Entries in technology (5)


Explosive technology growth is critical to the future of the U.S. economy

What if the singularity does not happen?

Peter Thiel -- co-founder of PayPal, early investor in Facebook, and current venture capitalist -- posed this question this weekend to attendees of the Singularity Summit, a conference that brought together some of the most forward-thinking technologists, futurists, and venture capitalists to explore the impact of technology on society.

The singularity can be interpreted as many things, but using the definition of Ray Kurzweil, it is a rapid and profound technological change that is irreversibly transformative. Kurzweil is known for his identification of exponential growth in technology, dating well before Moore's law, as in the diagram below, when Moore's law is seen as the fifth manifestation of this phenomenon. Source: kurwzeilai.net.

Continuing on this exponential path means that we should reach the singularity in this lifetime.

So what is Peter's conclusion if this doesn't happen?

Our expectations for constant growth that enable our credit-based economy to work will need to be seriously re-adjusted. This leaves us with two options: start saving a lot more (~40%) or work to ensure that we develop the technologies that will enable us to continue to grow. We'll probably need to do both.

In this interpretation, advancing technology IS the key to the economy. While on a panel with famous NYC-based VCs Mark Gorenberg and David Rose, Peter raised the question of whether maybe it is time to scale back on VC, given that most VC firms have not made money in the last 11 years. Maybe the 5% of his portfolio that Mark currently allocates to VC should be more like 2, 3, or 4%. The consensus of the panel, however, was that in the long run, if that 5% fails, then the 95% left is hopeless as well. It's the 5% investment in cutting edge technologies that will bring us to the next level and if we don't get there, then all growth will slump.

So who is most likely to power this growth? Peter was clear that it's not the so-called "technology companies" of Microsoft, IBM, and HP (he was far more positive about Intel). These firms are actually more like banks in that they are betting on no innovation in technology and would instead best succeed under the status quo. Peter is the primary donor to the Singularity Institute, who researches transformative technologies and ther impacts, and he also prefers to invest in companies that won't make money "for a long, long time." When you're the co-founder of PayPal, you can afford to do that.

Technology thus does not only further open and free markets, as Transcapitalist advocates, rather it is the critical input to the market's success.


Socially responsible outsourcing -- Samasource -- a social lending alternative

In our coverage of Kiva, Microplace, and LendforPeace, we have explored the amazing power of these internet platforms to connect lenders to poor entrepreneurs from around the world and make an impact in small, but meaningful ways.

It is worth looking beyond microcredit. Samasource is a start up non-profit that connects companies in need of simple technology tasks with trained workers in poor countries.  Like Kiva, Samasource has field partners on the ground, but instead of local NGOs, it seeks socially responsible local businesses who embrace three things: transparency, community, and progressive labor relations.

From CEO Leila Chirayeth:

Samasource helps talented but marginalized people empower themselves through internet-based work. Our San Francisco team screens and selects high-quality small businesses and nonprofit training centers in the poorest parts of the world, provides them with training and project management tools, and helps US clients outsource work to them. Our clients reduce costs, receive high quality work, and support dignified employment for some of the world's poorest people.

I'm excited to see an alternative, internet-based platform to social lending that still embraces the market as the ultimate driver of growth. The effectiveness of providing loans to the poor to reduce poverty is still uncertain (see David Roodman of the Center for Global Development for a thoughtful consideration of this topic on his blog). Intuitively, there is reason to believe that most poor people are not actually destined to become successful entrepreneurs. In the United States, I would not expect most of the Americans asking for small business loans are going to succeed -- so why would I hold micro-entrepreneurs in Africa to a different standard? The truth is that most people function and work within some sort of structure -- and for most people, that structure is a company.

Samasource supports that structure. By helping the local businesses (run by entrepreneurs, of course) find outsourcing work, Samasource creates jobs for workers who can become trained to perform needed tasks for others. And the model is sustainable over time -- not just for the individual who receives the training, but for the community that now has a viable job center. Companies can turn to Samasource for support with tasks similar to those seen on Mechanical Turk: data entry, application testing, audio transcription.

Again, Ms. Chirayeth:

Sama means equal in Sanskrit. We are a social business helping bright but marginalized people in poor regions find dignified jobs by expanding their access to markets.

You can support Samasource's mission to give work, not aid  here. If you work for a company that needs data cleaning or other basic tech services, consider using Samasource -- you get a good rate and you're supporting the development of sustainable and dignified jobs.


Mgive lets you text money immediately to your favorite non-profit

Next time you're considering paying a text message fee to vote for your So You Think You Can Dance?  favorite, why not instead text a few dollars to your favorite non-profit?

Yesterday during the 2009 BET Awards Show, Keep a Child Alive raised over $130,000 through the mGive- Mobile Donation Program. During Alicia Keys’ performance, more than 26,000+ mobile donors texted their $5 donations. Keys co-founded Keep a Child, a non-profit organization that provides health care and housing to children with HIV/AIDS in Africa and India.

The model is brilliant. Keys had a captive audience during her performance when she gave a shoutout to her non-profit, but even if viewers were convinced by the cause, how many of them would have then gone home or logged in online to make a donation? Probably not too many. But by suggesting that the audience members text a 5 digit number right that moment ("text ALIVE to 90999") Keys can get 26,000 people to participate.

Building upon the mobile banking model pioneered in Africa, the mGive platform enables donations without cash or credit card. The $5 donation will be added to donors' next mobile phone bill. Amazingly, donors can even visit mgive.com and download a receipt of their tax deductible donations. The application of cell phone technology in new ways plus the recognition of the power of micro-participation may prove to breathe new life into non-profit fundraising. Participating charities include:

  •   American Heart Association (text HEART to 90999)
  •   Amnesty International (text RIGHTS to 90999)
  •   Doctors without Borders (text DOB to 90999)
  •   Make a Wish Foundation (text WISH to 90999)
  •   Many more... See the full list here

Trends point towards increased regulation of high tech success 

Earlier this week, EU regulators levied a record $1.45 billion fine on Intel for anticompetitive practices. Through a suit brought by main competitor AMD, the commission found that rebate conditions and predatory pricing schemes violated anti-trust laws.

This exorbitant fine is bad news for the Intel, but even worse news for consumers. In the current down economy, Intel is a bright light of innovation and success that has not only revolutionized the computing industry but provided a massive engine of job growth. According to the Association for Competitive Technology:

For the past 20 years, the microprocessor industry has delivered more innovation, more speed, more functionality, and lower prices...Over the past 10 years, the average price of Intel's PC microprocessors has dropped by 60 percent. When the only one complaining about the competitive situation is AMD, it raises serious concerns about the efficacy of this action.”

This aggressive action against a company that is currently resilient enough to actually have the cash on hand to pay the fine (CEO Paul Otelinni announced two days ago that Intel has a healthy $10 billion cash balance) may be a harbinger of increased regulatory activity this side of the Atlantic.

Indeed, Ms. Christine Varney, the new commissioner of the Justice Department's antitrust division is scheduled to make a speech on Monday at the Center for American Progress outlining her intent to revive antitrust actions. Technology is one of the industries specifically expected to be targeted.

The question is: Why are governments going after high tech?

From Chairman Craig Barrett:

"The antitrust rules and regulations seem designed for a different era. When you look at high-tech companies, with the high R&D budgets, specialization and market creation they need to hold their big market shares, it's so very different from the old world of oil companies and auto makers that the antitrust regulations were designed for. They are out of sync with reality."

So the EU and American regulators are going to go after Intel (and TechCrunch predicts Google is next) where the vitality and money can be found, while propping up moribund industries like cars and encouraging massive consolidation in finance. How is this a recipe for innovation and growth?


Predicting the technology future

In a crowd of emerging prediction market sites asking all sorts of frivolous pop culture questions of their participants, Nostradamical chooses to ask an interesting one: What will be the key milestones in computing technology over the next few years?

To think about this question, they first explore the past 100 years through the technology prediction market questions that would have been: Will Apple make phones?(2007) Will the Sony Walkman just be a teenage fad? (1977) Is there money in microchips? (1969)

Unfortunately, since Nostradamical's model is to allow its members to submit their own markets, the actual technology markets are often somewhat silly and poorly formed, e.g., Will AOL continue to worsen and die? Power.com won't succed (sic) in 2009. I would like to see Nostradamical moderate the site a bit more and even create "official" markets suggested by the site owners.

Still, the site is fun, intuitive, and creates a stronger sense of a "predicting" community than many of its competitors. It integrates a Digg-like function of moving interesting predictions to the top and an (somewhat) incentivizing pyramid scheme for top predictors to work their way to the top to become "oracles." You can join the conversation with their most popular prediction: Will Apple announce their own search engine in 2009?