Economics of Technology – Page 7

“Infatuation with Deep Learning May Well Breed Myopia . . . Overinvestment . . . and Disillusionment”

(p. B1) For the past five years, the hottest thing in artificial intelligence has been a branch known as deep learning. The grandly named statistical technique, put simply, gives computers a way to learn by processing vast amounts of data.
. . .
But now some scientists are asking whether deep learning is really so deep after all.
In recent conversations, online comments and a few lengthy essays, a growing number of A.I. experts are warning that the infatuation with deep learning may well breed myopia and overinvestment now — and disillusionment later.
“There is no real intelligence there,” said Michael I. Jordan, a professor at the University of California, Berkeley, and the author of an essay published in April intended to temper the lofty expectations surrounding A.I. “And I think that trusting these brute force algorithms too much is a faith misplaced.”
The danger, some experts warn, is (p. B4) that A.I. will run into a technical wall and eventually face a popular backlash — a familiar pattern in artificial intelligence since that term was coined in the 1950s. With deep learning in particular, researchers said, the concerns are being fueled by the technology’s limits.
Deep learning algorithms train on a batch of related data — like pictures of human faces — and are then fed more and more data, which steadily improve the software’s pattern-matching accuracy. Although the technique has spawned successes, the results are largely confined to fields where those huge data sets are available and the tasks are well defined, like labeling images or translating speech to text.
The technology struggles in the more open terrains of intelligence — that is, meaning, reasoning and common-sense knowledge. While deep learning software can instantly identify millions of words, it has no understanding of a concept like “justice,” “democracy” or “meddling.”
Researchers have shown that deep learning can be easily fooled. Scramble a relative handful of pixels, and the technology can mistake a turtle for a rifle or a parking sign for a refrigerator.
In a widely read article published early this year on arXiv.org, a site for scientific papers, Gary Marcus, a professor at New York University, posed the question: “Is deep learning approaching a wall?” He wrote, “As is so often the case, the patterns extracted by deep learning are more superficial than they initially appear.”

For the full story, see:
Steve Lohr. “Researchers Seek Smarter Paths to A.I.” The New York Times (Thursday, June 21, 2018): B1 & B4.
(Note: ellipses added.)
(Note: the online version of the story has the date June 20, 2018, and has the title “Is There a Smarter Path to Artificial Intelligence? Some Experts Hope So.” The June 21st date is the publication date in my copy of the National Edition.)

The essay by Jordan, mentioned above, is:
Jordan, Michael I. “Artificial Intelligence – the Revolution Hasn’t Happened Yet.” Medium.com, April 18, 2018.

The manuscript by Marcus, mentioned above, is:

Marcus, Gary. “Deep Learning: A Critical Appraisal.” Jan. 2, 2018.

We Underestimate How Entrepreneurial the Americans Were in the 1800s

(p. C6) Jim DeFelice’s “West Like Lightning,” a history of the Pony Express, begins with an anxious young rider waiting to take the news to California that Abraham Lincoln had been elected president. The delivery service lasted only about 18 months, but its revolutionary speed left an indelible mark on the country. Many, including Mark Twain, marveled at riders’ courage and the spectacle of their switching horses every 10 miles or so for a fresh burst of speed.
. . .
In what way is the book you wrote different from the book you set out to write?
Historians, God bless them, they do a lot of debunking of legends. They can sometimes come off as schoolmarms. The reality is, those legends are fun. They’re the exciting part. I separate fact and fiction, but I love those stories — and underneath them, there’s a much deeper truth. There’s a reason we value these 19- and 20-year-old kids pushing themselves against the elements.
I knew there would be some debunking involved. What I didn’t know was how true a lot of those stories turned out to be. If I were a Pony Express rider, I’d be bragging about how fast I made it. These guys didn’t brag about that — they bragged about how far they went. They were bragging about endurance and dealing with the elements. That impressed me, the resilience.
I also think sometimes we underestimate — and I’m guilty of this — just how entrepreneurial and into technology people were in the past. We think we’re cool because we can fly somewhere and be there tomorrow. But for these guys, 10 days was huge. If you gave them something in downtown New York, it would be in San Francisco two weeks later. At the time, that would be like going from dial-up to the fastest speeds we have today.

For the full interview, see:
John Williams, interviewer, ” Making Good Time and Even Better Tales.” The New York Times (Monday, May 21, 2018): C6.
(Note: ellipses added.)
(Note: the online version of the interview has the date May 20, 2018, and has the title “Tell Us 5 Things About Your Book: Making Good Time With the Pony Express.” The first paragraph and the bold question are John Williams. The paragraphs following the bold question, are Jim DeFelice’s answer.)

The book discussed in the interview quoted above, is:
DeFelice, Jim. West Like Lightning: The Brief, Legendary Ride of the Pony Express. New York: William Morrow, 2018.

Silicon Valley Venture Capitalists “Fantasize about Relocating” to “Detroit and South Bend”

(p. B1) It was pitched as a kind of Rust Belt safari — a chance for Silicon Valley investors to meet local officials and look for promising start-ups in overlooked areas of the country.
But a funny thing happened: By the end of the tour, the coastal elites had caught the heartland bug. Several used Zillow, the real estate app, to gawk at the availability of cheap homes in cities like Detroit and South Bend and fantasize about relocating there. They marveled at how even old-line manufacturing cities now offer a convincing simulacrum of coastal life, complete with artisanal soap stores and farm-to-table restaurants.
. . .
(p. B4) Mr. McKenna, who owns a house in Miami in addition to his home in San Francisco, told me that his travels outside the Bay Area had opened his eyes to a world beyond the tech bubble.
“Every single person in San Francisco is talking about the same things, whether it’s ‘I hate Trump’ or ‘I’m going to do blockchain and Bitcoin,'” he said. “It’s the worst part of the social network.”
. . .
Recently, Peter Thiel, the President Trump-supporting billionaire investor and Facebook board member, became Silicon Valley’s highest-profile defector when he reportedly told people close to him that he was moving to Los Angeles full-time, and relocating his personal investment funds there. (Founders Fund and Mithril Capital, two other firms started by Mr. Thiel, will remain in the Bay Area.) Mr. Thiel reportedly considered San Francisco’s progressive culture “toxic,” and sought out a city with more intellectual diversity.
Mr. Thiel’s criticisms were echoed by Michael Moritz, the billionaire founder of Sequoia Capital. In a recent Financial Times op-ed, Mr. Moritz argued that Silicon Valley had become slow and spoiled by its success, and that “soul-sapping discussions” about politics and social injustice had distracted tech companies from the work of innovation.
Complaints about Silicon Valley insularity are as old as the Valley itself. Jim Clark, the co-founder of Netscape, famously decamped for Florida during the first dot-com era, complaining about high taxes and expensive real estate. Steve Case, the founder of AOL, has pledged to invest mostly in start-ups outside the Bay Area, saying that “we’ve probably hit peak Silicon Valley.”
. . .
This isn’t a full-blown exodus yet. But in the last three months of 2017, San Francisco lost more residents to outward migration than any other city in the country, according to data from Redfin, the real estate website. A recent survey by Edelman, the public relations firm, found that 49 percent of Bay Area residents, and 58 percent of Bay Area millennials, were considering moving away. And a sharp increase in people moving out of the Bay Area has led to a shortage of moving vans. (According to local news reports, renting a U-Haul for a one-way trip from San Jose to Las Vegas now costs roughly $2,000, compared with just $100 for a truck going the other direction.)

For the full commentary, see:
Kevin Roose. “THE SHIFT; Silicon Valley Toured the Heartland and Fell in Love.” The New York Times (Monday, March 5, 2018): B1 & B4.
(Note: ellipses added.)
(Note: the online version of the commentary has the date March 4, 2018, and has the title “THE SHIFT; Silicon Valley Is Over, Says Silicon Valley.”)

Blockchain May Enable “Consent-Based Ad Models”

(p. A13) Internet advertising started simply, but over time organically evolved a mess of middle players and congealed into a surveillance economy. Today, between end users, publishers and advertisers stand a throng of agencies, trading desks, demand side platforms, network exchanges and yield optimizers. Intermediaries track users in an attempt to improve revenue.
It’s an inevitable consequence of such a system that users end up treated as a resource to be exploited. When you visit the celebrity website TMZ, for instance, you face as many as 124 trackers, according to a Crownpeak test. Your data is stored and profiled to retarget promotions that shadow you around the Internet. You become the product. Some claim your data is not “sold,” but access is certainly rented out.
. . .
For a solution, look to blockchain technology. More than a word peppering earnings calls, it can deliver the change brands, publishers and users need. Put simply, it’s an immutable database that records transactions and produces trustworthy data.
In advertising, blockchain’s reliable data can radically shrink the ad-tech blob and provide the foundation for consent-based ad models. Improved blockchain reporting and transparency would obviate much of the need for companies focused on measurement, verification and even some data suppliers. Companies like Brave are using blockchain to build software that allows for more-direct relationships between advertisers and publishers, as it was before the blob. (Earlier this month Brave announced a partnership with Dow Jones Media Group, a division of this newspaper’s parent company.) Anonymous data on the blockchain or on a device can even replace the need for the mining of individual user data. Users should be compensated for their attention and seen as customers again.
The internet need not be characterized by predation and parasitism. It can once again be a place of infinite possibility. Innovation got us into this situation; it can get us out.

For the full commentary, see:
Brendan Eichand and Brian Brown. “The Internet’s ‘Original Sin’ Endangers More Than Privacy.” The Wall Street Journal (Saturday, April 28, 2018): A13.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date April 27, 2018.)

Jeff Bezos Is “Exploring Strange New Worlds”

(p. A15) Jeff Bezos is the world’s richest person. Amazon is on a tear–sales grew 43% last quarter–and may soon pass Apple as the world’s most valuable company. Amazon has ruptured retail, floated in the cloud, and even made superhero TV shows like “The Tick.” But what makes Mr. Bezos tick?
. . .
. . . , Mr. Bezos is now channeling pioneers, be they Columbus or James T. Kirk, exploring strange new worlds. His strategy is that he doesn’t let business models get in his way while exploring on the edge.
. . .
I’m convinced the real secret to Mr. Bezos’s success is that he hates PowerPoint slides. He insists instead on six-page narratives at meetings. Stories codify exploration. Here’s one: Put Alexa in every doctor’s office to listen and correctly fill in medical records automatically from the transcripts, freeing doctors to actually care for patients! Business model to come (but pretty obvious).

For the full commentary, see:
Andy Kessler. ” INSIDE VIEW; Columbus Discovers the Amazon.” The Wall Street Journal (Monday, May 7, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date May 6, 2018.)

Paying Consumers for Their Data

(p. B4) WASHINGTON–For every link you click, every photo you post, every word you search, somebody markets the data to advertisers seeking to target you. Consumer data is a valuable commodity, and that is one reason Google, Facebook and others let you use their platforms at no cost.
An Australian app maker called Unlockd thinks it has a better idea: The consumer should get a cut of this mobile-data business, in the form of rewards or other incentives. Other newcomers and smaller firms are taking a similar tack. Should this approach take off, some see it becoming a viable alternative to the ad model driving big platforms like Alphabet Inc.’s Google.

For the full story, see:
McKinnon, John D. “Startup Wants to Reward Your Clicking.” The Wall Street Journal (Thursday, May 10, 2018): B4.

(Note: the online version of the story has the date May 9, 2018, and has the title “Startup Takes on Google With a New Approach: Rewards for Users.”)

China’s “Double Whammy for Prospective Entrepreneurs”

(p. B12) China’s past attempts to stoke indigenous innovation have a checkered history. A flood of cheap capital and high, state-set solar power rates in the mid-2000s secured China’s place as the world’s number one solar cell manufacturer. But it also led to enormous overcapacity, which sank prices and pushed debt burdens higher, making investment in real R&D more difficult. For investors, China’s solar champions have been a losing proposition–American depositary receipts of top firms such as JinkoSolar are worth less than half of their peak in 2010. Robotics, a key element of Beijing’s “Made in China 2025” plan to dominate high-tech manufacturing, is exhibiting similar tendencies.
The state-centric nature of China’s financial system–and its weak intellectual property protection–represents a double whammy for prospective entrepreneurs. Small private-sector firms often only have access to capital through expensive shadow banking channels, and face the risk that some better connected, state-backed firm will make off with their designs–with very little recourse.

For the full story, see:
Nour Malas and Paul Overberg. “‘Chinese Innovation Won’t Come Easily Without U.S. Tech.” The Wall Street Journal (Tuesday, March 23, 2018): B12.
(Note: the online version of the story has the date March 22, 2018, and has the title “Can China’s Red Capital Really Innovate?”)

San Francisco Suffers Net Loss of People as Tech Booms

(p. A3) San Francisco is such a boomtown that people are leaving in droves.
In 2016 and 2017, more people moved out of the San Francisco-Oakland-Hayward metropolitan area–an urban core of 4.7 million people in a broader region known as the Bay Area–than moved into it from other parts of California or the U.S., according to U.S. census data.
In the year that ended July 1, the region showed a net loss of nearly 24,000 residents to the rest of the country, roughly double the loss of the previous year and a sharp reversal from net annual gains of about 15,000 as recently as 2013-14.
Economists said the outflow is being driven by the high cost of housing in the area, where the average home value in several counties surpasses $1 million.

For the full story, see:
Nour Malas and Paul Overberg. “‘San Francisco’s Boom Leads to an Exodus.” The Wall Street Journal (Friday, March 23, 2018): A3.
(Note: the online version of the story has the date March 22, 2018, and has the title “San Francisco Has a People Problem.”)

California Regulation Adds $9,500 to Average Home Cost

(p. A1) The California Energy Commission voted 5-0 to approve a mandate that residential buildings up to three stories high, including single-family homes and condos, be built with solar installations starting in 2020.
The commission estimates that the move, along with other (p. A2) energy-efficiency requirements, would add $9,500 to the average cost of building a home in California. The state is already one of the most expensive housing markets in the country, with a median price of nearly $565,000 for a single-family home, according to the California Association of Realtors.

For the full story, see:
Erin Ailworth. “Solar Panel Mandate Jolts Housing Industry.” The Wall Street Journal (Thursday, May 10, 2018): A1-A2.

(Note: the online version of the story was updated May 9, 2018, and has the title “California Takes Big Step to Require Solar on New Homes.”)

Hundreds of Years of CO2 Emissions Could Be Stored Forever in Oman’s Rocks

(p. A10) IBRA, Oman — In the arid vastness of this corner of the Arabian Peninsula, out where goats and the occasional camel roam, rocks form the backdrop practically every way you look.
But the stark outcrops and craggy ridges are more than just scenery. Some of these rocks are hard at work, naturally reacting with carbon dioxide from the atmosphere and turning it into stone.
Veins of white carbonate minerals run through slabs of dark rock like fat marbling a steak. Carbonate surrounds pebbles and cobbles, turning ordinary gravel into natural mosaics.
Even pooled spring water that has bubbled up through the rocks reacts with CO2 to produce an ice-like crust of carbonate that, if broken, re-forms within days.
Scientists say that if this natural process, called carbon mineralization, could be harnessed, accelerated and applied inexpensively on a huge scale — admittedly some very big “ifs” — it could help fight climate change. Rocks could remove some of the billions of tons of heat-trapping carbon dioxide that humans have pumped into the air since the beginning of the Industrial Age.
And by turning that CO2 into stone, the rocks in Oman — or in a number of other places around the world that have similar geological formations — would ensure that the gas stayed out of the atmosphere forever.
“Solid carbonate minerals aren’t going anyplace,” said Peter B. Kelemen, a geologist at Columbia University’s Lamont-Doherty Earth Observatory who has been studying the rocks here for more than two decades.
Capturing and storing carbon dioxide is drawing increased interest. The Intergovernmental Panel on Climate Change says that deploying such technology is essential to efforts to rein in global warming.
. . .
The rocks are so extensive, Dr. Kelemen said, that if it was somehow possible to fully use them they could store hundreds of years of CO2 emissions. More realistically, he said, Oman could store at least a billion tons of CO2 annually. (Current yearly worldwide emissions are close to 40 billion tons.)

For the full story, see:

Henry Fountain. “How Oman’s Rocks Could Help Save the Planet.” The New York Times (Saturday, APRIL 28, 2018: A10-A11.
(Note: ellipsis added.)
(Note: the online version of the story has the date APRIL 26, 2018.)