Monthly Archives: March 2019

Why Some Counties Are Powerhouses For Innovation

By Christopher Boone – By my analysis of data from the U.S. Patent Office, Santa Clara County, California, is sprinting ahead of the country. Between 2000 and 2015, more than 140,000 patents were granted in Santa Clara County. That’s triple the number for second-ranked San Diego County.

Four other counties in California – Los Angeles, San Mateo, Alameda and Orange – make the top 10.

These counties are in large metropolitan areas that are known as technology and innovation centers, including San Francisco, San Diego, Boston and Seattle. The other metro areas in the top 10, not the usual tech-hub suspects, are Greater Los Angeles, Detroit and Phoenix.

Besides large concentrated populations, these metro areas share two other ingredients that support innovation. All of them have one or more leading research universities and a large proportion of college-educated people.

Santa Clara County is home to Stanford University, an institution that has become synonymous with the high-tech and innovation economy of Silicon Valley.

Stanford’s rise as a world-class research university coincided with a rapid increase in federal and military spending during the Cold War. The university’s suburban location gave it an advantage, too, by providing land for expansion and for burgeoning high-tech companies. Stanford’s leadership aggressively courted research opportunities aligned with the priorities of the military-industrial complex, including electronics, computing and aerospace.

Another common trait about most of these centers of innovation is the jaw-dropping cost of housing.

Competition for higher-wage talent pushes up housing and other costs in these innovation centers. Although housing prices increased in greater Boston, Phoenix and Detroit, they remained relative bargains compared to the West Coast.

In my view, one way to unleash innovation would be to tap into the rich diversity of students, faculty and communities at two- and four-year colleges beyond the typical top 100 research institutes. more>

It’s Still Early Days for AI

Neural networks expand far beyond feline photos
By Rick Merritt – “We need to get to real AI because most of today’s systems don’t have the common sense of a house cat!” The keynoter’s words drew chuckles from an audience of 3,000 engineers who have seen the demos of systems recognizing photos of felines.

There’s plenty of room for skepticism about AI. Ironically, the speaker in this case was Yann LeCun, the father of convolutional neural networks, the model that famously identified cat pictures better than a human.

It’s true, deep neural networks (DNNs) are a statistical method — by their very nature inexact. They require large, labeled data sets, something many users lack.

It’s also true that DNNs can be fragile. The pattern-matching technique can return dumb results when the data sets are incomplete and misleading results when they have been corrupted. Even when results are impressive, they are typically inexplicable.

The emerging technique has had its share of publicity, sometimes bordering on hype. The fact remains that DNNs work. Though only a few years old, they already are being applied widely. Facebook alone uses sometimes simple neural nets to perform 3×1014 predictions per day, some of which are run on mobile devices, according to LeCun.

Deep learning is with us to stay as a new form of computing. Its applications space is still being explored. Its underlying models and algorithms are still evolving, and hardware is trying to catch up with it all. more>

The fundamental problem with Silicon Valley’s favorite growth strategy

By Tim O’Reilly – The pursuit of monopoly has led Silicon Valley astray.

Look no further than the race between Lyft and Uber to dominate the online ride-hailing market.

Most monopolies or duopolies develop over time, and have been considered dangerous to competitive markets; now they are sought after from the start and are the holy grail for investors. If LinkedIn co-founder Reid Hoffman and entrepreneur Chris Yeh’s new book Blitzscaling is to be believed, the Uber-style race to the top (or the bottom, depending on your point of view) is the secret of success for today’s technology businesses.

Many of these businesses depend on network effects, which means that the company that gets to scale first is likely to stay on top. So, for startups, this strategy typically involves raising lots of capital and moving quickly to dominate a new market, even when the company’s leaders may not know how they are going to make money in the long term.

This premise has become doctrine in Silicon Valley. But is it correct? And is it good for society? more>

Green money without inflation

Funding an ecological transition in Europe via ‘green money’ bonds would be economically justifiable.
By Paul De Grauwe – To what extent can the money created by the central bank be used to finance investments in the environment?

This is a question often asked today. The green activists respond with enthusiasm that the central bank—and, in particular, the European Central Bank (ECB)—should stimulate the financing of environmental investments through the printing of money.

The ECB has created €2,600 billion of new money since 2015 in the context of its quantitative easing (QE) program. All that money has gone to financial institutions which have done very little with it. Why can’t the ECB inject the money into environmental investments instead of pouring it into the financial sector?

Most traditional economists react with horror.

Who is right? It is good to recall the basics of money creation by the ECB (or any modern central bank). Money is created when that institution buys financial assets in the market. The suppliers of these assets are financial institutions. These then obtain a deposit in euro at the ECB, in exchange for relinquishing these financial assets. That is the moment when money is created. This money (deposits) can then be used as their reserve base by the financial institutions to extend loans to companies and households.

There is no limit to the amount of financial assets the ECB can buy.

In principle, it could purchase all existing financial assets (all bonds and shares, for example), but that would increase the money supply in such a way that inflation would increase dramatically. In other words, the value of the money issued by the ECB would fall sharply. To avoid this, the bank has set a limit: it promises not to let inflation rise above 2 per cent. That imposes a constraint on the amount of money which the ECB can create. So far, it has been successful in remaining within the 2 per cent inflation target. more>

Updates from Siemens

Simulation & Test for Process Industry Applications
Siemens – Operational excellence and innovation are critical requirements to lead and succeed in today’s chemical and petrochemical processing industries. Our integrated simulation solutions for multi-physics and test will enable your engineering teams to predict process performance, optimize for energy and process efficiency, reduce byproducts and waste, and troubleshoot sub-optimal processes.

To outperform in today’s competitive process industry, engineers need tools that enable them to develop the most complete understanding of the complex physical and chemical processes occurring in the equipment they design and troubleshoot; levels of understanding far beyond those provided by experiments or basic engineering principles. more>

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Updates from Chicago Booth

Given an out, people still fall back into debt
Research finds that keeping people out of debt traps isn’t as simple as paying off their loans
By Dee Gill – To the frustration of financial counselors everywhere, millions of people doom themselves to perpetual debt by repeatedly taking out small but expensive short-term loans they can barely afford. In the United States, these typically come from payday or car title lenders and go to financially strapped individuals.

In developing countries, small-scale entrepreneurs rely on daily or weekly loans for working capital. In both cases, borrowers pay exorbitant interest rates and, often, additional fees to extend a loan over and over. Interest payments can quickly add up to more than the loan amount.

Understanding how people get sucked into these debt traps is an important public-policy issue, according to Northwestern’s Dean Karlan, Chicago Booth’s Sendhil Mullainathan, and Harvard’s Benjamin N. Roth.

They conducted a series of experiments with indebted entrepreneurs in India and the Philippines and find that having their short-term loans paid off took the participants out of debt only temporarily. The entrepreneurs in question quickly took out new, profit-sapping loans. more>

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Updates from Ciena

Top 5 Takeaways from Light Reading’s CNG 2019 Conference
Did the ‘bomb cyclone’ winter blizzard last week in Denver keep you from attending the annual Light Reading Cable Next-Gen (CNG) conference? If so – you are not alone. Ciena’s Darren McKinney was at #CNG2019 – and can sum it up with: 10G, DAA, CIN, DOCSIS, Coherent and 5G…a real smorgasbord of acronyms and technologies.
By Darren McKinney – The Light Reading CNG 2019 event was chock full of excellent speakers – lots of very interesting presentations, panels, and fireside chats.

When the cable industry announced the 10G initiative people naturally think about 5G – there was a lot of discussion on 5G…particularly given CNG 2019 is a ‘cable conference’, these discussions covered:

  • 5G will not kill MSO broadband – 5G is an opportunity for MSOs (e.g. 5G will need 10G for mobile backhaul). There was discussion that 5G does not penetrate houses well and that Wi-Fi in the house offers better coverage. 5G as a replacement for Wi-Fi is not viewed as a big threat.
  • Why is the US market different? Cable MSOs outside of the US are largely mobile network operators (MNOs) already – why is the US market different? Discussion that financial ARPUs for MSOs in the US are 2-3x higher than in other parts of the world, that US MSOs have not had the same motivation (yet) to invest in mobile as has been seen in other countries.

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Updates from Adobe

Solving Problems with Smart Package Design

How does a Kansas City design agency get hired by an Indian food brand based in Trinidad and Tobago? For the Papadums Go-Go Gourmet project, that unlikely turn of events was simply par for the course.
By Terri Stone – Matt Wegerer is the founder of Whiskey Design. He’s not afraid of risk, so when the email came asking for a food-truck design for the Caribbean start-up, he didn’t blink an eye. “The client had some great recipes and he was doing some food-service stuff,” Wegerer says, “and before he went all in with brick and mortar, he wanted to build a fan base and work out the kinks through a food truck.

In Trinidad and Tobago, those don’t really exist.” And that’s how the geographically unlikely relationship came to be: The client searched the internet for “cool food truck design” and stumbled on the Rocket Pizza Truck in Whiskey Design’s portfolio.

Wegerer and Micah Barta, Whiskey’s art director and illustrator, jumped into the Papadums challenge. Because the client didn’t have a visual identity, the duo had to build the brand from scratch.

The brief for that was, um, brief. “They basically said, ‘You guys just do what you do,'” Wegerer recalls.

However, the lack of direction didn’t indicate a lack of vision. Wegerer says, “He told us to make it scalable—that they were starting with the food truck, but we should make something that works when they have 50 stores.”

Eventually, the project encompassed the logo, food truck, to-go bags, food packaging for markets, and more.

While a bare-bones brief may sound freeing, it has its own challenges. more>

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Hedge funds assets plunged by $88 billion in 2018

By Matt Egan – The hedge fund industry suffered a brutal 2018 as nervous clients yanked tens of billions of dollars from their portfolios. Hundreds of funds shut down and bets on tech stocks and oil blew up.

Hedge fund assets under management plummeted by $88 billion last year, according to research by eVestment, a firm that provides software to institutional investors. It was easily the deepest decline in assets for the industry since the financial crisis a decade ago, eVestment said in a report published.

Extreme turbulence across financial markets exposed glaring performance issues that have dogged hedge funds for years.

“Investors were again reminded that the industry is not necessarily full of exceptional managers,” wrote Peter Laurelli, eVestment’s global head of research. “There is no disputing the numbers.”

That realization hit a crescendo last month, when the S&P 500 suffered its steepest December decline since the Great Depression.

Jittery clients pulled $19.6 billion out of hedge funds that month alone, lifting annual withdrawals to $35.3 billion, eVestment said. more>

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Hedge funds

Moral technology

Self-driving cars don’t drink and medical AIs are never overtired. Given our obvious flaws, what can humans still do best?
By Paula Boddington – Artificial intelligence (AI) might have the potential to change how we approach tasks, and what we value. If we are using AI to do our thinking for us, employing AI might atrophy our thinking skills.

The AI we have at the moment is narrow AI – it can perform only selected, specific tasks. And even when an AI can perform as well as, or better than, humans at certain tasks, it does not necessarily achieve these results in the same way that humans do. One thing that AI is very good at is sifting through masses of data at great speed.

Using machine learning, an AI that’s been trained with thousands of images can develop the capacity to recognize a photograph of a cat (an important achievement, given the predominance of pictures of cats on the internet). But humans do this very differently. A small child can often recognize a cat after just one example.

Because AI might ‘think’ differently to how humans think, and because of the general tendency to get swept up in its allure, its use could well change how we approach tasks and make decisions. The seductive allure that tends to surround AI in fact represents one of its dangers. Those working in the field despair that almost every article about AI hypes its powers, and even those about banal uses of AI are illustrated with killer robots.

It’s important to remember that AI can take many forms, and be applied in many different ways, so none of this is to argue that using AI will be ‘good’ or ‘bad’. In some cases, AI might nudge us to improve our approach. But in others, it could reduce or atrophy our approach to important issues. It might even skew how we think about values.

We can get used to technology very swiftly. Change-blindness and fast adaptation to technology can mean we’re not fully aware of such cultural and value shifts. more>