Category Archives: Impacts of Technology

Are We Ready for 6th Generation Mobile Devices?

As the telecommunications industry races to implement 4th generation communications technology, it is worth looking back to see both where the industry has come from and speculating as to where it is likely to go.  What might the 5th and 6th generation electronics look like?

The first generation cell phones, introduced in the early 1980s, relied on radio frequencies to transmit analog signals.

Second generation phones used a digital signal to process mainly calls through circuit switching.  The first phones were introduced in the early 1990s.  Although later models integrated some packet switching and the ability to send and receive data, the phone was still mainly a phone and transmission speeds were low.

Third generation technology relied exclusively on packet switching to transmit signals.  This allowed the software to handle voice, data, and video.  Users could browse the Internet and transmission speeds were much higher.  The first 3G phones were introduced in the early part of this century.  Users could not only receive non voice data, they could send it.  This opened the way for including other capacities such as a camera and GPS into the device.

The fourth generation of phone, just being introduced, are fully integrated into the Internet with transmission speeds that approach or surpass broadband and allow the user to move between different modes of connecting to the Internet.  The ability to integrate data from a microphone, camera, GPS device, accelerometer, gyroscope, compass and other devices enabled a large range of apps.  Fast wireless connections expanded these apps by allowing this information to interact with remote databases.  It also allowed 4G phones to access the cloud for unlimited storage and processing power.

Progress has therefore been measured along two directions: the ability to seamlessly handle all forms of data, not just voice, and the speed of transmission.  In addition, advances in computing and material sciences have allowed phones with any given capacity to become smaller and more versatile.

Given this, where might the future lead?  I believe that 5th generation phones will increasingly integrate the Internet with reality.  Packet switching and fast transmission speeds allow users to access unlimited amounts of data of all types.  Very often this data is most useful when applied to the physical world in which users live.  Already, applications allow users to look at a scene through their lens and see data layered on top of their view.  This will be much more useful as display technology continues to develop.  Rather than calling up directions to a store, individuals might call up a visual yellow brick road that projects onto their eyeglasses and points the way.  When you go shopping, current software can tell you whether any of your friends are already at the mall.  Fifth generation software will continue to fully integrate the real with the virtual.

What is left?  Sixth generation might then integrate the communications system with our bodies so that we are truly connected to the Internet wherever we are.  As miniaturization continues we will be able to implant components directly into ourselves.  Cochlear implants are already well developed technology and scientists are working on implanting tiny cameras that send electronic signals to blind people.  Paraplegics are having circuitry implanted directly into their brains so that they can control things remotely.  As the reality of virtual worlds increases, it may become increasingly difficult to distinguish the virtual from the present.  Both may lay the same claim to being real.

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What’s Wrong With the Administration’s Innovation Agenda?

Does anyone remember Al Gore’s National Partnership for Reinventing  Government?

The Information Technology & Innovation Foundation had yet another great event on March 9th, 2011.  This one was devoted to the Administration’s innovation agenda.  There were two panels of distinguished speakers, including at least three top Administration officials.  Yet despite the excitement and confidence, the central message seemed hollow.  The reason I think is that, despite their best intentions, the Administration officials do not realize what true innovation would do to existing business models and, to the extent that they do realize it, they are unwilling to let such changes happen.  Yet without these changes, there is little reason to think that we will ever see the significant improvements in quality and cost that innovation can bring.

There were several references to the fact that productivity has lagged in education, health care and government services.  The logical conclusion might for government to withdraw from these activities so that consumers had choices, suppliers faced competition, and disruptive innovators could challenge incumbents.  Yet no one made this leap and there are few signs that the Administration wants to go in this direction.  Despite some positive steps in education, the President has still not challenged the basic power structure for education.  And in health care we have actually taken steps backward.  The hope instead seems to be that we can force change from the top.  Good luck.

Let’s take education.  One of the speakers mentioned a challenge by the President to develop technology that was the equivalent of learning from the nation’s best teacher and as captivating as the best-selling video game.  A great product, but it wouldn’t make a difference to public education.  Instead it would join the long list of technologies including 8 millimeter film, video, and computers which failed to have a significant impact on the cost or quality of education.  The reason is that technology almost always requires significant organizational change in order to have a large impact.   Companies used to have pools of typing secretaries to handle paper work.  Imagine giving each of them a computer but asking them to do the same work.  You get a little productivity improvement but not a lot.  Much of the productivity increase comes in being able to do away with the typing pool and asking executives to learn to type themselves.

The technology that the President is talking about could both dramatically lower the cost of education and improve its quality.  But in order to do that it would have to fundamentally upend the existing model of K-12 education.  There is no way that school boards, administrators and teachers are going to make that change themselves.  There is also no indication that the Administration would support giving parents the power to go around them to new entrants.  Doing so would have an enormous effect.  The District of Columbia spends well over $10,000 educating each student.  If you give 5,000 parents the right to use that money for education in whatever way they want, that’s a $50 million market right there.  Spread that across the country and a lot of businesses get interested.

The need for a different power structure was also illustrated by the personal history of one of the panelists.  Congressman Jared Polis described starting Proflowers.com before entering Congress, .  The company’s website states that: “once hand-picked, our flowers are delivered directly to you. Others take a longer route through brokers, middlemen and, finally, a florist’s shop. By the time they reach the recipient, their best days are long gone.”  The value proposition is that it facilitates transactions directly between the customer and the grower.  Its growth could only have happened because Mr. Polis was allowed to start a business that went around the established industry directly to the consumer.  Its success came at the direct expense of many of the middlemen listed on the website.  If the flower industry had been regulated on the K-12 model, change would have had to come from within the industry itself.  Mr. Polis would have been prohibited from approaching customers directly and instead would have had to convince brokers and florists to adopt a business model that was directly contrary to their immediate interests.  He would have been told of the difficulty consumers would have judging flower quality for themselves and the need to have an experienced middleman to provide advice and assure quality.  No doubt florists would have used some information technology, but Mr. Polis would have made very little money and consumers would have experienced little difference in the way they purchased flowers.

Of all people, Congressman Polis should perhaps see the value of new business models like vouchers in education and tax credits in health care.  I suspect he strongly opposes both.

An open business model in health care and education would ensure that patients and parents get to make the choices.  It would put the resources currently spent by government and employers directly in the hands of consumers.  It would eliminate the tax incentive currently given to employer-based health care.  It would allow new entrants to enter the market with a minimum of prequalification.  And it would not insist on a rigid way of delivering services.  Over the past decades the existing model within each industry has been characterized by increasing costs and stagnant, if not declining, quality.  Under an open model within ten years I believe both would show declining costs and improving quality.  Society and the average worker would be far better off.  Yet the transition would be rough.  Large numbers of teachers, schools, hospitals, and health care providers would close and the government would have far less power to dictate outcomes or policy.

Because the Administration is not ready to support such changes we will see incremental progress at best.  Costs will continue to climb, pricing more Americans out of the market.  No doubt ten years from now we will be going to similar conferences to hear a new Administration gush about how the latest technologies hold the promise of transforming health care, education and government services.

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The United States Faces Five Big Challenges

In order to make its strategic and economic leadership secure, America must successfully deal with five complex challenges over the next 20 years.  A solution to each of these challenges is achievable with sustained effort and, if achieved, they will strongly improve America’s ability to enjoy rising livings standards and continued international leadership.  They will also have positive implications for the rest of the world.

The Reform of International Institutions

The United States has a fundamental interest in seeing other nations join it as wealthy, responsible members of the global community.  Yet as other nations develop, the relative power of the United States is certain to decline.  This makes it imperative to develop international institutions that effectively accommodate and constrain the rising power of other nations.

Americans are much better off in a world where the citizens of China, India, Brazil and similar countries enjoy rising living standards and greater freedoms and where their governments bear a proportionate responsibility for ensuring the maintenance of the Western liberal order that has governed during the last 60 years. This order stressing free trade, human rights, nuclear nonproliferation, and collective security has delivered enormous benefits to the world.  As globalization increases the number of problems needing a collective solution, international institutions will gain even more importance.

Yet important international institutions including the World Bank and the International Monetary Fund, have lost much of their relevancy.  Decision making needs to be changed to reflect the rising influence of developing countries.  Just as important, their operations need to be streamlined and focused on a new mission that better reflects the need’s of today’s international community.  Other institutions like the United Nations and the General Agreement on Tariffs and Trade, look increasingly unable to deal with increasingly complex global problems.  Both the United Nations General Assembly and its Security Council continue to have difficulty addressing global issues.

Countries such as India and China need to find that the institutional structure surrounding them both furthers their interests and restrains their ability to act unilaterally against the interests of the general community.  And the world community needs institutions capable of dealing with collective problems.

Preparing Society for the Impact of Technology

Technology continues to increase at an accelerating rate.  In fact, it is likely that the amount of change occurring during the next 30 years will be at least an order of magnitude greater than the changes over the last 30 years.  If one remembers the social, economic and political changes that technology forced over the last three decades and then multiplies by 10 or 20, it becomes clear that new technologies will have a tremendous effect on both the wealth and shape of society.

These changes will have dramatic effects on privacy, life expectancies, industrial structure, and ethics.  What will happen to entitlements and the work place when people routinely live to be 120?  Will parents be allowed to alter their child’s genetics?  Who will have access to all of the data on our personal movements and transactions that future information systems will collect?  Will everyone be guaranteed access to drugs that eliminate disease or enhance mental performance regardless of cost?  We cannot answer these questions now, but we prepare for them.  In addition, the government should change policies governing work, health care, and savings to accommodate a world in which workers need to be more mobile and continuously retrain and in which they will live much longer.  Second, the government can begin to lead a national dialogue about the responsible use and legal framework that should surround new technologies.  It should also begin to enact policies to ensure that the benefits of technology are widely shared.

Competitiveness and Innovation

Globalization will continue to require greater collective decision making by the world’s powers.  If in 20 years the United States is not among the world’s leading economic powers these decisions will still be made, but Americans will have less influence over them.  Remaining the world’s leader in economic competitiveness and innovation boosts our role in global governance and our ability to protect our vital interests.  Concerns about international competitiveness can easily be overdone and other nations face more serious hurdles than we do.  Yet there is little doubt that the United States could do a much better job of ensuring that its laws encourage rather than retard greater productivity.  Failure to generate additional wealth impacts both our national security and our living standards.

Continued technological change can make a large contribution to national productivity, but only to the extent that organizational changes allow for its full use.  Significant reforms to the education, health care, and finance sectors will be necessary before we can see the steady improvement in both performance and price that characterize other sectors of the economy.  Additional investments in the nation’s transportation, energy and communications infrastructures will also be necessary but great care will be needed to ensure that the spending generates a high rate of return.  Finally, we need broad reforms to taxes, worker training programs, and regulation in order to channel activity away from consumption and into productive activity.

The New Social Contract

To obtain the necessary political support for the above changes, a new social contract is needed that strikes a better balance between individual responsibility and collective security.  Workers need to become less dependent on their employers for pensions and health care and individuals need more control over them.  Government assistance should be conditioned on responsible behavior, including an affirmative obligation to work.  In exchange, workers should be able to count on a higher level of protection against the uncertainties and dislocations that accompany a dynamic society.  This includes a fair distribution of the benefits of higher growth, better access to decent education and health care, and tougher enforcement of laws against deceptive and anti-competitive behavior.

The new social contract should provide the minimum level of income needed for a decent standard of living.  It should take the form of an income supplement so that individuals have the maximum flexibility to meet their own needs.  And it should be accompanied by policy reforms that make it easier for everyone to find decent shelter, save, obtain the training needed to improve their prospects, and gain access to affordable health care.

Fiscal Balance

The achievement of each of these goals requires the government to have a long-term focus.  This is unlikely unless it first learns how to balance its commitments with its resources.

The recent fiscal crisis is highlighting the large gap that has developed between America’s commitments to the future in the form of entitlement programs, debt, and infrastructure needs and its present ability to pay for them.

Far too many sectors of society, including all levels of government, are burdened with commitments that they cannot keep.  These commitments need to be renegotiated so that resources are devoted to more productive uses and the burden of future investment is more evenly spread.  A government that tries to meet every want is unlikely in the end to be able to meet even its most important needs.

In facing these challenges it is important to remember that, not only do other nations face their own challenges, our problems are in many ways less serious and our strengths more solid than those of our major competitors.  But the failure of other nations should not give us hope for, until we face up to the challenges before us, we will fall far short of of our potential.

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Filed under Budget Deficit, Competitiveness, Five Challenges, Impacts of Technology, International Institutions, Social Contract, Uncategorized