McCain the dinosaur

January 25, 2009

He was ridiculed during the campaign for not using email, or blackberry, or knowing the difference between a Mac and PC.

But never was his technological ineptitude as visible as today:

MCCAIN: There’s got to be some kind of litmus as to whether it’ll really stimulate the economy and whether it will in the short-term. Some of the stimulus in this package is excellent; some of it, frankly, has nothing to do — some of the projects and others that you just mentioned, $6 billion for broadband and internet access. That will take years.

Universal broadband access is actually the most important part of the entire stimulus package, and at only 6 billion (less than 1% of the total) is already incredibly underfunded.

Like many old-timers McCain still thinks of infrastructure in terms of roads and buildings, when we need to be thinking in terms of a new electron economy.  I’ll quote Friedman again:

If we spend $1 trillion on a stimulus and just get better highways and bridges — and not a new Google, Apple, Intel or Microsoft — your kids will thank you for making it so much easier for them to commute to the unemployment office or mediocre jobs.

Stimulating a new economy

January 19, 2009

Feldstein and Stiglitz both warn ‘what after the stimulus money is gone?’.  We have been propped up by two bubbles the last decade.  What will prop us up after we’ve used our borrowed money in two years?

Friedman puts it nicely: “If we spend $1 trillion on a stimulus and just get better highways and bridges — and not a new Google, Apple, Intel or Microsoft — your kids will thank you for making it so much easier for them to commute to the unemployment office or mediocre jobs.”

Fortunately I do see the foundation for a new economy in two specific elements of the emerging package:

A third element of the package is a wildcard: Healthcare reform.  Universal healthcare is a moral imperative, but the real value of reform is in increasing efficiency.  The current system is so expensive it is a real drag on the economy.  We must reduce costs and optimize delivery using technology, standardization, regulation and reorganization to a point where cost per insured is cut in half, otherwise we will still be at a disadvantage.  Most of this change will depend on Obama and Dashle’s reform skills, and not on how much we spend via stimulus package.

A fourth one is necessary for a world-wide recovery: Chinese people must start spending and enjoying the fruits of their labor.  The China-lends-us-money-so-we-can-buy-their-products dynamic is over.  This is obviously beyond our control, but well within the command of the central party committee.  Credit cards anyone?

The telepresence economy

January 18, 2009

Ten years ago we could not have imagined online banking or online news.  Even five years back internet telephony was a curious innovation.  Today I routinely use Skype to chat and talk with coworkers throughout the working day.  Whether they are next door or 100 miles away makes little difference.  Some of them even work 100% from home.  In software engineering Skype is an adequate communication tool.  In other professions it is not.

Now extrapolate the current tools, at the current pace of innovation, and imagine something like this:

Multiple large flat screens that envelope you.  At the touch of a button you can instantly view any one of your co-workers stations, or any number of them side-by-side.  Cameras are always on.  Your boss can drop by any time, as can your coworkers.

An etiquette develops, and the tools and features to support it, so you can signal that you are discussing something with Jack or Jill, whether it’s OK to join in the conversation, or you need a private moment.

The experience becomes so refined that it is interchangeable with real face to face contact, and actually easier since it can be started and ended at the touch of a button, and you can quickly scan who is available and who is not.

Over time just about every activity can take place over the wire: Customer service (phone,email, ‘face-to-face’).  Back-office (accounting, finance, audit, purchasing, HR.  Law and accounting services, even psych consults.  Teaching, tutoring.  Band practice.  Engineering and design (civil, software, mechanical).

The increase in productivity would be enormous (with my completely unscientific estimates):

  • Reduced cost of living expenses from living where it makes economic sense instead of where employers are (engineer can live lakeside in Montana for half the price of California): 5%
  • Lower oil/energy consumption, automobile wear and tear, infrastructure investment: 5%
  • Additional 3 to 10 hours per week spent working instead of commuting: 2%
  • Less office space building needed: 3%
  • Services chosen based on lower price, not proximity: 2%

The tools are nearly there, just one thing is missing: Universal, reliable, fast connectivity throughout the country.

Fortunately, we are about to get that too.