🔮 Deep tech trends; AI; thinking about innovation; Starcraft; invisibility, polyamory, bacon++ #242

How should we manage our innovation?

Hi, I’m Azeem Azhar. I’m exploring how our societies and political economy will change under the force of rapidly accelerating technologies and other trends.

💫 📅 If you’re a bodacious EV premium member, take a note of the upcoming State of the Exponential briefing with Aldyen Donnelly, Director of Carbon Economics at Nori, the world’s first carbon removal marketplace. In this briefing, hosted by EV’s Senior Advisor, Diana Fox Carney, Aldyen will showcase how her company brings together agriculture, carbon removal and blockchain technology, creating a marketplace through which anyone can pay to remove excess carbon from the atmosphere. Read more here and RSVP to attend.

Like what I write? Please hit the heart ❤️ button above.

Azeem

---

This issue is supported by our partner, Toptal

🚀 Blockchain is experiencing exponential growth and global attention. Whether you’re on the technology side of blockchain development or on the monetization side with cryptocurrency, now is the time to further your investment in the space. Toptal can help start or scale your blockchain operations with dedicated cryptocurrency and blockchain services. Don’t wait for the next winter, get started today.

---

Dept of the near future

🌿 One of the major factors shaping the deep tech trends of 2019 is the falling cost of DNA sequencing, which opens a treasure trove of opportunities for biotech and medical tech startups. One of those opportunities is the so-called ‘Book of Life’, the genetic sequences of all complex species on the planet and the relationships between them. So far, 0.28 percent has been decoded but the Earth BioGenome Project is setting out to change that, according to EV reader Juan Carlos Castilla Rubio.

🎯 DeepMind had a breakthrough. Its AlphaStar reached the top 0.15 percent of Europe’s 90,000 StarCraft II players. The game is strategically complex and played at breakneck pace, with 300 actions per minute. The first time AlphaStar beat two professional players in 2018, DeepMind was criticized for pitting a superfast computer against mere mortals; this time, the engineers ‘restricted the AI’s reflexes’. (Separately, a neural net has solved in the three-body problem 100m times faster than previously possible. Trisolaris here we come!)

🧠 We don’t really understand what ‘understanding’ means, not even in humans. Decoding what it would mean for a machine to truly understand a concept is even more complicated. The same goes for common sense. I discuss this in the latest podcast conversation with neuroscientist and AI entrepreneur Gary Marcus, whom most of you know as a deep learning contrarian.

🤔 Evan Selinger’s review of an AI anthology asks why technologists fail to think of moderation as a virtue? ‘Markets will have an oversized influence on which AI-infused products and services get developed, how they’ll enter and exit our lives, and who we’ll become as their influence impacts how we think, play, work, and govern.’

🇨🇳 China’s investment in AI is focused on three broad areas: international competition, strategic growth and social governance, according to an analysis of Chinese AI policy and regulation. Good read.

💨 Climate breakdown: 409ppm | 3,855 days

Each week, we’re going to remind you of the CO2 levels in the atmosphere and the number of days until reaching the 450ppm threshold. 

The latest measurement (as of October 29): 409ppm; October 31, 2018: 406.32 ppm; 25 years ago: 360ppm; 250 years ago, est: 250ppm. Share this reminder with your community by forwarding this email or tweeting this.

Dept of innovation

How should we manage our innovation? In a field like medicine, we’ve established a rigorous and scientifically-validated approach to testing and approving drugs, based on clinical trials and randomised controlled tests. In the finance and insurance industries, new entrants must comply with strict rules that protect the consumer. Capital adequacy and anti-money laundering requirements ensure the integrity of the financial system, supposedly.  

The tech industry has had no such framework. It has enjoyed ‘permissionless innovation’ since the advent of the Internet fifty years ago, this week. The open platform enabled entrepreneurs to try new things without getting permission from regulators or, indeed, anyone else.

This is why we got streaming audio in the mid-nineties, while the traditional broadcast industry remained heavily regulated. And why we’ve had a flourishing ecology of remarkably large products like Skype or Wikipedia, alongside weird, wonderful niche products.

The permissionless approach served us well. Can you imagine getting a search engine as good as Google, if it had to be approved by even the most forward-thinking of regulators? If newspaper lobbyists had had their way, would blogging have ever existed, let alone flourished? But, permissionless innovation also enabled other anti-delights, such as the unpleasant Usenet newsgroups, Chatroulette and 4Chan.

An alternative approach, that sits between permissionless innovation and full-on regulation, is the precautionary principle (or PP). Since it emerged in the 1980s, PP has encouraged cautious action if there might be a threat of serious damage, particularly environmental damage—even if we don’t have robust scientific evidence for it. This approach could work in scenarios where this is a chance we might blow the whole place up. 

But in general, I’m quite uncomfortable with the precautionary principle because it is so woolly. It eschews accepted norms of scientific evidence in favour of looser interpretations of what harm might be created. To that extent, it can be subjective and open to lobby and the ill-informed excesses of public opinion. 

A few recent incidents, remind us that public opinion is often not a great guide to complicated technical problems, especially where there are systemic effects.

• Be Cautious with the Precautionary Principle: Evidence from Fukushima Daiichi Nuclear Accident by Neidell et al, makes the case that more people died from the increase in electricity prices after Japan’s Fukushima nuclear reactor was put offline than from the incident at the power plant itself. (Summary of the paper by the Mercatus Center, a research group that is ideologically critical of regulation in general.) When the accident occurred, the Japanese government turned off nuclear power stations because of public fears, resulting in a 20-30 percent spike in electricity prices. Consumers responded by cutting their heating during winter. The authors estimate that 4,500 people died as a result. The disaster has directly accounted at least 1,500 deaths, mostly from the resultant evacuation. Only one death has been attributed to radiation. (The bigger problem with the public response to nuclear power is that it attenuated our decarbonisation progress. 

• The delays in introducing genetically modified ‘golden rice’ may have resulted in up to 2,000 child deaths per day in the developing world, as well as consigning millions of kids to blindness. 

Permissionless innovation (PI), and its weird step-siblings, industry self-regulation and industries cosied up to regulators, are no panacea either.

PI has been superb, brilliant, tinkertastic. The “don’t ask permission culture” lead to so many things we might not have created in the early days of the internet. I know first-hand how hard incumbent telecoms and publishing industries fought for worse than what the internet gave us.

Loosely coupled dumb networks which put intelligence on the edge, aka the internet, allowed for innovation on that edge. In the 1990s, the phone companies hated it. Their power arose for centrally-controlled circuit switching. If they had had their way, the internet protocol would have played second-fiddle to proprietary virtual circuits based on ATM or SDH. And, if they had succeeded, we would never have seen Geocities, Viaweb, Skype, Yahoo, eBay, Instagram, Amazon and, most digital services you use daily. (Admission: I was an aficionado of telecoms protocols in the early nineties.) 

But this week, we mark fifty years since delivery of the first message across the proto-Internet, the ARPAnet. The Internet has been mainstream in most markets for more than two decades. And the entire environment within which technology innovation occurs is vastly different to twenty-five years ago:

• The domains of operation are too important. Information access or self-publishing, the products of the mid-90s, are valuable but ultimately niche. But today’s technology innovators are tinkering with insurance, financial services, healthcare, even our DNA. 

• The tech industry today is simply too big and has tremendous access to capital. Entrepreneurs know how to ‘blitzscale’, that is, grow their companies globally very quickly. Capital markets are willing to support them however barefooted and Adam-Neumannish they are. (Listen to my discussion with Reid Hoffman on blitzscaling.) The biggest firms, Alphabet, Facebook, Amazon, Tencent and Baidu, are sovereign-state in scale. This actual or potential leviathanhood demands we ask them for more prudence.

• There are emergent effects from many of these innovations which, in a permissionless environment, are borne collectively by society or simply weigh on the vulnerable. For example, Uber and Lyft have increased congestion in cities while reducing driver wages. These firms’ founders and earliest investors make out like bandits.

• Our societies are incredibly interconnected. A decade ago, the global financial crisis took a bunch of mortgage defaults by sub-prime-rated American homeowners in and magnified them into the worst financial crisis in history. This crisis brought General Motors to within hours of bankruptcy, and debilitated factories around the world.
  From a sketchily-approved mortgage in Nevada to whacking industrial supply chains, meant those novel financial instruments travelled across the nervous system of the shadow banking sector, eviscerating Lehman Brothers and bringing America’s Bear Stearns, the UK’s HBOS and Germany’s Dresdner, amongst others, to their knees, in the process.

• The financial technologies of synthetic debt instruments emerged, admittedly in a regulated environment—the story is complex—but reminds me of the permissionless approach so common in the tech industry. (In another former life, I happened to hold short positions on the US housing market during 2007 and 2008, and have some personal experience of that crisis.)

So what should the goldilocks zone of regulation look like? How can we support fevered exploration while managing risks, especially systemic, run-away or existential ones?

I’ll turn to some possible solutions in a future issue of EV. Stay tuned :)

Short morsels to appear smart at dinner parties

🛡️ A company in Canada has made an ‘invisibility shield’. Anticipating the inevitable Harry Potter jokes, they’ve named it the ‘Broadband Invisibility Cloak’.

👎 Your AirPods will play music for a couple of years. They’ll pollute the Earth for a few millennia. (In other Apple news, iOS 13 has introduced third-party sign-ins for other apps. It has some nice privacy features.)

Societies change their mind faster than people do.

🥓 The US has its biggest pile of uneaten bacon for 48 years, over 18,000 metric tons. Bacon comes for pigs, highly intelligent, social animals.

🏁 Zoox’s self-driving car is a pretty smooth ride, apparently.

Polyamory is on the rise, but are we not taking it seriously enough?

🌐 All the domains Jeff Bezos registered in 1994, and why cadabra.com didn’t work. 

The story of Hilda Geiringer: the first female professor in applied maths in Germany, and a global pioneer in materials science.

The government of Taiwan has built its own social network with the reported goal to create a process which crosses political divides to develop new policies.

End note

I had a fascinating lunch with a Silicon Valley investor earlier this week. He was pretty excoriating about the direction the large US tech companies, in particular, Facebook, are taking. King Zuck, surrounded by well-trained courtiers, seems to see no limits to his power. 

My lunch brought to mind Aaron Sorkin’s letter to Mark Zuckerberg in The New York Times. Sorkin doesn’t hold back.

As we ate, Alphabet confirmed it was acquiring FitBit, the fitness tracking company. Not content with accessing our search habits, transit patterns, personal email, photos, in-home conversations and viewing preferences, Google is now running hell-for-leather for our physical data and key biomarkers. It is an unpleasant development.

The Internet turned fifty this week. It really is having a mid-life crisis

Best,
Azeem

---

This issue is supported by our partner, Toptal

⚡ Build the next exponential growth company with Toptal’s Designers, Developers, Product Managers, Project Managers, and Finance experts. Join today to tap into our elite freelance talent network.

---

What you are up to—notes from EV readers

Ryan Welsh: Explainable AI isn’t just about explanations.

Richard Dent and his colleagues from all over the UK urge universities to act swiftly and independently on climate change in an open letter.

Matt Lang writes about how growing up with voice assistants will shape the childhood.

Stephan Somogyi has a new job as the Product Lead for Android platform security.

Rowland Manthorpe is investigating how tech is used and misused throughout this British election campaign—if there's anything you think he should be looking at, send a message to rowland.manthorpe@sky.uk.

John Battelle launched The Recount, a new politics-focused media outlet.

Gideon Lichfield is looking for a Senior AI reporter at the MIT Tech Review.

Please share your projects and news updates with marija@exponentialview.co