Is Enterprise Going Non-Linear?

I just finished reading an older but still well-written book on American technology and enterprise entitled (appropriately enough), A History of American Enterprise, by John M. Dobson. Dobson was a professor at Iowa State University and he wrote the book in 1988 as a text for undergrads. Dobson did a great job of summarizing how technology and enterprise worked hand-in-hand from colonial days up to his time. Now that twenty more years have elapsed, it is interesting to see how the next couple of unwritten chapters have played out: the Gulf War, the Booming 90's, the dot com crash, 9/11, the Iraq and Afghanistan Wars, and now the bursting of the housing bubble and the deepest recession since the Great Depression. Clearly, this has not been a very stable period.

In reading this history, I was struck by how much more volatile recent times seemed to have been. Boom and bust cycles have always been a part of our history, of course. So have crooks, moguls, builders, and innovators. No, what struck me was that sometime around the 1970's, the system seemed to have moved from being reasonably understandable to being very volatile, almost chaotic in the mathematical sense of the term. The U.S. was moving into a post-industrial economy that was based more on imported products. Finance and services were rising as a total share of employment. Globalization was driving more and more businesses to outsource jobs and functions. In many ways, all these things were linear extensions of what had come before. Companies have always sought lower labor costs and more technology to automate their operations. Something else seemed to be happening that was quite different from the past.

I believe that the U.S. economy went into a new period in history because of two related things that reached some sort of critical mass in the late 70's and early 80's. The first (and the main driver) was the advent of ubiquitous, high-speed computer information networks. These networks not only opened the door to new financial products and services but they also allowed clever traders to generate profits on momentary differences in security prices across markets (arbitrage) that could never have been realized by human traders. These profits brought about the second change. The seemingly unstoppable ability to make easy money in financial trades invited huge sums of money into the market. More and more people and institutions felt like they were being left behind by traditional investment plans and the uncertain future of Social Security. The massive amount of money that was then traded in increasingly complex and split-second automated transactions essentially took us into a world where no one clearly understood or had sufficient control of business cycles. Some of this is becoming visible only now as people try to untangle the web of securitized mortgages and credit default swaps and other even more complex vestiges of the current melt-down.

I realize that there were dozens of other things going on during that time; Reagan supply-side economics, de-regulation, the explosion of wireless technology and the World Wide Web to name just a few. Part of complex, non-linear systems is that small inputs can create large and unexpected outputs. But I do believe that the system somehow slipped beyond the immediate control of real, breathing people. The question is not whether we will return to the "good old days". We will never go back to pre-automation. We wouldn't want to if we could. The question is whether future systems can be built with enough intelligence to limit the damage that can occur when huge sums are traded across the globe in microseconds. I believe that our systems will get smarter, partly because someone will figure out how to make a buck by helping them to do so. I also think that regulation is the human version of technology control systems. They are there to provide checks and balances to the operation.

I believe that the long view of history and technology provides us with a much needed antidote to the 24-hour business news cycle. When I read books like Dobson's, I see that there have been periods when we have accomplished great things and other periods when we seemed to have lost our rudder. Hopefully, we will be coming out of our current downturn soon. And you can be sure that technology will play a vital role as it always has.

[Photos: Top picture is a Lorenze Attractor from Chaos Theory. Bottom is a Televideo computer terminal. Both from Wikipedia.]

Michigan Central Station

UPDATE, March 6, 2010:  The New York Times today has another article with some beautiful photographs of the station.  Debate continues about the fate of this historic building which is slated for the wrecking ball if no one comes up with an alternate use. I found it interesting that the station has over 15,000 fans on some Facebook pages. I hope it survives.

I literally stumbled upon (via Stumble) some achingly beautiful photography by Kevin Bauman. The image below is one of his photos of the Michigan Central Railroad station in downtown Detroit. You can see others at the Behance Network and it is well worth a visit.



The images made me curious about this grand old railroad station. Wikipedia has a nice write-up on it here. The station was built in 1913 by the same architectural firms that built Grand Central Terminal in New York City. The main waiting area was designed to replicate a Roman bath house with grand ceilings and walls of marble. It was built some distance from the (then) Detroit downtown to encourage building out to meet the station. Two things happened to defeat those plans. First, the station was built for an era when passengers came and left the station by trolley and interurban electric cars. The station had very limited parking for automobiles. Second, Detroit expanded northward and not towards the station, leaving it marooned in the less trafficked part of the city.

Railroad passenger trains are virtually gone now except in the Northeast Corridor. The last Amtrak train left the Michigan Central Station on January 6, 1988 and the building was closed that same afternoon. During the 1990's, the station was heavily vandalized and was gutted by thieves looking for materials to sell. It is now owned by the same company that owns Detroit's Ambassador Bridge. Virtually every plan to restore the station has fallen through and just within the last month, the Detroit City Council asked for emergency funds of $3.6 million, not to preserve the building but to tear the old station down (even though it was placed on the National Historic Building registry in 1975). A gentleman in Detroit sued the city to block the demolition of the building and that is where things stand at the moment.

I can't help but think of the contrast between the fate of this beautiful old station and the busy and prosperous Grand Central Station. The comparison is as stark as the comparison between Detroit and New York City. Detroit was built by the automobile. Ford's town. General Motors and Chrysler, too. With all the terrible automotive news of late, a betting person probably wouldn't put much money on the revival of the auto industry...or Detroit.

Another interesting look at the station just before it started to go downhill can be seen on this YouTube video taken in 1987. It gives you some idea of how beautiful the station was even late in its active life.



Time passes and technology changes. The architecture that served that technology passes with it. Still, there is beauty in the past and perhaps a way will yet be found to save the old station. We can hope.

Technology Revolutions Redux

The future of the newspaper was the topic of a post I wrote about a month ago. Clay Shirky has written a great article on the topic which I featured in my blog. Recently, I read a corresponding article on the future of the book (or e-book). Steven Johnson wrote this one for the Wall Street Journal and I highly recommend taking a few minutes to read it. The future of the book seems to me to look much like the future of the newspaper: smaller and smaller chunks of content sold piecemeal rather than as a whole unit, writing that is directed at least as much at ensuring that it hits the top of Google search results as about the content itself, not to mention the disappearance of a physical world of packaged printing.

I am proud to be a bibliophile. I love books and I love bookstores. I love the feel of books and I love having a nice satisfying pile of unread books ready to be savored. But, I also admit to being a gadget geek. I love my iPod Touch with its ability to download e-books from Project Gutenberg (free via Stanza) and now even from Amazon (not free) with their Kindle App. There is something to be said for the ability to have a library in my pocket. I am even toying with the idea of buying a Kindle 2, but that might be pushing it a little too much.

Given my dual loves, it probably isn't surprising that I feel ambivalent about all of this deconstruction of the book. I see e-books as simultaneously a step forward and a step back. Is the gain from broader access offset by the cost of a more fragmented attention span? Who will have the time or attention to read a five-hundred page work of history or a great novel? How will we cope with an ever-increasing number of book options available both digitally and in good old fashioned paper?

While the winds of change seem to be blowing us in the direction of fragmentation, I am actually optimistic about the future of the book. I think both the printed book and the e-book will continue to grow and complement each other. That is not to say that publishing will remain what it has been. I think the whole domain of printing-on-demand, self-publishing, and micro-presses will continue to grow. But books as we know them will not disappear any time soon. Remember the much-hyped "paperless office" of a decade ago? Office printers have never been so busy.

We are in the midst of a technology revolution and any sort of new quasi-equilibrium is still in the distant future. When it does arrive, we can be sure it will not be what we might predict today. That is the whole fun of living through a revolution. At least on my better days it seems that way. On my conservative days, I grumble and rant about how it just isn't what it used to be. But it never has been what it used to be and for that we can count our blessings.

American Icons

I was reading a magazine the other day that had a review about a new book marking the 100th anniversary of the Ford Model T. This car surely has become an American icon of the automobile industry (truly the Good Old Days in light of recent events). I got to thinking about what made the Model T an Icon (definition: a thing regarded as a representative symbol of a class of products). The Model T was not the first American car. It was not the first factory-produced car, but it was the first to create the first mass market for automobiles. As the Model T penetrated people’s daily lives it became synonymous with the collective consciousness of that class of objects called cars. Icons are like that. They may not be the first invention in a new class but they become the short-hand for our mind’s eye. Often the very brand names of the product become generic to the whole class: Kleenex Tissues, Scotch Tape, Xerox copies. If asked, people will often be able to name the icon in a particular class of products. Here are some of my guesses:

Refrigerators: Frigidaire
Steamboats: Fulton’s Claremont
Electricity: Edison’s Lightbulb
Commercial Airliners: DC-3
Personal Music Device: Walkman
Personal Computer: Apple II
Sewing Machine: Singer
Tractor: John Deere

Not every product category has an icon, of course. Sometimes nothing dominates a category to the degree that it becomes the single representative of the entire class. Is there an iconic television, for example? Successful products tend to draw imitators and the choices quickly proliferate. This is one of the reasons that icons tend to be found early in the life cycle of a product category, before they are overwhelmed by imitators.

I was thinking of trying to collect even more iconic examples of American technology. I would also be interested to know what icons are emerging today? If you have any suggestions, I would appreciate your comments.

A Streetcar Named Defunct

I came across this picture recently and it stopped me in my tracks. There is something about images like this that fill me with a sense of melancholy and nostalgia for a time I never even knew. This photo was taken in Los Angeles in 1956 as the Pacific Electric Railway streetcar line was being shut down and converted to buses. How ironic that a relatively clean mass transit technology was replaced by a highly polluting, fuel-consuming technology... in Los Angeles of all places!

Streetcars had been a major form of mass transit in most towns and cities since the late 1800’s. The perfecting of three things: the electric motor, the electric distribution grid, and the speed controller, made trolleys practical. The very word trolley as a synonym for streetcar comes from the system to connect the streetcar’s pole to the overhead power lines. Originally, on the end of the pole a small wheeled “troller” rode on the wire to make contact and transmit power to the streetcar. The troller frequently derailed from the overhead wire and it was time-consuming to reposition it again. The troller was soon replaced with a more reliable underwire system.

Streetcars were invented before the wide-spread availability of the automobile and the bus. Trollies changed the very nature of the city. It was now possible for people to live at a considerable distance from their jobs. The factories of the day were usually air polluters and most folks wanted to live in greener and quieter neighborhoods away from the noise and filth of the factories. In many ways, this was the precursor of the modern move to the suburbs. Residential areas began to be segregated from industrial areas. As more cities grew, more thoughtful planning became the norm.


While they were in the business of daily transportation, streetcar companies did all they could to increase ridership. This included building large amusement parks at the end of their lines to encourage people to ride their cars even on the weekends. Parks such as Palisades Park in New Jersey was built as a streetcar park in 1895 (you can see a long list of such parks on Wikipedia here). The trolley not only brought people to be amused, it became part of the cultural heritage in plays such as Tennessee Williams’ A Streetcar Named Desire.

The streetcar faded during the forties and was all but gone by the mid-50’s. The demise of the trolley lines was brought on by the rapid rise in automobile ownership as well as the conversion of trolleys to bus lines. The success of converting cities from streetcars to buses was facilitated by the illegal consortium of General Motors, Firestone, Standard Oil, and others who worked through a front company called the National Car Lines to replace streetcars with buses. The consortium profited from the sales of their products to run the bus lines. But often, this changeover was welcomed by the locals because of the perception that the bus lines were more modern and convenient than the drafty old streetcars which had suffered from years of lack of maintenance. The streetcars were sent to the salvagers. A few streetcars were purchased by cities in other countries and continued to run successfully for many more years. You can still find streetcar tracks embedded in out-of-the-way roads in many cities.

But all of this is just background to my reactions to the photo. While this time the image was of streetcars, on another occasion it has been old cars rusting in a field or an abandoned canal or factory. What I think about is the pride of the builders when the technology was new. I can feel the pride of the community as it launched its new enterprise. I think about all that the technology promised for improving the future of the people of that day and age. And if often fulfilled those promises. But like everything else, the time for the technology came and went. All that was left were memories, old photos, and a feeling of being somehow diminished.

I wonder which technologies people will mourn fifty years from now? Will people think back nostalgically about their Blackberries or their iPods? Will people remember the Good Old Days of Web 2.0 and Twitter? I find it hard to believe but then I would guess my parents would never have thought anyone could miss the old streetcars. So it goes.

[Picture from the UCLA Archives. Taken at Terminal Island, Los Angeles on March 19, 1956 by the Los Angeles Times.]

Staying Connected: Text, Audio, Video? Less is More

Our daughter is spending this year in Mali, Africa. Mali is one of the poorest countries in the world. The small town of Douentza in which she lives in is a 14 hour bus ride from the capital city of Bamako. Yet, even in Douentza we can talk to her by cellphone and she can e-mail from the local internet cafe to give us updates. Global communication is truly amazing. But the internet connection in Douentza is not broadband and is slow most of the time. It is not fast enough, for instance, to support real-time video conferences. So until just recently we hadn't seen our daughter's smiling face in months.

Last week, she went to Bamako on business. A colleague of our daughter who lives there has a high speed connection in her apartment and we were able to have a wonderful video conversation using Skype. Being able to see her while we talked gave us a much better feeling of how she was doing. Every parent knows the signs of stress in their kids and we could see that she was really doing quite well. The video added a special dimension to our regular phone conversations. With Skype on both ends, the whole conversation was free. When I stop and think about this even for a moment, it is amazing. I can talk to someone half a world away in real-time video at virtually no cost. The internet has changed our lives in so many ways we could not even imagine 15 years ago.

Video phones are a sci-fi novelty idea that has been around since I was a kid. I can remember seeing prototypes demonstrated on television that showed the Modern Family of the Future sitting at their video phones and talking like they were in the same room. AT&T actually tried to commercialize video phone service in several major cities in the 1970's but the costs were so high that the business was a flop. The equipment had limited capability, the network was expensive and proprietary, and the bandwidth for transmission was extremely limited. This was still a very primitive communication technology era. It would take another 25 years, low-cost, powerful microprocessors, and the world wide web to make the impractical possible.

The idea of being able to remotely see someone while talking to them is something that seems to have always caught the imagination. Wikipedia has an image of a picture phone that dates from 1910. With the advent of television, the video phone seemed to be just around the corner. Today, many cellphones are enabled for video conversations. The average laptop or desktop computer comes with a small video camera that allows web-based video conversations to take place easily. So why aren't video calls more popular? Why isn't everyone checking in via a video link with friends, family, and business colleagues?

But as we all know, it is not video that has become the ubiquitous mode of communication, it is text messaging. Every day while driving I will see some other driver who is busily punching out a message while keeping just half an eye on the road. Somehow, the need to text even while doing something that could get you killed has become a compelling need for so many. Why do people feel so compelled to be linked at every moment? Why not just talk rather than text? After all, texting requires you to type on a teeny-weeny keypad and use a shorthand language of abbreviations and emoticons. But in some ways, this seems to make texting more attractive rather than less.

The biggest advantages of texting is that it (1) doesn't require the other person to be available at the moment and (2) you can be available for connection anytime, anywhere via your cellphone. It is basically a stripped down e-mail system that works because people carry their "computer" (read: cell phone) with them and always have it on. Texting frees you up from having to answer the phone when you are busy or don't feel like talking. Texting allows you to be one step removed from the audible cues you can hear in someone's voice which can at times be a good thing. Texting allows you to stay in touch in places where talking is annoying or prohibited. You can even write some things that you might not be willing to say out loud.

Whole new paradigms have sprung up that are based on our ability to send small messages to not just a single person but a whole world that might be reading. Twitter is the most notable of these. Twitter turned out to be one of the principle means of getting the news out in rapidly-unfolding events (like the Mumbai massacre) that otherwise would be unavailable to us. Much of the power of what has been dubbed Web 2.0, or social networking, is built on small text messages that connect us billions of times a second.

So often, it turns out that less is more. Given the option of full-blown real-time video communication, we choose instead to chat asynchronously via small cryptic strings of text and emoticons. Somehow, despite the limitations of the medium, we can make ourselves perfectly clear. We need to stay connected to each other but that doesn't mean that we want to be in a face-to-face conversation, even with our best friends. Texting and Twittering. We love to connect. We love the immediacy. But we also love the sense of being able to control when we talk and when we listen. Technology allows us to connect and it allows us to maintain a certain distance. We struggle with the balance point and we probably always will.

George M. Pullman: Force for Progress or Corporate Despot?

And the sons of Pullman porters, and the sons of engineers,
Ride their fathers' magic carpet made of steel...
- Steve Goodman

He was buried at night in a reinforced crypt with tons of concrete poured on top of his casket to protect it from desecration by those who hated him. He was the American idyll, the self-made man. In his life, he changed the way people traveled, he built his vision of a planned community, and he was the center of one of the most bitter labor struggles of his era. His name was George Mortimer Pullman.

Pullman’s name has become eponymous with three things: railroad sleeping-cars, the village he created to house his factory workers outside of Chicago, and the bitter labor strike of 1894.

George Pullman was born in western New York in1831. He left school when he was 14 and worked for a time in his brother’s cabinet-making business. He was an ambitious kid with a natural talent for business. While still in New York, his father, a builder, had contracted to move local buildings that were in the way of a project to widen the Erie Canal. When his father died unexpectedly, George took over the contracts and successfully completed the work. He took those building-moving skills with him to Chicago. The young city was built on a low-lying swamp. Entire blocks needed to be raised to afford better drainage and sewer function and Pullman was one of the men who was contracted to raise the buildings and streets. While on an early train trip, he experienced the primitive conditions on early railroad cars which had only rough bunks for sleeping. In his own discomfort, he saw opportunity. He began building a better sleeping-car but the Civil War interrupted his early plans as all available manufacturing resources were turned to the war effort.


Pullman went to the Colorado gold fields during the Civil War. After raising capital in a dozen business ventures related to the mining industry, Pullman returned to Chicago and began building the most luxurious sleeping-cars of his day. His cars cost four times what a normal passenger-car cost. They made long, grueling railroad trips not only tolerable but comfortable. Pullman slowly signed up one railroad after another to put his sleeping-cars in their passenger trains. But unlike other car manufacturers, Pullman never sold his cars to the railroads, he leased them and managed them directly. He was the first to hire special sleeping car porters to make up the beds at night. These Pullman Porters were almost always black men from the south. While he paid them lower wages than he would have had to pay to whites, his wages were much better than most blacks could earn in other occupations. By leasing the cars, he insured not only the quality of the service (and hence repeat customers) but he also was able to move his cars between railroads to balance changes in seasonal demand.


In the early 1880’s with his business needing new and enlarged manufacturing facilities, Pullman decided to build a huge new factory complex outside of Chicago. To optimize the output of his workers, he envisioned an ideal community with everything that his workers would need. It would also be free of the vices found in other cities. He worked with a young architect, Solon Spencer Beman, and a landscape architect, Nathan F. Barrett, to design his planned community. It was named, naturally enough, Pullman, Illinois. Pullman never considered anything more than a prudent business investment. It was expected to return a profit and increase the productivity of his workers. While the town looked wonderful and visitors marveled at the architecture, the workers themselves grew to hate it. They had no say in the administration of their town, the rents were high, and any discussions of organizing labor was severely repressed.

The Panic of 1893 was brought on by speculation and overbuilding of railroads. As railroads failed, a recession set in and orders for Pullman cars plummeted. In 1894, Pullman laid off two-thirds of his workforce and cut the salaries of the remainder by 25 percent. He didn’t, however, reduce his rents or the costs of food and other necessities in the town of Pullman. When his employees appealed to him to either cut the rents or reinstate their wages, he refused to negotiate. Many of his workers were getting paychecks, after withholding for rent, of only a few pennies to feed their families.

Eugene V. Debs had been organizing the American Railway Union to bring together the less-skilled workers of the nation’s railroads (the skilled workers formed brotherhoods which did not participate in the subsequent strike actions). The ARU organized the Pullman workers and George Pullman immediately closed his doors and laid off even those workers who did not join the union. Pullman was repeatedly asked to go to arbitration to settle the strike but he steadfastly refused. The strike eventually disrupted the U.S. Mail service which was primarily carried by train. Because the ARU had members nation-wide and because Chicago was the major rail hub, the strike started to impact rail service across the country. The disruption of the mail gave President Grover Cleveland an excuse to send in Federal troops to break the strike. A dozen strikers were killed in the battles that followed and millions of dollars were lost in damages to buildings and property. But the strike was broken, as was the union. Debs was arrested, convicted and spent six months in prison.

George Pullman became one of the most hated faces of the Gilded Age. He died three years later in 1897 of a heart attack. It was the residual hostility from the Pullman Strike that resulted in his burial at night to protect his body from desecration.

The deep unrest between labor and capital was not resolved by the Pullman Strike. It seems to me that the story essentially repeated itself with Henry Ford who first raised his workers up with the five dollar day and then tried to ultimately deny them a decent living which lead to the violent River Rouge Strikes of 1937. But at least one good thing came out of the Pullman Strikes and other labor unrest of that period. Labor Day was created as a national holiday in June of 1894 both to commemorate the working class of the country and to dampen the hostilities between labor and capital.

George Pullman was an entrepreneur, a visionary thinker, and a social experimenter. Pullman was not, however, someone who could see that it was in his best interest and the interest of his company to arbitrate his differences with his workforce. His intractable position cost many people, himself included, dearly.

Post Script: Following his death, the courts forced the Pullman Company to divest itself of its real estate holdings, and the town of Pullman was annexed into the city of Chicago. You can still visit the neighborhoods today. See this link on Flickr.

Cosmos

Almost 30 years ago, a television series debuted which had a profound impact on our popular understanding of science, especially the science of astronomy. The series, Cosmos, was hosted by astronomer Carl Sagan. The series was the most widely-watched public television series in history until Ken Burns' series, The Civil War, was produced in the 1990’s. Cosmos is now available in its entirety (and for free) on Hulu.com.


[Image of Hulu video. If the video does not show up, click through to original post]

Despite its age, the series is still worth watching. The passage of time does date the film somewhat. The special effects are pre-Star Wars and the pacing is much slower than today’s quick-cut-editing television. But the writing is beautiful and the pace actually lets you contemplate what is being said.

Sagan, who died in 1996, reminds me a lot of Lewis Thomas, another lyrical scientist who wrote several wonderful books of essays on science including The Lives of a Cell: Notes of a Biology Watcher. Both men manage to convey that at the bottom of all we know there is still an awe-inspiring mystery that is capable of humbling us if only we will pause long enough. We need to look up at the stars or down at a flower at least once in awhile to stay connected to a bigger reality. Sagan said that we are made of “star-stuff”, the very atoms that were once parts of stars are now what make up our bodies and everything else in the universe. As we get bogged down in the daily grind of the 24-hour news cycle about the latest economic disaster or the Celeb-of-the-Week Club, we would do well to remember that “This too will pass”, as will the stars themselves. But the mystery will remain.

Those worlds in space are as countless as all the grains of sand on all the beaches of the earth. Each of those worlds is as real as ours and every one of them is a succession of incidents, events, occurrences which influence its future. Countless worlds, numberless moments, an immensity of space and time. And our small planet at this moment, here we face a critical branch point in history, what we do with our world, right now, will propagate down through the centuries and powerfully affect the destiny of our descendants, it is well within our power to destroy our civilisation and perhaps our species as well.
- Carl Sagan

Technology Revolutions are Messy

Clay Shirky had an interesting post in his blog entitled Newspapers, Thinking the Unthinkable. I recommend reading it. Shirky’s point is that the newspaper industry has been struggling since the advent of the internet to find a new business model that will allow them to make money and stay in business. His prognosis is that they can’t and they will disappear. He comments:

Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead.

Much has been written about the demise of newspapers. Nicholas Carr in the The Big Switch devotes much of a chapter to the topic. As Carr describes it, newspapers were able to prosper because they were able to put together an information bundle - news, classifieds, sports, stock prices - that they were able to pay for with ad revenues. People had to buy the whole bundle to get the pieces they wanted. The problem now is that the newspapers are being unbundled. Most people don’t want to buy a whole newspaper, they just want to go to the story that they see on the website that interests them. It is no longer possible to get advertisers to underwrite the cost of the bundle. This means that no one is paying for the foreign bureau in Baghdad, for instance, but in a more pernicious way, the very stories that are now promoted by the news editors are the ones that attract the most clicks and hence the most advertisers. These often tend to be the lighter stories that do not delve deeply into issues that have longer-term consequences.

So the newspaper transformation revolution continues. This is by no means the first. Revolutions are messy. As Shirky notes, it is easy to see the Before and the After. What is hard to see is the During. He mentions the work of Elizabeth Eisenstein who wrote a book entitled The Printing Press as an Agent of Change which describes what happened during the Gutenberg transformation to the printed page:

The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

Eventually, of course, a new equilibrium was established and it easy to forget the queasiness that occurred during the transformation period. It is always this way. Nicholas Carr closes his book with the following:

All technology change is generational change. The full power and consequences of a new technology are unleashed only when those who have grown up with it become adults and begin to push their outdated parents to the margins. As the older generations die, they take with them the knowledge of what was lost when the new technology arrived, and only the sense of what was gained remains. It’s in this way that progress covers its tracks, perpetually refreshing the illusion that where we are is where we were meant to be.

[Image from Wikipedia: Statue in Brookgreen Gardens, Pawleys Island, SC]

Innovation - Not?

Businessweek’s economist, Mike Mandel, recently gave a presentation in which he put forth the contrary proposition that over the last decade the U.S. has failed at innovation. You can read the short version here at Phil Nussmaum’s OnDesign Businessweek Blog. The nut of Mandel’s argument is that by the economic measures of stock prices and wages, the last ten years have either been flat or even declining despite all the internet and biotech activity. The only business that really seemed to flourish was finance and we all know where that ended up. Mandel remains cautiously optimistic that we will return to prosperity in the medium term but as they say, “Past performance is no guarantee of future returns”.

I think we all sense that we are living through a time that in which we are undergoing a fundamental shift that is probably even greater than that which took place in the Industrial Revolution. Revolutions are unpredictable beasts that tend to get out of hand. The impact of a revolution is rarely foreseeable from within it. But a new culture will emerge out of this one as surely as the rise of the corporation and mass production rose from the last one. Utopian visions have always been a part of fundamental technology shifts. And they have almost always been wrong. The new culture brings not only progress but a new set of problems.

Mandel is pinning his hopes for recovery on the Usual Suspects of biotech, green energy, and the web. That may prove to be right because changes don’t simply come out of thin air. They have long incubation periods in which the emerging future looks like an adolescent that is noisy and best ignored. But one thing is clear, whatever happens it will come about because it provides a more economical way to meet people’s needs.

I have been reading an interesting book by Nicholas Carr entitled The Big Switch. Carr writes about the parallels between the impact of electric utilities of the 20th century and the emergence of “computing utilities” in the 21st century. Both dramatically reduce the cost and improve the reliability of a basic technology. The economies of scale that come with centralizing the technology in a utility make a whole new way of living possible. And those same economies make the emergence of the new technology inevitable.

So Carr would agree with Mandel that betting on the internet, or more precisely, computing as a utility is one way in which we will see innovation in the future. Green energy, even though it may be the way out of climate change, has to find a way in which it is the most cost effective solution. Maybe that happens through tax policy but if it is not the lowest cost provider, the market will choose a cheaper path. It always does.

The same might be true for pharmaceuticals and biotechs. The cost of discovering and producing a new drug is just too high. The problem that Big Pharma faces (and what is driving the mega mergers of the last decade) is a diminishing pipeline of good candidate drugs. When the costs for discovery and development are approaching a billion dollars, it is just too expensive to be sustainable. So what is needed here is a way to reduce those costs. Some think that the increasingly sophisticated use of mathematical models of biological processes, the so-called “in silico” biology will be the answer. Tests can be done in a computer much cheaper than they can be performed on a bench or at the bedside. But their relevance is only as good as the model itself.

We need much more innovation to break free of this recession. And the innovation needs to give us real results, not just the financial illusion of innovation. We are all depending on it.

Necessity is the Mother of Invention

I wrote yesterday about a wonderful art exhibit at the Ackland Art Museum at the University of North Carolina in Chapel Hill. I quoted John Eckblad, the collector who provided the prints for the exhibition as saying:

Today, with our economy and environment under siege, it’s useful to remember that crisis begets invention. When we seem closest to capitulation, the seeds of our next reality have already been sown. And, we need not wonder for long how our new realities will look and feel. Once again, artists will be there to both document and interpret.

Saturday, there was an article in the New York Times about just this thing. The article by journalists Matt Richtel and Jenna Wortham described how the recession with its resulting layoffs was forcing a whole new way of entrepreneurial activity from younger people who couldn’t find work. The article quotes Mark V. Cannice, executive director of entrepreneurship programs at the University of South San Francisco as saying:

If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas — scientists, engineers, business folks now looking to do other things,” Mr. Cannice said. “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.

The technology enabler that is releasing a wave of entrepreneurial activity is the web. Whether people envision starting a new dot com business or whether they are using the web to market their physical products or locate suppliers, the internet is making low-cost innovation possible. It is tempting to think that this is somehow a unique feature of the technology of our time. But every new technology wave has had the same impact on releasing innovation. The railroads with their resultant lowering of transportation costs stimulated decades of new business. Montgomery Ward and Sears both developed in the late 19th Century as a means to cost-effectively provide retail goods to rural people. Both of these catalog businesses were located at the center of the U.S. rail hub in Chicago. They were literally the Amazons of their day, enabled by a technology network that made the business even possible.

It’s going to be interesting to see what emerges out of this new wave of “forced entrepreneurship” (Mark Cannice’s phrase). Lots of it will be local and hence not visible to most of us. Many of the startups will be short-lived. But they will have not only allowed their owners to survive, they will help the economy and will be the route for many to what amounts to a free MBA through the School of Hard Knocks. These entrepreneurs will acquire invaluable knowledge that will serve them all their lives. As Eckblad said, “The seed of our next reality have already been sown.”

At the Heart of Progress: An Exhibition

The Ackland Art Museum at the University of North Carolina in Chapel Hill has a wonderful exhibition entitled “At the Heart of Progress: Coal, Iron, and Steam Since 1750”. The exhibit if built around a collection of engravings and prints from the John P. Eckblad Collection. Eckland has been collecting images of industrial art for over 30 years. The exhibit does a remarkably good job of showing how artists and illustrators have captured both the positive and negative aspects of the Industrial Revolution. The exhibition has a well-written and beautifully illustrated catalog for a cost of $15. If you can’t get to Chapel Hill, you can obtain the catalog from the museum. The catalog does a great job of providing insightful commentary on the forces in play from the early Industrial Revolution through the 20th Century. Take this passage for example:

Coal, iron, and steam power came together in a complicated triangular relationship. As ironworks increased demand for coal, coal mines were dug ever deeper, and the dangers of flooding made pumping apparatus a necessity... Iron demanded coal, coal demanded steam, steam demanded more and better iron, but this circle of progress was soon sending out branches. Coke, the key to iron-smelting with coal, was produced by baking coal in ovens to increase its carbon content by vaporizing other components. The by-product, coal-gas, was soon found to have its own uses as a fuel and a source of light.

The images in the collection follow the advancement of industry into the 20th Century and focus not just on the technology but also on the human side of the drama: the plight of the workers and the conflicting forces between employment and the danger and degradation of the work.

Eckblad seems to be, at heart, a technology optimist. In an introductory statement, he encapsulates the relevance of this historic look back on today’s events:

Today, with our economy and environment under siege, it’s useful to remember that crisis begets invention. When we seem closest to capitulation, the seeds of our next reality have already been sown. And, we need not wonder for long how our new realities will look and feel. Once again, artists will be there to both document and interpret.

Technology, like art, is just another dimension of the human drive to create. That art should interpret technology is only a natural part of our desire to understand the forces that we release with our innate creativity.

The Heights

Technology changes and yet some things stay the same. Take the location of towers as an example. Usually, towers are located on the highest point in the area to afford the longest unobstructed line of sight possible. It doesn’t matter whether the purpose of the tower is visual observation like you find in old fire towers or electronic communication for the ever-increasing wireless networks. A clear view is important. It is a matter of simple economics. The fewest number of towers to do the job is the cheapest way to go.

Most of the old forest fire towers are now abandoned. We have better ways to do the job. We can even spot forest fires from space satellite imagery. But still, towers and heights seem to attract us. The towers that haven’t been torn down are fenced in and the bottom ladders have been removed to keep people off of them. But there are always people who disregard the barriers and find a way to climb the old towers anyway. We are drawn to high places. Some of this is the spirit that makes people climb mountains: the challenge of the climb. But we are wired to value the view. Maybe it is primal, a survival skill. The longest view lets us see any approaching danger. Whatever the reason, we still put a premium on the view.

The modern version of the mountain top, the premium view, is the top-floor corner office in the high-rise office tower. This is usually reserved for the senior person in the organizational pecking order. People work like dogs to get into the corner office and they relish the view when they get there. Views are symbolic of status and power. I once had a corner office (only on the second floor) but it looked out on a beautiful pond. I mourned the day I had to move out of that office. I hardly had a person come see me who didn’t comment on the view. It gave me a certain amount of organizational status irrespective of my actual position.

Property with a view commands a premium. Whether it is a mountain top of ocean-side, we will pay real money for the long, unobstructed view. If an area is being developed, the shore and the hillside always bring the highest price. People go to extraordinary lengths to build their homes in precarious places just for the view. You can hardly go a year without seeing a California hillside home either burn in a brush fire or slide down the mountain in a rainstorm. And then the owners immediately rebuild in the same location.

We are creatures with limited capabilities and we value ways to extend our inborn assets. Whether it is a view for our sight, communication networks for our hearing, or transportation systems for our legs, we are have a natural affinity for that which extends us. Technology extends us. Our insatiable desire to transcend our limitations drives technology. I wonder sometimes whether technology tickles the same part of the brain that lets us enjoy a sunset on the ocean shore? Are we neurologically wired to seek the innovative for the same reason we seek the sunset? Maybe we’ll find that answer at a future sunrise.