Friday, December 30, 2011

More Megapixels, More Image Quality?

We have experienced the increase of the megapixels on digital cameras during the past few years, I still remember when 0.5 megapixels was the largest image size we could find meanwhile nowadays we can find cameras with 24.3 megapixels and the megapixels will continue to increase as the camera companies keep telling users that largest megapixels translate in better image quality. Personally, as an amateur photographer and researcher in the field of image processing, I think that most of the time an image with more than 6 megapixels is a waste of memory and camera resources.

Let me start explaining the reasoning camera makers use to convince user that more megapixels is better: Printing quality. As you know, a good printing quality is achieved when the printing resolution is equal or higher than 300 PPI (pixels per inch) and, therefore, if you want to print a large image with good quality you would need to have a large image, for example with a 2 megapixels image the largest print size at 300 PPI would be of 14.7 cm x 9.7 cm (5.8” x 3.8”). You can do the math yourself, but in the page of Imagine 123 you will find a table of the image size and printing sizes you may have. The camera makers tell users that with larger pixels they won’t just be able to print in larger format but also they will obtain more detailed photographs since you will have more pixels to represent the objects in the image. I don’t say this claim is completely false, but you need to consider other aspects that aren’t as straightforward as the concept “bigger is better” and this discussion has been in the air since some years ago as you can see in this cnet news note from 2007.

If we accept as a fact that most photography enthusiasts don’t print their photos in large format, then the camera makers just have the detail in the image as the only reason to offer users more and more megapixels every day. But, it is really true that more megapixels are synonym of more detail? My answer is yes for just few cases but most of the times is a big no. Let me explain you my reasons:

First we need to consider the sensor of a digital camera, it is an array of light sensitive elements and each pixel will correspond to a small area of the sensor, meaning that the information in each pixel is the sum of the light arriving through the lenses into the pixel area. Now, if we keep the size of the sensor constant and we increase the megapixels the resulting pixel size will be reduced and therefore less light will arrive to each pixel increasing the effects of electrical noise in the sensor degrading not just the sensitivity to finer tonal gradations but also the quality of the image in dim conditions. As an example, I took two different photographs using my camera with 6 megapixels (2816 x 2112 pixels) and a 7.18 mm sensor and one of the cameras of the HORUS system with just 1 megapixel (1024 x 768 pixels) but a 8 mm sensor, i.e., more than twice larger pixels. You can see how there is more noise in the image captured with the 6 megapixels camera despite the fact that there are more pixels to represent the same object. You can see the complete pictures in my blog.

My camera
HORUS system camera

The noise is not a problem in highly illuminated scenes, that’s one of the few cases were bigger is better, but for dim conditions the camera makers try to solve the problem using clever image processing methods, for example increasing the gain of the light sensor and using filtering algorithms to reduce the noise, most of the times reducing also the image size. As you can imagine, the image processing will end up with an altered image and for purists this could be a downside of using cameras with large megapixels.  

At the end, maybe professional photographers will fully exploit the advantages of large images, but we must keep in mind that the image quality is not completely determined by the megapixels of it, we also must take into account the camera’s optics (lenses) and especially the sensor’s size and sensitivity and, therefore, we shouldn’t trick ourselves into the “bigger is better” mantra of most of the camera makers and sellers.

Go Daddy and SOPA

Today Mashable wrote an article arguing that it's time to give Go Daddy a break. Since it was recognized that Go Daddy was a supporter of SOPA Reddit and the rest of the internets have been lambasting Go Daddy for it's stance. Go Daddy has responded to the internet three different times, each with a strong change in its tone. First, it responded with a very caviler attitude as if there was nothing that the web could do against them for their SOPA support. Once there was announced an official domain move day of December 29th and thousands of domains fled Go Daddy, the company changed their stance from Supporter to "no longer supports" SOPA. Once the 29th hit even more sites moved from Go Daddy which has forced Go Daddy to officially oppose SOPA. However, even this hasn't placated the internet and members of sites like Reddit are calling for more domain name changes. Mashable things enough is enough. The point has been made the company has changed its stance.

The author, Todd Wasserman, doesn't seem to understand why members of sites like Reddit would be so upset and still out for blood. Sites like imgur are moving from Go Daddy, even though the official stance has changed and the boycott domain change day has passed. Should they still change? I think they should. What Wasserman doesn't understand is this is as much an emotional response as a logical one.

The initial response basically marginalized the most active users of the internet, which include many domain name holders and entrepreneurs. Effectively saying to their clients, you don't matter to us you pay us and we'll do what we want to the internet. These are technologically savvy consumers that really understand how the internet works and have an expectation of how they should be treated on the internet. This was akin to kicking a hornets nest.

The slow response to the internet's concerns allowed users to find additional information about Go Daddy's involvement in SOPA. It was discovered that Go Daddy actually helped write the bill and was exempt from it. This represented a betrayal of the highest order. A company that has gotten rich on the back of user created content from start-up companies, blogs, video sites, etc, was helping to destroy the very content that made it rich. Talk about a Judas move.

When the company then switched to doesn't support SOPA, this just further angered communities like Reddit, because it didn't go far enough. Internet users wanted the company to condemn the bill with all the force it could muster. However, it took a half measure approach and did nothing to actually make users on happy. Content owners want to be sure that their domain registrar was as against the bill as they were. Otherwise, all of their protests and content could easily be cut off while Go Daddy continued to profit off of the users content.

So, should the full reversal after the boycott have helped placate the internet? I don't think so. The company was disingenuous in their initial responses rebuffing serious concerns from the most savvy of their users. These users were able to explain to the less savvy the actual hazards of a domain registrar supporting SOPA. The half measure changes showed that the company was only bowing to pressure and likely could have changed positions as quickly as it had once the boycott was announced.

Making an example out of Go Daddy makes it known to other large companies that bills like SOPA are completely unacceptable and support of them will not be tolerated if you're a web based service or company. Should the internet relax on Go Daddy? No, not until they begin making campaign contributions against the bill's supporters, actively works to lobby against it through transparently working to write bills to fully protect the internet from future legislation like this. Changing its stance seems some what opportunistic and I know I need more action than a statement. Working to oust members that support it, would be putting its money where its mouth is.

Sunday, December 25, 2011

If I made video games, this is how I'd deal with Piracy

Piracy is something of a real issue. It can impact the livelihoods of artists as well as the big companies. However, the methods that companies go to when fighting piracy are extreme and infuriate end users. The people that listen to music or play games for the love of music or video games.

My friends over at KMBOD have written in the past about how horrible some of the Digital Rights Management (DRM) systems are on video games. These systems require continual verification that the game has actually been purchased. In some cases it makes the game unplayable or extremely difficult to play. In some cases the user must be online the entire time regardless of the type of game the user is playing. It makes sense for the game to be online if you're playing multiplayer games, but if you're playing a single version of the game why would you need to be online? Why should the game suddenly crash if you get disconnected from the internet? These types of things anger the gaming community and drive them away from specific titles and potentially entire publishing companies. Some publishing companies are Electronic Arts and Valve.

I don't think that DRM is the right system to use. For one it's easy to get around if you really want to and many players kind of look at DRM as a challenge something they should get around and publish online as a community service. It's not just video games that do this, but also DVDs, Blu Ray and CD's. In fact in the US it's illegal under the DMCA to circumvent DRM.

So what would I do instead? Since there are a fair number of pretty easy distribution channels for video games now. There's Steam, EA's origin and a few other ones that I'm not really aware of. There's also buying it from Amazon, Best Buy, Game Stop and a bunch of other stores. So access to the game is pretty easy. Price might be an issue, but for good games people are willing to pay a premium, just look at the sales of Skyrim and Modern Warfare 3. Huge blockbuster games. These changes are mostly for First Person Shooters, but similar type changes could apply for other types of video games, such as RPGs or strategy games.

Despite the ease of access people still pirate because they want to try before they drop $60 on a game. So what I'd do is make it as easy as possible to access both legally and illegally. I fully believe in the try before you buy model. However, for copies that weren't installed from a CD or downloaded from an online distributor like Steam the game quality would be diminished. For instance many gamers complain about the number of frames per second for a game. Video is shot at 60 fps and the human eye can't see much faster than that, but we can tell the difference if it's much slower than that amount. In the illegal versions I would make the game run at 30 fps, but it would initially start at the 60 fps and over the course of a minute or two and have a little note flash that if you buy the game you can get the full 60 fps.

Another feature that gamers complain about is the perspective within the game (field of view FOV). They describe it as feeling like your playing with your head in the monitor. basically it's restriction on peripheral vision. Again I would start the game out with full vision and then slowly move the POV into the "monitor" restricting the view and giving the paying customers an advantage over the pirate customers.

I would also make the user do less damage than their paying counter parts. This would reduce the number of kills and make the player less effective on the playing field and more likely to die and less likely to kill. Finally, the last thing I would do is to have a little pirate flag next to any player that didn't legally purchase the game so all of the other players would know when some one hadn't bought the game. In games where kill counts matter this could cause users to be banned from servers and reduce the ease access for playing.

None of these things would ruin the game to the point that some one wouldn't want to play it. What it would do though is push people towards paying to be able to compete at the same level as everyone else.

Saturday, December 24, 2011

Good men are hard to find

This week my grandfather, Paul Joseph Kapsar Sr., passed away. He was a good man. He was honest, caring and willing to help those in need. His service was beautiful and I'm extremely grateful I was able to come back to be part of the service. He's had a serious impact on my life and the way I look at things, because he was honest and respected honesty. He respected hard work and was never afraid to get his hands dirty. We need more people like my grandpa. People that are reliable and that you can trust to do the right thing.

Despite all his great qualities society never rewarded him the way that it rewards the cut throat businessmen. My grandpa didn't pass away a rich man in money, but in life. I feel that in many ways he was significantly better off than those that are willing to compromise their morals and ethics to make more money or to get reelected.

I think that we need people like my grandfather in positions of authority. Why? He was ethical and would have come up with a balanced approach to dealing with the economic crisis rather than the brutal or over coddling approach of the republicans or democrats respectively. He would not be a supporter of SOPA or of the recent changes of the NDAA which limit our freedoms. He was a vet and cherished everything that came with protecting the United States.

His passing has made me realize the pitiful state of our country's leadership. The republican primary is a contest between who is willing to go lower. Gingrich is willing to destroy the check and balances of the Constitution. Romney doesn't open his mouth without lying about his opponents or Obama. Perry is one of the biggest bigots on earth. The only republican willing to stand beside his ethics and moral positions is Ron Paul and his economic policies would be disastrous. Lamar Smith the guy pushing SOPA, will vote for a bill even whenever an argument pointed out how flawed the bill was, and he agreed with the argument.

Our financial sector things that they are entitled to whatever type of bonuses they are getting handed out and decry free loaders that get unemployment, when they have been given more government money than all of the American People combined. It would have been cheaper for the federal government to give money to the home owners to buy underwater houses than to save the banks.

Our country is experiencing a moral bankruptcy which seems destined to drive it into the ground. The future is made all the darker when a great man like my grandfather has passed away.

Sunday, December 18, 2011

Billions and trillions

One of Carl Sagan’s books that I really like is “Billions and Billions”, where he wrote about the importance of exponentials, the connection between hunting and football, the true size of the universe, the decline of our planet, government and even abortion. Though I read it in English, I once, in a friend’s house, found a Spanish translation of the book and I was surprised when I realized the translated title: “Miles de Millones”, which means “Thousands of Millions”. If you are a native English speaker you might be thinking “Why were you surprised? A billion is a thousand millions, in other words it is 109”, and that is the main reason I decided to write about this because in most Spanish speaking countries the term “Billion” means a million of millions, i.e. 1012, and probably now you understand my surprise.
Historically, the term billion in English was first used to design 1012 following the French numbering system and it was introduced in the 15th century[1]. Now that meaning is part of the denominated long-scale system where a trillion is 1018, meanwhile in the short-scale system, used in most of the English speaking countries, a billion is 109 and a trillion is 1012. Surprisingly, the short-scale meaning was introduced also by France in the late 17th century even though they officially use the long-scale system nowadays. In the past, England used the long-scale system for a long time but they changed to the short-scale one, meaning that when reading old documents from England you must be careful about the meaning of billion and trillion.
If you are used to the exponential notation, then this whole discussion might be pointless since you use an unambiguous way to describe large quantities that doesn’t need the confusing terms billion and trillion. In that sense, the International Bureau of Weights and Measures (BIPM) suggests to avoid the use of billion or trillion since their meaning is language dependent and I think that scientists that publish or communicate their work should be aware of this language ambiguity and avoid it or at least be clear about the scale they use. As a recent example, we have the news about the MIT camera that is able to capture video at the speed of light, where they use in the title the sentence “one trillion frames per second” and they even use the word trillion over all the official website of the project, I couldn’t find a footnote or an explanation of the scale they are using and, therefore, after my first excitement about having a camera capturing data at 1018 frames per second I had to use my common sense to realize that they are talking of 1012 frames per second since their results have time lengths of nanoseconds (10-9 seconds) and hundreds of picoseconds (100 times 10-12 seconds). I’m not saying that their results lost importance because the camera works just at 1012 fps, that’s still very impressive if we take into account that most of the video cameras we had commercially don’t go further than 30 or 60 fps and that the fastest video camera I have worked with has a maximum frame rate of 1000 fps. I’m just saying that at first I imagined the amount of data captured and the transfer and storage capacities needed to work with it but later everything looked a little bit smaller because my reference frame was using the large-scale system.
In a globalized world, where communication between people from different countries and languages is a common thing, we need to have standards to communicate our ideas unambiguously and we must try to allow everyone to fully understand the information we are sharing with them, even though their common sense should be enough for them to understand us. Since there is not a chance that we have an standard meaning for billion and trillion in the world, I invite everyone to avoid their use or at least to give an explanation of the meaning of those words in their work.

[1] Smith, David Eugene. History of Mathematics. Courier Dover Publications. pp. 84–86. ISBN 978-0486204307.

Thursday, December 15, 2011

SOPA hearing today

For all of those interested in protecting the Internet today is the last day to try to prevent congress from passing SOPA. This law, would censor the internet. There have been a lot of people talking about this law on both sides of the argument. Chris Dodd president of the RIAA is pushing heavily for this law. He argues that if China has the same ability to control content in China, then the US should have the exact same authority. In a previous blog I argue that this is the biggest killer to internet innovation. Effectively this would create a Great FireWall of the US.

Opponents of the law have started a censorship the internet campaign. I tweeted one of these yesterday. Effectively it blocked out parts of your writing in simulation of the final impact of the law. In addition to these campaigns a few other big hitters have come out against the law, including the Writers' Guild of America. This group understands that copyright laws shouldn't dictate the future of the internet and it's openness. In addition yesterday the EFF posted an open letter from internet leaders arguing that SOPA would crush innovation. I strongly suggest reading this letter. It's written by the people that created things like IPv6. These people know what they are talking about.

We users have had a blessing in disguise with the MegaUpload and Universal Music Company DMCA Take down issue. Effectively, they took down legal songs using a copyright provisions in addition to taking down videos ABOUT the discussion.

So what are some of the key problems with this bill? It requires DNS level blocking. Which could potentially break the internet. It takes down entire domains if there is a single alleged copyrighted material online. It can block payment to sites through requiring Master Card and Visa to shut down payment for the site. All of these have to happen within Five DAYS. Nothing gets done in five days in any business.

There are additional problems with these laws and our foreign policy. Recently Hilary Clinton gave an extensive speech on net freedom and how repressive regimes are censoring the internet and killing free speech. So, our international rhetoric is completely out of line with what we're doing internally. Furthermore, this is going to create problems with the Organization for Economic Cooperation and Development (OECD) has decided to institute a policy framework which is effectively the opposite that everything SOPA stands for. Finally, this has a negative impact with the #NoDisconnect policy that the EU has recently pushed for.

If you want to keep up to date with the comments being discussed in the hearing today. Follow @EFFLive as they are tweeting comments from congressional leaders about the problems with this law. Additionally, please contact your congressional leaders today (scroll down to the bottom) about this issue.

Watch Live Stream Here:

Additional Reading:
Internet Blacklist vs. Constitution - EFF
SOPA and Educators - EFF
Recent SOPA amendments - TechDirt
DC Decided to Regulate Hollywood to prevent innovation - TechDirt

Monday, December 12, 2011

MegaUpload and the DMCA

We've recently had a perfect example of the dangers of giving copyright holder more powerful weapons in their war on "piracy." Megaupload works as a service where a user can upload content and allow other people to download it or share it at a later point in time. A good amount of the material is, in fact, copyrighted. There are versions of Game of Thrones and plenty of other videos. This services has totally legitimate uses though. There are competing services that you can use, something like DropBox or GoogleDocs which works in a slightly different manner. The users is required actively share the files. In Megaupload the uploader doesn't have to actively share the file it can be accessed by many people.

MegaUpload would be a sure fire target if SOPA or Protect IP gets passed. What would happen is that MegaUpload would effectively be blacklisted from the Internet and cease to exist if they can't fix the problem within five days. Additionally, any payments they would receive can also be blocked. This of course isn't anything new, but recently Universal Music decided to use a DMCA take down notice to remove a MegaUpload video from YouTube.

This happens on a regular basis. These companies have programs that look for copyrighted material and then any offending material is issued a take down notice, which YouTube is required by federal law to comply with. There's just one problem in this case. MegaUpload claims to own all of the copyrights to this song and video. Universal was issuing a false take down notice. As a result MegaUpload is now suing Universal.

What can we take from this? Well, that giving the authority of content control to companies that have an incentive to silence material that is harmful to their business is a bad thing. In this case, we have a company abusing state authorized power to censor a music video about another company. We should expect this type of behavior to continue if these copyright holders are given additional authority to censor the internet.

It appears that not only are record labels abusing their authority, but the DHS had seized a website,, for over a year without any sort of recourse. Particularly troubling in this case is that the blog did contain copyrighted material, but it was given to the blogger by the record labels and artists.

As users of the internet we all should be extremely concerned about what is happening on the internet in the name of Copyright. Freedom of culture is something we all enjoy and relish, however actions by Universal and the DHS severely threaten our cultural freedom and ability to have public discourse on the usage of technology. MegaUpload was using famous pop stars to stake a claim that they are a legitimate company. Using a law in an illegal manner was trying to silence that conversation.

Thursday, December 8, 2011

Are patents going to impact how doctors treat a patient?

Today Ars Technica reported on a case before the US Supreme Court and how the court is assuming that the usage of scientific data, which has been publish, is a valid patent. This is a pretty scary scenario. What do you mean? Well, the patent is related to how the levels of some chemical impact the dosage of a drug. That's it. If you have level X in your blood you should have dosage Y. The patent holder created a device to test the level of the chemical in your blood which then suggests a dosage level. The Mayo clinic developed their own test and  have been administering the test on their own without paying anything to the company. The arguments in the court essentially assume that this is a valid patent.

Should this patent be valid though? Seems like something that could be patented. Based on what is considered patentable, this should fall under mathematical formulas. Essentially, this is a matter of correlation and basic regression analysis. During a drug trial you can determine a correlation between the impact of a dosage of a drug on the current level resulting in a lower level of the chemical. This is really how all medicine works. If you can reduce costs by creating your own tests and administering it yourself then that's great. Hospitals should be encouraged to do this if they are large enough.

This is what Doctors do. They read literature about the medicine the condition it's supposed to impact and what sort of connection there is with the dosage levels and the response rate within the patients. Every doctor has to use a test to determine the level of a chemical or some condition. This can be the pulse (irregular heartbeats), blood pressure (pressure cuffs), blood sugar (A1 test) and the list goes on. In each case the doctor is able to assign a proper dosage prescription based on the study of patients. If a doctor was required to pay a licensing fee for each and every case of this our currently exorbitant costs of health care will seem cheap. Like when we used to complain about $1.50/gallon for gas.

The other problem with patenting something like this is that it's likely to be highly unenforceable except for when a large institution like the Mayo Clinic. Individual practitioners will be safer than large clinics, but they could be impacted as well. If they are required to use an extremely expensive proprietary testing methodology rather than have the ability to use any testing method it will drive up prices and may put doctors out of business.

If the court rules on this as if these types of patents are valid, we will need to push to have patent law changed again. The last change moved things in general, in the right direction but a lot more work needs to be done.

Tuesday, December 6, 2011

Data protection, anonymity and copyright

I talk a great deal on this blog about data issues, privacy and ownership, anonymity and copyright, however is there a clear connection between them? Should we care about who has access to our data, who we are and control over our access to data?

I think that these issues are so connected that we need to do something about how they are managed at a federal level. Currently, it's rather easy for governments to request data from internet sites. Some times they require warrants or court orders other times the companies simply hand over the data. Savvy users understand how their data is collected and used by companies. I'll be the first to admit that I'm learning about this as I'm going. It's not easy because some times it's really inconvenient to really protect your data. The more sites that are connected together the more likely one of your accounts are to be hacked. Linking sites also creates other problems. Specifically Facebook and Google. Twitter isn't as bad, but it easily could be.

Why are Facebook and Google bad though? First Facebook is the worst by far. Both Zuckerbergs have made statements proclaiming privacy a bad thing.We can see this erosion with the creation of Facebook's OpenGraph and seamless information sharing. We've all see the increase in the amount of information that our friends are sharing. Such as Spotify and articles they've read. Which now no longer click through, but end up going to some app from that company. All of this information is being stored and sold to customers with your name on it. Effectively you've lost your ability to view websites freely without it being stored on multiple servers by multiple companies at the same time.
Google comes in a close second with their privacy problems. They aren't any better with Google+ as they require names at this time. We also don't know what Google does with the information that you give them when you link accounts together. By giving access to Google when you sign into another website Google is learning more about you which will likely be used to adjust your filter bubble.

Without anonymity or at least pseudonymity it's significantly more difficult to control access to your data. Putting a buffer between you and the people that are interested in learning about you as a person can protect you from a lot of bad people. However, whenever there are discussions about anonymity or pseudonyms some one almost always makes the argument that it will increase the safety for child molesters or terrorists.

The Copyright industry is one of the most vocal advocates of this tactic. In fact, this is one of the arguments being used for SOPA. They argue that if you don't have anything to hide then you have nothing to worry about. Well, I don't buy that argument. People have privacy fences for a reason around their yard. Why not do the same thing for your data? Being anonymous doesn't mean your bad, it just means your being safe.

Anonymity makes it more difficult for copyright holders to come after people who download movies without buying the movie. They want to know if your downloading it regardless of the fact that you might actually own the movie in some other physical medium and are using the digital copy as a back up. They also don't really care if you go out and buy the movie after watching it. In fact the Swiss government came out and said that buying a movie or song after downloading is extremely common.

Based on these three points, I believe that everyone should be pushing leaders to increase the ability for users to be anonymous on the internet. This will protect users data from identity theft, allow users better control over their data and decrease the impact of the filter bubble. We must accept the fact that people may use the freedom in unethical ways. However, this doesn't mean that it's unethical for people to be anonymous online and doesn't mean that they are unethical. It means that we need to define clear laws and procedures to deal with unethical or illegal activities in these systems. Without these guidelines we are likely to have no control over our data.

Sunday, December 4, 2011

Phone Trackers

A few days ago news came out about a company called "Carrier IQ" installing data on phones that will report usage to carriers to improve service. Initially, it was reported that this software was a keystroke logger, which would have been nearly as bad as this, but apparently it doesn't actually track keystroke. What's a keystroke logger? Well, it's a pretty common way to get access to information. Essentially, it tracks every since keystroke you make while typing and stores it as well as the software you're using. So, if you get this type of software onto the computer of, say, a business competitor, you can get access to all the information related to a given product. You'd have to get it on the right computer and you'd probably get some information you don't care about. How would this impact you as a user? Well, if it had been on there, basically every single email, text, website or instant message would have been logged and sent to whatever company cared about it.

In the video above a developer walks through the functions of Carrier IQ on an HTC device. It appears, in this case, that CIQ can, in fact, operate as a key logger. However, there are some additional points of concern with this bit of software. First it reads a great deal of information from incoming and outgoing data. It's indicated that SMS information goes to CIQ BEFORE the user is notified that an SMS has come through. An additional point of concern is the fact that CIQ is able to get information from HTTPS, at least over WiFi. This should be a serious concern as the point of HTTPS, the stuff your bank data is sent with, is supposed to be encrypted and is the safest way to handle data.

I checked my phone and it's not on the Samsung Galaxy. If you rooted your phone, then you are safe. Otherwise you should be aware your location and other data may be set to your phone manufacturer or your service provider.

Richard Stallman, the founder of GNU/Linux license, noted that these types of applications are created when users aren't able to actively see what's going on with software. It's a loss of control over your data that is really the danger here. I agree with Stallman, but don't go as far, that we need to have more transparency with the software that we use. Users should be able to have more control over what is going on with the devices they purchase. Users should be outraged that data can be tracked with no method of stopping the tracking. This is a huge invasion of our privacy and these companies should be fined heavily for this.

I have no reason to trust Carrier IQ or any company that uses this software. I'm disappointed in HTC. Apple does have it in some of the earlier versions of iOS, however it only operated during diagnostic mode. It has also been indicated that, unlike what the video claims, that this software isn't on Nokia devices.

Al Franken has called for Carrier IQ to explain how this software works and what it does. I think there needs to be a call for something a step farther and that is a patch to allow users to turn off the program and remove it as soon as possible.

As consumers we need to be aware of the fact that companies are trying to use software and technology to control and track our behavior. Currently we still feel outraged by this and at times feel that we should be reaping the benefit of firms collecting our data. However, unless something changes this will become the norm and we won't feel like our privacy is being invaded. It will become, that's how it's always been.

Further Reading:

Wednesday, November 30, 2011

Owning your data

Yesterday Facebook and the FTC came to an agreement on privacy settings. This will require Facebook to undergo privacy audits twice a year by a third party firm. In Europe Facebook users are already able to download their data as I mentioned in a previous post. I think we're living in an age where users will need to be well educated on the impact of the privacy policies of websites on the users personal data. However, how can we do this? I personally never look at the privacy policy on a website. Why? Because I don't really trust them. Effectively, just by going to the website I agree to these policies and effectively whatever is stated in the privacy information I'm bound to. However, I have to go to the website before I can read it, thus creating a catch-22.

If I did disagree with something written in the privacy policy, I've already agreed to accept their terms and if they said "we're going to steal all your cookies and sell them for profit" and I object to that it's too late. They already did it.

This puts us users in a bind. We enjoy the benefits of cookies. We don't have to always remember our passwords, we automatically get logged into our favorite websites. Personal settings pop up as soon as we log in. There are plenty of benefits from using cookies. We lose all of these as soon as we use services like Incognito from Google Chrome. Some of my readers have commented that they have switched to using an Incognito window, but it's much more of a pain to log into Facebook and they have actually started using the service less. In terms of Facebook to compensate I use TweetDeck which pulls my news feed from both twitter and Facebook. However, it doesn't get everything including messages from friends, which is annoying, but not the end of the world.

To deal with these privacy issues, the EU is proposing a pan-European standard for privacy policies that a website has to get approved. Companies like Facebook are actively fighting against this rule. I think that this is a great step. I know a lot of people don't like new government regulations. However, in this case the public is woefully uninformed and find getting informed on these topics cumbersome. A lot of money is being made off of people's ignorance. Now, many people would say that's their fault for not properly investigating this topic.

There are a few resources out there to help with getting a better understanding of how to protect yourself. The EFF has an entire section of their website devoted to privacy issues. The ACLU has a Technology and Liberty section which includes topics like privacy.

So why should we care about this? If you aren't doing anything wrong you don't have anything to worry about. I'm sorry, but this is a really naive way of looking at privacy issues. Some of you readers out there have fences in your back yard. Many of them are called privacy fences, if you aren't doing anything wrong why do you have a fence? Others will have a safe to store valuables and important documents, why do you need a safe, if you aren't doing anything wrong you shouldn't need a safe.

Putting this into a physical context highlights the absurdity of the not doing anything wrong argument. It also highlights the differences between privacy in the physical world and in the digital world. It's really easy to understand how to increase your privacy at home build a fence, better curtains better locks, bars on your windows etc.. Fixing privacy on your computer is much more difficult. Security experts have tried to make things as simple as possible by using names like Virus scanner, Firewall etc.  Most people don't really know how to use these properly.

Adding a Firewall to your computer can make using it difficult and clunky. Services that you use frequently suddenly stop working correctly and it's not always obvious why at first. There needs to be a movement within security companies to make everything as simple as possible for the broader population. There should be advanced settings for the people who really want to control their data. Basically we need the firewall to turn into a fence for most people but with settings to turn it into the Berlin Wall if an advanced user wants it.

All users need to understand the risks, just like they need to understand risks of burglary, they shouldn't need to be a security expert though.

Other potential resources (I have no idea if they are any good, I just searched for privacy resources)

Friday, November 25, 2011

AT&T deal is most likely dead

We all should be extremely happy that this deal failed. Even those that don't live in the US. Two major US agencies were investigating the eventual impact of a merger between AT&T and T-Mobile. From a consumer point of view what would have been the impact of the merger?

Well, there could be benefits, for instance T-Mobile users will get access to a much larger network. They will have higher quality signal connection in more cities and in more areas through out the US. T-mobile has one of the smaller network area coverage of the 4 remaining cellphone providers in the US. (Verizon, AT&T, Sprint, T-Mobile). AT&T users may get some relief in large cities like San Francisco and New York. It is likely that the combination of the two companies' networks will increase the total capacity in a given city.

AT&T and T-Mobile claim that not only will these things be better for the customers of both providers but there will also be an increase in investment in the network. However it really doesn't seem to be the case. Based on their own documents they show that it would actually reduce the yearly investment in the cell networks for the new network overall, reduce the number of employees and likely increase the prices of cell service.

Why is this expected? Well, if the networks are combined there will likely be a reduced need for RF Engineers. These guys are effectively the "Can you hear me know guy" from Verizon commercials. They both design the interaction between the cell sites and look into where the coverage, how much capacity there is for calls/text/data in a given area and if there will be dead spots within their expected coverage area. If a group of engineers for both T-Mobile can cover all of NYC and there's a group at AT&T to cover the same area, well some of them will have to go.

What about the investment though? Well, if capacity suddenly increases in areas that are cramped for capacity, then there will be less investment. Additionally, if there is excess capacity in areas that don't have the growth potential for fully meeting that capacity the new merged company would be stupid not to redeploy those areas that have less capacity. This means that AT&T could potentially go a few years without actually buying new equipment to meet capacity demands.

Why would prices go up? I wrote an article about how monopolies at the Urban Times. Effectively, when there are not pressures driving a company to lower prices to attract more customers prices will rise or stay the same. Which will be significantly higher than the costs of the company. With only two other competitors, which most people assume Verizon would buy Sprint, there is little pressure to innovate and keep prices low. Additional the cost of switching keep prices higher too.

Because of these reasons it's a very good thing that the US government stepped in to prevent this merger. It also indicates that the government is still willing to step in and act in the best interest of the people. In fact, the collapse of this merger could be a good thing for T-Mobile users as the company will get a settlement of $4 Billion. This should be invested in their network and will increase their ability to compete. Another reason we should be happy for this collapse, is that T-Mobile is a very innovative company in terms of adoption of new types of cell phones. T-Mobile has also had excellent customer service compared to the other cell phone providers.

Thursday, November 24, 2011

Today's post is on the Urban Times

This article is about using a strong understanding of the technology base of a firm to determine where the best chances of success in a new technology are. It discusses the Innovator's Dilemma, Dynamic Capabilities and Technological adjacencies. All three of these ideas are critical for firms to understand movement into a new market.

Wednesday, November 23, 2011

Economics, Philosophy and Science

The Occupy Wall Street movement has spawned a great deal of branch protests. It has increased our awareness of economic, educational and governance issues. We have seen a series of aggressive police actions and amazing responses from victims. Historically, universities have been a sites of unrest. Berkeley had it's riots in the 60's, there's the famous Kent State shooting picture and there are many other examples. What do much of these have in common? The state has used it's authority and power to overly aggressively clamp down on protesters. However, violent protesters can't be accepted, but non-violent protesters cannot be met with force. It's part of our heritage to protest the government.

However, it's important to understand what we're protesting and why. It was clear from the beginning of the OWS movement that most of the people didn't really understand what they were protesting. Very broad general things like Wall Street making too much money or the fact that no one has gone to jail. I think it's important that for protesting to be effective the leaders and a majority of the protesters need to be well educated on what it is exactly they are protesting.

In this case the protesters needed to be educated on economics and philosophy/morality. Why economics, those guys are like the bad guys man? Well, sadly, to have an actual conversation with these people you need to speak their language. You don't have to actually accept their assumptions as true or accurate, but you need to be well educated on the topics. Additionally, if you are well educated on economics, you'll know there are different capitalist perspectives on economics that indicate that a more equal society is a safer and happier society. Using evolutionary economics, policies can be crafted to help protect economies from crashes. In addition, being educated in slightly beyond the basic supply demand curve, it will help prevent the wool from being pulled over our eyes. This will also allow more members of our society to enter public discourse and understand and speak intelligently about the topics that impact all of us. People will actually understand what socialism and communism actually mean.

In addition to a good economic ground work, we also need to understand some basic philosophy. People are accused of moral relativism, we need to know what it actually means (morality is flexible based on the situation) and how that impacts people's actions. We also need to know when our leaders are behaving morally, immorally and what sort of freedoms we should be giving to people. Our country is founded on the philosophical ideas of the enlightenment. The US government was founded on rights, which all people should have regardless of sex, race or whatever. This includes speech and protest. If these are within our rights, then we need to protect them from people that believe it is their right to physically assault you when you exercise your rights. Morality and ethics can also drive our legislature to define laws based on humanist principles to ensure living wages and the right to live for all people. Or at least the need to create the social mobility claim to have in our society. Decreasing costs of education reduces the initial burden after school which allows people to take more risks, which may allow them to move from one social strata to the next. These should be done for moral reasons and because education and research has been shown both neoclassical economics and evolutionary economics to be a huge driver of sustained economic growth.

We also need a strong scientific foundation, which will provide a healthy dose of skepticism for government and data published by any group on either side. It gives the tools to decide if we should accept these data or open our tool box and figure out where the flaw in the data is. Science is the driver of current economic growth. It is what allows the next big break through at the platform level. We've had several platforms, coal, steel, rail, and we're currently on the silicon platform/computing platform. To develop new platforms we need to continue to drive to the frontier of science.

Our founding fathers embodied these ideals. Jefferson was a philosopher that wrote his own version of the bible. He and Franklin were both accomplished scientists. All of them believed in the rights of the people that exist not because they are given to them by the government, but because they are natural rights all people have. It is important that we acknowledge these rights and make sure we are educated in these topics to ensure an actual debate over the problems we're facing as a society. Without being educated in the importance of these topics we'll begin to argue based on the best sound byte and not on the content of the message.

In closing, all people need to become literate in these topics to provide the best foundation for an argument. Without being able to speak the right language, you'll sound like whining children that's wondering like a child lost in the woods, or out of your element if you will. With these tools, anyone can talk coherently and powerfully against the very things our own government protests in other countries.

Monday, November 21, 2011

Feds need warrant to get phone data

In a victory for cell phone users everywhere, A court says that the feds need a warrant to request phone data which includes location. We should be celebrating this victory even though it isn't a total victory. This case will most likely go to the US Supreme Court. The Federal government is not going to give up on this easily. Especially since there have been other rulings that have ruled in favor of warrantless mobile phone tracking. So it's still unclear what the end result of all of this will be.

Additionally, this may also have implications for some of the other tracking that the government is doing. Apparently, the governments don't need a warrant to install GPS tracking devices onto cars. Which the police argue saves tax payers money. It raises serious privacy concerns though. What is the limit to the number of people the police can track at a time? Can they simply track anyone closely related to a crime even if they have nothing to do with any sort of crime? With polices officers required to track individuals this puts an obvious limit on the number of people the police and other law enforcement agencies can track. They are limited to the usefulness of the tracking and the number of officers they have available to track. With the GPS tracking they have the ability to simultaneously, continuously track any individual associated with a crime or a suspect of a case. This gives them a huge amount of data on people that may not have done anything illegal and shouldn't be tracked in the first place.

With this data agencies are able to construct a network of frequent activities for the prime suspect and any other people they consider interesting. If these suspects go to a known drug hide out it can implement additional people in a crime that wouldn't have been obvious without the tracking. It could allow for an increased ability to  crack down on crime. However, it can also send up a great deal of false positives and implement innocents.

Should we be concerned with this type of tracking? Definitely. The purpose of requiring a warrant, in a historical context, is to prevent the government for arbitrarily searching the house of a person. I find the ability to be remotely tracked terrifying. Just because I don't have any thing to worry about doesn't mean I'd want the government to have the ability to track me on a whim. I feel it's important for there to be a check on the law enforcement. I think it's clear from the UC Davis pepper spray incident that there's a sense of unlimited power within many of our police forces. Warrantless tracking through cell phones or vehicles are incredibly similar.

The job of the court and our constitution is to protect the people from the excesses of the government through the actions of law enforcement. We need to work with our legislation to push for laws to address these issues if the courts don't make the action in the manner to protect the fourth amendment and our privacy.

Friday, November 18, 2011

Innovation and government regulation

Yesterday during a short twitter discussion the topic of US governmental policies killing new business starts came up. With the 140 characters I wasn't able to property address the issue that was raised. It is extremely clear that SOPA is an innovation killer, because it effectively requires everyone to have a copyright lawyer on staff at the start of any sort of web company. If you have pictures, video, commentary or whatever on your site you'll possibly be the target of some copyright holder. This policy isn't in place and appears, for the moment, to be killed. I expect this law to be resurrected in a year or so. Despite the face that the EU adopted a resolution against SOPA.

Let's look beyond SOPA though, what other policies are in place that seem to prevent job growth? One of the biggest ones right now is tax levels for people making $250,000 or more. Politifact did an analysis of Congressman Boehner's claim that taxing millionaires hurts small businesses and prevents hiring. They found this statement to be False. Of course this does depend on the definition of a small business, which Politifact expresses is difficult to define. One metric that I'm aware of is based off the annual sales, where sales over $500,000/year moves you out of the small business area. This may not be the best amount, but let's say your company has sales of $3,000,000 a year and has enough profit to pay you $1,000,000 of that a year. This tells me that you aren't reinvesting and trying to continue to grow your firm, probably aren't paying your employees very well. Additionally, at this amount of sales it is likely that as an entrepreneur you've had to get capital investment in one of several ways, loans or from venture capital. A bank wouldn't care if you were getting paid a million a year, but there's no way a VC would allow you to pay yourself that if they weren't getting a good size chunk of money too and you were still planning on reinvesting in the future enough to get a huge IPO. Now, if you've built this company from the ground up to this level on your own, then you aren't paying yourself that kind of money. You would have to be re-investing that money back into the firm to get new equipment hiring the best people, etc.

Another way for companies to get started is through spin-off from another company, bootstrapping themselves to get going or spinning-out of a university. I have an article that will come out soon in the Urban times that addresses some policies that can help with the creation of Spin-outs and start-ups. In the US, we still have the best policies for this. The EU as a collective and European countries are modeling many of their intellectual property laws and funding methods off of US policies. A few examples are a very similar law to the Dole-Bayh law from the 80's to allow universities to own IP and to give it to their employees if they wish. The creation of technology incubators - this was a truly American innovation, innovation prize contests and national seed funds. The continual reinvention of these policies in the US allows us to create more new companies than European counterparts from a variety of sources.

Are there other policies that hurt the creation of companies? Yes, sure. I'm sure there are some pollution regulations that negatively impact the survival rate of firms. However, from a purely economic perspective this regulation is forcing the company to internalize the cost of the negative externality. Which the company should innovate to reduce the amount of pollution they are creating or buy equipment that reduces their costs in other ways. Innovation to reduce pollution should reduce the cost of raw materials, because they are being used more efficiently and in lower quantities. Every company wants to be able to reduce the amount of raw materials they use. In the next few years we will see greener companies, not because they have a desire to be sustainable, but because it's more profitable. The regulations the EPA puts into place requires companies to internalize negative externalities, which from both a evolutionary and neo-classical economic perspective is expected from the market and when the market fails then and only then the government needs to step in.

There will be regulations that are industry specific that may slow the amount of innovation and creation of firms, but some of that is surely death by a thousand paper cuts (too much paper work) and the inability to figure out a way to acquire enough funds to get the company going. Compared to European countries the US is the leader for ease of firm creation and the EU is still playing catch up in that regard.

Wednesday, November 16, 2011

Biggest threat to internet innovation

Regardless where you live, the largest threat to the internet is the US Congress/Department of Justice and close second may be the UK court system. In this post i'm going to focus on the US congress and DOJ because what they are doing is fairly ridiculous. The US Congress is currently considering a bill called Stop Online Piracy Act or SOPA, critics like to call it the E-parasite act. This act, according to various sources, this bill amounts to online black-listing. It's also being called the Great FireWall of America. This is a complete disaster in my opinion. The internet is one of the fastest growing parts of our economy. Anyone can start up a web based company. It doesn't have to be anything fancy at first, but over time you'll get more sophisticated.

The EFF notes three extremely popular sites that are in the cross hair of SOPA. Etsy, because there are simply too many little shops that could be selling illegal material. For instance, the US Supreme Court Ruled that you couldn't resell AutoCAD, the likelihood of that happening might be low, but what about a screen printed shirt with some band logo? That's just as illegal. Another site is Flickr, which is pretty obvious because it's so easy to claim a picture as your own. The last they mention is Vimeo for the same reasons. I would also expect YouTube to be on that list as well.

So aside from a black list what does the actual bill do? What legal censorship isn't enough for you to be outraged against this bill? I mean we're talking about Turkey and Pakistan level of censorship of sites here. It's not unrealistic to expect facebook and Google to get black listed with this law. Facebook could get hit if some one quotes stuff illegally or posts video with copyrighted material on it. Since you're able to post and stream through facebook, it might raise some questions over copyright.Google of course links to a huge amount of copyright material that a user can get illicitly.

Ok, what else is there you really want to know? The rights holders can request payment processing companies (read Visa, Mastercard and ad companies) to block payments to your site. For some people that will mean no more YouTube money, for others it will be a death sentence. Does the court get involved with any of this? Nope. The companies have 5 days to respond to a payment stop. Which means even if you are in the clear, if a request happens, you likely won't get paid. Check the EFF's break down for more details.

But this is 'Merica! Surely something like this won't happen. They'll take our jerbs! Yes, they could in fact take away your jobs. Is anyone fighting against this? Yep. Google, Facebook, Zynga, Twitter, Michelle Bachmann (Yes the crazy lady), Ron Paul (Yes the crazy in a different way guy) and a small list of Congress members from both sides of the aisle are banding together to try to kill the bill. They are arguing that the bill is too broad and doesn't appropriately address the problem is trying to "fix."

What do most Americans feel about copyright legal action? As a whole they are against it. In fact most only think that a small fine of a maximum of $100 is appropriate for a downloaded song. Many have indicated that as more legal alternatives have appeared users have been less likely to use the illegal versions. Of course this is self reported data so it could be skewed, but even if you add 10 points it's still showing that legal alternatives are best deterrent for illegal downloading.

You can email your representatives here. I strongly suggest you do. The more voices that speak out in protest the more likely at least a few people will hear. Personally, I don't think the US government should even be talking about copyright right now. They need to be working on jobs.

Monday, November 14, 2011

Review: Republic Lost. Or the hand book for OWS

I just finished Republic Lost by Lawrence Lessig last night. If it's not obvious by now, I'm a big Lessig fan. I find his work extremely interesting and relevant to the changing world. It is a bit dry to be honest, all of his writings deal with how society, the market and laws interact.

In my opinion this book should be the handbook for anyone interested in the Occupy movement. I'll explain why in a few steps. First, he mentions various different cases of inequity which are highly promenient in the US. He specifically addresses the 99% argument and does it a great deal of good. He fully explains what it means to be in the 99% in a way that has been missing in the dialogue. He actually says that the 1% isn't the biggest problem it's actually a much smaller percentage, but the 1% can cause a lot of damage as well.

In the book he systematically explains how and why money is a problem in the system. In many cases it's not that there is quid pro quo corruption going on. More that it seems like there is corruption going on because of the money involved. As an outsider it's hard to trust a system where the Teachers union (or wall street or exxon) can say I will give $1 million dollars to any candidate that supports tenure (or bail outs or deep water drilling). This is an implicit threat because if you don't support these topics your opponent will, because it will give them campaign donations. As donations play a huge amount of time for a congressman (30-70%) anything that makes it easier to get money the congressmen will campaign to support.

There have been studies that question if these gifts actively change legislative voting behavior, but many quotes from former congressmen explaining that there is a sense of obligation to the donor. This isn't a tit for tat type exchange, Lessig argues it's more of a gift economy. Like what buy a round of beers for your friends, you don't want money for it, you want them to buy you the next round. The fact that you bought instills (in most people) a sense of obligation to buy the next round. This analogue is perfect in fact, as Lessig argues that congress is dependent on these funds like an alcoholic. This is an illicit dependency as he shows that Congress should be "dependent on the People alone."

Lessig builds an extremely will supported case that donations impact the legislative process by impacting what congressional leaders allow debate on. Even if it doesn't impact votes, it impacts what is considered important by the congress. This is one of the ways that congress seems out of touch with regular people. I believe Lessig builds a strong enough case to demonstrate that something must be done. He actually has a few suggestions on how to deal with the problem.

The first is the old fashioned way of trying to build support through congress to enact real campaign reform. Lessig doesn't believe this is realistic and gives it about a 0% chance of success. His next idea is to get about 300 well known people to run as super candidate to force the issues. Have these people run in multiple different districts (it's legal) and garner enough attention to force the politicians to say they will vote for reform. Do this in enough state and in the right states and it might work. He calls this a kind of political terrorism. He gives it a 5% chance of working once you get started.

His next idea is to have one of those types candidates run for the of president making the promise to hold congress hostage until the reforms are made, BUT resign as soon as the reforms are completed. He argues that this is required for people to honestly believe that the changes would happen and for congress to actually enact the changes. There would be no negotiations other than making sure all the normal people get paid and services don't impact most business. He also gives this one a 5% chance of working.

The final suggestion is to push for a constitutional convention. This would require 38/50 states to OK the convention. He, at length, describes all the potential problems and legal issues with the convention, which matter once the ball gets rolling. In addition to this he suggests creating about 300 shadow conventions where regular people are given the opportunity to make constitutional amendments. These could then be the basis for what is sent to congress.

In total, if you are part of the OWS movement you need to read this book. It will help give more firepower for your arguments against the 1% and it will give some guidance on what the first priority should be. I agree with Lessig that until we get money out of the system no other reforms are possible. We will not have a function government until the People are the only thing the government relies on for choices of legislature.

Sunday, November 13, 2011

Saturday, November 12, 2011

Router = Computer

According to the online magazine an ADSL modem/router is considered by a German court. The dispute is over if a user is allowed to install software that changes the ADSL modem's firewall settings. It was actually a battle between two companies, the company that makes the router and the company making software for the router. I think that this ruling has some extremely interesting implications.

First, by defining a router as a computer it opens the door for a HUGE number of devices to be defined as a computer. Most of us wouldn't think of a router as a computer. It's a switch, it has a very specific purpose of deciding which packet gets through to the network at a given time and to prevent congestion on the network. In this case, it has the additional function of pulling out the high speed data from the phone line as well. It does have a user interface, but it's typically restricted to a web browser. This is hardly something the average user would consider a computer. Which tells me something about the judge in the case - he understands technology and computing. The US and rest of Europe could use more judges like this.

Second, since a broad range of devices are now considered devices, at least in Germany, it could force companies to open up their hardware to user software manipulation. I see a few areas where I think this will cause major companies problems.

The first would be video game consoles. If a router is considered a computer there is no way that a company could argue that a video game console is not a computer. Consider the following, you are able to install software video games onto the console, you actually interact with an operating system, you are able to browse the internet and of course play games on the console. These are all things you are able to do on your PC. There are more restrictions on the console than the PC of course. Now, let's say a third party company wants to come along and create something that will allow you to increase the functionality of the software or the machine in someway. In Germany, the user should have the right to do that.

The second would be cell phones. It's pretty obvious that cellphones are computers and this ruling would just cement that. I think this will cause more problems for iOS than for Android. For two reasons, first Android already allows third party app stores onto the devices which increases the control of the end user over the computer. Second, Apple controls what software can be allowed into the app store thus controlling what a user is able to install on their computer. The German ruling basically says that a company cannot stop a user from installing software onto their computer if they want to install it. Apple and the App store are directly controlling what a user can and cannot install onto their device. I would not be surprised if this type of control is challenged in the German courts.

One other implications could be that as you own the computer user may be able to stop companies from remotely installing software onto their computer they don't want on there. For instance, in the US it's not uncommon for Verizon Wireless to push software out to specific devices without notifying you. You are giving implicit consent by using their networks. However, if the same thing happened to my PC from Comcast there would be a law suit. Since phones are in a weird quasi state of rights in the US there isn't the same sort of feelings. However, I believe as the gap between PC and phones close and the desire to control what goes on the phone and what doesn't increases there will be lawsuits over installing and deleting software from your computer.

Thursday, November 10, 2011

Unintended consequences of knowledge management regimes

There are several consequences of the differences between the US (and the west) and China (and other autocracies). First, with one of the major assumptions of neoclassical economics out the window, it calls into question basing economic policy on neoclassical economics. Second, with a monopoly structure for intellectual property several different economic incentives have been created. Finally, the differences in IP management between the countries creates tensions at several different levels. I'll discuss each of these points in more detail.

First, if one of the major assumptions for economic policy includes non-rival, non-exclusive knowledge, it's difficult to understand why there isn't more competition in many markets. However, as we know it's not really possible for any firm to pick up any sort of technology and start to produce a given product. Because of this difficulty regions and areas tend to become experts at specific types of technologies. However, even in the case of China the freedom of access to IP makes it easier for firms to produce specific products. The problem still lies in the fact that you still need tacit knowledge to actually make the product. A patent is supposed to give you the information you need to produce the technology. However, the actual patents are difficult to read and not likely to be possible

Second, with a monopoly structure in place for intellectual property it gives very different incentives for owners of intellectual property. First, for people who actually produce a product, attacking products that are similar for infringement can be a very lucrative proposition. It prevents other companies from becoming competition. Apple is currently using this tactic to go after Android through Samsung and HTC. With a full monopoly technological progress can actually come to a standstill. An example of this is with Xerox copiers. With the monopoly in place Xerox did not innovate and kept prices extremely high. As soon as their patent ran out the competition came in and almost took all of the market share from Xerox. They introduced lower priced products and a wider more personal product range. Without the monopoly in place other companies could try to move into the market space earlier and drive innovation from the beginning of the market.  Finally, with reduced ownership of IP there will be less patent trolls like Intellectual Ventures.

Third, the IP management is causing issues between firms and the Chinese government. The firms do not want to give up their IP because it's how they are able to make their money. Some of these technologies are so easy to copy it's impossible to make a profit without protection. In theory pharmaceuticals should be perfectly copyable based on the chemical properties of the drug. If the pharmaceutical companies didn't have a chance to recoup the investment on a drug (500 million - 1 billion per drug) there would be no innovation. The differences present problems for trade and agreements between countries. The US and China have had serious disagreements over how IP should be managed.

Basically, the differences in how IP is understood impacts a countries policies economically and in trade. It is important to understand exactly what's going on with these issues. Our governments are pushing for different levels of control over IP both in patents and other forms of copyright. As some one interested in policy, it's important to understand what types of policies we should be pushing for. I don't think there's any true right answer for the IP problem. In different situations policies should be adjusted. We cannot have a stagnant IP regime when technologies are evolving as fast as they are.

Tuesday, November 8, 2011

Are democracies or autocracies better with technology Management?

According to neoclassical economics knowledge is a non-rival (I can use it without preventing you from using it) and non-exclusive (available to everyone) resource. This has two impacts on their economic theory. First, the actual impact of research and development is excluded from economic growth and is ignored. Second, that any company should be able to pick up and produce any technology. Both of these points are relatively ridiculous. For two reasons. First, we know that research leads to the formation of new companies. Second we know that most companies cannot produce any product and many companies that produce products outside their expertise fail at it.

From a neoclassical perspective democracies are terrible at sharing knowledge and technologies. Democracies have a slew of laws that regulate access to technology form monopolies for specific technologies if they have something called a patent. Additionally, there are other contracts that can get in the way of sharing of knowledge in a way that is neoclassical. Non-disclosure agreements and non-compete clauses. If you aren't allowed to discuss a specific technology with other people, it prevents knowledge from spreading and being shared to other companies. If you aren't allowed to compete within the same industry after you leave a company, it prevents you from using that knowledge in a positive way at another firm.

These laws have been put into place in our democracies to ensure proper protection of technologies for firms. It's designed to prevent the spreading of tacit knowledge from company A to company B. As a company this is incredibly desirable. Without these protections some research would be worthless to conduct. Knowledge spill-overs would cause prices to fall to cost or lower as firms compete for market share. It's great for consumers, but bad for firms.

So what happens in China? Well according to Make it in America, China requires many firms to hand over their Intellectual Property to the Chinese state. What ends up happening after this is that the Chinese government sells the information or gives the information to one or more Chinese company. These companies tend to be made up of former employees at the company that made the product before. This allows tacit knowledge transfer to the firm and a fast ramp to compete directly with the inventor of the technology. The knowledge is freer in China than it is in the US because of this. This increases competition and may be impacting the cost of goods like solar panels.

In a way this type of behavior forces companies to compete based on the actual costs of the technology. This is what is expected in the neoclassical theory. All prices will eventually drop to the marginal cost of a product with near zero profits for the producing company. In a perverse way, this is a "freer" market than ours because it comes closer to the non-rival non-exclusive knowledge base.

In my next blog, I'll discuss this topic more.

Monday, November 7, 2011

China, Technology and creativity

Sorry I've been away for so long. I've been hanging out with my Awesome wife! She gave a talk in Ireland, which I went to for most of a week. It was a good time. She then came here to Eindhoven for a week and had an interview. So that's why I haven't been updating. Sorry faithful readers.

At a party on Saturday, I got into a fairly active discussion with 4 PhDs and myself. They are all engineering PhDs, so they understand research and how technology works rather well. We got into a discussion on if China was going to actually really over take the US in scientific research. I said I think it's likely, but there were many arguments against that likelihood. I didn't really get to finish my argument on why it's possible. So, I'm going to do that now.

Basically, some of the core arguments against China being able to overtake is us lack of creativity. China is a country of followers, not a country of creative leaders. Another argument was the lack of high quality education and research centers in China. I'll address the second argument first and then discuss the first argument.

Americans know that we educated a lot of foreigners at our universities, 2008 was an all time high for the number of international students. In fact my roommate at one point explained to me that one of the groups at the University of Texas was comprised entirely of Chinese students. They conduct their meetings and research all in Chinese and, in fact, leave the US speaking worse English than when they arrived. But why are they leaving? The link above notes that there simply aren't enough H1B Visas or green cards for them all to stay. Effectively we're throwing out the people we educate. Over time enough good scientists and engineers will be sent back and will start teaching in China. China has big ambitions and has been creating universities as fast as it can. Using an evolutionary perspective, we can see that it's likely they will continue to create variation and students will be selecting the best universities. One of them is likely to start producing more science and better science than another. This will lead to the best students and best researchers going to that school. One or two could become the Chinese version of MIT, Berkeley or Harvard. I think it's clear that education won't hold them back. Eventually, they will have several universities in the top 200 list according to the Times Higher Education ranking.

The second argument is a little tricker to argue against. The Chinese aren't creative enough to create radical innovations. First, I'm sure that the Chinese I know would object to this blanket statement. However, let's assume for the moment that's it's some what correct. There's a culture that doesn't reward creativity and rewards conformity. I can think of two countries that have similar types of culture that have been creative and are excellent centers of research and innovation, Japan and South Korea. Now are they as good as the US at innovation or research, No. However, they have had some great innovations and do great research.

When it comes to patent research there's something called a Triadic patent. It's a patent that is filed in the US, Europe and Japan. Europe and Japan have higher standards for patents than the US and are more difficult to acquire. Why does this matter? Well effectively Japan is the only country in Asia that would fit better with the European countries in terms of GDP per capita, protection of IP and research.

Both South Korea and Japan have a few companies that are on the leading edge of their respective fields. Samsung is in a huge number of different areas and is the world leader in many of them. Japan has Nikon, Sony, Toyota and a few other big companies that are on the cutting edge in research, design and innovation. So, I don't accept the argument that the Chinese couldn't be creative.

Another point I was trying to make, is that over time as a country becomes the center of manufacturing and incremental innovation on a product, it's likely that they are going to be able to create the next radical innovation in that field. There are two things that support this. First, in a book by Andrew Liveris, the British CEO of Dow Chemical, there is anecdotal evidence to support bringing manufacturing back to the US along with the R&D that goes with it. The other argument is based on the research of Cesar Hidalgo of MIT that shows through network theory, that to become a leader in technology you have to build your way through a series of other technologies. It helps explain why it's so hard for countries to pick up creating semiconductors. However, as a country develops the technological capability to work within a type of technology they are likely to create innovation and changes in that technology.

China has effectively been given the ability to manufacture just about everything through outsourcing. They have the technological capabilities to build and design new technologies. China also has the resources devoted to it. They created a five year plan where they are going to invest $1.5 trillion in 7 science sectors. Because of these factors I believe that China is a real threat to US and European leadership in research and technology. For any one to dismiss China because of cultural reasons or technological capabilities is making a mistake and is likely to be surprised in 20 -30 years when China becomes a leader in at least one field, likely more than one.

Wednesday, October 26, 2011

Technology Theft

Apparently in the Steve Jobs bio there's discussion about how he plans on destroying Android because he thought Google stole his idea. Well, yea, a phone operating system is genius, it's just difficult to get a critical mass for a given operating system. There's the problem of lock-in and network effects, which impact the likelihood of a given person adopting a new technology. That's also why Google followed Apple's lead with creating the Android Market. It's also why Apple is suing every single major Android phone manufacturer. However, Jobs shouldn't have been that upset there have been a lot of dead cell phone operating systems like Palm's, many mobile windows and most recently the beautiful MeeGoo from Nokia.

Cell phones aren't the only place where this sort of "theft" happens. Typically, it's more considered technological borrowing by taking from one technology type and applying it to another. This happens when some technological limit is hit on a technology. This technological theft basically allows the engineer/designer to overcome some inherent limitation in a technology. An example of this was the effort that allowed proper planes to compete with jets for an extended period of time. They use super chargers and similar technology to allow the plane to fly at heights and speeds they shouldn't normally be able to fly at.

However, this borrowing can lead to major legal issues. Which is why it's fairly common to see licensing agreements between major firms that involve thousands of seemingly unrelated patents. This is so they can avoid any sort of legal issues if they have to use a technology the other company owns.

Other types of theft are really common, such as in software. Look at how much Facebook has taken from both twitter and google+.

What should we do about technology theft? Well, we need to deal with the patent problem first. However if we address that issue I think that technology theft is one of the best things that can happen. It's a way that drives improvements of subtechnologies that make the larger technologies more efficient. It's a way that technology evolves through selection process.

On a side note, I get to see my wife tomorrow, so I'm probably not going to be blogging much for the next week or so.