Making a Call from Mount Everest

Stephen DeAngelis

November 24, 2010

Conservative business analyst Holman W. Jenkins, Jr., asserts, “Except for computers and the Internet, the idea that we’re experiencing rapid technological progress is a myth.” [“Technology = Salvation,” Wall Street Journal, 9 October 2010]. Jenkins doesn’t make it clear whether that assertion is his or simply the view of the subject of his article, Peter Thiel, a co-founder of PayPal and an early investor in Facebook. Jenkins continues:

“Look, [Thiel] says, at the future we once portrayed for ourselves in ‘The Jetsons.’ We don’t have flying cars. Space exploration is stalled. There are no undersea cities. Household robots do not cater to our needs. Nuclear power ‘we should be building like crazy,’ he says, but we’re sitting on our hands. Or look at today’s science fiction compared to the optimistic vision of the original ‘Star Trek’: Contemporary science fiction has become uniformly ‘dystopian,’ he says. ‘It’s about technology that doesn’t work or that is bad.’ The great exception is information technology, whose rapid advance is no fluke: ‘So far computers and the Internet have been the one sector immune from excessive regulation.'”

If you didn’t detect it in his last comment, Thiel has strong libertarian leanings. His lament about technological stagnation isn’t aimed at technology but at politicians he believes are undermining America’s (and other countries’) entrepreneurial spirit. “All sorts of things are possible in a world where you have massive progress in technology and related gains in productivity,” he says. Those best situated to see future possibilities Thiel claims are university professors, entrepreneurs, and venture capitalists. By the way, Thiel himself is now a venture capitalist. Having struck it rich through his involvement with PayPal and Facebook, he now runs a global macro hedge fund called Clarium Capital. Jenkins concludes, “You don’t have to agree with every jot to recognize that [Thiel’s] view is essentially undisputable: With faster innovation, it would be easier to dig out of our hole. With enough robots, even Social Security and Medicare become affordable.”

 

As Thiel noted, however, people now seem increasingly concerned about the darker side of technology. Many people are even asking whether or not technology is inherently good or evil [“Is Technology Good or Bad? Yes.,” by L. Gordon Crovitz, Wall Street Journal, 23 August 2010]. Crovitz writes:

“‘The optimist proclaims that we live in the best of all possible worlds,’ observed satirist James Branch Cabell. ‘The pessimist fears this is true.’ The oldest debate about technology is the most basic: Is it a force for good or bad? A summer spent catching up on the many arguments by dueling Internet optimists and pessimists makes clear that the answer is … both.”

Certainly that is not a surprising answer. Technology is intrinsically neither good nor evil. Only when the intent of those who use it is applied does technology assume a moral character. Isn’t that grist of many a Hollywood film plot? Normally the storyline has a kindhearted, but naive, scientist creating what he hopes is a technology that will save the world only to see it co-opted by evil military personnel and power-hungry politicians who turn that technology into a weapon.

 

Crovitz goes on to note that pessimists, like Nicholas Carr, fear that technology is re-wiring our brains and making us shallower thinkers. “[Carr] cites studies showing that the online medium ‘promotes cursory reading, hurried and distracted thinking, and superficial learning.’ He also points to the science of neuroplasticity, which is showing that even the biology of the brain is changing in people who spend a lot of time online.” Crovitz also points that “information overload has become a common affliction. A recent advertisement for the fashion brand Kenneth Cole reads, ‘12% of people check their emails in their place of worship … OMG.’ Oh my God, indeed.” To learn more about Carr’s position, read my post entitled The Mind — it is a-changin’. Crovitz points out that pessimists have always had their concerns about advancements. He writes:

“Plato doubted his era’s innovation of the written word. In ‘Phaedrus,’ the god Theuth boasted that his invention of writing would improve the wisdom of people compared with the oral tradition. King Thamus responded, ‘The discoverer of an art is not the best judge of the good or harm which will accrue to those who practice it.’ The risk is that people ‘will receive a quantity of information without proper instruction, and in consequence be thought very knowledgeable when they are for the most part quite ignorant.'”

Although I admit that people have written evil and immoral things, Plato was too pessimistic. The benefits that writing has brought to mankind far outweigh the evil. As I wrote in a previous blog, “unrecorded spoken words cannot stir generations since they have no lasting impact. That is why reading and writing are humanity’s greatest inventions. … A Japanese proverb says, ‘One written word is worth a thousand pieces of gold.'” Based on that argument, I suspect Crovitz is an optimist. He concludes:

“Adam Thierer, president of the Progress and Freedom Foundation, … calls himself a ‘pragmatic optimist,’ which seems like a sensible position. ‘The Internet and digital technologies are reshaping our culture, economy and society in most ways for the better, but not without some serious heartburn along the way,’ he told me last week. ‘Were we really better off in the scarcity era when we were collectively suffering from information poverty? I’ll take information overload over information poverty any day.’ Whatever the mix of good and bad, technology only advances and cannot be put back in the bottle. So Clay Shirky, a New York University professor … [and] optimist, gets the last word: ‘As with previous revolutions driven by technology—whether it is the rise of literate and scientific culture with the spread of the printing press or the economic and social globalization that followed the invention of the telegraph—what matters now is not the new capabilities we have, but how we turn those capabilities, both technical and social, into opportunities.'”

The opportunities created by technology are what I want to focus on for the remainder of this post. New York Times’ columnist Thomas L. Friedman believes that technology is about to unleash the energy and potential of the world’s two most populous countries, China and India [“Do Believe the Hype,” New York Times, 2 November 2010]. He writes:

“The Hindustan Times carried a small news item the other day that, depending on your perspective, is good news or a sign of the apocalypse. It reported that a Nepali telecommunications firm had just started providing third-generation mobile network service, or 3G, at the summit of Mount Everest, the world’s tallest mountain, to ‘allow thousands of climbers and trekkers who throng the region every year access to high-speed Internet and video calls using their mobile phones.’ … This is just one small node in what is the single most important trend unfolding in the world today: globalization — the distribution of cheap tools of communication and innovation that are wiring together the world’s citizens, governments, businesses, terrorists and now mountaintops — is going to a whole new level. In India alone, some 15 million new cellphone users are being added each month.”

What is really going to make a difference, according to The Economist, is that mobile phone users are going to become internet users as well [“The next billion geeks,” 2 September 2010]. According to the article, “the mobile internet will transform the BRICI countries.” For those not familiar with the term BRICI, it stands for Brazil, Russia, India, China, and Indonesia. The term more broadly represents all of the world’s more advanced emerging market countries. The article notes that today “only 81m Indians (7% of the population) regularly use the internet.” Broad penetration of smart phone technology, like finding a 3G system near the summit of Mount Everest, will change that statistic. The article continues:

“In other developing countries, too, there are many more mobile phones than internet connections. In Brazil, Russia, India, China and Indonesia (the so-called BRICI countries), there are 610m regular internet users but a staggering 1.8 billion mobile-phone connections, according to the Boston Consulting Group (BCG). In a report called ‘The Internet’s New Billion’, BCG predicts that by 2015 there will be 1.2 billion internet users in these countries—dwarfing the total in America and Japan. These new internet users will mostly log on via their mobile phones.”

How will these new internet users affect the global economy? The article concludes:

“The stakes are high. In developing countries, every 10 percentage-point increase in mobile-phone penetration yields an extra 0.81 percentage points of annual economic growth, according to a 2009 World Bank study. The mobile internet could be even more powerful. The unemployed will search for jobs online. Farmers in remote areas will find customized advice on crop planting.”

The article notes that “the drawback of the internet is that you have to be literate to use it. That is a huge problem in India, where the literacy rate is only 60%.” Nevertheless, the poor are being helped by the spread of mobile technology [“Mobile phones help to transform the lives of India’s poor,” by Joe Leahy, Financial Times, 19 January 2010]. Leahy reports:

“Before he got a mobile phone seven years ago, Vijay Navle, a small Mumbai fish trader, spent much of his time and scant income travelling on buses and trains. Every day, he would make the five-hour round trip to visit fishermen living on the Arabian Sea on the north of the city to see if they had caught any of the prawns and large fish that he sells to exporters at south Mumbai’s Sassoon Dock. Today, like a growing number of Indians, rich and poor, Mr Navle and the fishermen have mobile phones. Fishermen call him when they catch something and he arranges the pick-up and delivery to customers by phone.”

Leahy writes, “For hundreds of millions of people across India such as Mr Navle, the rise of mobile telephony has led to changes in their lives as profound as the advent of the fixed-line home telephone was for rich consumers in the west.” Leahy agrees with Friedman and The Economist that an even more profound change will come when the poor get access to the mobile internet. He continues:

“The [mobile phone] industry is looking to 3G for growth. With fixed-line internet penetration in India estimated at well under 10 per cent, 3G could provide the first contact with the world wide web for many Indians. For it to be successful, however , it will have to overcome many hurdles, such as the need for cheaper smartphones. … To aid the spread of 3G, operators will also have to come up with more commercially useful applications for lower-income people, many of whom are illiterate. Examples include enabling online money transfers or crop pricing and trading for farmers. … While mobiles can change lives for the better, advances in technology can also be a double-edged sword, as fish trader Mr Navle is discovering. The mobile initially gave him an edge. But recently, his income has declined as customers have begun calling around to get a better price.”

Returning to Tom Friedman’s column, Friedman writes:

“Having traveled to both China and India in the last few weeks, here’s a scary thought I have: What if — for all the hype about China, India and globalization — they’re actually underhyped? What if these sleeping giants are just finishing a 20-year process of getting the basic technological and educational infrastructure in place to become innovation hubs and that we haven’t seen anything yet?”

Friedman provides readers with an example of an Indian start-up company that has turned the combination of mobile phones and mom-and-pop kiosks into a virtual banking system. He concludes:

“India today is this unusual combination of a country with millions of people making $2 and $3 a day, but with a growing economy, an increasing amount of cheap connectivity and a rising number of skilled technologists looking to make their fortune by inventing low-cost solutions to every problem you can imagine. In the next decade, I predict, we will see some really disruptive business models coming out of here — to a neighborhood near you. If you thought the rate of change was fast thanks to the garage innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get fully up to speed. I sure hope we’re ready.”

Friedman didn’t say whether all of this innovation coming out of emerging market countries would be good or bad for the developed world. He simply wondered if the developed world would be ready for it. There is no reason that all of this innovation should be a bad thing. Innovation flowing from developed countries into developing countries was a good thing. I see no reason why a reverse flow should be a bad one. Is that Everest ringing or opportunity knocking?