Technology – Page 48 – artdiamondblog.com

“What Digital Divide?”

"Jazmyn Johnson, 9, recently helped her mother, Barbara, use their high-speed DSL Intenet connection at their home in Duluth, Ga." Source of caption and photo: online version of NYT article cited below.

(p. A1) African-Americans are steadily gaining access to and ease with the Internet, signaling a remarkable closing of the "digital divide" that many experts had worried would be a crippling disadvantage in achieving success.

Civil rights leaders, educators and national policy makers warned for years that the Internet was bypassing blacks and some Hispanics as whites and Asian-Americans were rapidly increasing their use of it.

But the falling price of laptops, more computers in public schools and libraries and the newest generation of cellphones and hand-held devices that connect to the Internet have all contributed to closing the divide, Internet experts say.

Another powerful influence in attracting blacks and other minorities to the Internet has been the explosive evolution of the Internet itself, once mostly a tool used by researchers, which has become a cultural crossroad of work, play and social interaction.

. . .

"What digital divide?" Magic Johnson, the basketball legend, asked rhetorically in an interview about his new Internet campaign deal with the Ford Motor Company’s Lincoln Mercury division to use the Internet to promote cars to black prospective buyers.

For the full story, see:

MICHEL MARRIOTT. "Blacks Turn to Internet Highway, And Digital Divide Starts to Close." The New York Times (Fri., March 31, 2006): A1 & A15.

(Note: ellipsis added.)

Increases in Demand for Online Video, Stabilize Prices for Fiber-Optics Lines

Source of graphic: online version of WSJ article cited below.

(p. B1) At long last, the pipes are starting to fill up.

For years, the fiber-optic communications industry has been awash in spare capacity that sent prices for data transmission plunging. Now, thanks to continued growth in Internet traffic, demand is beginning to catch up with supply in many areas of the active global network.

Still, plenty of inactive fiber-optic lines remain — the majority of the lines put into the ground or underwater have gone unused for years and can be activated on short notice and relatively inexpensively. That means the glut has not come to a definitive end and consumer prices are unlikely to rise. But at the moment, prices for sending data traffic at least appear to be stabilizing, providing a welcome reprieve for companies that operate the so-called backbone of the world’s telecommunications infrastructure.

. . .

What’s behind the increased demand for network capacity? Industry executives and Prof. Odlyzko say video sent via the Internet is a key driver. That includes the increasing distribution of movies online, many sent illegally. On local (p. B4) phone networks that reach into most homes and offices there has never been excess capacity, and carriers like Verizon Communications Inc. are spending billions to beef up local connections to handle tasks like video.

. . .

Level 3 Chief Executive James Crowe admits "our crystal ball got cracked pretty badly there" during the tech boom, but says on Level 3’s network now "there’s every sign that inventory that was up on the shelf is being drawn down and in some areas even exhausted."

For the full story, see:

MARK HEINZL and SHAWN YOUNG. "With Rising Internet Traffic, Spare Fiber-Optic Lines Fill Up." The Wall Street Journal (Thurs., April 27, 2006): B1 & B4.

Economic Efficiency Arguments Mattered in Clearing Whirlpool to Acquire Maytag

A few weeks ago, the Justice Department cleared Whirlpool’s $1.7 billion acquisition of Maytag even though the new entity would have a dominating share of the marketplace, controlling about three-quarters of the market for some home appliances.

The department justified its decision by a combination of evidence and law. That included confidential commercial information that the department says it cannot make public; a very broad definition of the marketplace to include foreign companies, some of which have yet to make a bigger push in the United States; and an expansive reading of the economic efficiency defense for permitting such deals.

The decision demoralized the career ranks of the antitrust division at the Justice Department, officials there have said. And it left private antitrust practitioners in Washington wondering whether, in light of the decision and the flurry of corporate dealers, there are could really be any mergers that this administration would challenge.

For the full commentary, see:

Stephen Labaton. "STREET SCENE: LEGAL BEAT; New View of Antitrust Law: See No Evil, Hear No Evil." The New York Times (Friday, May 5, 2006): C5.

Container Ships Revolutionized Shipment of Goods

Source of book image: http://www.pupress.princeton.edu/titles/8131.html

Virginia Postrel’s periodic column in the New York Times over the past six years, was a beacon of optimism, clarity and fresh insights on how the economy works. The excerpt below is from her last column. Presumably she is moving on to other worthy challenges, but her column in the Times will be missed.

”Low transport costs help make it economically sensible for a factory in China to produce Barbie dolls with Japanese hair, Taiwanese plastics and American colorants, and ship them off to eager girls all over the world,” writes Marc Levinson in the new book ”The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger” (Princeton University Press).

For consumers, this results in lower prices and more variety. ”People now just take it for granted that they have access to an enormous selection of goods from all over the world,” Mr. Levinson said in an interview. That selection, he said, ”was made possible by this technological change.”

. . .

The idea of containerization was simple: to move trailer-size loads of goods seamlessly among trucks, trains and ships, without breaking bulk. But turning that idea into real-life business practice required many additional innovations.

New equipment, from dockside cranes to the containers themselves, had to be developed. Carriers and shippers had to settle on standard container sizes. Ports had to strengthen their wharves, create connections to rail lines and highways, build places to store containers and strike new deals with their unions.

Along the way, even the most foresighted people made mistakes and lost millions. Malcom McLean himself bought fast fuel-guzzling ships right before the 1973 oil crisis and slow, economical ships just as fuel prices turned down. ”Almost everybody who was concerned with containerization in any way at some point got the story wrong,” Mr. Levinson said.

It is a classic tale of trial and error, and of creative destruction.

For the full commentary, see:

Virginia Postrel. "ECONOMIC SCENE; The Container That Changed the World." The New York Times (Thursday, March 23, 2006): C3.

The full reference to Levinson’s book is:

Levinson, Marc. The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. Princeton University Press, 2006.

Hydrocarbons Exist in Abundance

Source of book image: http://www.amazon.ca/exec/obidos/tg/detail/-/books/0521679796/reviews/702-4209854-6789623

In a useful commentary, Holman Jenkins quotes Exxon CEO Rex Tillerson:

"It is true that the age of ‘easy oil’ is over. What many fail to realize is that it has been over for decades. Our industry constantly operates at the edge of technical possibility, constantly developing and applying new technologies to make those possibilities a reality," he told a group in Washington last week.

Doubters might consult a new book by energy economist Mark Jaccard, entitled "Sustainable Fossil Fuels," winner of Canada’s Donner Prize. He argues that hydrocarbons, in the form of oil, gas and coal, exist in such abundance, the challenge of technology is how to burn them more cleanly, not how to survive without them.

For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; On Gasoline, Voters Get the Politicians They Deserve." The Wall Street Journal (Weds., May 10, 2006): A19.

The full reference to the Jaccard book mentioned by Holman, is:

Jaccard, Mark. Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy. Cambridge University Press, 2006.

Tech Advances, Are Not Always Advances in All Respects

Advances in technology are not uniform along all dimensions. The new technology is often better overall, but may actually represent steps backward along some dimensions. For example I used to use a word-processor called "Wordmarc" that permitted me to go to a page by simply typing in the page number of the page, which I still wish I could do with large documents in Microsoft Word. And the first email system we used in the college, from Wordperfect, I think, allowed you to retrieve an email, if you had second thoughts about it, before it was opened by the intended recipient.

Here are a couple of more examples:

(p. A8) In the age of film, when the button was pressed, the picture was captured in an instant. In the vast majority of digital cameras, there’s a delay that can last as long as two seconds.

To some users, it’s another example of how advanced-technology products often lack important virtues of their predecessors. Cellphones often crackle with static that Ma Bell eliminated in rotary phones many years ago; computer printers need endless adjusting before they can print an address on an envelope — a task that typewriters took in stride.

"I think we’ve really gone backwards on these technologies," complains Marcia Gregg, a mother of two from Boston who has a digital camera but still fondly recalls her Pentax from the 1980s that "was instantaneous and made a really cool sound" when its motor drive was running.

For the full article, see:

WILLIAM M. BULKELEY. "Why Digital Cameras Often Shoot the Pony But Get Only the Tail The Answer Is ‘Shutter Lag,’ The Bane of Shutterbugs; Photo Ops Become Oops." The Wall Street Journal (Fri., May 26, 2006): A1 & A8.

“My Merit Is My Caste; What Is Yours?”

NEW DELHI, May 22 — The problem of caste prejudice here is as ancient as the Hindu texts. The efforts to redress it date from the formation of modern India nearly 59 years ago. Today — as India enjoys awesome rates of economic progress and confronts the challenge of spreading the benefits to its needy majority — the nation faces a polarizing totem of public policy: a government plan to extend college admission quotas to certain "backward" castes.

Affirmative action is in some ways an even more emotional issue in India than in the United States. In recent weeks, a proposal to extend quotas for admission to some of the country’s flagship, federally financed universities has caused fresh turmoil.

Protests — particularly by medical students who say merit should be the only basis for admission to India’s intensely competitive medical schools — have spread across the country and, here in the capital, hobbled public health services. Advocates and opponents of the measure have exchanged often ugly rants.

. . .

Medical students have been particularly outraged because the plan would further restrict the limited number of seats. Medical education in India begins with a five-year undergraduate program, and the proposal could affect students’ chances of completing their training.

The central lawn of the All India Institute of Medical Sciences, the pre-eminent public hospital, was occupied Friday by medical students on the fifth day of a strike that began last week and continued on Monday. "My merit is my caste. What is yours?" read one T-shirt.

. . .

The opponents say set-asides would diminish the quality of India’s best universities and divide students along caste lines.

"Why after 55 years are we still thinking in terms of caste-based reservation?" demanded Poojan Aggarwal, a third-year student at Safdarjung Medical College here. "We should talk now of total meritocracy. We know on this issue none of the political parties will support us."

For the full story, see:

SOMINI SENGUPTA. "Quotas to Aid India’s Poor vs. Push for Meritocracy." The New York Times (Tues., May 23, 2006): A3.

(Note: ellipses added.)

Leapfrog Competition in Video Game Machines

Source of book image: http://www.amazon.com/gp/product/customer-reviews/0385479492/ref=cm_cr_dp_2_1/104-0758544-2447945?%5Fencoding=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Co-opetition is a readable book with some plausible discussion of interesting cases. The central message is that business is not always a zero-sum game (in contrast, say, to competitive sports). One implication is that the firm’s complementary relationships with other firms, may deserve as much attention as its competitive relationships.

One qualitfication: I think the book too much emphasizes game theory as the sine qua non source of the book’s insights. About the only game theory you really need to understand 99% of the book’s analysis is the concept of the "zero-sum game."

In a couple of places, the book discusses "leapfrog" competiton in the video game industry:

(p. 102) By mid-1995 the price of the 3DO machine was down to $400 (with $150 worth of software thrown in). Cumulative sales passed half a million. Progress, surely, but as of early 1996, 3DO’s future remains uncertain. It no longer has the 32-bit game to itself. Sega is shipping its 32-bit Saturn machine at $400. Sony has launched its 32-bit PlayStation at $300. Looking to leapfrog them all is Nintendo, whose 64-bit Ultra machine is due out in April 1996 at a price under $250.

(p. 114) Could a challenger hope to breach Nintendo’s virtuous circle? Not once the circle had got rolling. Forget about alternatives–TV, books, sports. From a kid’s perspective, there were no good alternatives to a video game. The only real threat came from alternative video game systems. Here, software was key, as always. With a huge library of Nintendo titles to choose from, why would anyone buy another machine? Perhaps a challenger could take successful Nintendo games over to its platform and then offer its own library. But the exclusivity clause killed that option. No game could be taken to another platform for a two-year period, by which time the game was passe. A challenger would have had to start from scratch. While large profits and shortages normally invite entry, the virtuous circle made competing in Nintendo’s game hopeless. The only hope was to leapfrog Nintendo with a new technology; that’s what Sega ultimately did, as we’ll see in the Scope chapter.

Source:

Brandenburger, Adam M., and Barry J. Nalebuff. Co-Opetition; a Revolution Mindset That Combines Competition and Cooperation; the Game Theory Strategy That’s Changing the Game of Business, 1st ed. Currency, 1996.

“Everybody wants to be like Bill Gates”

Vietnamese university students hoping to see Bill Gates. Source of image: http://www.nytimes.com/2006/04/27/world/asia/27vietnam.html?ex=1303790400&en=255d4d4996b1a9a6&ei=5088&partner=rssnyt&emc=rss

HANOI, Vietnam, April 26 — It was Lenin’s birthday. The most important Communist Party meeting in five years was under way. And the star of the show was the world’s most famous capitalist, Bill Gates.

The president, the prime minister and the deputy prime minister all excused themselves from the party meeting on Saturday to have their pictures taken with Mr. Gates, who has more star power in Vietnam than any of them.

When people heard he was in town, hundreds climbed trees and pushed through police lines to get a glimpse of him. He was the subject of the lead article in the next day’s newspapers.

This is where Vietnam stands today, moving cautiously toward a new version of communism while the people and their leaders lunge eagerly for the brass ring of capitalist development.

"That was very symbolic," said Le Dang Doanh, an official in the Ministry of Planning, speaking of the reception for Mr. Gates. "It is a very clear sign of the new mood of society and the people. Everybody wants to be like Bill Gates."

For the full story, see:

SETH MYDANS. "Communist Vietnam Lunges for Capitalism’s Brass Ring." The New York Times (Thurs., April 27, 2006): A3.

Note: the version of the article above corrects an error in the print version that had misidentified the day of Lenin’s birth, and Gates visit as a Sunday (it was a Saturday).

Will Google Leapfrog Microsoft?

Microsoft co-founder Bill Gates and Google CEO Eric Schmidt. Source of photo: online version of NYT article quoted and cited below.

The Microsoft-Google rivalry is shaping up as a titanic corporate clash for the ages.

It may not turn out that way. Markets and corporate fortunes routinely defy prediction. But it sure looks as if the two companies are on a collision course, as the realms of desktop computing and Internet services and software overlap more and more.

Microsoft, of course, is the reigning powerhouse of computing and Google is the muscular Internet challenger. On each side, the battalions are arrayed: executives, engineers, marketers, lawyers and lobbyists. The spending and competition are escalating daily. For each, it seems, the other passes what Andrew S. Grove, a founder and former chairman of Intel, calls the "silver bullet test" of strategic competition. "If you had one bullet, who would you shoot with it?"

How the Microsoft-Google confrontation plays out could shape the future of competition in computing and how people use information technology.

Do the pitched corporate battles of the past shed any light on how this one might turn out?

Business historians and management experts say the experience in two of the defining industries of the 20th century, mass-market retailing and automobiles, may well be instructive. The winners certainly scored higher in the generic virtues of business management: innovation, execution and leadership.

But perhaps even more significant, those who came out on top, judging from history, had two more specific attributes. They were the companies, according to business historians, that proved able to adapt to change instead of being prisoners of past success. And in their glory days, these corporate champions were magnets for the best and brightest people.

For the full story, see:

STEVE LOHR. "And in This Corner . . . Microsoft and Google Grapple for Supremacy as Stakes Escalate." The New York Times (Weds., May 10, 2006): C1 & C14.

Source of graphic: online version of NYT article quoted and cited above.