Irving Wladawsky-Berger

Reinventing Society in the Wake of Big Data

For several years now, big data has been one of the hottest topics in the IT industry.  But, what do we mean by big data?  What are people really excited about?  Is it real, hype, or something in between? 

A number of recent articles have been sounding the alarm that big data may be at the peak of inflated expectations in Gartner’s hype cycle.  For example, Gartner’s Research director Svetlana Sicular recently observed that big data has already reached the peak of the hype cycle, and is now falling into the trough of disillusionment, a necessary step before (hopefully) moving on to the slope of enlightenment.  She writes that a number of her most advanced big data clients are starting to get disillusioned: 

“These organizations have fascinating ideas, but they are disappointed with the difficulty of figuring out reliable solutions. . . Several days ago, a financial industry client told me that framing a right question to express a game-changing idea is extremely challenging: first, selecting a question from multiple candidates; second, breaking it down to many sub-questions; and, third, answering even one of them reliably.  It is hard.  Formulating a right question is always hard, but with big data, it is an order of magnitude harder, because you are blazing the trail (not grazing on the green field).” 

As is typically the case with major disruptive technologies, many people are waking up to the fact that realizing the value from big data and becoming a data-driven institution is a lot harder and will take longer than they originally anticipated.  But, is it worth it?  What is this data-driven world all about? 

MIT Media Lab  Professor Alex “Sandy” Pentland talks about the promise of becoming a data-driven society in a very interesting online conversation, - Reinventing Society in the Wake of Big Data.  Pentland is a big data pioneer, whom O’reilly Media founder Tim O’reilly named one of The World’s 7 Most Powerful Data Scientists in Forbes. 

“This is the first time in human history that we have the ability to see enough about ourselves that we can hope to actually build social systems that work qualitatively better than the systems we've always had,” says Pentland.  “That’s a remarkable change.  It’s like the phase transition that happened when writing was developed or when education became ubiquitous, or perhaps when people began being tied together via the Internet.”

Payment Technologies: Past, Present and Future

History can be a useful guide to the future, especially when trying to predict the impact of disruptive changes on human organizations and cultures.  I was reminded of this dictum when recently attending a very interesting workshop at the University of California, Irvine - Payment Technologies: Past Present and Future.

The workshop was sponsored by the Intel Science and Technology Center for Social Computing and hosted by the Institute for Money, Technology and Financial Inclusion (IMTFI).  IMTFI was established in 2008 “to support research on money and technology among the world's poorest people. . . [and] to create a community of practice and inquiry into the everyday uses and meanings of money, as well as the technological infrastructures being developed as carriers of mainstream and alternative currencies worldwide.” It is part of UC Irvine’s School of Social Sciences.   

The workshop brought together a mix of people from different disciplines, including anthropology, history, economics, business and technology.  The agenda covered a wide variety of subjects, ranging from the methods used to keep track of transactions in ancient Mesopotamia and the pre-Columbian Inca Empire, to the advent of credit cards in the mid-20th century and the future of digital payments in the 21st century.

It was organized by IMTFI director Bill Maurer and USC Annenberg School doctoral candidate Lana Swartz, who distributed a short paper laying out the workshop’s objectives:

“The end of cash is on the agenda, seemingly everywhere.  Constituencies rarely aligned - multinational payments companies, economic development and aid practitioners, nonprofit volunteers and venture capitalists - are coming together around the prospect of the supposedly imminent disappearance of physical currency objects. . .” 

“Reaching further back in time, however, we also recognize that the era of cash - of tangible, physical objects of paper or metal serving as money - is, relatively speaking, a historical anomaly, especially seen from the point of view of 10,000 years of recorded human civilization.  Archaeologists and historians of the ancient Near East have shown that money of account, recorded in transactional records, long pre-dated the minting of coin or other tangible objects used as a universal equivalent for exchange.  In the beginning was not the coin, but the receipt.  Is cashlessness a return, then, to a world of institutionalized, transactional record-keeping?  If so, what questions ought scholars and practitioners be asking, now, about those past and possible future worlds?”

Cloud Computing and Open Architectures

Earlier this month IBM announced that all its cloud services and software will be based on open standards and an open cloud architecture.  Standards and open source software are necessary to help cloud computing achieve the kind of market success enjoyed by the Web, e-mail and other widely used Internet-based services.  IBM’s announcement could in turn influence other IT vendors, application developers and users everywhere to similarly embrace open cloud architectures, much as was the case with IBM’s Web-based e-business strategy in the 1990s, and with its Linux initiative in the 2000s. 

I personally think of cloud computing as the emergence of a new model of computing in the IT industry.  This is important because since the advent of the IT industry over fifty years ago, this is only the third such model, the mainframe-based centralized computing and the PC-based client-server computing being the two previous ones. 

Unlike the previous two models, cloud computing is totally centered around the Internet and related open architectures.  Its most prominent characteristic is its ability to deliver all kinds of IT resources as-a-service over the Internet, e.g., computing, storage, software, platforms, applications and so on.

Patent Activity and the State of US Innovation

A few weeks ago, the Brookings Institution released a study that looks in detail at patenting activity in the US from 1980 to 2012 - Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas.  The study examines whether patent activity is a good concrete indicator of innovation, economic growth and productivity by looking at historical data going all the way back to 1790.  It includes a number of important findings, chief among them that the rate of patenting in the US stands at historically high levels.

This is a timely report given recent concerns that the US might be losing its innovation edge.  For example, in 2011 George Mason University economist Tyler Cowen published The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better.  According to Cowen, over the past two centuries the US economy has enjoyed lots of low-hanging fruit, including a vast, resource rich land, waves of immigrant labor, access to education and the technological advances of the Industrial Revolution, e.g., railroads, cars, electricity, telephones, chemicals, steel, and so on.  But, Cowen believes that we are at a technological plateau, and wonders whether long term growth is still possible because the supply of low-hanging economic fruit is nearly exhausted.

Then last year, in a provocative paper, Is US economic growth over?, Northwestern University economist Robert Gordon questioned the generally accepted assumption that economic growth is a continuous process that will persist forever.  Perhaps the slow growth we are experiencing in the US and other advanced economies is not cyclical, but rather evidence that long-term economic growth may be grinding to a halt.  The rapid growth and rising per-capita incomes we experienced during the Industrial Revolution of the past two centuries might have been a unique episode in human history.  There was little growth before 1800, and there might conceivably be little growth again for the rest of this century.

Given the close link between innovation and economic growth, it’s not surprising that questions are being raised whether our current slow growth is evidence that the innovation engine is now stalled.  The Economist took a look at these innovation pessimism concerns in its January 12 issue.  “With the pace of technological change making heads spin, we tend to think of our age as the most innovative ever,” it points out.  But, Has the Ideas Machine Broken Down?, asks the lead article in its title.  “The idea that innovation and new technology have stopped driving growth is getting increasing attention.”  In the end, The Economist concluded that the fears that innovation is slowing are exaggerated and not well founded, a conclusions similar to that reached by the Brookings report.