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jerryking : physical_economy   5

The Cyber Age Has Hardly Begun - WSJ
By Mark P. Mills
Sept. 17, 2017

Most everything critical to daily life—food, energy, buildings, transportation—is physical, not virtual. The fabric of civilization involves digging up, processing, fabricating, moving and operating gigatons of material composed of atoms, not bits. As amazing as artificial intelligence and the cloud seem today, the world is still in the early days of truly useful, ubiquitous software that can be infused into the physical world’s hardware.

The billions of dollars in economic value from information technology has been associated with improvements mainly in information-related activities: mail, news, entertainment, advertising, finance and travel services. That’s no accident, as those domains are relatively easy to digitize. Very little of the hardware world is digitized so far. The “smart” objects industry is dominated by monitoring and analysis. That’s valuable but doesn’t fundamentally alter how objects are created or operate.

Contrary to breathless prose about robots taking manufacturing jobs, the data show underinvestment in automation and information technology in factories. U.S. companies need more robots and software to boost their competitiveness, profits and employee rolls. While spending on information technology remains high in media, banking, education and insurance, it lags far behind in chemical and food processing, energy and transportation.

Infusing software into hardware so that it becomes invisible and reliable is hard. The physical world involves factors like inertia, friction and gravity, all of which present serious safety implications. Cyberphysical systems have to work with near perfection. The real, rather than virtual, world cannot tolerate the equivalent of frozen screens, reboots, video jitter, or iterative upgrades of sloppy software rushed to market.

One iconic cyberphysical system, the self-driving car, has seen many impressive demonstrations, but engineers know much more work remains to be done. Several researchers recently demonstrated how easily self-driving cars are confused by simple graffiti on street signs. Automotive AI systems have yet to achieve the situational awareness of an inebriated college freshman......When more tech companies use their gargantuan cash hoards to acquire traditional enterprises—like Amazon’s acquisition of Whole Foods—we’ll know the fusion between atoms and bits has really begun.
Silicon_Valley  digital_economy  Amazon  cyberphysical  physical_economy  IT  atoms_&_bits  physical_world  pervasive_computing  ambient_computing  idle_cash  autonomous_vehicles 
september 2017 by jerryking
The Coming Productivity Boom: Transforming the Physical Economy with Information
March 2017 | Michael Mandel and Bret Swanson.

DIGITAL INDUSTRIES VERSUS PHYSICAL INDUSTRIES

Physical Industries
Where the main output of the industry is
predominantly provided in physical form
All other industries, including agriculture;
mining; construction; manufacturing
(except computers and electronics); transportation
and warehousing; wholesale and
retail trade*; real estate; education; healthcare;
accommodations and food services;
recreation.

Digital Industries
Where the main output of the industry
can be easily provided in digital form
Computer and electronics production;
publishing; movies, music, television, and
other entertainment; telecom; Internet
search and social media; professional
and technical services (legal, accounting,
computer programming, scientific research,
management consulting, design, advertising);
finance and insurance; management of
companies and enterprises; administrative
and support services
atoms_&_bits  booming  digital_artifacts  digital_economy  e-commerce  knowledge_economy  paradoxes  physical_economy  productivity  productivity_payoffs  value_migration 
august 2017 by jerryking
We are still waiting for the robot revolution
2017 | Financial Times | Tim Harford.

“Our chief economic problem right now isn’t that the robots are taking our jobs, it’s that the robots are slacking off. “

Or at least — it should. Our chief economic problem right now isn’t that the robots are taking our jobs, it’s that the robots are slacking off. We suffer from slow productivity growth; the symptoms are not lay-offs but slow-growing economies and stagnant wages. In advanced economies, total factor productivity growth — a measure of how efficiently labour and capital are being used to produce goods and services — was around 2 per cent a year in the 1960s, when the ATM was introduced. Since then, it has averaged closer to 1 per cent a year; since the financial crisis it has been closer to zero. Labour productivity, too, has been low.

Plenty of jobs, but lousy productivity: imagine an economy that was the exact opposite of one where the robots took over, and it would look very much like ours. Why? Tempting as it may be to blame the banks, a recent working paper by John Fernald, Robert Hall and others argues that productivity growth stalled before the financial crisis, not afterwards: the promised benefits of the IT revolution petered out by around 2006. Perhaps the technology just isn’t good enough; perhaps we haven’t figured out how to use it. In any case, results have been disappointing.

There is always room for the view that the productivity boom is imminent. Michael Mandel and Bret Swanson, business economists, argue in their policy paper that we are starting to find digitally driven efficiencies in physical industries such as energy, construction, transport, and retail. If this happens, Silicon Valley-style innovation will ripple through the physical economy. If.
Tim_Harford  artificial_intelligence  productivity  automation  economists  efficiencies  energy  construction  transportation  retailers  robotics  physical_economy  data_driven 
august 2017 by jerryking
When Uber and Airbnb Meet the Real World - NYTimes.com
OCT. 17, 2014 | NYT | Claire Cain Miller.

Why have these companies run into so many problems? Part of the reason is that they think of themselves as online companies — yet they mostly operate in the offline world.

They subscribe to three core business principles that have become a religion in Silicon Valley: Serve as a middleman, employ as few people as possible and automate everything. Those tenets have worked wonders on the web at companies like Google and Twitter. But as the new, on-demand companies are learning, they are not necessarily compatible with the real world....The belief that problems can be solved without involving people is probably why many of these companies did not meet with regulators and officials before starting services in new cities. And it has come back to haunt them. Luther Lowe, director of public policy at Yelp, had some basic advice for Uber that could apply to Airbnb, Lyft and others: Hire a lobbyist and meet with the mayor and the city council before setting up shop....DESPITE these three major differences between web companies and the ones that bridge the digital and physical worlds, they all share another guiding Silicon Valley principle: the belief that if enough people want to use a product, the company will succeed....Julie Samuels is the executive director of Engine, which advises start-ups on policy...another principle shared by both older and newer tech companies: Regulators are little more than roadblocks standing in the way of innovation.
meat_space  in_the_real_world  Uber  Airbnb  Claire_Cain_Miller  Silicon_Valley  on-demand  lobbyists  regulators  analog  physical_assets  physical_world  physical_economy  cyberphysical 
october 2014 by jerryking
Marc Andreessen on Why Software Is Eating the World - WSJ.com
My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense......Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. In today's cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite and GPS networks. The days when a car aficionado could repair his or her own car are long past, due primarily to the high software content. The trend toward hybrid and electric vehicles will only accelerate the software shift—electric cars are completely computer controlled. And the creation of software-powered driverless cars is already under way at Google and the major car companies.....Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).

In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. [the great game] Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud.....Finally, the new companies need to prove their worth. They need to build strong cultures, delight their customers, establish their own competitive advantages and, yes, justify their rising valuations. No one should expect building a new high-growth, software-powered company in an established industry to be easy. It's brutally difficult.
Marc_Andreessen  Andreessen_Horowitz  software  physical_economy  creative_destruction  Joseph_Schumpeter  software_is_eating_the_world  delighting_customers  physical_world  high-growth  Silicon_Valley  competitive_advantage  incumbents  the_great_game  electric_cars  cyberphysical 
august 2011 by jerryking

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