Future Imperfect #21: Beyond Silicon Valley
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Here’s what I’ve been following this week:
Silicon Valley, meet Rwanda
You might not know it, but entrepreneurs don’t just work for dead unicorns in Palo Alto. Many and more are reshaping the economic landscape outside of the United States altogether. Case in point: Rwanda’s Startup Generation.
Perched on the top floor of an office complex that overlooks the Rwandan capital of Kigali, kLab, one of the country’s first tech incubators, has all the trappings of a Silicon Valley start-up. On any given day dozens of young people can be found here — brainstorming at the coffee bar, or crowded around the foosball table, or, most often, hovering over laptops. Their projects range from software that improves the milk-collection process in rural areas to a local version of Trip Advisor, and are evidence of a future many Rwandans hope to see.
Founded in 2012 as a partnership between the government, the country’s private sector, and a smattering of international donors, kLab is emblematic of Rwanda’s efforts to instill an entrepreneurial spirit in its young people. This push toward entrepreneurship began as an unconventional response to the global financial crisis and has become a staple of the country’s recovery from the 1994 genocide that left as many as a million dead. As Jean Philbert Nsengimana, the Minister of Youth and ICT (Information and Communication Technology), said, “the focus [is] on equipping the young people with the right tools in terms of not only technology, but also an entrepreneurship mindset.”
Now Rwanda has myriad problems for sure—a lack of reliable electricity and a less than democratic government for example—but it’s hard not to be at least a little bit optimistic for the country’s future based on this approach.
Taking away the long-haul jobs
Did you heard about the world’s first convoy of driverless trucks? Let the disruption to the global economy, and our personal lives, commence:
Shipping a full truckload from L.A. to New York costs around $4,500 today, with labor representing 75 percent of that cost. But those labor savings aren’t the only gains to be had from the adoption of driverless trucks.
Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost.
In addition, once the technology is mature enough to be rolled out commercially, we will also enjoy considerable safety benefits. This year alone more people will be killed in traffic accidents involving trucks than in all domestic airline crashes in the last 45 years combined. At the same time, more truck drivers were killed on the job, 835, than workers in any other occupation in the U.S.
But it’s not all sunshine and roses…
The loss of jobs representing 1 percent of the U.S. workforce will be a devastating blow to the economy. And the adverse consequences won’t end there. Gas stations, highway diners, rest stops, motels and other businesses catering to drivers will struggle to survive without them.
Key takeaway: Don’t just focus on the shiny new innovation. Appreciate the shiny new innovation, then figure out which part of the economy it’s going to flatten.
Tightening the belt
Have you heard about the global steel glut? It’s the natural result of a country, China, increasing its steel manufacturing capacity by 730 percent in just 15 years while America’s capacity has remained more or less flat. So how do we fix this?
One of the reasons free trade is under such attack in the United States and some other countries is that the classic free trade argument — that the market will sort this mess out to everyone’s benefit — simply does not hold true in such a distorted sector. If nothing is done, some of the most efficient steel plants in the world will go under and the heavily subsidized, unprofitable ones in China and elsewhere will survive.
But the classic U.S. and European response — to throw up trade barriers in the form of anti-dumping tariffs — is not terribly helpful either. Temporary tariffs can give some breathing room to their steel industries. But they come too late, often when the companies are teetering on the verge of bankruptcy. And breathing room for what? If there is no big reduction in steel capacity worldwide, the problem will either be shuffled off to other countries or will re-emerge when the tariffs expire. In the meantime, big steel-using industries like automobiles and shipbuilders will face higher costs than their competitors in countries where steel markets are less protected.
The only effective solution is a hugely difficult one — following the OECD prescription and negotiating an international agreement in which steel producing nations agree to an orderly, shared reduction in capacity to balance supply and demand better. But such a deal is almost impossibly difficult to reach. Steel-producing nations tried this seriously once before, in the early 1990s, when the OECD hosted talks on a “Multilateral Steel Agreement” (MSA). The U.S. steel industry had hoped that an MSA would “end government subsidies, cartels and cartel-like behavior and other anti-competitive practices in steel trade and open up all steel markets worldwide to full, market-based competition.”
Without some sort of agreement, expect trouble in the steel industry. What kind of trouble? Layoffs, bankruptcies, and increasing Chinese monopolization of the steel market.
A fountain of poker chips
The future of water innovation in the United States may be found in an unlikely place: Las Vegas. The saying “necessity is the mother of invention” holds true in the city that gets just four inches of rain per year amid a 16 year long drought. And at the center of this innovation—an incubator:
Las Vegas’ focus on water — and the constant pressure on its supply — has driven years worth of public experimentation, establishing the area’s umbrella water utility, the Southern Nevada Water Authority, as a nationally recognized leader in water quality treatment. The utility boasts a state-of-the-art laboratory that produces ground-breaking research and a roster of scientists who routinely publish in major academic journals.
About 18 months ago, the region took an even bolder step forward. In a move driven in part by Nevada’s near-collapse during the Great Recession, the state, the city, the University of Nevada’s Desert Research Institute, the regional water authority and private industry teamed up to turn that reputation for water innovation into a catalyst for job creation.
They created WaterStart, a tiny incubator that finds and tests promising water technologies and helps hasten them to market. Technologies, for example, to remove nitrates from well water; that use drones to measure plant stress from the air to improve irrigation precision; or, as with those nondescript listening devices stashed along the Strip, to detect leaks before they can cause millions of dollars in lost tourism revenue.
Now WaterStart is taking the lead in identifying smart technologies to save Las Vegas, and other similar cities, from the perils of water shortages.
Contemplate the marvel that is existence
Exhalation, a peek into one possible universe next door, from Ted Chiang. There’s many angles to appreciate in this piece, particularly this examination of memory:
Despite these advances, the field of anatomy still had a great unsolved mystery at its core: the question of memory. While we knew a little about the structure of the brain, its physiology is notoriously hard to study because of the brain’s extreme delicacy. It is typically the case in fatal accidents that, when the skull is breached, the brain erupts in a cloud of gold, leaving little besides shredded filament and leaf from which nothing useful can be discerned. For decades the prevailing theory of memory was that all of a person’s experiences were engraved on sheets of gold foil; it was these sheets, torn apart by the force of the blast, that were the source of the tiny flakes found after accidents. Anatomists would collect the bits of gold leaf — so thin that light passes greenly through them — and spend years trying to reconstruct the original sheets, with the hope of eventually deciphering the symbols in which the deceased’s recent experiences were inscribed.
I did not subscribe to this theory, known as the inscription hypothesis, for the simple reason that if all our experiences are in fact recorded, why is it that our memories are incomplete? Advocates of the inscription hypothesis offered an explanation for forgetfulness — suggesting that over time the foil sheets become misaligned from the stylus which reads the memories, until the oldest sheets shift out of contact with it altogether — but I never found it convincing. The appeal of the theory was easy for me to appreciate, though; I too had devoted many an hour to examining flakes of gold through a microscope, and can imagine how gratifying it would be to turn the fine adjustment knob and see legible symbols come into focus.
More than that, how wonderful would it be to decipher the very oldest of a deceased person’s memories, ones that he himself had forgotten? None of us can remember much more than a hundred years in the past, and written records — accounts that we ourselves inscribed but have scant memory of doing so — extend only a few hundred years before that. How many years did we live before the beginning of written history? Where did we come from? It is the promise of finding the answers within our own brains that makes the inscription hypothesis so seductive.
GIF of the Week: The future of logistics
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