Irving Wladawsky-Berger

The Prosperity Puzzle

The April 30 issue of The Economist includes a special briefing on The Prosperity Puzzle. The briefing highlights how tricky it is to compare living standards across countries, across economic classes within a country, and, - arguably hardest of all, - across time.

“Which would you prefer to be: a medieval monarch or a modern office-worker?,” it glibly asks.  “The king has armies of servants.  He wears the finest silks and eats the richest foods.  But he is also a martyr to toothache.  He is prone to fatal infections.  It takes him a week by carriage to travel between palaces.  And he is tired of listening to the same jesters.  Life as a 21st-century office drone looks more appealing once you think about modern dentistry, antibiotics, air travel, smartphones and YouTube.”

The point is further illustrated by referencing the research of Yale economist William Nordhaus.  In the mid 1990s, Nordhaus looked at the evolution of the price of light over the past two centuries in Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not.

The President’s Commission on Enhancing National Cybersecurity

Last February, President Obama issued an Executive Order establishing the Commission on Enhancing National Cybersecurity within the Department of Commerce.  The Commission is charged with “recommending bold, actionable steps that the government, private sector, and the nation as a whole can take to bolster cybersecurity in today’s digital world, and reporting back by the beginning of December.”

The Commission is composed of twelve individuals from the world of business, technology and academia. Former national security advisor Tom Donilon and former IBM CEO Sam Palmisano serve as chair and vice-chair respectively.

To gather the necessary information for its short- and long-term recommendations, the Commission is holding public meetings around the country, each focused on a different sector of the economy.  On May 16, it met in New York City to discuss the challenges and opportunities facing the financial sector.  The meeting included three panels, one on finance, one on insurance, and the third on research and development.

I was a member of the R&D panel, along with MIT professor Sandy Pentland, IBM Fellow Jerry Cuomo, and Greg Baxter, head of digital strategy at Citigroup.  During our 90 minute panel, we each made introductory remarks based on our previously submitted briefing statements and then answered the commissioners’ questions.

Can AI Help Translate Technological Advances into Strategic Advantage?

After many years of promise and hype, artificial intelligence is now being applied to activities that not long ago were viewed as the exclusive domain of humans.  It wasn’t all that long ago that we were wowed by Watson, Siri, and self-driving cars.  But it’s getting harder for our smart machines to truly impress us.  Earlier this year Google’s AlphaGo won a match against one of the world’s top Go players.  Go is a very complex game, for which there are more possible board positions than there are particles in the universe.  Yet, we seem to be taking AlphaGo’s impressive achievement in stride.

“Any sufficiently advanced technology is indistinguishable from magic,” is one of the most memorable quotes of science fiction writer Arthur C. Clarke.  But, as we better understand its promise and limitations, technology becomes just another tool we rely on in our work and daily life.  With familiarity, the romance begins to fade, - as was the case with electricity, cars, airplanes and TV in the early decades of the 20th century, and as has been the case more recently with computers, the Internet, and, - increasingly now, - with AI.

Over time, our feelings turn from wonderment and admiration for the seemingly magical achievements of the technology in its childhood years, to the far more practical questions of what the technology can actually achieve when it grows up.  This has been a particular issue with information technologies in general, including the Internet and AI.

The IT industry has long been associated from what’s been called the Solow productivity paradox, in reference to Robert Solow's 1987 quip: “You can see the computer age everywhere but in the productivity statistics.  We all thought that the Solow paradox was finally behind us when IT-driven productivity surged between 1996 and 2003.  But despite the continuing advances in technology, productivity is now back to its slow pre-1995 levels, for reasons that are still not well understood.

Digital technologies are all around us.  But, are they a major source of competitive differentiation?  Are they a strategic value to business?  Can they help increase innovation and productivity and drive long term growth?  These questions have no easy answers, as we have learned over the years.

The Public Face of Science

Last month, the American Academy of Arts and Sciences launched a three year initiative to address the complex relationship between scientists and the public.  The Public Face of Science project will explore the interactions of the general public with science, technology, medicine and related areas.

Throughout the 20th century, polls have consistently indicated strong public support for science and technology, especially during the Cold War decades following World War 2.  But recent polling data, - and in particular, a recent study conducted by the Pew Research Center, -  reveals a more complex relationship between the public and science.  While scientific achievements are still recognized and valued, there is a large opinion gap between the general public and scientists on a number of scientific issues.

The Pew findings were released in a January, 2015 report based on two surveys of science-related issues conducted in collaboration with the American Association for the Advancement of Science (AAAS).  The first survey is based on a representative sample of 2,002 general public adults and was conducted by landline and mobile phones.  The second survey was conducted online, and is based on a representative sample of 3,748 US-based scientists who are members of AAAS.

The Analog Foundations of the Digital Revolution

This past January, the World Bank issued the Digital Dividends report, a comprehensive study of the state of digital developments around the world.  All in all, it’s a mixed picture.  Digital technologies have been rapidly spreading in just about all nations, but their expected digital dividends, - i.e., their broad development benefits, - have lagged behind and are unevenly distributed.

“We find ourselves in the midst of the greatest information and communications revolution in human history,” notes the report in its Foreword.  “More than 40 percent of the world’s population has access to the internet, with new users coming online every day.  Among the poorest 20 percent of households, nearly 7 out of 10 have a mobile phone…”  But, while this is great progress, much remains to be done.  Many are still left behind due to their limited connectivity, and are thus unable to fully benefit from the global digital revolution.

While universal connectivity is necessary, it’s far from sufficient, the report adds.  “[T]raditional development challenges are preventing the digital revolution from fulfilling its transformative potential…  the full benefits of the information and communications transformation will not be realized unless countries continue to improve their business climate, invest in people’s education and health, and promote good governance.”

Let me attempt to summarize the salient findings and recommendations of this comprehensive (over 300 pages) report.