Monthly Archives: September 2008

Innosuing, not innovating

image Endnote, owned by Thomson Reuters Reuters, is suing the main creator of Zotero, Dan Cohen (Or, rather, they are suing GMU, his university.) The reason is that Zotero includes a tool that can convert Endnote styles to Zotero (much like Openoffice has functionality for converting from MS-Word or other formats).

Now, there is a brilliant market move. Endnote is primarily used by academics. I have used it since around 1991, and for a couple of years I was a beta tester (and had the T-shirt to prove it.) Aside from the T-shirt, I got zilch for my efforts (and I did find a bug or two.) Neither did the thousands of academics who have created bibliography styles for various journals and uploaded them to Endnote’s web site.

I can’t think of a better way than a law suit to make people move to Zotero. This definitely does it for me – unless Thomson Reuters pulls this stupid suit. Come to think of it, we have a number of users at the Norwegian School of Management, I am sure I can persuade quite a few of them to switch sides…..

Suing an academic for creating software for other academics which draws on work of other academics when your primary market is academics? Have they hired hired lawyers from the music industry?

Zotero is a better tool, too. Shared lists, bibliographies, support for clipping from searches, including Google Scholar. Instant saves from browsing.

Time to move, methinks. Let me see, how hard would it be to migrate my 2100+ article database….

Update two hours later: Boingboing is on the case.

Update 10 hours later: Check out the Boingboing comments – Streisand effect in the making. John Mark Ockerbloom has a thoughtful piece on the suit.

Why can’t the Treasury act like Buffett?

Posner argues that the government should behave like Warren Buffett, who made a $5b investment in Goldman Sachs in return for a guaranteed 10% dividend. (One surmises that the government may have to settle for less ambitious returns, though). Becker disagrees, arguing that government ownership introduces risk of political considerations overriding economical ones.

I side with Posner, if for nothing else that economic considerations – that is, economic from the view of each failing bank – has disappeared a long time ago. Government seats on boards is a small price to pay for a bailout. And as the markets rebounds, the government stake can be sold again.

Here in Norway, this actually happened – the government took over failing banks in 1987, at one point owning almost all of them, then selling them out again. Worked reasonably well, except for the bank shareholders, of course. But that is the point of shares – you can claim ownership to all the assets and all of the residual return. If the assets disappear, so does your claim.

Update:  Check out Tom Evslin’s nice little demonstration of how we got into this mess in the first place.

A power plan for the US

Bob Cringely proposes an upgrade to the US grid as well as a moratorium on incandescent light. Not sure about the underlying statistics, but I have always wondered about the puny 110V and ancient (often spaghetti) cabling found even in affluent neighborhoods over there. Not to mention the efficiency loss from the thin copper. 18% less power use? On the surface, this seems like a good idea to me.

Small firm, large firm, we are all equal now

Hal Varian has a good post on the democratization of data over at the Google blog – in short, that small firms now can access information and analysis (including consultants) much like large firms can.

My interpretation: Information access is now close to free. What you now need is understanding. That takes people, and if you can access the smart ones in person as well as their explicated output, you will do well.

Little brother pretty fast

Cory Doctorow’s Little Brother (available for free download here if you don’t want to buy it) is a "young adult" book on the topic of surveillance and personal freedom and privacy. The story is about Marcus, nicked M1k3y, who after a terrorist attack hits San Francisco gets detained by the DHS, denied his rights, and decides to take revenge. This involves quite a bit of hacking, security, cryptography and subterfuge.

The purpose of this book is both to tell a story and to teach the (young) reader something about personal freedoms, critical thinking and how to preserve your privacy in an increasingly connected and digitized world. This shows – there are some quite detailed discussions of this, somewhat simplified versions of Cory Doctorow’s speeches and writings on these subjects.

I sort of liked the book – it is important from the perspective of raising a generation of youngsters that know enough about the technology to maintain some sort of privacy, and encourage creative thinking – loosely defined as demanding logic and actions in proportion to consequences from the authorities. Cory’s book has gotten to the NYT bestseller list, and deservedly so. This is something to be happy about, for Cory spreads the word of his book electronically (as well as the book) and this nicely vindicates that strategy and points towards the future for aspiring authors. And, as someone struggling to get young people to read about and be interested in technology – not just what it does and how it looks but how it works – I see the value in the book.

But I do wish the literary qualities, such as the plot and the character development, were a bit more ambitions. On the other hand, Neal Stephenson does that, and Little Brother is an excellent introduction to Cryptonomicon, which set the reader up for the Baroque Trilogy and the idea that, well, history matters.

So, highly recommended. Wonder when we will see the first Norwegian translation? (I have translated for Cory before, but am a bit under the weather here. Anyone for a "dugnad"?). It is not like anyone needs to ask permission…

(On a side note, the paper copy I got from Amazon had half of page 197/8 torn out. Rather than sending it back to be replaced (which I know Amazon would do without argument), I printed out those pages from Cory’s web site and put them inside the book. Saves work and time. Same thing as when I switched from a static web page to a wiki for my course syllabi – now the customers, i.e., my students, fix broken links without bothering me…..)

A simplistic answer…

Becker and Posner discusses the financial crisis, and for once I feel a little disappointed, for they somehow miss the international side of things. The financial crisis has been possible because the American people have been on an enormous consuming binge, thanks to cheap stuff from China financed by credit from, yes, China, channeled through mortgages based on ever escalating house prices.

Anyway, I was at an HBS alumni conference last week, and the topic, of all things, was technology trends and financial crises, with speakers such as Martin Wolf, Carlotta Perez and Erik Reinert. One interesting point which was brought up was the US curious insistence on always having cheap energy: Not only is there no tax on gasoline (which would have brought down consumption and emissions, given the national coffers some badly needed cash without having to sell Treasury bonds, and reduced dependence on foreign oil), but the US, according to another speaker, subsidizes coal production to the tune of $50b per year. Stop doing that, and you would help the environment and could buy yourself an investment bank every year….

Carlota Perez on how to understand global technology trends

image Carlota Perez: Global Technology Trends: Challenges to national strategies and policies

HBS 100th Anniversary

Soria Moria Hotel, Oslo

Only one of Schumpeter’s ideas accepted: Technical change is the driver of economic growth. But it is not totally random, it has continuities and discontinuities.

1970: Low cost microelectronics, sw, computers, internet, digital telecommunications….

1907: Mass production, low cost petroleum fuels, universal highways and electricity networks

Success may depend on anticipating the future, which you can do by looking at the past. There are powerful regularities and identifiable specificities in technological revolutions: Comes every 40 to 60 years, at the end of maturity of the previous technology, and has a similar sequence of diffusion in two periods of 20 to 30 years, with a financial crisis in between.

Tech revolution and techno-economic paradigms

Five revolutions: 1771 Industrial revolution, 1829: age of steam and coal, iron and railways. 1875 age of steel and heavy engineering (electrical, chemical, civil and naval); 1908 Age of the automobile: 1971 Age of the information technology and telecommunications. Next one may be biotech, bioelectronics, nanotech and new materials.

We are only halfway in the IT revolution. And each revolution takes about half a century to spread around the world.

Each revolution has a double nature: the create new industries that function as engines of growth, but there is also a new techno-economic paradigm. The first creates an explosive growth, the second modernizes and rejuvenates the mature industries.

The diffusion of each technological revolution confronts enormous resistance from institutions deeply adapted to the previous paradigm. Therefore, each technological propagates in two different periods: Installation and deployment. The first half sets up the infrastructure, usually with over-investment, but the infrastructure stays. It is a period of creative destruction, of unlearning, lead by financial capital, ends in a stock-market crash. The second is one of creative construction, led by production capital, applying the paradigm to innovate across all sectors and to spread the social benefits more widely – until maturity and exhaustion.

Why the bubble?

The capitalist economy is shaped by two different and functionally separate agents: Production capital (agent of accumulating wealth-making capacity) and financial capital (agent for reallocating and redistributing). Production capital has a long-term bias, financial capital has a short-term bias. Financial capital is better at massively redirecting resources and force new paradigm diffusion. Production capital is better for carrying growth and expansion within an established paradigm.

The role of the state changes: In installation period – the gilded age – the market does it all. In the deployment stage – the golden age – the state has an intelligent come-back, promoting long term growth.

Three investment paths for assuring long-term growth

Financial wealth and production wealth can both be destroyed, but for financial wealth you normally cannot influence it.

The best investment for the future is the capacity for technical change. Short-term, this means fostering innovation and entrepreneurship in the current paradigm. In the medium-term it means betting on the gestation of the next revolution. Insuring the long-term future means favoring open-ended science increasing the quality of human capital.

The current techno-economic paradigm shift is from the logic of cheap energy to the logic of abundant information. The new paradigm is still wrapped in the old, because cheap oil and cheap Asian labor favored stretching the old paradigm. But rising material and oil prices will lead to rising packaging and freight costs. Every little thing is wrapped in energy, such as cardboard or plastic. The visible effects of increasing global warming, with a rising climate risk (more Katrinas). There will be a change in the production, transport and distribution of tangible goods, leading to changes in business strategies and government policies.

The major transformations to expect (or to participate in): [lots of things], two being changes in lifestyle and urban planning towards activities and foot transportation.

Long-term funding: In the knowledge society, redistribution is not enough. Open-ended science works like a rich genetic pool. Investing in science, technology, education and entrepreneurship counteracts inflation by increasing average productivity. It is time to abandon market fundamentalism and agree ton a shared strategy to put order in finance and to collectively promote innovation to insure the future.

Martin Wolf on the Financial crisis

image Notes from

Martin Wolf: Challenges of globalization
HBS 100th Anniversary
Soria Moria Hotel, Oslo

Timing of this conference is very prescient….

This financial crisis is more interesting than the Depression, since it is taking out the core of Wall Street.

"Let China sleep, for when she wakes, she will shake the world." — Napoleon Bonaparte

"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war." Alan Greenspan, FT, March 16th, 2008

"Simply stated, the bright new financial system – for all its talented participants, for all its rich rewards – failed the test of the market place." Paul Volcker, April 8, 2008

Three of the five biggest investment banks have disappeared since he said that….and the others may not be around for another week or so.

What is driving the world economy?

It is the biggest globalization and convergence story of all time (last 20 years). There is a global move to the market, with liberalization of barriers to trade and capital flows, declining costs of transport and communications (half the world’s population has access to mobile phone in 2010), entry of countries containing billions of people into the world economy (China, India and former Soviet Union has doubled the world’s labor force) and the growth of those economies

What is upsetting the world economy?

Hyman Minsky: Success leads to excess. A world of low inflation and strong growth generates confidence.

Global imbalances also lead to monetary excess, asset price booms and credit explosions. The US was the target for global excess savings, but if a country spends more than its income, so must its citizens. US Households did most of that spending. Surplus of capital everywhere, 70% of it going to the US. UK, Spain and Australia also large importers of capital. The problem continues: China’s surplus is $400b annually already, and rising. This ultimately leads to revulsion, house prices collapse. What makes it worse is that inflationary pressures have risen, too, largely because of rising commodity prices due to more demand from China – the one-off impact of globalization has weakened.

(One reason for the housing boom is that the stock market has been depressed since 2000.)

The striking feature of this from the capital exporting side (aside from Germany and Japan, which accumulate capital and the waste it, mainly abroad), 5,5 trillion in foreign currency, mainly in the US, by China, Japan, Asia, oil exporters and Russia.

Hyman Minsky: when times are good, investors take on risk, the longer times are good, the more risk they take on. Ultimately, they take on too much risk, asset prices overshoot, and then fall, debt is called in, and the system collapses.

We are at the early end of this disaster….

What is the future of global capital markets?

This is a fundamental shift. The savings-surplus countries have with massive capital funds, much of it in sovereign wealth funds (larger than hedge funds and private equity already, 5% of global capital). The countries that need investments don’t have reliable capital markets.

Conclusion

Globalization itself is an immensely powerful political, economic and technologic process, though it is not by any means guaranteed to continue. Capital market integration has proved to be highly unstable. governments are going to be much bigger players in global capital markets form now on.

David Foster Wallace dead at 46

image This is sad news indeed. David Foster Wallace was one of my favorite writers. I never made it through Infinite Jest, but loved his essays – on television, cruise ships, and tennis (I, II and III) – with incredible humor, deep knowledge of many an arcane subject and limitless playfulness with language. Side sentences with parentheses with footnotes with footnotes, yet all of it making sublime sense.

And then he goes and hangs himself. What a loss, and what a waste.

(Via Paul Kedrosky.)

CAMRB

Mary Beard wants a campaign for real bookstores, and solicits suggestions for "real" bookstores. Here are my favorites (and woefully incomplete, I know):

  • image The Harvard Book Store, Harvard Square, Cambridge, MA. A must since Wordsworth disappeared. Good basement with used books and remainders.
  • The Harvard COOP, Harvard Square, Cambridge, MA. Managed by Barnes and Noble, but with enough sophistication and volume both for staff and clientele that the selection is good and the advice competent, unless you happen upon an employee from the days before B&N took over.
  • City Lights, San Francisco. A bit of a legend and a tad long in the underground tooth, but excellent selection and very knowledgeable staff (even if you arrive in a business suit.)
  • Tronsmo, Oslo. Small bookstore with interesting books (and really good on cartoons, which is not my thing). Truly independent, good for a surprise every time you stick your head in.
  • Blackwell's, OxfordBlackwell’s, Oxford, UK. Enormous and somewhat disorganized, but selection, selection, selection.
  • The Jeffery Amherst Bookshop, Amherst, MA. Only been there once, but liked it a lot (and so did my elder daughter.)

Other suggestions (or, by all means, leave comments over with Mary.)

A Swiss army knife for the traveling techie

As anyone with some technical knowledge is keenly aware of – at the mere hint of some computer familiarity, you are instantly transformed into the local help desk. I frequently am asked to "take a look at" the PC of some neighbor or more or less distant family member. In most cases, it is a question of cleaning up disks and removing viruses and installed programs.

I am not sure if I really want to do this, but loading this little collection of software onto a memory stick seems like a good idea. Except then you get asked to look at even more barnacled computers….

(Via Stephen Downes.)

One danger of search-collected newspapers

United Airlines’ share price dropped 76% when Google News erroneously picked up a six-year old story about UAL filing for bankruptcy and pushed it to the front page.

Not that this couldn’t happen in any newspaper, but Google News is automatically generated. This opens for interesting possibilities in pump-and-dump….

Classic writing…

ACM Ubiquity re-published something referred to as a classic today, which to me came as a surprise, especially since, well, I wrote that thing in an hour or so as the result of a direct question from John Gehl, former editor. But hey, being called a classic can’t be all bad, can it?

Alternatively, cucumber season is raging across the pond…

The opportunity-creating IT department

Vaughan Merlyn has a good post on how IT departments should go from problem solving to opportunity creation. This, to me, means stepping up to the third level of IT management (where the IT dept is facilitating innovation and change, the goal being business transformation. The two former is providing utility services (standard and basic, reliable and cost-effective, the goal being business efficiency) and being a business partner (being flexible and responsive, facilitating growth in scale and scope, the goal being business effectiveness). (See this post and many of Vaughan’s for more detail.)

We used to say that the first and second level activities will not go away even if you reach the third level. But I am beginning to wonder.

The utility business part, for one thing, can now be almost totally farmed out to providers that provide, well, services at expendable cost. In an era of cheap and cloudy services, I am beginning to wonder why IT departments own their servers or provide desktop functionality. If I were kitting out a small company (50 people or less) today, I would do it with cheap and small computers (with really pricey 3G/WiFi/whatever connectivity options) running mostly server-based stuff, and iPhones or the like for the mobile crowd. Productivity software through the Google suite, for instance, with Gmail/Docs/etc. (Google Gears ensures that you can edit off-line). Salesforce or something like that for CRM, a wiki for collaborative stuff. Typepad or WordPress for company web page.

Accounting would be an issue due to localization – it is one of the last holdouts of geographic differentiation, since each country still has its own accounting rules and tax levels. I am not sure about to which extent online accounting is available here in Norway, but I think it is available. (and if not, I would volunteer to be the test site – it should be fairly easy to webify.)

As for personal stuff – just let the employees install whatever they want locally. They are grown-ups.

In that kind of environment (and yes, I am aware of the legacy code/apps/most users are stupid and definitely old/mainframes are still important/no company can start over arguments) the role of the IT department lies in tying things together from the user perspective – orchestrating innovation through the creation of smart mash-ups of all these online services. As for print, backup, and initiating new employees to this liberation from the past – farm that out to someone who does it for a living.

Wouldn’t it be lovely….

PS: Here is an article from The Economist about the Zoho office suite saying essentially the same thing: "Sooner or later, Zoho or another emerging-economy upstart will let a lot of air out of the corporate IT balloon."

Chrome impressions

I have now run Chrome as my default browser for a grand total of 14 hours – impressions so far:

  • Fast. Much faster than Firefox and IE.
  • Each tab is a separate process. Good statistics page allows you to shut down tabs that generate memory gobbles (a Firefox weakness).
  • The user interface is a little sparse, but you get used to that. Miss some functions from Firefox (how too open a local file, for one.) But just a few.
  • Much more graphically oriented than Firefox – pull tabs out as windows, for instance, and windows into tabs.
  • Works better with Google Docs (no surprise there) – showed some formatting codes not visible in Firefox.
  • Flash works – no more 4 seconds play and then full stop on Youtube.

Verdict so far: I thought I would never replace Firefox, but now I am beginning to wonder. If I am still using it in a week, then it is goodbye to Firefox. (I haven’t started testing plugins yet, then again, I don’t have any plugins that are absolutely critical.

First problem (9/4/8): Could not edit an entry at my course wiki (at pbwiki.com) – nothing happened when I click "edit".

Second problem (9/6/8): Could not retrieve a certificate from my net bank. Had to start up Firefox again.

Notable comment: Plus ca change: Jim Courtney on why multi-threading is important. (And yes, I used DesqView and QEMM extensively from about 89 to about 94, too.

Google Chrome

Google is announcing Google Chrome, an open-source browser tailored to, amongst other things, the multimedia rather than text-oriented uses of the web according to this comic by Scott McCloud (warning – slow site at this point). Here are some screenshots – looks to me like they have taken ideas from Opera (thumbnail navigators) as well as Firefox (autocomplete, private browsing). A nice feature seems to be the memory leak monitor – some web pages can cause a lot of memory problems (Incidentally, I installed AdBlock Plus in my Firefox version, which helps a lot.) See Slashdot for the usual comments, Nick Carr has a discussion about this as an important step towards cloud computing (and the goal of Google being to upgrade all browsers). Mozilla says they are not worried about the new competition No points for guessing what is going to be the top search term and discussion topic in the blogosphere this week.

image

Google Chrome, if it is to take off, needs to become a real competitor not to IE or Firefox (they can easily implement most of the added features) but to Vista. And the only way it can do that is by integrating the various Google applications (search, Calendar, Docs, etc.) into the browser. It also needs to be faster than IE or Firefox, and to handle upgrades easily. My guess is some kind of offloading to server-based rendering, much like Opera Mini is doing, making it easier to provide regular HTML to cell phones and the like. If it displays Google apps faster (and more reliable – Youtube is not persistently good on Firefox) than anything else, then it could quickly become important.)

Another way to gain share would be to exploit the enormous collection of user stats that Google has, to produce something that tries to guess the intent of the user and provide suggested links and user-influenced interfaces. Information systems these days is more and more about guessing the users intent rather than having him or her specify it up front, and Google is well informed (too well informed, some would say) about what we like to do.

Update 8/3: Have installed it. Runs fine. Memory management as good as advertised. Won’t be switching over from Firefox soon, but we’ll see over time. As for the story behind Chrome, Steven Levy has a good writeup, as usual, in Wired.