I subscribe to investor John Mauldin's Outside The Box, a free newsletter which often contains some worthwhile analysis of current trends. A few weeks back, a newsletter called America's Greatest Wealth Creation Engine showed up in my inbox. Sometimes Mauldin presents an article of interest by others. This one was by Alex Daley and Doug Hornig, and the "wealth creation engine" was never-ending technological progress. From Mauldin's introduction—
Those who know me well know that I am in incurable optimist. I think the world is going to be better in ten years than it is today. I thought that 20 years ago and 10 years ago and expect to think that 10 years from now. Part of that reasoning comes from the accelerating pace of change in the technology world. The next 10 years will see more change than the last 20-30 years combined!
And that means opportunity. Yes, with ups and downs and twists, but opportunity nonetheless. This week’s Outside the Box is a short essay from my friend Alex Daley who writes the letter Casey’s Extraordinary Technology...
Mauldin and I don't see eye to eye on many things, and his eternally sunny disposition is one of them. Not only does such an attitude retard our efforts to solve the very real problems confronting us, but it also flies in the face of Reality. Dealing with Reality is always the best choice. In fact, it's our only choice. So I think of incurable optimism as an incurable disease. And there's no way in Hell that the world is going to be "better" 10 years from now. The only remaining question is how much "worse" it's going to be.
Daley and Hornig's presentation turns out to be mostly a pep talk that recounts past technological triumphs. You can read it if you like, and I will quote it briefly below, but the alert observer will note that it's a little short on details about technological miracles which are ready for the marketplace, or even subsidized commercial-scale applications in the Real World. This gives me an excuse to ask a question pertinent to our times—
Where are all the really important technological breakthroughs we've come to expect?
Daley and Hornig praise technological progress, where inevitable advances are impersonal and implacable—
Over the past decade, while the overall market
was weakly limping along, these companies have been steadily growing revenues, adding jobs, and spewing profits. At the same time as brash startups were reinventing news, entertainment, communication, medicine, and virtually every other aspect of our work and home lives, promising to deliver still more growth even in this weak economy. We’re talking about technology, of course. Technological development is impersonal and implacable. It cares not who controls Congress or chairs the Fed. It has been the stuff of American life for a century – from the assembly line to the smartphone. Most importantly, it’s done what a successful segment of the economy is supposed to do, bring about prosperity by adding to the tangible wealth of the country. And it did so the old-fashioned way, by creating things useful to society...
Some look at technology and see only the downsides. The oil spills, the loss of privacy, the ugly machinery of war. But we recognize that technological advances have, for the most part, made our lives longer, better, healthier, more comfortable, and more fun. There’s no reason to believe that that trend won’t continue.
In fact, the biotech and nanotech revolutions now just getting underway promise to usher in a renaissance of such magnitude that it will likely make all our previous techno-magic seem like simple card tricks....
OK, hold it right there. In my 57 years on Earth, I've been hearing about the Impending Revolutions in biotech and nanotech for at least 25 of them. Where are these Revolutions? In the last 30 years, there have been three four major technological developments: 1) personal computers; 2) wireless & fiber optic telecommunications; 3) the internet; and 4) portable gadgets which are mostly glorified smart phones. Indeed, these developments have created a lot of wealth for investors and inventors, which is why Bill Gates and Steve Jobs are among the richest people in the world.
Thus we have what I call an iPhone Economy. But outside this revolution in communications, where's the Really Big Stuff? You know, beam me up, Scotty! Or put another way, why are we still burning fossil fuels? Why are we still driving cars with internal combustion engines?
The sad truth is that without the Really Big Stuff, our iPhone Economy is unsustainable. Consumerism, fed by technological "breakthroughs" like the iPhone, is doomed. From this perspective, all the internet did was increase our need to burn fossil fuels. Our economy is limping along now, but what will it look like in 20 years? Or 30? The prognosis isn't good.
To find out about the Cutting Edge in technology, I go over to MIT's Technology Review. But I don't go over there very often, because the story is always, depressingly, the same. In preparing this post, I went there today, and simply clicked on the headline stories that looked interesting. I quickly found three typical examples.
- Research To Watch: Building Microbial Fuel Factories, filed under Energy.
Joule Unlimited, a startup based in Cambridge, MA, is genetically altering photosynthetic microörganisms so that over their lifetime, they devote only 5 percent of the solar energy they absorb to growing and staying alive. The rest goes to secreting a steady supply of diesel fuel.The company, which is building a pilot plant in Leander, TX, says its process will generate 15 to 25 times as much fuel per acre as technology for making fuels from cellulosic biomass, but that it will take several years to demonstrate at a large scale. Synthetic Genomics, with funding from ExxonMobil that could exceed $300 million, is taking a similar approach, working with algae.
To replace all petroleum with biofuels, however, it might be necessary to genetically engineer organisms that get energy through potentially more efficient mechanisms. And the U.S. Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E) is funding 13 projects that are engineering organisms to convert electricity and hydrogen--ideally from renewable sources--into liquid fuels for conventional cars.
Several years to demonstrate at a large scale. I've been reading these kind of stories for several years, and the demonstration is always several years away. Where's the biotech miracle? Wake me up when you're ready to demonstrate this technology.
- Fungus Genes Help Turn Grass Into Ethanol, filed under Materials.
Scientists have taken genes from a fungus that grows on grass and dead plants, and transplanted them into yeast that is already used to turn sugar into ethanol. The genes let the yeast ferment parts of plants that it normally can't digest, potentially streamlining the production of ethanol...
The technique doesn't address much of the processing involved in ethanol production. Ethanol makers would still need to use enzymes to break the cellulose down to an intermediate stage called cellodextrin. But the yeast can work with this, instead of waiting for it to be broken down all the way to glucose, removing steps that cost time and money.
It could be five years before the modified yeast is ready for use in a demonstration-scale ethanol plant, and perhaps a decade before ethanol made this way winds up in gas tanks, Cate says. Researchers won't know for some time how much of a boost in yield the modified yeast will produce until it is tried in a production setting.
"We make a 10 to 20 percent improvement, other companies make a 10 to 20 percent improvement in their enzymes, and all of a sudden we've brought down the cost to where it can start to be competitive with oil," says Cate.
All of a sudden? It's always five (or several) years before this new shit can be demonstrated. See my remarks just above.
- A New Way To Use The Sun's Energy, filed under Energy.
A new type of device that uses both heat and light from the sun should be more efficient than conventional solar cells, which convert only the light into electricity. The device relies on a physical principle discovered and demonstrated by researchers at Stanford University...
The breakthrough came when the Stanford researchers realized that the light in solar radiation could enhance energy conversion in a different type of device, called a thermionic energy converter, that's conventionally driven solely by heat. Thermionic converters consist of two electrodes separated by a small space. When the positive electrode, or cathode, is heated, electrons in the cathode get excited and jump across to the negative electrode, or anode, driving a current through an external circuit. These devices have been used to power Russian satellites but haven't found any applications on the ground because they must get very hot, about 1,500 °C, to operate efficiently. The cathode in these devices is typically made of metals such as cesium...
Even at high temperatures, the photon-enhanced thermionic converter will generate more heat than it can use; Melosh says this heat could be coupled to a steam engine for a solar-energy-to-electricity conversion efficiency exceeding 50 percent. These systems are likely to be too complex and expensive for small-scale rooftop installations. But they could be economical for large solar-farm installations, says Melosh, a professor of materials science and engineering. He hopes to have a device ready for commercial development in three years.
Apparently, the thermionic converter—that sounds like Star Trek!—is bit too hot to handle. If the stars align just right, we might see a device ready for a very unlikely commercial development coupled to a "steam engine for a solar-energy-to-electricity conversion" in just three years.
It seems that at the end of the 20th century and the beginning of the 21st, the problems we need to solve got a lot harder to solve. Extraordinary technological breakthroughs enhanced our ability to extract oil from reservoir rock, but the advances needed now to replace oil seem to be at least an order of magnitude "harder" in some sense.
For Steve Jobs, creating new Apple iStuff is easy. But new iStuff doesn't matter. Creating real breakthroughs that will help us get through the 21st century—that's really, really hard.
"In the last 30 years, there have been four major technological developments: 1) personal computers; 2) wireless & fiber optic telecommunications; 3) the internet; and 4) portable gadgets which are mostly smart phones."
Wireless includes 2G (voice) and 3G (voice & high speed data). 3G probably should get a separate mention from the general wireless category since it's a radical technology that marries computing with communications. 3G is based on CDMA, which is proprietary to Qualcomm, so it doesn't get much publicity, but it's CDMA that is driving Apple's entry into wireless communications. Both Verizon Wireless and Sprint offer 3G with Qualcomm's EV-DO Rev A technology. It works well when there is a sufficient signal and the network doesn't have too many people on it.
As for technology solving the problem of resource depletion, I think the real problem is the obsession with growth in general (more people, more things, etc). As a result, any efficiencies gained are quickly consumed by the desire for growth. Since efficiencies lower the price of natural resources, it (perversely) increases consumption because more people can afford the lower price. So it comes back to the world's (particularly the Western World's) obsession with growth.
The true bane of the world is the automobile. The world could afford the growth in the consumption of other goods outside of the automobile for quite some time, in my opinion, but it's the automobile that really places huge demands on the Earth's resources. For better or for worse, though, people love the automobile. Even in europe, which is very anti-automobile due to high gas taxes; high tolls for bridges, tunnels and highways; and limited physical space, europeans love autos.
Posted by: John Mack | 09/12/2010 at 01:45 PM