisms. “At this point in time, we do not know if the caterpillars themselves are producing a digestive enzyme or might it be bacteria in their gut,” Bombelli, a biochemist at Cambridge, wrote to The Post. “Or it might be a bit of both!” [Ben Guarino, Washington Post, Apr 24, 17]
Harry Huskey, one of the last surviving scientists in the vanguard of the computer revolution, who helped develop what was once billed as the first personal computer because it took only one person to operate, though it was the size of two refrigerators, died on April 9. He was 101. [Sam Roberts, New York Times, Apr 20, 17]
Waxing nostalgic about jobs lost to technology is little better than complaining that antibiotics put too many gravediggers out of work. [Gary Kasparov, WSJ, Apr 14, 17]
Jackpot. In 1992, Zachary Zimmerman loaded up his car and drove from Pennsylvania to San Diego. Armed only with a bachelor’s degree in cellular and molecular biology, he pulled into the parking lot at the famed Scripps Research Institute in La Jolla and began hunting for a gig on its job board. He toiled as a technician, washing Petri dishes and emptying the trash. On Thursday, he and the other five employees at the company Forge Therapeutics in San Diego won an $8.8 million research award to spur development of a potentially groundbreaking class of treatments against the world’s deadliest drug-resistant bacteria known as “superbugs.” [Carl Prine, San Diego Union Tribune, Mar 31, 17]
Need quality techies? Nearly 40 percent of tech workers in the Bay Area are looking to move elsewhere [Silicon Valley Business Journal, Apr 4, 17] They would no doubt prefer their present "worth" and weather in a lower cost place.
Affordable desalination might be on the way: a graphene oxide sieve with pores of less than 1 nanometer in diameter is able to filter salt out of water.[technologyreview, Apr 3, 17] Read the science.
Brave prediction. Artificial intelligence and robots will not only perform many unpleasant and super-human tasks but also will complement our most human capabilities and make workers more productive than ever. Humans equipped with boundless information, machine intelligence, and robot strength will create many new types of jobs. [Michael Mandel and Bret Swanson, The Coming Productivity Boom Technology CEO Council, March 2017] Authors' analysis not shown, just their opinions. Ok for politics, but not for science and economics.
Productivity a mixed benefit? More than a third of U.S. jobs could be at “high risk” of automation by the early 2030s, a percentage that’s greater than in Britain, Germany and Japan, according to a report ..by accounting and consulting firm PwC, [which] emphasized that its estimates are based on the anticipated capabilities of robotics and artificial intelligence, and that the pace and direction of technological progress are “uncertain.” [Samantha Masunaga, Los Angeles Times, Mar 26, 17] With infinite R&D funding, we could infinitely reduce job counts to near zero while everyone enjoys vacation.
IBM and Google both said they aim to commercialize quantum computers within the next few years (Google specified five), selling access to the exotic machines in a new kind of cloud service. .... the first quantum computer to start paying its way with useful work in the real world looks likely to do so by helping chemists trying to do things like improve batteries or electronics [by], simulating molecules and reactions. [Tom Simonite, technologyreview.com, March 17, 2017] Good luck with that incursion into the life of molecules; just don't be shocked to run into the same morass of uncertainty as plagues the climate modellers.
Beijing is pushing Chinese firms to invest in early-stage U.S. companies specializing in technology with potential military applications, a [DOD white paper]says. ... AI startup Neurala (Boston, MA; no SBIR) turned to China for minority share in a capital raise when US military showed little interest. [Paul Mozur and Jane Perlez, New York Times, Mar 23, 17]
[Warren] Buffett quipped in 1999 that a farsighted capitalist should have shot down Orville Wright at Kitty Hawk in 1903, so as to avoid the century of operating losses in the airline industry that followed. [Dan McSwain, San Diego Union Tribune, Mar 19, 17]
Illinois Science & Technology Coalition released its Winter 2017 Innovation Index, identifying 804 university startups since 2016, including 129 from tech transfer activities and 497 remaining in Illinois. [SSTI, Mar 16, 17]
The University of Texas MD Anderson Cancer Center launched an ambitious project with IBM Watson to transform cancer care with the help of artificial intelligence. Almost five years and more than $62 million later, the institution has little to show for it, according to an audit by the [UT] System Audit Office [that]doesn’t evaluate IBM Watson’s scientific capabilities or whether the technology works for this purpose. ... An IBM spokeswoman said the “pilot was a success, and likely could have been taken forward had MD Anderson chosen to do so.” ... [an IBM] senior vice president of cognitive solutions and IBM Research said the Watson system was “all set to go.” He added that it would only take “months to get it up and running” if MD Anderson gave IBM “the green light. [Daniela Hernandez, Wall Street Journal, Mar 8, 17]
Just three years after opening its doors, San Diego’s only proton therapy center is seeking Chapter 11 bankruptcy protection. .... The center opened in 2014 with five treatment bays and a 90-ton cyclotron that used magnets to accelerate protons to two thirds the speed of light. Hopes were high that patients would come flooding in to have tumors of all kinds treated. [Paul Sisson, San Diego Union Tribune, Mar 2, 17]
Incubator U. For tech hubs to thrive, a city or region needs a nearby university, with a strong research and engineering tradition, providing a constant supply of skilled graduates. However, that isn’t enough. “There must also be a culture of tech commercialization within any nearby university,” says Chuck Eesley, affiliated faculty member at the Stanford Technology Ventures Program. “There’s no place for the Ivory Tower academic mindset, or the idea that commercialization somehow gets your hands dirty.” University incubators are already responsible for the commercialization of academic research output. But, in most cases, their influence is minor and peripheral. “Perhaps the university of tomorrow should be more like one big incubator,” suggests McLoughlin. [John Holden, techcrunch.com, Feb 21, 17]
Employees switch jobs at half the rate they did 15 years ago. Entrepreneurship has also plunged: Only 7%-8% of U.S. companies are start-ups, down from 12%-13% in the 1980s. .... a useful corrective to the conventional wisdom that American ingenuity, sooner or later, will revive a low-growth economy. There’s much less progress under way than most people think, and a prolonged era of sluggishness seems ever more likely. [Matthew Rees reviewing Tyler Cowen's The Complacent Class, Wall Street Journal, Feb 27, 17]
Scrunch up in the tail. United and American airlines are starting their super-austere economy sub-class fares that barely allow you to board the plane and sit on your carry-on in a tight seat near the tail for about a 10% discount from today's regular steerage price. First experimental subjects from Minneapolis in April.
the city of Boston has opened a new facility just for robotics startups. The nonprofit hub, MassRobotics, at 12 Channel Street in Boston’s Seaport Innovation District. [TechCrunch, Feb 17, 17]
Tech and healthcare entrepreneurs are less optimistic this year amid growing uncertainty about funding, finding talent and how new government regulations will affect their startups, according to an annual report by Silicon Valley Bank. [Cromwell Schubarth, Silicon Valley Business Journal, Feb 14, 17]
the upswing is global: In Europe, Japan, China and elsewhere, business surveys and markets have turned markedly more optimistic. This is partly because investors hope that any fiscal stimulus Mr. Trump enacts will spill over to other countries. [Greg Ip, Wall Street Journal, Feb 15, 17] Love that government spending (with lowered tax revenue) on borrowed money. Borrow in haste, let the children repent at leisure.
The MacArthur Foundation, known for bestowing its annual “genius” grants on artists, actors and other creative people, announced the eight semifinalists in a new competition: come up with the best proposal to solve a global problem, with a reward of $100 million. Out of more than 1,900 proposals submitted, the foundation’s judges chose eight: Orphanage care, Malnutrition in developing countries, Needless blindness, Americans without health insurance, Lack of access to books online, Newborn deaths in Africa, Lack of education for displaced children, River blindness in Nigeria. .... the award will be given out every three years [Graham Bowley, New York Times, Feb 15, 17] Can private funding of private entities do a better job than government to government?
Today, nearly half of young people under age 18 are racial minorities and a quarter are first and second generation immigrants. And this fraction will grow as the white population continues to age. [William Frey, Brookings, Feb 10, 17]
Manufacturing Jobs Aren’t Coming Back A town that once relied on textile mills for its economic lifeblood, Greenville, South Carolina, should be dead. Instead, it’s booming, thanks to big investment from companies like BMW, Michelin, and General Electric. But there’s a catch: the new factories going in are increasingly automated and employ fewer workers. Getting a job in one of these plants isn’t easy. Can We Build Tomorrow’s Breakthroughs? American manufacturing is in trouble. If it can be saved—and that’s a big “if”—it’s going to require old-guard companies to reinvent themselves while small startups find a way to build disruptive products that can be produced at scale. Nowhere is this more evident than in Michigan, where new prospects are taking shape in the automotive industry. [technologyreview.com, Feb 9, 17]
The U.S. economy has become less innovative and entrepreneurial. From 1977 to 2014, the number of new firms per $1 billion in GDP fell from 95 to 25, and the number of patents outside of health and IT per $1 billion halved relative to the 1980s. [Dynamism in Retreat, Economic Innovation Group, Feb 2017] Read the Dynamism in Retreat report.
Shrinking dynamism. While economic dynamism has powered U.S. prosperity for generations, it is now declining in nearly every definition of the term, according to new research from the D.C.-based think-tank and advocacy organization Economic Innovation Group (EIG). In Dynamism in Collapse, an analysis of economic conditions from 1977 to 2014, EIG finds that dynamism has decreased substantially, as seen in diminishing rates of job turnover, the share of employment in new companies, and the percentage of the population moving across state lines. This eroding dynamism, the report finds, has led to considerable challenges for regions, markets, and workers. [SSTI, Feb 8, 17] Read Dynamism in Collapse report.
Immigrants needed. Minnesota’s future population and economic growth depends on increased immigrant and refugee admissions. That’s the conclusion of a recent University of Minnesota report underlining the state's shrinking workforce, its aging baby boomer generation and the need for foreign-born workers to help lead sustained economic growth. As detailed in the “Immigrants and Minnesota’s Workforce” report, ... Yet Minnesota isn’t really equipped to make up that loss with the growth of the native population, according to the study. [Ibrahim Hirsi, Twin Cities Business, Feb 9, 17] Read the report Immigrants and Minnesota’s Workforce.
The best research to date indicates that 47 percent of all U.S. jobs are likely to be replaced by technology over the next 10 to 15 years, more than 80 million in all, according to the Bank of England. [Ed Hess, Washington Post, Feb 8, 17]
while immigrants represent about 15 percent of the general U.S. workforce, they account for around a quarter of entrepreneurs and a quarter of inventors in the U.S. Moreover, over a third of new firms have at least one immigrant entrepreneur in its initial leadership team. [Dany Bahar, Brookings, Feb 7, 17]
Thanks to automation, we now make 85 percent more goods than we did in 1987, but with only two-thirds the number of workers. This suggests that while Mr. Trump can browbeat manufacturers into staying in America, he can’t force them to hire many people. Instead, companies will most likely invest in lots and lots of robots. AND The robots won’t be made in America. They might be made in China. [Farhad Manjoo, New York Times, Jan 25, 17]
Scientists at The Scripps Research Institute in La Jolla say they have engineered the first stable life form that incorporates artificial DNA The semi-synthetic organism is an improved version of one unveiled in 2014, said Floyd Romesberg, who led the team that created both versions. [Bradley Fikes, San Diego Union Tribune, Jan 23, 17]
manufacturing jobs, as contrasted with manufacturing activity, are not coming back to the United States, nor are they coming back most anywhere. New technologies have been rapidly eliminating manufacturing jobs everywhere — even in China. ... Mr. Trump will soon find out that to increase the total number of jobs at higher real wages, the United States will need more trade rather than less. Trade increases the extent of the market, thus reducing unit costs, and allows for comparative advantage, making better use of labor (resulting in higher real wages) and capital everywhere. [Richard Rahn, Washington Times, Jan 23, 17]
Economic reality. For decades, Americans believed that they were riding a magic carpet of economic growth, owing to advances in science and, later, to the rise of Silicon Valley. In fact, growth in total factor productivity has been slow since the early 1970s. The 1996-2004 Internet boom was only a fleeting departure from the trend. Over time, as businesses have cut back on investment in response to diminishing returns, growth in labor productivity and hourly wages has slowed, and workers in many households have dropped out of the workforce. .... as I show in my book Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change, American innovation first began declining or narrowing as far back as the late 1960s. [Edmund Phelps, Project Syndicate, Jan 16, 17] Look askance at glowing growth projections from political maneuvers.
We don’t have a clear definition of “great,” or of the historical moment when, presumably, America was truly great. ... because the country is wealthier than it has ever been: Real per capita household net worth has reached a record high, as Federal Reserve Board data shows. But the distribution of wealth has certainly changed: Inequality has widened significantly. [Robert Shiller, NYTimes, Jan 12, 17] Nevertheless, "we" elected one of the greatly unequal to remedy the inequity of the uncompetitively educated who used to rely on labor unions for their mutual protection, before the greatly unequal destroyed the unions with automation and "right-to-work" laws.
Monopoly growth. According to research at the New America Foundation, the number of start-ups fell 53 percent in the years between 1977 and 2010 when the country stopped seriously enforcing antitrust laws. ... Three companies control 99 percent of the drug stores in the country. ... The bigger monopolists get, the more resources they can spend on lobbying government to change the rules or protect their advantages. [Justin Talbot-Zorn, thenation.com, Jan 16, 17] Capitalism left untended would concentrate business in ever larger monopolies. The 21st century is returning to the 19th century.
CIA-backed Arlington venture fund In-Q-Tel is boosting investment in security software platform Phantom, in the California company's new $13.5M seed round . The Kleiner Perkins-led round will add to the company's sales and engineering for its automated security software platform. In-Q-Tel was part of the company's first funding round in March. [DC InnoBeat, Jan 12, 17]
Celgene is paying Anokion (Swiss) $45 million up front. ... Anokion has laboratories in Cambridge, MA, stands to gain an additional $10 million if the company hits pre-clinical milestones. The deal also gives Celgene an equity stake in Anokion plus the exclusive right to buy the biotech at a pre-specified but undisclosed point. In the meantime, Anokion will keep control of its research and development programs. Anokion’s research focuses on immune tolerance, the process in which the immune system learns to recognize the proteins of invading agents, such as bacteria or viruses. [Frank Vinluan, xconomy.com, Jan 9, 17]
More than one-third of tech professionals are earning at least 10% less than they could command if they looked for a new job today, according to salary-data firm Paysa. [Lauren Weber, Wall Street Journal, Jan 10, 17]
For the 24th year in a row, IBM again took home the top spot in the annual race of new patents, racking up a record 8,088 patents in 2016, or roughly 22 patents per day. [Luke Stangel, Silicon Valley Business Journal, Jan 9, 16] How many lawyers do you think that takes?
George Scangos is back in the Bay Area, targeting HIV and other infectious diseases. The former Exelixis CEO — who spent the past six-plus years leading Boston-area biotech Biogen — is CEO of Vir Biotechnology ... backed by $150 million from Arch Venture Partners, an equity investment from the Bill & Melinda Gates Foundation and other unspecified investors. [Ron Leuty, San Francisco Business Times, Jan 5, 17]
A team at Hewlett Packard Labs has built what it claims to be the biggest and most complex light-based computer chip, which could solve traveling salesman problems faster than conventional hardware. Read IEEE paper By Rachel Courtland.
----------------------------------------------------- 2017 ---------------------------------------------
----------------------------------------------------- 2016 ---------------------------------------------
Establishing correlations, causality and logical interpretation for why innovation occurs has occupied much social science theory and research — to mixed results. Sometimes invention emerges from quirky, stubborn isolation and greed, and unfortunately sometimes from repressive, authoritarian and totalitarian regimes. If America has proved particularly fertile for ingenuity, though, the reasons won’t be found in this pleasant but superficial book. [Richard Kurin reviewing Baker's AMERICA THE INGENIOUS, NewYork Times, Jan 1, 17] For a variety of reasons, innovation (that horrid overused word) thrives in America. One certain helper is the wealth of capital seeking an outsize return. Which undercuts the pleadings for government programs like SBIR and results in government picking winners among the uncompetitive for private capital who cannot or will not swim in the capital ocean.
Let’s be honest: no one knows what is happening in the world economy today. Recovery from the collapse of 2008 has been unexpectedly slow. .... Policymakers don’t know what to do. They press the usual (and unusual) levers and nothing happens. Quantitative easing was supposed to bring inflation “back to target.” It didn’t. Fiscal contraction was supposed to restore confidence. It didn’t. ..... What unites the great economists, and many other good ones, is a broad education and outlook. This gives them access to many different ways of understanding the economy. The giants of earlier generations knew a lot of things besides economics. Keynes graduated in mathematics, but was steeped in the classics (and studied economics for less than a year before starting to teach it). Schumpeter got his PhD in law; Hayek’s were in law and political science, and he also studied philosophy, psychology, and brain anatomy. Today’s professional economists, by contrast, have studied almost nothing but economics. [Robert Skidelsky, project-syndicate.org, Dec 28, 16] But despair not, a national referendum has chosen an economic saviour - Trump - with promises unlimited.
a middle-school English teacher tried to get [author Michael Lewis] suspended. He had assigned the class to write a report on the historical novel “Johnny Tremain.” Michael turned in a piece that was so good, the teacher asked how he had done it. Michael merrily admitted that he had copied his report directly from the back cover of the book. When ordered to write 100 times “I will not plagiarize,” Michael shot back that the task seemed to him another form of plagiarism. It took the intervention of the headmaster to protect him from being suspended. [Walter Isaacson, Washington Post, Jan 1, 2017] Lewis has succeeded again with the praised The Undoing Project.
stand alone. A
tiny segment of U.S.
appears to be thriving—the one with no employees. ... The
of businesses classified as manufacturers with no employees has been
rising steadily since the depths of the recession. The tiny operations
often make food, craft beer, toiletries or other niche products. Their
growth stands out in a sector that has been shedding workers for
decades. [Jeffrey Sparshott, Wall Street
Journal, Dec 28,
16] No matter to politicians who root for small biz but push
real money to big biz with lobbyists and campaign contributions.
Fortunately, there's not much evidence of real corruption with personal profit to legislators.
Intel has a team of quantum hardware engineers in Portland, Oregon, who collaborate with researchers in the Netherlands, at TU Delft’s QuTech quantum research institute, under a $50 million grant established last year. Earlier this month Intel’s group reported that they can now layer the ultra-pure silicon needed for a quantum computer onto the standard wafers used in chip factories. [technologyreview.com, Dec 21, 16]
Retractions in 2016. See Science Daily Seeking fame with false data is often caught by the zillions of scientists competing for fame in the same sciences. Example: It’s every researcher’s worst nightmare: a manuscript gets rejected during peer review, then shows up later—published by one of the reviewers. Michael Dansinger of Tufts Medical Center took his heartache into his own hands, publishing a letter to the reviewer who stole his paper in the Annals of Internal Medicine, the journal that had originally rejected his manuscript during review. (The reviewer’s version of the paper—which contained the lifted work—was retracted in September.)
Pumping goods out, automatically. Manufacturing output is nearing prerecession levels. But about 1.5 million factory jobs—about 20% of positions lost during the downturn—haven’t returned. .... Well-trained workers are in demand. The number of open manufacturing positions is at a 15-year high. But a swath of low-skilled former factory workers seems frozen out of the increasingly high tech sector no matter how fast the economy grows. ... Said one maker who plans a more than $200 million overhaul : We may have too many people. You just walk around our manufacturing operations and you can see opportunity to automate all over the place. [Andrew Tangel and Patrick McGroarty, Wall Street Journal, Dec 18, 16] But our politics is stuck in the past, as usual, as politicians promise magical revival. Trump's task will be paper over the truth of his promises [to slash regulations and shake up trade relations with China], that corporate profits and dividends will rise while jobs per unit of output continues to fall. Fortunately for him, his voters aren't too good with math.
a round-up of some of 2016’s forecasts, and a look at why they didn’t quite work out as expected: $80 oil, market collapse if Trump elected, 2016 recession, $2000 gold. The bottom line remains: forecasts and predictions are exercises in marketing. Outrageous and wrong forecasts are typically forgotten, and when one randomly happens to come true, the guru is lauded as the next Nostradamus. [Barry Ritholtz, Bloomberg, Dec 14, 16] Go ahead, make ten forecasts for 2017; at least one of them will be right.
Somewhere between necessity being the mother of invention and pure creative genius, all kinds of useful products have come into our lives. Were their creators inspired by a desire to get rich? Did they have years of schooling or technical training? Were they part of huge corporations with unlimited budgets? No. They just let their creativity take over. And we benefit from their inventive ways. .... Managers would be wise to consider the studies conducted by Teresa Amabile, a professor at Harvard Business School and head of its Entrepreneurial Management Unit. She has explored creativity for nearly 30 years, [Harvey Mackay, Minneapolis Star Tribune, Dec 11, 16]
Books to Make Winter Pass Faster by Barry Ritholtz, Bloomberg: The Undoing Project, Michael Lewis; Shoe Dog: A Memoir by the Creator of Nike, Phil Knight; Narrative and Numbers: The Value of Stories in Business, Aswath Damodaran; The Daily Show (The Book): An Oral History as Told by Jon Stewart, Chris Smith ; Homo Deus: A Brief History of Tomorrow,Yuval Noah Harari ; But What If We’re Wrong?: Thinking About the Present As If It Were the Past, Chuck Klosterman; How to Think About Money, Jonathan Clements; Time Travel: A History, James Gleick; To Pixar and Beyond: My Unlikely Journey with Steve Jobs to Make Entertainment History, Lawrence Levy; Atlas Obscura: An Explorer’s Guide to the World’s Hidden Wonders, Joshua Foer, Dylan Thuras, Ella Morton; The Industries of the Future, Alec Ross.
By all appearances, we’re in a golden age of innovation. Every month sees new advances in artificial intelligence, gene therapy, robotics and software apps. Research and development as a share of gross domestic product is near an all-time high. There are more scientists and engineers in the U.S. than ever before. None of this has translated into meaningful advances in Americans’ standard of living. [Greg Ip, Wall Street Journal, Dec 6, 16]
As Tversky explained, “we find ourselves unable to predict what will happen; yet, after the fact we explain what did happen with a great deal of confidence ." .... Mr. Lewis is outraged by McKinsey & Co. coaching their consultants to radiate certainty while billing clients huge fees to forecast such unknowable variables as the future price of oil. ... In a world of overly certain predictions and policy prescriptions from consulting firms and think tanks to politicians and book authors, Mr. Lewis has given us a spectacular account of two great men who faced up to uncertainty and the limits of human reason. [William Easterly, reviewing Michael Lewis's The Undoing Project, Wall Street Journal, Dec 5, 16]
Dynamism fading. Since the end of World War II, the hierarchy of economic priorities has been relatively clear. At the top was creating an open, innovative, and dynamic market-driven global economy, in which all countries can (in principal) thrive and grow. Coming in second – one might even say a distant second – was generating vigorous, sustainable, and inclusive national growth patterns. No more. In fact, a reversal seems to be underway. Achieving strong inclusive national-level growth to revive a declining middle class, kick-start stagnant incomes, and curtail high youth unemployment is now taking precedence. [Michael Spence, project-syndicate.org, Nov 29,16]
Ohio's state-backed "fund of funds" is constrained from attracting more venture capital firms to the state, says one of its investment managers, which not only hurts its internal returns but could lead to promising technology startups leaving the state when it's time to land larger stage investments. [Carrie Ghose, Columbus Business First, Nov 17, 16] If investors shy away from your state, it's time to ask why. Unfortunately, retail politics discourages serious thinking or the long term. Which was a big contributor to Trump's win.
Some of Cincinnati's biggest corporate players – think Procter & Gamble and Kroger – are turning to Israeli startups to solve some of their largest problems. ... Six Israeli starups will come to Cincinnati in Feb 2017. [Andy Brownfield, Cincinnati Business Courier, Nov 28, 16]
US jobs, higher prices. Even if Apple finds enough workers to assemble in the U.S., the cost of making an Apple iPhone 7 could increase $30 to $40, estimates Jason Dedrick at Syracuse University. Since labor accounts for only a small part of an electronic device’s overall costs, most of these higher expenses would come from shipping parts to the U.S. If the iPhone components were also made in the U.S., the device’s costs could climb up to $90, according to Mr. Dedrick’s research with UC Berkeley’s Greg Linden and UC Irvine’s Ken Kraemer. That means that, if Apple chose to pass along all these costs to consumers, the device’s retail price could climb about 14%. [Kathy Chu and Juro Osawa, Wall Street Journal, Nov 16, 16]
United Airlines adding sardines economy class. For a
price you get a seat, period. No choices, no freebies, no carry-ons, no
qualifying points for elite status. If price
to you, you got a deal. Stand by for a chorus of flier complaints about
dismal economics. If you fly sardines enough, and use a
credit card, you can enjoy some of the elite economy perqs.
ONE of Joseph Schumpeter’s best-known observations was that successful businesses stand on ground that is “crumbling beneath their feet”. ... To stay ahead, front-runners must keep inventing new things. This means that capitalism is inherently unforgiving: today’s leader is tomorrow’s failure. [The Economist, Nov 12, 16]
Confirmation bias: Everyone reads what confirms their prior beliefs. Everyone. Not just read, but specifically seek it out, retain it and ignore everything else. This is why the internet is so balkanized, and why fact-checking hardly matters. Confirmation bias is hard to shake and often impervious to reality. [Barry Ritholtz, bloomberg.com, Nov 9, 16]
Three New York research institutions, two venture firms, and Japanese pharma Takeda joined to form Bridge Medicines, an initiative to take drug projects from New York’s Tri-Institutional Therapeutics Discovery Institute and funnel them into New York-based biotech startups. Given the city’s dearth of lab space, however, it’s unclear where those startups will go. [Alex Lash, xconomy.com, Nov 4, 16]
Why are spun fibers are strong? Why do most screws have right-hand threads? And why are the wheels on Conestoga wagons so very big? Answers to all these and more in “Why the Wheel Is Round” by Steven Vogel. [Stephen Budiansky, Wall Street Journal, Nov 4, 16]
LA new nursery. Los Angeles is experiencing its own real-life Cinderella story, as the area’s technology scene has been transformed from backwater to boomtown in just a few years. Hordes of venture capitalists from northern California, once long dismissive of their southern neighbour, now regularly commute in search of deals in a less heavily hunted spot than the Bay Area. In 2016 the city’s startups received around $3bn in funding, around six times more than in 2012, according to CB Insights, a research firm. ... has several advantages, including good universities, warm weather, a relaxed culture, proximity to San Francisco and much lower costs. Michael Schneider, the boss of Service, a customer-relations startup, reckons he would need to have raised at least 40% more money if based in San Francisco [The Economist, Nov 5, 16]
Expanding territory. Facebook took a big step this week in helping drive down the price of networking hardware, publishing plans for a device it’s helping develop that would send information between data centers using fiber optic cables. .... setting it apart from competing products from companies like Cisco, which come pre-bundled with proprietary management software. [Luke Stangel , Silicon Valley Business Journal, Nov 2, 16] The power of cash flow from mere chatter to vertically integrate.
UK-based Optalysys has found that off-the-shelf
electronics hardware makes it affordable to perform complex frequency
analysis by encoding data on laser beams and analyzing their
interference to perform calculations. ...
French startup LightOn is exploiting the random scattering of light to
mimic machine learning techniques that compress information by
multiplying it with random data. In both cases, using light makes it
possible to perform operations far faster than regular computers can.
[MIT Tech Review, Nov 3, 16]
In a surprise move, Verastem said it had licensed worldwide development and commercialization rights to an experimental treatment called duvelisib from Infinity Pharmaceuticals. The deal came four months after Infinity reported disappointing data in a mid-stage clinical trial of duvelisib, prompting previous partner AbbVie Inc. to terminate their alliance. [Robert Weisman, Boston Globe, Nov 2, 16]
Some investment rising. One bright spot [despite Businesses just aren’t investing the way they used to.] is that businesses do still seem to be spending on research and development. Investment in so-called intellectual property products, such as patents, has been rising at an average annualized pace of almost 5 percent, adjusted for inflation, for the past few years. So if and when businesses do decide to put more money into fixed capital, they might know what to do with it. [Mark Whitehouse, Bloomberg, Nov 1, 16]
According to data, the number of patents awarded to small entities sank from 25.9 percent in 2001 to 19 percent in 2015. Some attribute the decline to the rising cost of patenting, a slowdown in the processing of patent applications, and an increase in patent infringement lawsuits. Another reason: small businesses’ share of the economy has fallen. [Crain's, Oct 31, 16]
“One of the reasons most medical devices invented in an academic environment never make it to patients is because they’re so complex and you can’t manufacture them at the right scale, or at the right price,” Karp told me. “The lab is really just the first step.” ... Karp decided that he would need to build his own network of contacts: entrepreneurs, venture capitalists, patent attorneys, regulatory body contacts, consultants, and business managers, who would be familiar with his methods and guide him on every step of the process. He spent the next two years meeting with venture capitalists around Boston, attending networking events sponsored by local law firms, consulates and biotech companies. He flew around the country presenting his work to various companies. “I wanted to make it in such a way that as soon I came up with an idea, all I’d have to do is just fire off an email to the right person and that would be it,” he said.[Laura Parker, The Guardiaan, Oct 25, 16]
Seeking innovation. American businesses have continued to spend on a key ingredient of future productivity and economic growth: research and development. Private fixed investment in R&D surged at a 17% annual rate in the second quarter, adjusted for inflation and seasonal variations, according to the Commerce Department. [Ben Leubsdorf ,Wall Street Journal, Oct 27, 16]
[Adam Smith, 1776] understood two crucial facts. First, the economy becomes more productive as workers become more specialized. Second, workers become more specialized as the number of people with whom they trade increases. Because free trade maximizes the number of people who trade with workers, free trade maximizes the production of goods and services. ... In my experience, everyone who complains about the alleged “loss of sovereignty” from trade agreements really objects to the trade-liberalizing effects of such agreements. [Prof Donald J. Boudreaux, TribLive.com, Oct 25, 16]
A Seattle nonprofit that facilitates corneal transplants has raised $10 million to launch a for-profit subsidiary working to eliminate corneal blindness. SightLife will be the parent corporation of SightLife Surgical (Seattle, WA; not SBIR eligible), which will work to research and commercialize treatments for the disease. The nonprofit has worked for nearly 50 years in the field and is a leading provider of corneas from organ donors. [Rachel Lerman, Seattle Times, Oct 23, 16]
Gotta watch 'em. Honeywell is joining the ranks of Yahoo and Best Buy by banning telecommuting for most of its workers worldwide, effective immediately. [Minneapolis Star Tribune, Oct 21, 16] Better climate for fostering groupthink with the CEO's little red book.
a more-than-century-long hijacking of our inner lives by commercial interests that began in 1833. That was when a 23-year-old printer named Benjamin Day invented the modern newspaper by using low prices and salacious content to build circulation—then packaging his audience to advertisers. That business model has adapted to every technological advance since the printing press. [Steven Levy reviewing Tim Wu's The Attention Merchants, WSJ, Oct 19, 16]
Distracted. In the first half of this year, nearly 18,000 people died on American roads, up 10% from last year. Fatalities per 100 million miles driven hit a seven-year high. ... traffic experts are pretty sure of at least one [cause]: cellphones and other hand-held devices that take drivers’ attention off the road. .... “It is inconceivable to think of any innovation that doesn’t bite back,” says Joel Mokyr, a technology historian and economist at Northwestern University. ... Hillary Clinton may have concluded that the convenience of email is no longer worth the reputational risk, and Donald Trump may eventually feel the same way about Twitter. [Greg Ip, Wall Street Journal, Oct 19, 16]
Cheap graphene power. as first reported by Bloomberg earlier this month, [Henrik] Fisker is back and working on an electric car [with] a range exceeding 400 miles ..... turning to graphene supercapacitors. Graphene is both the thinnest and strongest material discovered so far. .... But its real-world application so far has been limited by the high cost .... But Fisker told Business Insider that his battery division, Fisker Nanotech, was patenting a machine that he said could produce as much as 1,000 kilograms of graphene at a cost of just 10 cents a kilogram. [Danielle Muoio, businessinsider.com, Oct 16. 16]
Not now, hotshot. Over the past two centuries, almost all professional scientists and engineers have worked not to cut down the old trees of technologies and knowledge and grow new ones, but to nurture and prune the existing ones. In corporate-based science and technology, disruption is very rare, continuity rules, and makes change and advance possible. At different times in history, such disruption was even discouraged. [Patrick McCray, Aeon, Oct 11, 16]
Polls indicate that most Americans think the country is on the wrong track, and that the economy is their top concern. This dissatisfaction comes not from studying the national income statistics but from their day-to-day experiences, which are not living up to their aspirations. [Greg Mankiw, Jun 17, 16] Old rule: Happiness is what you got minus what you expected. Richest, most powerful nation, high living standard even at lowest class by historic standard, and still a large angry portion of people stirred to their anger by politicians seeking office as saviors. But if their predecessors couldn't deliver on their promises, neither can the present seekers. Economics moves along on its own power and government helps with stability and a hand for the economic losers. What more could the public expect from a free-market liberty-oriented government? Oh, yes, the Republicans still insist the country is in a big hole that only a biz guy can fill with lower taxess.
Bigger, bigger, bigger. Robert Litan, of the Council on Foreign Relations, and Ian Hathaway, of the Brookings Institution, note that the number of startups is lower than at any time since the late 1970s, and that more companies die than are born, pushing up their average age. ..... In 1990 the top three carmakers in Detroit between them had nominal revenues of $250 billion, a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three companies in Silicon Valley had revenues of $247 billion and a market capitalisation of over $1 trillion but just 137,000 employees. [The Economist, Sep 17, 16] Note: 90% reduction in employees per unit of revenue. Each dollar the consumer spends pays for far fewer available jobs and new companies, but tons of cash for company owners. No wonder Trump gets support for pie-in-the-sky promises to create jobs and economic growth. The bad news is the reduction of cash flow back to consumers will eventually shrink the cash flow and the economy. No Trump illusions will brighten the dismal economic realities.
Despite a dip in the number of start-ups founded last year, San Diego remains a good place for innovation, powered by diverse technology clusters and a continued healthy flow of federal research dollars. That’s the gist of the 2015 San Diego Innovation Report by local start-up accelerator Connect. [Mike Freeman, San Diego Union Tribune, Sep 16, 16]
EurekAlert -- a widely-used web-based news service [operated by the American Association for the Advancement of Science] that serves the world's science and medical writers -- was taken offline Wednesday morning due to a serious security breach. [Gary Robbins, San Diego Union Tribune, Sep 14, 16]
Big pharma on the hunt. The needs of big drugmakers are driving the stock-price outlook of smaller biotech companies. ... The latest example came last Thursday: Gilead Sciences executives said at an investor conference that the company feels an urgency to look at outside deals and that they would be willing to take a risk on a company developing a class of new cancer drugsknown as PARP inhibitors. ... With such companies on the hunt, finding long-term biotech bargains is a challenge. [Charley Grant, Wall Street Journal, Sep 11, 16]
Why aren’t businesses investing more? Because there is already too much productive capacity in the world for the level of demand. Prices are generally falling or growing only tepidly, especially for manufactured goods. Vacancy rates for stores and offices are high. There is no great need to invest in high-tech equipment such as computers or chips because there haven’t been any great leaps forward recently. The old equipment works fine. (I’m using a six-year-old computer to write this.) (Rex Nutting, Aug 26, 16] What will the presidential candidates do about it? Who knows. They are busy appealing to the lowest denominator of voters who way outnumber capitalists. They have to make sound-bite promises but don't really have to defend them. Secret plan for defeating the foreign enemy? Nixon and Trump: trust me!
the U.S. Council of Economic Advisers estimated that 83 percent of jobs paying less than $20 per hour could be automated. [Andrew McAfee and Eric Brynjolfsson, Foreign Affairs, J/A16]
Medtronic completed a $20 million investment agreement from May with Mazor Robotics, an Israeli manufacturer of spine surgery guidance systems. [Sam Schaust,Twin Cities Business, Aug 16, 16]
Wall of worry. Two conclusions emerged from the Benchmark Lunches [for serious investors] this year. The first was that the world was condemned to a prolonged period of slow growth unless vigorous fiscal spending took place in the major industrialized economies. Monetary policy had been helpful in the recovery after the 2008-2009 recession, but its effectiveness as an economic stimulus had diminished. The second was that considering the uncertainties caused by margin compression, limited revenue growth, the U.S. political outlook, terrorism, Brexit and other factors, the fact that the U.S. equity market is making an all-time high is remarkable. .... low world productivity, which improved at 1.8% in the 1964-2014 period and was expected to increase .9% over the next fifty years, but was only up half of that recently. [Byron Wien, realclearmarkets.com, Aug 1, 16] Unhappily for voters who believe politicians' promises, immigration and trade have little to do with productivity growth. Nor do social media play any role.
For the second year in a row, Wisconsin has earned a bottom-of-the-barrel ranking for start-up business activity, a new report says. ... According to the report by the respected Ewing Marion Kauffman Foundation, start-up activity in the U.S. overall rose in 2016 for the second year in a row. But among the 25 largest states, Wisconsin came in either last or second-to-last in each of the three categories the foundation evaluated. .... Gov. Scott Walker took exception to the methodology and focus of Kauffman's report. [Kathleen Gallagher, Milwaukee Journal Sentinel, Aug 26, 16] perhaps the [present] governor's "take-no-prisoners" rightist politics doesn't go down well with innovators.
Over capacity, under investment. Who’s preparing the United States for the 21st century? Nobody, really. Not the 22 million private businesses, not the 118 million households, and not the 90,000 state, local or federal government agencies. Since the recession, investments have fallen sharply, and they haven’t gotten back up again. .... In fact, net investment has been running at the lowest rates since the Great Depression of the 1930s, suggesting that U.S. investment itself is in a depression. .... Because there is already too much productive capacity in the world for the level of demand. [Rex Nutting, marketwatch.com, Aug 25, 16]
Invulnerable microbe. Scientists have designed a new synthetic E. coli genome that, if fully assembled, could give rise to a microbe that’s resistant to every known virus. Developed by a team from Harvard Medical School, the new version of the genome required 62,000 DNA changes to be made to the naturally occurring genetic code. Described in Science. [MIT Tech Review, Aug 19, 16] If it is invulnerable. how will it be controlled in the wild?
the locomotive is faltering. The economy didn't pick up after the stimulus wore off. What ails the private sector? ... What's distinctive about today's economic situation is that the problem is global. Almost every major country suffers from reduced economic vigor. [Robert Samuelson, WashPo, Aug 15] Somebody has to spend money, consumers or investors or government. Consumers are not making enough wages, and capital obviously prefers safe government bonds with safe low returns, and government is paralyzed by political fear of deficits. So, we will muddle and laugh at political candidates' promises to boost growth in a return to some golden age.
Capitalists do capitalism. Now from San Francisco to Washington and Brussels, the tech oligarchs are something less attractive: a fearsome threat whose ambitions to control our future politics, media, and commerce seem without limits. Amazon, Google, Facebook, Netflix, and Uber may be improving our lives in many ways, but they also are disrupting old industries—and the lives of the many thousands of people employed by them. And as the tech boom has expanded, these individuals and companies have gathered economic resources to match their ambitions. Creative destruction and concentration of market power. Will the concentration make a richer economy? Much of the problem, notes MIT Technology Review editor David Rotman, is that most information investment no longer serves primarily the basic industries that still drive most of the economy, providing a wide array of jobs for middle- and working-class Americans. [Joel Kotkin, thedailybeast.com, Aug 11, 16]
worker productivity has been disappointing for several years for reasons economists don’t entirely understand. But the latest data suggest it will turn out to be even worse than that in the first half of 2016. [Neil Irwin, NY Times, Jul 29] Productivity is two-edged sword: it raises efficiency but reduces the need for workers. Its recent effect in the US is to reduce labor demand and give the political demagogues an opening to blame trade and immuigration as an excuse to raise the national fortress walls. Demagogues are free to ignore the inconvenient facts as long as they raise their fists in pretended anger.
The city’s story is also a warning that rebuilding clusters is fiendishly hard. ... Perhaps the most important lesson from Cleveland is that the likelihood that you’re going to remain a top cluster for ever is small. Even if you diversify your risks and invest in your future, as Cleveland clearly did, some unforeseen event might knock you for six. And reversing decline is harder than capitalising on success. Success is a delicate flower that can easily be killed. Failure is a weed that it is almost impossible to exterminate. [The Economist, Jul 23, 16] Politicians love catchy names like "clusters" for subsidizing industry in their cities where people way outnumber jobs. It brings in public money (better than no money) that has little staying power but demands re-payment of any loans to creditors.
If what bothers you about America is, instead, the fact that it doesn’t look exactly the way it did in the past (or the way you imagine it looked in the past), then you don’t love your country — you care only about your tribe. [Paul Krugman, NY Times, Jul 28] Beware longing for a golden age that never was.
Economics drives jobs. Taiwan’s Foxconn, best known for making Apple iPhones in Chinese factories, is planning to build as many as 12 new assembly plants in India, creating around one million new jobs there. [MICHAEL SCHUMAN, NY Times, Jul 22, 2016]
a study by the Center for Business and Economic Research at Ball State University, “found that productivity growth accounted for more than 85 percent of the job loss in manufacturing between 2000 and 2010, a period when employment in that sector fell by 5.6 million.” This 85% compares, according to the study, with 13% of job losses attributed to trade during the same period. In other words, to bring most jobs back, Mr. Trump would have to outlaw mechanization. [Mary Anastasia O’Grady, Wall Street Journal, Jul 24, 16]
Second class innovators. Many Chinese companies seem to be copycats, unable or unwilling to come up with world-beating ideas, products and services of their own. The Chinese legal system also looks rigged against foreign inventors. A cultural deference to authority and an educational system that emphasises rote-learning complete the stereotype. ... Yet, In fields from gene editing to big-data analytics to 5G mobile telephony, Chinese experts are now among the world’s best. [The Economist reviewing Paper Tigers, Hidden Dragons: Firms and the Political Economy of China’s Technological Development. By Douglas Fuller and China’s Next Strategic Advantage: From Imitation to Innovation. By George Yip and Bruce McKern, July 9]
[Jens Beckert's] new book, Imagined Futures: Fictional Expectations and Capitalist Dynamics, makes a thorough, exhaustively documented argument in support of what many have suspected about capitalism: It's a castle in the air, built on fantasy shading into fraud. He makes a compelling case that no corner of the market is untouched by the process of generating imagined futures. The novelty of his work lies in offering a way to understand that process as a social system in which everyone, from individuals to institutions, is implicated. .... post-mortems in the form of popular films like The Big Short and Inside Job keep cropping up as vivid reminders of just how much fiction was pumped into the markets and the media before the crash. [Brooke Harrington, TheAtlantic.com, Jul 13, 2016]
Your audience. Citing polls conducted at the beginning of the new millennium, Otto reveals that 52% of Americans believe that humans and dinosaurs once coexisted. [Peter Reczek reviewing The War on Science by Shawn Otto, Science, Jul 1, 16]
Bain Capital Ventures partner Indy Guha said most of the companies he invests in don't have engineering in the Bay Area anymore because it has become too expensive. They are now doing that part of their business in places like Canada, Russia, China, India and less expensive parts of the U.S. like Phoenix. ... "You can get an inside sales rep for 50 grand fully loaded and ready in Phoenix, Or you can get that person for $120,000 in the Bay Area" .... [ companies] are finding large pockets of talent at a reasonable price. [Cromwell Schubarth, Silicon Valley Business Journal, Jul 7, 16]
Medtronic PLC is preparing to invest another $20 million in med-tech Mazor Robotics (Israel), which is expected to announce a new robotically assisted spine-surgery system called Mazor X. ... More than 16,000 successful spinal surgeries have been done worldwide with Mazor's existing flagship guidance system, the Renaissance, and its predecessor. [Joe Carlson, Minneapolis Star Tribune, Jun 12, 16]
SV eating the world. Clusters of high-tech startups are blooming everywhere, in cities large and small [as] entrepreneurs are seeking greener pastures, including better quality of life and lower operating costs for their startups. .... And yet, as fast as the rest of the country creates startups, Silicon Valley grows even faster, disrupting entire industries, from transportation to lodging, retail and media. Silicon Valley is transforming fragmented industries into unified, winner-take-all markets that reward the biggest, best-funded, most aggressive companies—which are still being built, for the most part, in Silicon Valley. ... all venture capital invested in the U.S. [in 2015] went to companies in the Bay Area. [Christopher Mims, Wall Street Journal, Jul 10, 16]
Google’s AI division has taken on its first proper medical research gig: using machine learning to help doctors spot the early signs of visual disorders by scouring a million eye scans [MIT Techreview.com, Jul 6]
Volatile and unpredictable. We have entered an age in which economic and financial forecasting is much harder and less reliable. Because financial markets and financial investors are increasingly driving the world economy and it is inherently volatile. ... Finance now represents the most powerful force on earth, even beyond nuclear weapons. Commodity prices, corporations and governments are increasingly at its mercy. Which is why reliable economic and financial forecasting may be history. [Roger Altman, Wall Street Journal, Jun 23, 16]
The number of companies in Silicon Valley that got seed funding from investors, for instance, more than doubled between 2007 and 2012. Venture capital funding in the U.S. over the last five years has totaled a remarkable $238 billion, and 200 companies today are so-called unicorns, privately valued at more than a billion dollars each. Meanwhile, though, a host of economic researchers have been telling a much bleaker story: American entrepreneurship is actually on the decline, and has been for decades. As the economists Ian Hathaway and Robert Litan documented in a 2014 Brookings Institution paper, the percentage of U.S. firms that were less than a year old fell by almost half between 1978 and 2011, declining precipitously during the recession of 2007-’09 with only a slow recovery after. ... As many seeds as ever are being planted. But fewer trees are growing to the sky. [James Surowiecki, technologyreview.com, Jun 15, 16] More lifestyle startups and app makers? Should government have a response?
Why Startups Are Struggling. Sometimes it can feel like everyone you know works at a startup. And it’s true enough that the number of Silicon Valley newbies securing seed funding has doubled between 2007 and 2012. But the Commerce Department points out that the number of new businesses started by Americans has fallen sharply since 2000, as has the percentage of workers employed by companies less than a year old. So what gives? It’s not a lack of appetite for risk, the approach to R&D, or the inherent quality of the companies—in fact, in areas like the San Francisco Bay Area, the rate of high-quality startup creation is at a high. Instead, it might just be that incumbents are increasingly hard to topple. That may not seem too big a problem now, but the future of technology may be better served by many small startups battling with cutting-edge innovation, rather than FaceGoogleZon hurling Monopoly money at moonshots. [technologyreview.com, Jun 15, 16] Not DOD's idea of nurturing SBIR companies; DOD just wants answers. Novelty, like IEDs, causes a dogma challenge.
I’m on the board of directors now of a temp staffing company. This past 12 months they had $700 million in revenues. The year before they had $400 million in revenues. Meanwhile, thousands of startups have been invested in. So temp staffing is on the rise and startups are on the rise. And the middle class, according to my friend in the vertical palace, is being hollowed out. It’s true. I see it from the front lines. There’s nothing we can do about it. It’s a tidal wave and we are just a tiny island of history that is being overwhelmed. [James Altucher, self-proclaimed genius, jamesaltucher.com, Jun 13] History and economics have no conscience; they just happen.
consumer-sentiment surveys have shown people are actually pretty optimistic these days. And why shouldn’t they be? Sure, the political bluster ahead of the presidential election seems particularly pointed this year. But the fact remains interest rates are low, gas prices are still cheap, home prices are up and wages are finally starting to tick higher. People are loosening the purse strings, too: Consumer spending recently advanced at the fastest pace in nearly seven years. ... As a reminder, In an election year, plenty of politicians claim the economy is a disaster. [Stephen Russolilo, Wall Street Journal, Jun 9, 16] Remember that politicians seeking office make a lot of silly claims, distortions, and half-truths.
Russia’s new twin-engine MC-21 jet is intended to revive the nation’s aircraft-making prowess and reduce its reliance on Boeing and Airbus planes. [Seattle Times, Jun 8] Anything Russian is a big risk. They simply do not do and think like us. During the Cold War, the Russian equipment we "obtained" proved well below our assumptions about performance.
The top five ranked (for entrepreneurship growth) metros were Washington, D.C.; Austin, Texas; San Jose, California; Columbus, Ohio; and Nashville, Tennessee. [The Kauffman Index of Growth Entrepreneurship Metropolitan Area Trends]
Proponents [of universal basic income] argue there is one [big US] problem: technological unemployment. It's probably no coincidence that wonk enthusiasm for universal basic income in the U.S. is growing along with rising public concern about robots taking our jobs. It's hardly an unfounded fear. Artificial intelligence and robots do seem to be getting ever-more clever and capable. Drones delivering packages. Cars driving themselves. Software winning at Jeopardy! and Go. One widely cited Oxford study estimates that 47 percent of total U.S. employment, "could be automated relatively soon, perhaps over the next decade or two." So no time like the present to get universal basic income up and running so we can work out the kinks, yes? [James Pethokoukis, theweek.com/, Jun 2, 16] Pethokoukis is a regular advocate for anything that shrinks government in favor of free-market solutions even to problems inherent in free markets.
China’s global deal-making boom is coming undone. .... the boom in Chinese overseas deal making occurred while businesses and individuals were pouring cash overseas, either to avoid an expected depreciation of the yuan or just to get assets out of the reach of Beijing. ... Companies globally are pulling out of deals at a record pace this year, with U.S. companies accounting for the top three scuttled mergers. [Ken Brown, Wall Street Journal, Jun 1, 16] Nevertheless, despite the dodgy nature of China's business and finance, Signs are growing that investors are piling up bets on Chinese stocks, anticipating a decision to include the shares in a major world index. [Shen Hong, Wall Street Journal, Jun 1, 16] As always, caveat emptor.
No shortage of advice. As investors search for bargains in a world of overpriced assets, they should be guided by my own Emetic Market Hypothesis, which says if the mere thought of owning an asset turns your stomach, that probably is a sign to buy it. [Jason Zweig, Wall Street Journal, May 27, 16] Whatever your view of any market, there is always someone somewhere with whatever advice you want to hear.
two of the world’s largest automakers, Toyota and Volkswagen, said they were stepping up to invest in technology start-ups that are working to change the way people travel by car. Toyota said it had formed a partnership with and invested an undisclosed amount in Uber, the biggest ride-hailing company. Gett, the app popular in Europe, said it was working with Volkswagen, and the automaker was investing $300 million in the start-up. [MIKE ISAAC and NEAL BOUDETTE, New York Times, MAY 24, 2016]
Medtronic is investing as much as $56 million in Mazor Robotics (Israeli) maker of robotic guidance systems used in spinal surgeries, .... makes systems that use 3-D imaging to help surgeons plan surgeries and robotic-assistance tools to help complete the procedures. [Mark Reilly, Minneapolis / St. Paul Business Journal, May 19, 16] Medtronic is a Minnesota company pretending to be an Irish company for tax purposes.
America has made its own bed. The culprit is a large saving deficit; The country has been living beyond its means for decades and drawing freely on surplus saving from abroad to fund the greatest consumption binge in history. Politicians, of course, don’t want to blame voters for their profligacy; it is much easier to point the finger at others. ... US politicians continue to focus on keeping the consumption binge going .... with a net national saving rate of 2.6% in late 2015 – less than half the 6.3% average in the final three decades of the twentieth century – and trade deficits with 101 countries. [Stephen Roach, former Chairman of Morgan Stanley Asia and the firm's chief economist , May 23, 16] So go right ahead and again vote for the candidate with the most delicious sounding promises. The entire depressing economic argument.
Capital chases high-growth ideas, and high-growth ideas tend to be concentrated in areas of highly educated and highly skilled workforce,” said Manuel Adelino, an economist at the Fuqua School of Business at Duke University who has published several research papers on entrepreneurship patterns and credit availability. “This suggests that the lack of new business formation in rural America may lead to widening gaps in income and employment” between those areas and big cities. .... 20 counties [that have] combined for half the country’s new business formation are almost entirely pillars of the innovation economy. [Jim Tankersley, Washington Post, May 22, 16] It must be time for politics again to seek economic succor for the "flyover" states and the small towns. A dominant factor would be the presence of two Senators for every state, however small. The bad news is that capital to exploit any good new ideas by small companies in small places is likely to move the operation to bigger market areas.
Why fewer startups? It is by now well documented that start-up activity has been slowing down in the United States for about three decades, dropping sharply over the past 10 years. Even as American culture has turned entrepreneurs into rock stars, the U.S. economy is producing fewer and fewer of them. ... The Kauffman Foundation reports that the percentage of adults owning a business has been declining since the 1990s, when the foundation first began to track that number. At the Brookings Institution, Ian Hathaway and Robert Litan found that the start-up rate (the number of new companies as a percentage of all firms) has fallen by nearly half since 1978. Why is this happening? No one is quite sure. .... Young people today dress like Silicon Valley entrepreneurs, consume technology voraciously and talk about disruptive innovation. But they want to work at Goldman Sachs, McKinsey and Google. [Fareed Zakaria, Washington Post, May 19] The federal government contributed to the decline as its three decades of SBIR focused the "innovation" money on competent companies likely to succeed at incremental R&D. And Congress stood idly by, satisfied that it had done enough by pushing 3% of federal R&D into small biz.
It is easy to be cynical about economics, which can be imperial and condescending and irritating in its tendency to look for the lost keys under the streetlight. Economists largely missed the housing bubble, and many had pretenses of command over the macroeconomy that today look foolish. Academic papers are more and more about less and less, and many economists seem quite fine with that, thank you very much. [Michael Strain, AEI, May 14]
Who will buy the innovations? from 2000 through 2014, the middle class shrank in nine of every 10 metro areas, Pew found. ... By Pew's definition, a three-person household was middle class in 2014 if its annual income fell between $42,000 and $125,000. [CHRISTOPHER S. RUGABER , AP, May 12, 16] Not to worry, though, our political candidates have ready-made solutions for a problem of which they show little understanding. Ask them sometime about marginal propensity to consume.
Silicon Valley, where the soaring cost of living has precipitated an exodus that has been underway for at least the past year. A recent poll released by the Bay Area Council found that over one third of the residents in Santa Clara, San Mateo, and San Francisco counties now say they are ready to leave, due chiefly to high housing costs and intractable traffic. [Bruce Bigelow, xconomy.com, May 10, 16] What is it worth to rub shoulders with the world's best? The world's next best claimants pitch their creature comforts to attract the top classers to new homes like San Diego and big talk Texas.
for every manufacturing job lost since the 1970s, we have created 10 jobs elsewhere. And for every job lost to trade we have created 100 more jobs elsewhere. ... The “bring jobs back” [campaign] promise is simply a lie. It isn’t blue-collar workers in Juarez or Beijing who have stolen factory jobs. Folks with master’s degrees in robotics working in Palo Alto, Calif., have taken those jobs. [econ professor Michael J. Hicks, Minneapolis Star Tribune, May 6, 16] Campaigns are for simplifications that usually mis-identify any problem, and promise unworkable solutions.
The strategy of the Daily Mail runs against conventional wisdom in digital media. Home pages of websites matter less than before. Many news sites have ceded the job of distributing content to Facebook, Snapchat, Twitter and other platforms. But organisations that let Facebook and others publish their stories risk losing their ability to profit from them. The Mail uses its home page as a distribution hub, helped along by its titillating “sidebar of shame”, which features celebrity gossip and racy photos on continuous refresh. Since 2012 it has claimed the title of the world’s most-visited English language news site. It now attracts an estimated 220m monthly unique visitors to its various sites around the world, including Mail Online in Britain. [The Economist, Apr 16, 16]
If academic discoveries turn out to be wrong, Merck wants its money back. That’s the tough-minded proposal floated today by the chief medical officer of Merck, one of the world’s 10 largest drug companies, as a way to fix the “reproducibility crisis,” or how many, if not most, published scientific reports turn out to be incorrect, ....The problem of irreproducible research has been getting attention thanks partly to the efforts of a group of psychologists who have been redoing scores of classic experiments and have found most don’t mean much. .... "if this became a requirement it would stop [university-industry] research in its tracks,” says David Winwood, a business development executive at the Pennington Biomedical Research Center in Baton Rouge, LA. [Antonio Reglado, technologyreview.com, Apr 27, 16]. Sounds like a scheme invented by a lawyers' association.
According to non-profit advocacy group the Reshoring Initiative, offshoring resulted in a net loss of approximately 220,000 manufacturing jobs from 2000 to 2003. However, according to the group, the country added roughly as many jobs due to foreign investment and reshoring as it lost to offshoring last year. Some of the largest U.S.-based companies, likely for both public relations and practical reasons, have begun building factories domestically for operations that would likely have gone overseas a few years ago. [247wallstreeet.com, Apr 20]
Re-trenchement. Intel said that it was laying off 12,000 people, about 11 percent of its work force, as it continues to reel from a long downturn in global demand for personal computers. ... also reported lower-than-expected first-quarter earnings ... new restructuring is intended to help Intel invest more heavily in its new segments, such as chips to power connected devices. [Quentin Hardy, New York Times, Apr 19, 16]
Customers respond to products and services that solve an important problem at reasonable cost in a manner that is superior to existing solutions. Venture capital (VC) investors—who will typically be required for commercializing university technologies—invest in people, business experience, and market pull, not technology per se. [Yael V. Hochberg reviewing Research to Revenue A Practical Guide to University Start-Ups by Don Rose and Cam Patterson, Science, Apr 8,16] Profit: the only real criterion for investment. Scientific knowledge and government smarts do not make profits.
A Beijing-based company is opening a high-tech lab for fast and inexpensive DNA testing at UC Davis Medical Center — but needs special certification before it can do so. Novogene Bioinformatics Technology Co. Ltd. is installing five high-speed genome sequencers at the UC Davis Medical Center in Sacramento. The company will use an Illumina HiSeq X Ten [Mark Anderson, Sacramento Business Journal, Apr 14, 16]
Chinese investors pumped more than $15 billion into the U.S. last year, with California continuing to be a favorite location to invest, a new study from the nonprofit National Committee on U.S.-China Relations and research firm Rhodium Group said this week. ... $8 billion into California since 2000 supporting 452 Chinese companies [Riley McDermid, San Francisco Business Times, Apr 13, 16] They gotta love a country with honest government accounting and individual rights.
Cheerleading not enough. Their book, though—like much other writing on this subject—has so little analysis of what works and what doesn’t that it will be of limited help to anyone looking to revive a town that has seen better days. ... The bulk of the book recounts their visits to hothouse cities in the United States and Europe that illustrate the point. These vignettes are entertaining, but they are biased toward success stories, and in some cases material facts are omitted. ...In Akron [OH], for example, While a small number of scientific and technical jobs have been added, total employment peaked nearly a decade ago, and wages remain below the national average. In short, after 15 years the economic benefit of becoming a “brainbelt” seems to be limited. ... In Albany NY What they don’t make clear is that this required breathtaking amounts of public money. “The GlobalFoundries arrangement was one of the biggest taxpayer handouts ever offered to a private enterprise in the United States,” the Albany Times Union reported in 2011. The subsidy was initially pegged at $1.2 billion, or nearly $1 million per job created in the project’s first phase—enough to pay an average plant worker’s wages for more than a decade. [Marc Levinson reviewing The Smartest Places on Earth by Agtmael and Bakker, Wall Street Journal, Apr 14, 16] The politicians felt good about pumping public money into depressed areas, but like the cheerleading for SBIR pumping, they treat anecdotes as the singular of data and analysis. A public comment added Toledo [OH] Toledo's particular center of excellence, glassmaking, is an important component of… drumroll… solar panels! So gobs of public money, local enthusiasm, and usually sober people stampeded into the high-tech world of solar energy just as Chinese overcapacity sank the market for these commodity products. Why do these things happen? 1. Opportunity cost ignored - what would have happened if the money had been left in the private economy? 2. Concentrated benefit (millions and publicity for Akron and pennies per Ohio taxpayer) and diffused cost wins every political argument. The same reasons that SBIR exists.
Coals to Newcastle.
As demand for organic
feed surges, U.S.
cows feast on Romanian corn. [Megan Durisin,
Bloomberg News, April 14, 16]
Shifting sands. From 1983 to 2002, U.S. total manufacturing jobs contracted about 9.3%, but grew an additional 36.6% in the high skilled area. In other words, employment has not been lost, but restructured. [themodernlibertarian.com, Oct 2015] Going from basic high school to the assembly line unionized job no longer works as the career guide.
A born writer. One night I was invited to a dinner where I sat next to the wife of a big shot of a big Wall Street investment bank, Salomon Brothers. She more or less forced her husband to give me a job. I knew next to nothing about Salomon Brothers. But Salomon Brothers happened to be where Wall Street was being reinvented—into the Wall Street we’ve come to know and love today. When I got there I was assigned, almost arbitrarily, to the very best job in the place to observe the growing madness: They turned me into the house derivatives expert. All of a sudden people were telling me I was a born writer. This was absurd. [Michael Lewis, author of Liar's Poker, Moneyball, and The Big Short, quoted by Robert Frank, Atlantic, May 2016]
Hard smart work or luck? According to the Pew Research Center, people in higher income brackets are much more likely than those with lower incomes to say that individuals get rich primarily because they work hard. Other surveys bear this out: Wealthy people overwhelmingly attribute their own success to hard work rather than to factors like luck or being in the right place at the right time. That’s troubling, because a growing body of evidence suggests that seeing ourselves as self-made—rather than as talented, hardworking, and lucky—leads us to be less generous and public-spirited. It may even make the lucky less likely to support the conditions (such as high-quality public infrastructure and education) that made their own success possible. .... Psychologists use the term hindsight bias to describe our tendency to think, after the fact, that an event was predictable even when it wasn’t. This bias operates with particular force for unusually successful outcomes. [Robert Frank, Atlantic Monthly, May 2016]
Infinite info means instant discounting [aka efficient market theory]. "in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost.” [said Benjamin Graham in 1976]... As the proportion of U.S. public securities managed by professional investors has risen from under 10% of market capitalization prior to 1950 to 70% today, “undervalued” and “overvalued” stocks have disappeared. This is confirmed by the very high rate at which stock pickers and other “active” investors consistently fail to beat a simple market index over time. [Jeff Troutner, Equius Partners, Apr 12]
Research opinions vary greatly. From BCA Research: “However, leading economic indicators remain bearish, and the slide in the monetary base warns that the path of least resistance for GDP growth is lower. History shows that once GDP growth dips below the level of 10-year Treasury yields, a prolonged slump in stocks typically ensues. This outlook contrasts starkly with current expectations. [http://realinvestmentadvice.com/, Apr 11, 16] Whatever prediction you want to see can be found with impressive credentials. With so many economic variables and forces, any prediction has some credibility. Your problem is to figure which critical data were misinterpreted.
In a 2015 paper titled Does Science Advance One Funeral at a Time?, a team of scholars at the National Bureau of Economic Research sought an empirical basis for a remark made by the physicist Max Planck: “A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.” [Ian Leslie, The Guardian (UK), Apr 7, 16]
Shakespeare’s death on April 23, 1616, went largely unremarked by all but a few of his immediate contemporaries. There was no global shudder when his mortal remains were laid to rest in Holy Trinity Church in Stratford. No one proposed that he be interred in Westminster Abbey near Chaucer. [Stephen Greenblatt, NY Review of Books, Apr 21]
New jobs, old jobs, lower benefits. eye-opening new research from Princeton’s Alan Krueger and Harvard’s Lawrence Katz on Americans in alternative work arrangements, which they defined as “temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers.” This cohort of the workforce grew from 10.1 percent in 2005 to 15.8 percent at the end of 2015, representing an increase of 9.4 million workers. That’s all of the growth in the labor market over the past decade. [David Dayen, Why are Workers Angry?, newrepublic.com, Apr 6, 16]
living in the city isn’t like living on the beach, because the shortage of urban dwellings is mainly artificial. Our big cities, even New York, could comfortably hold quite a few more families than they do. The reason they don’t is that rules and regulations block construction. Limits on building height, in particular, prevent us from making more use of the most efficient public transit system yet invented – the elevator. [Paul Krugman, New York Times, Apr 3, 16]
Prosperous places. “It’s pretty clear that some metropolitan areas are doing really well,” said Andrew McAfee, an [MIT] economist. “The ingredients to that formula seem to be some combination of great research universities and knowledge-intensive industries, whether it’s high tech on the West Coast, biotechnology here in the East or clusters of technology and robotics in places like Pittsburgh.” The Denver metropolitan area has become a showcase of the sunnier side of the American economy. [Patricia Cohen, New York Times, Mar 31, 16]
A wild-West pharma world. Drugs that failed to make it to the market in the U.S. and elsewhere are finding new life in China. In 2013, Bristol-Myers Squibb stopped global trials of a first-line liver-cancer drug after it failed to outperform a rival. Instead, the company licensed the drug, brivanib, to a Chinese startup. The startup, Shanghai-based Zai Lab Ltd., sees high potential for brivanib in China because its rival—sorafenib, developed by Bayer AG and Onyx Pharmaceuticals —costs around $7,500 for one month of treatment and isn’t covered by national insurance. [Fanfan Wang, Wall Street Journal, Mar 29, 16] Informed consent and honest reporting may be a serious question with a government like China's.
in late 2013, the massive Ivanpah concentrated solar power plant in the California desert looked like the possible future of renewable energy. ... But the troubles at Ivanpah have joined the delay or cancellation of several high-profile projects as evidence that concentrated solar power could be a dying technology. ... Most of these shuttered projects have been doomed by one factor: cost. Given cheap natural gas and the continued fall in solar photovoltaic prices [technologyreview.com, Mar 29, 16] Time for more politics of government subsidy for uneconomic industries. The politics works to keep mediocre companies alive with SBIR doing stuff that only a government could love.
University of Washington professor Pedro Domingos, author of “The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World,” warned me late last year that we were in for a rough ride. “Over the next five to 20 years, some occupations will disappear, but lots of occupations will be created,” he said. People would still be needed, especially if they adapt to team with machines. “You can’t outrun the horse,” Domingos said, “so you ride the horse.” [Jon Talton, Seattle Times, Mar 26]
Microsoft pulls plug after chat robot slings slurs, rips Obama and denies Holocaust. ... “She” was intended to tweet “like a teen girl” [MarketWatch, Mar 24] AI needs a lot of maturation.
Big player checks out. Google parent Alphabet is dismantling its robotics effort after less than three years and aims to sell Boston Dynamics, the legged-robot maker that was the centerpiece of the program, according to people familiar with the matter. The moves reflect internal disagreements about the direction of Boston Dynamics and concerns about Alphabet’s ability to make money from robots as the company increases its scrutiny of costs, said the people familiar with the matter. In addition to Boston Dynamics, Google bought at least six other robotics firms in 2013, combined them into a group dubbed Replicant [recently dissolved] [Jack Nicas, Wall Street Journal, Mar 23, 16]
"This big hangover is happening because [VC] people invested in lot of app companies that just aren't hitting it out of the ballpark," Perkins said. "Most of the companies that are struggling were just using existing technology to do something you couldn't do before, in a different way." [Cromwell Schubarth at the Silicon Valley Business Journal's Pitch Night, Mar 18, 16] SBIR suffers from the same disease of easy targets with small payoff, which is expected from government mission agencies that hate to report failure of anything.
Only the paranoid survive. Former Intel Chief Executive Officer and Chairman Andrew Grove died at age 79. [Reuters, Mar 21, 16]
In America the rate of startup formation has fallen steadily since the late 1980s, according to work by Jorge Guzman and Scott Stern of MIT. That is not as disconcerting as it sounds: the authors find that the American economy is still producing plenty of the right sort of firms, with lots of growth potential. Worryingly, however, fewer of those firms seem to grow big. [The Economist Mar 18, 16]
A study from the National Foundation for American Policy, a nonpartisan think tank, shows that immigrants started [51%] of the current crop of U.S.-based startups valued at $1 billion or more. [Wall Street Journal, Mar 17, 16]
companies are adding to the national stock of capital at an historically slow pace. In a separate calculation, the U.S. Bureau of Labor Statistics says that what it calls “capital intensity”—the ratio of capital used to hours worked—was so weak that it actually subtracted from workers’ productivity from 2010 through 2014. Economists and policymakers agree this is happening. They disagree on why. So put one of these theories in your pipe and smoke it, Sherlock. [Peter Coy, Bloomberg Business Week, Mar 17] Not to worry though, the candidates will espouse some theory that serves their interest in getting elected. We have no shortage of economic myths.
The face behind the next big thing could easily belong to a middle-aged male Ph.D. from India or China, working at a large firm, conclude researchers from the Information Technology and Innovation Foundation in Washington, D.C., and George Mason University in Fairfax, Virginia. The team used patents and awards to identify and send surveys to more than 6000 U.S. innovators. Of the 923 who responded, 46% are immigrants or the children of immigrants. More than half hold doctorates and work at firms with more than 500 employees. The median age is 47, and just 12% are women. Fewer than 8% belong to a minority group. http://scim.ag/avginnovator [Science, Mar 4, 16]
Publishing science. Handful of Biologists Went Rogue and Published Directly to Internet. On Feb. 29, Carol Greider of Johns Hopkins University became the third Nobel Prize laureate biologist in a month to do something long considered taboo among biomedical researchers: She posted a report of her recent discoveries to a publicly accessible website, bioRxiv, before submitting it to a scholarly journal to review for “official’’ publication. [Amy Harmon, New York Times, Mat 15, 16]
Joseph Shuster, a chemical engineer and entrepreneur who helped start about 10 Minnesota companies, died on March 6. ... Born on a farm near Hibbing, Minn. (heart of the Mesabi iron range), Shuster and his family moved to Chicago when he was a boy. He grew up poor in the public housing projects. ... among startups: Minnesota Valley Engineering, Teltech Resource Network, ... He was particularly passionate about the opportunities in using next-generation nuclear power and other renewable resources such as wind and solar energy. [Kavita Kumar, Minneapolis Star Tribune, Mar 15]
Early-stage investments have accounted for the lion’s share of the venture industry’s gains since 1994, according to Cambridge Associates, a research firm that studied the quarterly financial reports of dozens of venture firms. ... New players have been successful partly because they have been more willing to put money into companies outside Silicon Valley, especially in China, where start-up success stories have been abundant over the last decade, Cambridge Associates said in a report last fall. [KATIE BENNER and MICHAEL J. de la MERCED, New York Times, Mar 13, 16] Unfortunately for the economy, most of the headline winners are services that make no new products for new markets nor productivity increases. What's the economic benefit of Facebook?
Got a hot new tech, or a school-age child? A new report finds U.S. workers rank dead last among 18 industrial countries when it comes to using digital technology to perform practical tasks. ... If the problem-solving deficit is bad, the reasons for it may be worse, said Stephen Provasnik, the U.S. technical adviser for the International Assessment for Adult Competency: flagging literacy and numeracy skills, which are the fundamental tools needed to score well on the survey. ... “This is the only country in the world where it’s OK to say ‘I’m not good at math,’ ” said Mr. Provasnik. [Douglas Belkin, Wall Street Journal, Mar 9, 16]
Less invasive surgery. The HeartLander robotic crawler presented itself as an ideal vehicle for minimally-invasive, highly accurate epicardial injection of such an agent. ... We have successfully demonstrated an elegantly simple miniaturized cooling and injection system, fully integrated into the existing platform of the HeartLander crawling robot. Our ability to carry out repeated injections in multiple sites of warm animal tissue, while protecting the injected material from premature cooling, demonstrates the readiness of the system for in vivo trials, performing epicardial injections in swine via the subxiphoid approach to pericardial space, even without further optimization. [Michael Chapman et al, Application of the HeartLander Crawling Robot for Injection of a Thermally Sensitive Anti-Remodeling Agent for Myocardial Infarction Therapy, Conf Proc IEEE Eng Med Biol Soc, Jul 2015] A 3-centimeter-long, crawling robot [from Carnegie Mellon U] has been designed to be inserted into a human heart to assist in performing surgery. [Matt Stroud, Pittsburgh Business Times, Mar 4, 16] The trick is the deliver a cooler polymer that cures at body temperature to a designated site in the warm-blooded heart and then let it cure in place.
A new book by Antoine van Agtmael, who coined the phrase “emerging markets”, and Fred Bakker, a Dutch journalist, called “The Smartest Places on Earth”, argues that the rust belts of the rich world, especially in America, are becoming hotspots of innovation. ... Bruce Katz of the Brookings Institution, a think-tank, reckons that America’s 50 most research- and technology-intensive industries have added nearly 1m jobs since 2010. ... As Van Agtmael and Bakker note, Akron has capitalised on its heritage as home to America’s four biggest tyremakers by turning itself into America’s capital city of polymers. The University of Akron’s Polymer Training Centre houses 120 academics and 700 graduate students. Companies such as Akron Polymer Systems (Akron, OH; $1M SBIR) and Akron Surface Technologies (Akron, OH; no SBIR) are inventing new ways to commercialise synthetic materials..... In Watervliet, New York, firms such as Cleveland Polymer Technologies (Watervliet, NY; no SBIR, with operations in Israel and India, founded 2004 in Elmira, NY) occupy space in an old US Army arsenal. In Manchester, New Hampshire, the old and once-crumbling riverside mill district now buzzes with knowledge businesses and fancy restaurants. [The Economist, Mar 5, 16]
Since last Leap Day. The average large-cap growth fund is up 9.33% annualized (says Morningstar). That same fund gained just 1.43% over the past 24 months and lost 8.58% over the past year. [Chuck Jaffe, marketwatch.com, Feb 26] Of note: for the first three years of that four years, the federal government was pumping money into the economy in stimulus spending and big bond buying. The Republicans who oppose government aid to the economy were not heard complaining about their stock market profits that the people on the lower economic levels could not reap.
The world of work is changing dramatically. With the rise of automation, demographic shifts and decreasing demand for labor, North Carolina’s workforce will have to adapt to survive. ... The share of U.S. economic output that’s paid out in wages now stands at its lowest level since the government started keeping track in the mid-20th century. ... the experts recommend enhancing career pathways for students starting before kindergarten and supporting a student’s personal and professional development through to full employment based on his or hers interests and skills. [Christopher Gergen and Stephen Martin, Raleigh News & Observer, Feb 28, 16] The authors project a Darwinian struggle for the fewer good jobs to outhink the robots. Which portends a social revolution for how to treat the many with long life expectancies and ever fewer jobs paying a living wage. And any race for more and better technology will just aggravate the dilemma. As economist Robert Gordon noted, the Industrial Revolution's creating more jobs than it destroyed is over, as is America's dominance of the world economy. Stand by for bitter political debate loaded with half-truths.
The U.S. cyber security industry, once one of the hottest targets for venture capitalists, is now grappling with a funding slump that has forced some startups to sell themselves or cut spending. ... many of the new ventures have struggled to gain traction, finding it difficult to stand out from the crowd and provide customers with sophisticated enough security solutions to match the increasingly advanced cyber attacks they face. ... Private investors pumped a record $3.3 billion into 229 cyber security deals last year [Heather Somerville and Jim Finkle, Yahootech, Feb 24, 16]
This was a dead-cat bounce and they've already buried the cat! The oil price is heading into the teens because the world economy is falling apart. We're done with the 20-year credit bubble. The central banks everywhere are lost. Out of dry powder. And that means there is a recession that's going to engulf the entire world economy including the United States. [DAVE STOCKMAN, realclearmarkets.com, Feb 24] Cheer up, he said, things could be worse. So I cheered up, and sure enough, things got worse. Anonymous.
biotech startup Unleash Immuno Oncolytics (Argentina) will soon move into the Cambridge Innovation Center in the Cortex innovation district thanks to an investment by the BioGenerator [Brian Feldt, St. Louis Business Journal, Feb 18, 16] Our lead product, UIO-512, is a patent-protected oncolytic virus designed to target both malignant cells and tumor-associated stroma cells, facilitating a lateralized infection. [company website]
Inevitably, the high tide of startup financing will recede—and high-profile valuation write-downs may be the beginning—but there are some indications that this most recent tech startup boom will have permanent economic benefit. For one thing, the costs of starting a tech company and experimenting with different ideas have come down dramatically. The causes of this cost reduction—cloud computing, server access, etc.—will not go away. For another thing, there is evidence that “hot market” entrepreneurial financing can, in the long run, generate more radical innovations. And, in the more traditional “small business” sector, there are some indications that lending conditions (finally) improved in 2015 after a slow recovery from the recession. [Dane Stangler of Kauffman Foundation, The Looming Entrepreneurial Boom]
As a whole, the country may seem to be going to hell. That jeremiad view is a great constant through American history. The sentiment is predictably and particularly strong in a presidential-election year like this one, when the “out” party always has a reason to argue that things are bad and getting worse. [James Fallows, Atlantic Monthly, Mar16] But Fallows disagrees after a long cross-country exploration, What is true for this very hard-luck city [San Bernadino, CA] prevails more generally: Many people are discouraged by what they hear and read about America, but the closer they are to the action at home, the better they like what they see. Fallows sees the America that adapts to change faster than any other nation. In my lifetime we have adapted to the post-World War II collapsed world, the oil supply revolution, the economic rise of China and Japan and cheap Asian labor, the digital avalanche of microprocessors, and the near collapse of the financial system. Bottom line: ignore what you hear from political candidates whose interests overwhelm their intellects. Their offers of revolution are fantasies.
Sixty percent of the top 25 tech companies were founded by first- or second-generation Americans. If you look at the Fortune 500, the figure is 40 percent. Immigration has been a catalyst for innovation in this country for as long as one can recall. [Ruth Porat, CFO Google, Foreign Affirs, M/A16]
Campbell Soup has committed $125 million to new venture capital fund, with the goal of investing in startups that are transforming the food industry from farms to home delivery ... [CEO] Denise Morrison said that since 2010 about 400 startups in the food industry had received about $6 billion in venture-capital funding. ... Campbell's fund, Acre Venture Partners L.P., will be independent of Campbell and managed by unidentified outsiders, though Campbell is its sole limited partner, the company said. [Howard Brubaker, Phildelphia Inquirer, Feb 17, 16]
Startups may be fun, but. drug development is a grueling, expensive process. And while every situation is different, an industry trade group says a successful drug costs $2.6 billion to develop, on average, if one counts the cost of failed drugs. Generally, it takes more than 10 years to bring a concept to market, according to the Pharmaceutical Research and Manufacturers of America. While that estimate leaves plenty open to interpretation, no development-stage company has that kind of cash on hand. And many of the companies that went public during the boom are years, rather than months, away from commercial viability. ..... Just over 200 biotech and pharma companies have listed via an initial public offering since 2011, according to Dealogic. Within that group, more than 100 development-stage biotech companies are still trading. [Charley Grant, Wall Street Journal, Feb 18]
provide some sort of insurance to reduce the risks of starting a business? Or start importing more entrepreneurs since we’re not growing enough of our own? ... were two of the policy recommendations issued by the Kauffman Foundation at its seventh annual “State of Entrepreneurship” event .... Kauffman President and CEO Wendy Guillies noted the rate of new business creation is now 50 percent what it was in the 1980s. [Kent Hoover, Washington Business Journal, Feb 17, 16] The government has a potential startup engine - SBIR - that is being hugely wasted on good companies doing incrementally good stuff over and over that has little downstream potential.
Need a writing model? Mr. Petroski is a lucid writer and indeed, when talking about the public’s obligation to maintain our infrastructure, a rather eloquent one. [Howard Schneider reviewing Henry Petroski’s 19th book The Road Taken, Wall Street Journal, Feb 17, 16]
A study of over 1.6 million putts shows that professional golfers are significantly more likely to succeed in sinking a par putt than a birdie putt of equal distance and difficulty. Remarkable but true: If the average top golfer putted as well for birdie as he puts for par, he would make an additional $1.2 million a year. Why? The best explanation, coming from behavioral science, is that most people are “loss averse,” meaning that they dislike losses a lot more than they like equivalent gains. [Cass Sunstein, bloombergview.com, Feb 12]
MediWound (Israel) up 17% [Feb 3, 16] announces positive top-line results from the Company's second Phase 2 clinical trial evaluating EscharEx(R) for debridement of dead or damaged tissue in chronic and other hard-to-heal wounds. [company press release]
Almost magic MIT-DARPA chip for intel processing: the MIT researchers’ breakthrough microchip, dubbed “Eyeriss,” minimizes the number of times that the chip’s 168 cores have to access a memory bank, a process that eats away at energy efficiency in conventional graphical processing units, or GPU, chips. Every core in Eyeriss has its own memory. In effect, it’s like creating the functionality of 168 chips on a wafer where there was just one. That could lead to a pocket–sized device that can perform deep learning functions independently, potentially bringing a lot more brains into the devices that soldiers carry with them into the precision-guided counterterrorism battles of today and tomorrow. [Patrick Tucker, Defense One, Feb 4, 16]
World leader, still. According to the World Economic Forum’s most recent Global Competitiveness Report, the United States is the third most competitive economy in the world, behind only tiny Switzerland and Singapore and slightly ahead of other large economies such as Germany, Japan, and the United Kingdom. ... U.S. job creation over the past five years has outpaced that of any other advanced economy, and the U.S. dollar has surged as investors flee Europe and Asia in search of better returns. ... On innovation, for example, which drives economic growth in wealthy nations, the United States is far ahead of any country in the world. ... As former President Bill Clinton put it in his inaugural speech in 1993—following an election in which a weak recovery and growing foreign competition had similarly fueled insurgent campaigns for the presidency—“there is nothing wrong with America that cannot be cured by what is right with America.” [Edward Alden and Rebecca Strauss, Foreign Affairs, Feb 1, 16] Pay no attention to political candidates running for office on the basis that the nation needs them as a saviour.
Immuno-oncology drug developer BeiGene Ltd.(China) raised about $158 million in its IPO [Corrie Driebusch, Wall Street Journal, Feb 2, 16]
Big betting on Magic. Magic Leap said that it raised $794 million in new funding in a round led by Alibaba Group, confirming earlier speculation that the secretive augmented-reality company was raising a large new round of funding. Together with a previous round of $542 million led by Google, this brings Magic Leap’s total raised since late 2014 to about $1.34 billion. [Rachel Metz, technologyreview. com, Feb 2, 16]
Light effect transistor. Jason Marmon at University of North Carolina in Charlotte and a few pals unveil just such a device in the form of a light effect transistor. This is essentially a wire that conducts when it is bathed in light and insulates when it is dark. In other words, it is a switch modulated by light. The team says its new device is simpler than a field effect transistor and does not rely on dopant atoms, so it can be made smaller and thereby continue Moore’s law. [Emerging Technology From the arXiv, technologyreview.com, Feb 2, 16]
The race is on. A British researcher has received permission to use a powerful new genome editing technique on human embryos, even though researchers throughout the world are observing a voluntary moratorium on making changes to DNA that could be passed down to subsequent generations. [Nicholas Wade, New York Times, Feb 1, 16] Where the race will go is a question of how life reproduces itself. Are humans an inevitable result of evolution? If so, why would humans be the end of the road as religions like to pretend?
economics is not a science like chemistry or physics in which new discoveries become immutable truths, but an endless debating society whose disorderliness reaches a fresh fever pitch whenever the road ahead seems bleak. This is the point at which we are now. Economists are fiercely divided not only over how to address the world’s challenges but also even over what those challenges are. [Steven Rattner, New York Times, Jan 31]
Charley Kempthorne, 78 years old, wakes each morning before sunrise, pours a cup of black coffee, opens his computer and writes in a private journal that he began in 1964. These days, he logs between 1,000 and 3,000 words a day. By his rough calculations, his journal is about 10 million words long. [CLARE ANSBERRY, Wall Street Journal, Jan 26, 16] This journal has been running thirty years with a focus on government and high risk technology in small for-profit companies, first ten years inside the government. Its author is also 78.
America is still the safest and most desirable place in the world for the accumulation and disposition of capital. Our currency is the world’s favorite for good reasons. Ownership enjoys better legal governance in the US than in most other places. And our institutional strengths allow us to change governance without tanks in the streets. All of that is a positive for our markets, and particularly so, given the state of divergences in the world. [David Kotok, Cumberland Advisors, Jan 21]
the world’s hottest commodity. The price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December, to $13,000 a tonne [The Economist, Jan 16]
Apple CEO Tim Cook said Apple built its iPhones in China not because hiring was cheaper but rather because it had "vocational skills", such as the tool and die makers it needs to make the iPhone, on a scale that the US currently lacks. "You could take every tool and die maker in the United States and probably put them in the room we're sitting. In China you would need football fields." [Liam Tung, zdnet.com, January 19, 2016] Meanwhile, one presidential candidate who claims to favor free trade would impose a 45% tariff on Apple hardware from China and 35% on Ford vehicles from Mexico. Of course, his magic would keep those countries from reciprocating. Why do we listen to sirens with unworkable songs? They feed our fantasies of resuming US omnipotence of 70 years ago?
Chinese leaders fumbled in their efforts to stop their stock bubble from deflating and confused the world when they devalued the yuan last August and again this month. Chinese monetary policy is opaque and politicized, which means outsiders are skeptical of the official story that the devaluations are part of a move to a more market-determined exchange rate. [Greg Ip, Wall Street Journal, Jan 20] Markets and politics can't be commanded simultaneously.
the growing concentration of income means that whatever the growth rate, most of the population will barely share in its fruits. Altogether, Professor Gordon argues [in his new acclaimed book], the disposable income of the bottom 99 percent of the population, which has expanded about 2 percent per year since the late 19th century, will expand over the next few decades at a rate little above zero. [Eduardo Porter, New York Times, Jan 19, 16] Not to worry, though, our political candidates will promise us a free lunch, and we will elect the best sounding lunch. Then we will continue to moan that "Washington is out of touch", as though Washington were some independent wealthy entity instead of just a collection of the people we elected, whose main purpose becones getting re-elected.
Whither innovation and growth. Will the best brains of the future build things resembling our past innovations, or will they dedicate their time to tasks like making Twitter more user-friendly? ... In terms of specific policies, I was particularly pleased that Mr. Gordon did not endorse the foolish view that federally funded infrastructure will magically reinvigorate American growth. He also, wisely, recommends educational investments, especially for the very young; sensible tax reform; drug-law liberalization; and more visas for skilled workers. ... More generally, the extremely unusual nature of mid-20th-century economic growth raises doubts about whether any public-policy cocktail can rekindle those glory years. .... Most important, the book is full of wonder for the miraculous things that America has accomplished. Doesn’t that suggest that America will continue to do other miraculous things? [Edward Glaeser reviewing Robert Gordon's acclaimed book The Rise and Fall of American Growth, Wall Street Journal, Jan 15, 2016]
Massachusetts is the most innovative state, with California scoring a close second and Washington, New Jersey and Connecticut rounding out the top five states, according to the data compiled by Bloomberg. ... The Bloomberg U.S. Innovation Index scored each of the 50 states on a 0-100 scale across six equally weighted metrics: R&D intensity; productivity; high-tech density; concentration of science, technology, engineering and mathematics (STEM) employment; science and engineering degree holders; and patent activity. [Bloomberg Business, Jan 15] The highest place for a politically red state was #15. Those low tax, low government states may want to reconsider their approach to life if they want to compete in the big leagues of innovation in a tech-heavy world. Especially when the bottom drops out occasionally of the commodities markets.
Expansion meets competition. Wal-Mart is closing hundreds of stores across the globe, including 154 in the U.S., a rare retreat for the retail behemoth on its home turf. [Wall Street Journal, Jan 15] It's a competitive world our there that bewilders our politicians because they cannot promise a credible favorable solution.
Insulin from skin cells. Scientists at the Gladstone Institutes and the University of California, San Francisco (UCSF) have successfully converted human skin cells into fully-functional pancreatic cells. The new cells produced insulin in response to changes in glucose levels, and, when transplanted into mice, the cells protected the animals from developing diabetes in a mouse model of the disease. The new study, published in Nature Communications, also presents significant advancements in cellular reprogramming technology, which will allow scientists to efficiently scale up pancreatic cell production and manufacture trillions of the target cells in a step-wise, controlled manner. [Dana G. Smith, PhD / Gladstone News / January 5, 2016]
this age of protest is driven, in part, by the fact that the three largest forces on the planet â€” globalization, Mooreâ€™s law and Mother Nature â€” are all in acceleration, creating an engine of disruption that is stressing strong countries and middle classes and blowing up weak ones, while superempowering individuals and transforming the nature of work, leadership and government all at once. When you get that much agitation in a world where everyone with a smartphone is now a reporter, news photographer and documentary filmmaker, itâ€™s a wonder that every newspaper doesnâ€™t have a â€œProtestâ€ section. [Tom Friedman, New York Times Jan 11, 2016]
Job engines. Companies less than a year old accounted for all of Wisconsin's net new job creation in 2012, according to a new study conducted by two University of Wisconsin-Madison researchers. ... Those companies have not been around long enough to lay people off, which tilts the net job creation account in their favor. However, the bottom line: Start-ups contribute more than 100% of net job creation and offset the net job losses of older companies, Deller said. ... Generally, only half of newly established companies survive to five years, Conroy and Deller said. .... Conroy and Deller published two versions of their study. One, intended for policy-makers, is called, "Where do the Jobs Come From? Strategies for Job Creation." The other, which details all of their data analysis, is called "Employment Growth in Wisconsin: Is it Younger or Older Businesses, Smaller or Larger?" [Kathleen Gallagher, Milwaukee Journal Sentinel, Jan 11, 16] Great news, although not really news, for politicians who want to be seen handing money to job creators with a simple explanation to a pubic with little understanding of economics. Unless some new market is created, a new job at a startup is matched bt a job loss at a present supplier. But politics isn't interested in such accounting that spoils a beautiful free-lunch story.
Shape-shifting Material. Taking industrial origami to a new level, researchers in China unveiled an experimental shape-shifting material that can fold itself into complex forms one after another, offering a world of possibilities for medical and aerospace applications. The scientists designed their new polymer plastic to reconfigure itself on cue in response to preset temperature changes. Moreover, the material is designed so that, when desired, it can alter into a new form without erasing features from its previous shape, making it suitable for intricate parts difficult to machine or mold by conventional means, they said. [Robert Lee Hotz, Wall Street Journal, Jan 8, 16]
A group led by Henry Snaith, a physicist at the University of Oxford and leading perovskite researcher, has demonstrated what it says is a viable pathway to a device that combines a conventional silicon cell with a perovskite cell to boost the efficiency of that silicon cell by several percentage points. [Mike Orcutt, technologyreview.com, Jan 7, 16]
San Diego County ranks
nationally in best return on investment in local public companies,
according to the CNBC financial network.
The 40-metro Power City Index for 2015 ranked Raleigh, N.C., as first with a return of 16.9 percent, followed by San Diego at 15.4 percent and Silicon Valley at 14.6 percent. ... The three worst metro areas were all in negative territory: Pittsburgh, down 12.1 percent; Kansas City, down 14.7 percent; and Houston, down 16.3 percent. [Roger Showly, San Diego Union Tribune, Jan 5, 16]
See how he built a giant. The UC San Diego Library will house and archive the papers of the late J. Robert Beyster, the physicist who founded defense contractor Science Applications International Corp. (SAIC) and turned it into one of the nation's largest employee-owned companies. ... was a nuclear reactor expert who founded SAIC in San Diego in 1969 [Gary Robbins, San Diego Union Tribune, Jan 7, 16]
Intel announced the acquisition of German drone startup Ascending Technologies. [Cromwell Schubarth, Silicon Valley Business Journal, Jan 4, 16]
Reproducibility -- the Holy Grail of scientific verification -- is rarely possible for biomedical studies, according to two reviews published Monday. Most biomedical studies do not include the full protocol and data required for replication, authors of the studies said in PLOS Biology. [Bradley Fikes reporting on the Journal of Irreprodicible Results, San Diego Union Tribune, Jan 4, 2016]
institutions and customs is not merely picturesque, but also a living
record of safety, prosperity, strength, civil peace, and political and
economic stability. Laws grew thick and strong, like a great forest,
and men sheltered contentedly beneath them.
Hitchens, reviewing Tombs, English and their history, New York
Times, Jan 2] Students of American history should realize
goes back a lot longer than 1604 in Jamestown.