The perils of instant information

This was the view from the Wall Street Journal’s “Marketplace” page on the wsj.com website at 10 am today:
Left side of the screen, story saying “Stocks are likely to gain early Thursday, as traders consider a bigger-than-expected decline in jobless claims, a restructuring at GE and merger deals.”
Right side of the screen: stock chart showing the opening lower than yesterday’s close and heading even lower.
I’m not picking on the Journal — I’m just pointing out the problems of reporting in the age of instant information. It would be difficult for the news page of the Journal’s website to keep up with very tick of the Dow. If I wanted real-time analysis, I would probably tune into one of the financial cable channels. Even with the boost that the Internet has given to the written word (via websites, blogs, etc.), there is still nothing like live reporting for fast moving stories.

Music industry adjusts to file sharing

In advance of the expected Supreme Court ruling on Grokster, the news media has been cranking out stories about how the music industry is trying to cope with the new technology. For example, “File-Swapping May Be Here to Stay” from the AP

Recording companies have begun taking steps to legitimize the peer-to-peer technology that lets computer users share songs, video and other files with one another online.
. . .
In the last few months, major record labels have signed licensing deals with companies working to field file-swapping services that would block unauthorized files from being traded online.

Yet, even these optimistic stories question whether such a strategy will work.

Even so, it remains to be seen whether those industry-endorsed alternatives can attract people who now tap open file-swapping networks using such programs as eDonkey, BitTorrent and Kazaa.
“When it comes down to it, why is somebody going to pay for something they can get for free?” said Mac Padilla, 21, a student who lives in Los Angeles.

So, as I’ve said earlier (see Closing the barn door — the Grokster case) regardless of the Supreme Court decision, the music industry will ultimately find a new model. And there are some tantalizing suggestions out there. More on this later.

Destroying your local advantage

In this economic era of global competition, localities are desperately seeking unique local assets (what Professor MaryAnn Feldman calls “jurisdictional advantage” – see her paper on the Athena Alliance website) upon which to build a competitive advantage.
Yet, here we have a case of a locality in the process of destroying a unique local asset. WSJ.com – In Tasmanian Forests, A Battle Breaks Out Over Bees and Trees:

Leatherwood grows only on this heart-shaped island the size of Ireland, a hundred miles south of the Australian mainland and 800 miles west of New Zealand. The trees’ small, star-shaped flowers blossom into the autumn, generating 70% of the 1,200 tons of honey produced in Tasmania each year.
But today, a battle of trees versus bees is unfolding here. For more than 30 years, timber companies have been energetically converting the forests of this Australian state, which have the tallest and oldest flowering trees in the world, into sawdust and woodchips, which are shipped primarily to Japan. The loggers want the huge eucalyptus, but like dolphins caught in a tuna net, the leatherwood, Huon and King Billy pines that grow alongside them are harvested as well. The loggers then firebomb the forests to clear out the debris, a process that can lead to runaway “regeneration burns” and inadvertently destroy nearby leatherwood, and threaten the hives.
If the logging of leatherwood isn’t limited, the beekeepers warn, not only will their livelihood disappear, but so will the world’s only source of leatherwood honey, which has a sharp, musky flavor similar to honey from chestnuts or thyme.

Reminds me of the story Jared Diamond tells about Easter Island — “and so what was that inhabitant of Easter Island thinking of when he cut down the last tree” and thereby destroyed a key pillar of the local economy.

Hire the retired

One of the central premises of the information-innovation-intangible economy is that we need all the brainpower we can muster. Yet, some of our most experienced brains are leaving the workforce. But there is an alternative, as the New York Times’ John Tierney explains in the “The Adams Principle.”

The work ethic is alive and well among America’s retirees, or at least the ones who bombarded me with letters after I suggested raising the retirement age for Social Security. They said they would be glad to keep working if I could find them a job.
In theory, this shouldn’t be a problem because employers ought to be clamoring for workers as baby boomers hit retirement age and the pool of younger workers shrinks. In reality, though, older workers face discrimination. While some companies are recruiting them, many employers are still leery, partly because of irrational prejudice against the old, but also because of perverse incentives in current policies.
. . .
Most workers could keep going longer if they and employers reconsidered the old assumption about a career trajectory. They could learn from the example of John Quincy Adams, who was elected to Congress after serving as president. He dismissed objections that the new job was beneath him, and voters didn’t discriminate against him for being overqualified.
Adams started his new career at age 63, just about when the typical American man now retires. He wasn’t especially spry, once calling his body “a weak, frail, decayed tenement battered by the winds and broken in on by the storm.” Yet he stayed on the job until his death at age 80.
He accomplished so much in those years that he is remembered as a better congressman than president. You could call him an inverse example of the Peter Principle, someone who succeeded by being demoted below his level of incompetence.
But I prefer to draw a different lesson. Call it the Adams Principle for employees and employers: if the president can flourish after a demotion, so can anyone else.

I’m not sure Adams would agree that his time in Congress was a demotion. If fact, he often referred to it as a promotion, since it was the one public office he held where he was directly elected by his neighbors (elected as Senator by the Mass State Legislator and his term as President through an election in the House of Representatives).
However, the point is well taken. The “retired” have more to offer than simply being “re”-“tired”.

Two alternatives in drug research

News of two alternative models in drug research (alternatives to the generally understood model of private company R&D funds leading to a drug that is patented in order to recoup R&D costs):
1) WSJ.com – Government Offers Funds For New Drug Research:

The federal government is trying to lure pharmaceutical companies into investing in riskier medical research by offering to pay for and carry out early clinical trials of experimental drugs.
The clinical trials are part of an unusual effort by the National Institutes of Health to solve a seemingly intractable problem: the dearth of breakthrough drugs for diseases that have long stymied researchers. The shortage stems from drug companies’ aversion to investing in promising but untested ideas that have been cooked up in academic labs. The cost of getting a new drug to market has ballooned, and drug makers tend to pursue products where the biology is known and the pathway to regulatory approval is laid out.
The project could bring pure research out of university labs and into the marketplace, but it faces hurdles in drug makers’ reluctance to share information with potential rivals.

2) WSJ.com – Funds Steer Biotech Drugs to Poor:

To remove barriers blocking biotech inventions from reaching patients in the developing world, the Bill and Melinda Gates Foundation is awarding a $5.4 million grant to BIO Ventures for Global Health, a nonprofit offshoot of the Biotechnology Industry Organization.
The award was to be made today at BIO 2005, the industry trade group’s annual convention in Philadelphia.
The grant aims to help the nonprofit group identify market opportunities in poor countries now considered too high-risk and low-yield for companies to invest in costly new drugs, diagnostics and vaccines. The funds will pay for business case studies of an array of products, starting with tuberculosis vaccines. A century old, the existing TB vaccine is only partially effective, and hasn’t prevented the disease from killing about two million people a year world-wide.
The grant could clear the way to making other biotech vaccines, as well as delivery systems to reduce the need for needles, refrigeration or trained personnel. It also could advance new diagnostic tests and drug-delivery mechanisms to enhance health care in poor countries.

Let a thousand research models bloom!

EU patents

The EU is pushing ahead with its plans for patenting of software. Technology giants win with EU patents plan – Technology – International Herald Tribune:

The 26-member Legal Affairs Committee agreed late Monday that companies could have EU-wide patent protection for computerized inventions including washing machines, cellphones and antilock brake systems as long as they make a technical contribution to further innovation in a particular field of technology.
The committee voted against several more stringent amendments in approving a measure that still bans patents on so-called business methods, like Amazon.com’s “one-click” online purchase feature.
. . .
The proposed patent protection would also extend to computer programs, but only when the software is used in realizing inventions.
. . .
Debate over the bill has divided those who say patents are needed to reward companies for innovation and others – mostly from smaller companies – who say they are concerned that they would be shut out of software they have been able to use for free.

I’m sure that open-source software community will see this as a defeat – and the big software companies as a victory. I take no sides in that fight – but I am glad that the Europeans didn’t go down the road of patenting business methods.
And if you are not worried about business method patents, try this as a thought-experiment: imagine what might have happened if Franciscan monk and mathematician Luca Pacioli had patented his system for double-entry bookkeeping?
By the way, according to Luca Pacioli: The Father of Accounting

While Brother Luca is often called the “Father of Accounting,” he did not invent the system. Instead, he simply described a method used by merchants in Venice during the Italian Renaissance period.

Under today’s US standards of “obviousness”, that doesn’t necessarily mean that he would not have gotten a patent.

Parents and education

If teachers are one of the keys to a successful education system (see Schools and Competitiveness), another key is involved parents. There is a fear that parents don’t always see the value in education. For example, according to a recent study in Michigan – “Your Child” Parent-Teacher Survey:

only one in four Michigan parents believe that getting a good education is essential to getting ahead in life.
Other key findings include:
* Nearly half of parents don’t think everyone should have a college education nor do they trust the judgment of teachers and professors.
* Three out of five define the success of their children without reference to education or the ability to support themselves.

The immediate response to these findings was summarized in a Detroit Free Press editorial, “Parents’ Low Expectations Frustrate Education Reform”:

Educators have taken a lot of criticism in recent years. But it’s now clear that their effectiveness has been limited by uninterested parents. State law and common sense give parents the fundamental right to direct their child’s education. But many parents have shoved off all the work on others, who cannot possibly carry the load by without parents as partners. State and local leaders need to convince parents that education should be more of a priority.

However, I think we need to take the summary of these findings with a large grain of salt. I am not sure that everyone should have a college education — there are many vocational and other types of training that are useful. And I am not completely surprised that parents define success for their children in non-educational and non-financial terms. “Be happy” was the number one answer in the survey; “education/degree” was number two.
82% of the survey agreed with the statement: “Parents need to be fully involved in their child’s education. Teachers and schools can only do so much by themselves.”
13% agreed with “Parents need to communicate with their child’s school from time to time, but it’s up to the teachers and
schools to let the parents know if there’s a problem.”
only 4% agreed with “Parents are responsible for making sure their child is dressed and ready for school. The teachers and schools are responsible for the rest.”
That doesn’t sound like a group of parents that “have shoved off all the work on others”.
Nor do I understand the finding that claims that patents don’t think education is important. On the question “How important do you think having a good education yourself is for getting ahead in life?” only 2% said it was unimportant. 21% said it was essential and 51% said it was very important. 20% said it was fairly important.
What they don’t have is confidence in the educational system: 48% said they had complete or a great deal of confidence. 51% said they some, very little or no confidence.
And while half of the parents don’t think everyone should necessarily go to college, those findings don’t apply to their own children. Only 3% said their child will not attend college. 9% said their may or may not attend college. 87% said their child would definitely or probably attend college (60% in the definitely category).
That doesn’t sound like a set of parents who don’t understand the value of college. 95% of the parents what their children to get some form of post-secondary education (vocational school or community college – 8%; at least a few years of at a 4 year college – 8%; a bachelors degree – 37%; an advanced degree – 42%).
One of the most interesting finding in the study was that parents understand the difference between “school” and “education”:
only 2% agreed with the statement: “Education is something that happens when a person is in school, and it’s done when you leave school.”
24% agreed with “Education can happen throughout your life, because
there are always opportunities to take classes.”
34% agreed with “Education can happen throughout your life if you
know how to educate yourself.”
38% agreed with “Education happens automatically throughout your life, whether you’re in school or not.”
That last answer is undoubtedly extremely troublesome to the education professionals. In other words, 2/3 of the parents surveyed believe that education is something that an individual does — not something that happens in schools.
More on this point later.