“Economics” Category

iOS 9 and the Information Ecosystem

Earlier this month, Apple introduced iOS 9 with new search and Siri features. In iOS 9, users will be able to search for both specific activities and content that is contained in iOS applications. What this means is that users should be able to search for “sunburn” to find information on how to treat sunburns that is provided by iOS medical applications, and tapping the item will immediately launch it in the application. Additionally, these features will allow users to reference whatever they are looking at in a reminder they create through Siri. That is, when looking at an Amazon product page, users will be able to tell Siri “Remind me to buy this tonight,” and Siri will add a reminder with the link included.

Prior to iOS 8, an application’s functionality and content were indivisible from the application itself. If a user was looking at a photo in their photo library and wanted to edit it using a more powerful editing application they had installed, they had to leave Photos, open the editing application, and find and open the photo again there. If the user needed to access a text document they had stored in Pages, they had to launch Pages. In iOS 8, Apple eliminated the redundancy in the former example through extensions, which allow developers to atomize their application’s functionality and allow users to utilize it outside the scope of the application itself.1

The latter example is still true within iOS 8. Content is indivisible from the application itself. iOS 9, however, begins to break content and tasks from the application by making them searchable through what used to be called Spotlight on iOS but is now just Search.

The features around Search and Siri Reminders are absolutely useful. It is flexible and convenient to be able to move over to the resurrected Search page on the home screen and type in, say, “Denver” to find my flight or Airbnb reservation. What I find more interesting than the user-facing features here, though, are the tools provided to developers to make this possible, and the direction task and content search indicate iOS may be heading.

An Information Ecosystem

To allow iOS’s new Search feature to surface tasks and content that are contained within applications, developers must indicate to the system what within their application is content that should be surfaced, and what type of content it is (image, audio, event, etc). Developers do much the same thing for tasks. Somewhat similarly, extensions indicate to the system what kind of content they can consume.

This is referred to as “deep linking,” because it allows users to follow a “link” to somewhere deep within an application for some kind of task or content, exactly like clicking on a link in Google to a news article within a website, as opposed to going to the website’s home page and moving through their hierarchy to the article. “Deep linking,” while apt, is also somewhat misleading because this allows much more than just search. When developers update their applications to take advantage of Apple’s new APIs for identifying content and tasks to the system, they will be helping the system structure what–and what kind–of data is on the user’s device. The system will know what content is on a user’s device, what kind of content that is, and what kind of content applications provide. The system will know what photos, contacts, events (say, hotel reservations), and music are on a user’s device.

Using these tools, we could begin to construct an understanding of what the user is doing. Applications are indicating to the system what tasks the user is doing (editing a text document, browsing a web page, reading a book), as well as what kind of content it is they are interacting with. From this, we can make inferences about what the user’s intent is. If the user is reading a movie review in the New York Times application, they may want to see show times for that movie at a local theater. If the user is a student writing an essay about the Ming dynasty in China, they may want access to books they have read on the topic, or other directly relevant sources (and you can imagine such a tool being even more granular than being related to “the Ming dynasty”). Apple is clearly moving in this direction in iOS 9 through what it is calling “Proactive,” which notifies you when it is time to leave for an appointment, but there is the possibility of doing much more, and doing it across all applications on iOS.

Additionally, extensions could be the embryonic stage of application functions broken out from the application and user interface shell, one-purpose utilities that can take in some kind of content, transform it, and provide something else. A Yelp “extension” (herein I will call them “utilities” to distinguish between what an extension currently is and what I believe it could evolve into) could, for example, take in a location and food keywords, and provide back highly rated restaurants associated with the food keywords. A Fandango extension could similarly provide movie show times, or even allow the purchase of movie tickets. A Wikipedia extension could provide background information on any subject. And on and on.

In a remarkable piece titled Magic Ink, Bret Victor describes what he calls the “Information Ecosystem.” Victor describes a platform where applications (what he calls “views”) indicate to the system some topic of interest from the user, and utilities (what he calls “translators”) take in some kind of content and transform it into something else. What this platform would do is then provide inputs to all applications and translators. The platform would provide some topic of interest that has been inferred from the user; as I described above, this may be a text document where the user is writing about the Ming dynasty, or a movie review the user is reading through a web browser. Applications and translators can then consume these topics of interest and information provided by utilities. The Fandango utility I describe above could consume the movie review’s keywords, for example, and provide back to the platform movie show times in the area. The Wikipedia utility could consume the text document, and provide back information on the Ming dynasty.

What is important here is that the user intent that can be inferred from what the user is doing and what specific content they are working with, and the utilities described above, could be chained together and utilized by separate applications for the user, in such a way that was not explicitly designed beforehand. Continuing the movie review case, while the user is reading a review for Inside Out in the New York Times application, they could invoke Fandango to find local show times and purchase tickets. This could occur either by opening the Fandango application, which would immediately display the relevant show times, or through Siri (“When is this playing?”). More interesting, one could imagine a new kind of topical research application that, upon notice that the user is writing an essay related to the Ming dynasty, pulls up any number of relevant sources, from Wikipedia (using the Wikipedia utility) and online sources (papers, websites). Perhaps the user has read several books about the Ming dynasty within iBooks, and has highlighted them and added notes. If iBooks identifies that information to the system, such a research application could even bring up not just the books, but specific sections relevant to what they are writing, and passages they highlighted or left notes on. Through the platform Victor describes, the research application could do so without being explicitly designed to interface with iBooks. As a result, the work the user has done in one application can flow into another application in a new form and for a new purpose.

To further illustrate what this may allow, I am going to stretch the above research application example. Imagine that a student is writing an essay on global warming in Pages on the iPad in the left split-view, and has the research application open on the right. As the user is writing, the text will be fed into a topic processor, and “global warming” will be identified as a topic of interest by iOS. Because earlier that week they had added a number of useful articles and papers to Instapaper from Safari, Instapaper will see “global warming” as a topic of interest, and serve up to the system all articles and papers related to the topic. Then, a science data utility the user had installed at the beginning of the semester would also take in “global warming” as a topic, and would offer data on the change in global temperature since the Industrial Revolution. The research application, open on the right side of the screen, will see the articles and papers brought forward by Instapaper and the temperature data provided by the science data utility, and make them immediately available. The application could group the papers and articles together as appropriate, and show some kind of preview of the temperature data, which could then be opened into a charting application (say, Numbers) to create a chart of the rise in temperatures to put in the essay. And the research application could adjust what it provides as the user writes, without them doing anything at all.

What we would have is the ability to do research in disparate applications, and have a third application organize our research for the user in a relevant manner. Incredibly, that application could also provide access to relevant historical data for the user as well. All of this would be done without the need for this application to build in the ability to search the web and academic papers for certain topics (although it could, of course). Rather, the application is free to focus on organizing research in a meaningful and useful way in response to what the user is doing, and they would just need to do so by designing for content types, not very specific data formats coming from very specific sources.

Utilities, too, would not necessarily need to be installed with a traditional application, or “installed” at all. Because they are face-less functions, they could be listed and installed separate from applications themselves, and Apple could integrate certain utilities into the operating system to provide system-wide functionality without any work on the user’s part. For example, utilities could be used in the same way that Apple currently integrates Fandango for movie times and Yelp for restaurant data and reviews. Siri would obviously be a beneficiary of this, but all applications could be smarter and more powerful as a result.

A Direction

Apple hasn’t built the Information Ecosystem in iOS 9. While iOS 9′s new search APIs allow developers to identify what type of content something is, we do not yet have more sophisticated types (like book notes and highlights), nor a system for declaring new types in a general way that all applications can see (like a “movie show times” type).2 Such a system will be integral to realizing what Victor describes, and is by no means a trivial problem. But the component parts are increasingly coming into existence. I don’t know if that is the direction Apple is heading, but it certainly *could be*, based on the last few years of iOS releases. What is clear, though, is Apple is intent on trying to infer more about what the user is doing and their intent, and provide useful features using it. iOS 7 began passively remembering frequently-visited locations and indicated how long it would take to get to, say, the user’s office in the morning. iOS 9 builds on that sort of concept by notifying the user when they need to leave for an appointment to get there on time, and by automatically starting a certain playlist the user likes when they get in the car. Small steps, but the direction of those steps is obvious.

I hope Apple is putting the blocks in place to build something like the Information Ecosystem. Building the Information Ecosystem would go a long way to expanding the power of computing by breaking applications–discrete and indivisible units of data and function–into their component parts, freeing that data to flow into other parts of the system and to capture user intent, and for the functionality to augment other areas in unexpected ways.

I believe that the Information Ecosystem ought to be the future of computing. I hope Apple is putting the blocks in place to build something like it.

  1. Although for the photos example, Apple hasn’t totally finished the job; while you can use photo editing extensions from within the Photos application, you can’t do so for photos added to emails or iMessages. []
  2. We can declare new types, and other applications can use them, but as far as I know each developer must be aware of those types separately, and build them into the application. This makes it difficult to use data types declared by third-parties. []
June 25th, 2015

Marcia Angell’s Mistaken View of Pharmaceutical Innovation

Alex Tabarrok responds to Marcia Angell’s claim on Econtalk that the pharmaceutical industry doesn’t drive much innovation:

Notice that Angell first claims the pharmaceutical companies do almost no innovation then, when presented with a figure of $70 billion spent on R&D, she switches to an entirely different and irrelevant claim, namely that spending on marketing is even larger. Apple spends more on marketing than on R&D but this doesn’t make Apple any less innovative. Angell’s idea of splitting up company spending into a “budget” is also deeply confused. The budget metaphor suggests firms choose among R&D, marketing, profits and manufacturing costs just like a household chooses between fine dining or cable TV. In fact, if the marketing budget were cut, revenues would fall. Marketing drives sales and (expected) sales drives R&D. Angell is like the financial expert who recommends that a family save money by selling its car forgetting that without a car it makes it much harder to get to work.

And by the way, if you have any interest in the economy or economics, or public policy, I would highly recommend listening to Econtalk. It’s consistently interesting and, in many cases, insightful. You could do a lot worse for things to listen to while commuting.

December 3rd, 2012

Amazon Reshapes Computing

Great piece about Quentin Hardy about how Amazon’s web services have changed computing:

EdX, a global online education program from the Massachusetts Institute of Technology and Harvard, had over 120,000 students taking a single class together on A.W.S. Over 185 United States government agencies run some part of their services on A.W.S. Millions of people in Africa shop for cars online, using cheap smartphones connected to A.W.S. servers located in California and Ireland.

“We are on a shift that is as momentous and as fundamental as the shift to the electrical grid,” said Andrew R. Jassy, the head of A.W.S. “It’s happening a lot faster than any of us thought.”

I think of this along the same lines as increasing automation in manufacturing. It’s eliminating a tremendous amount of jobs, but it’s also (1) allowing products and services to be created that never could have existed before, and (2) means that people who had to do low-meaning work like build and maintain servers for online services can now focus on making those services better or creating new ones entirely.

In the short term, it creates a tremendous amount of dislocation and economic difficulty for people who suddenly can’t be employed at wages they used to receive. In the long-term, though, we’re commoditizing and automating these kinds of repetitive work so people can be freed up to focus on creating. I believe we’re in the middle of a revolution as important as the movement from agriculture to manufacturing.

August 30th, 2012

Are we innovating outside of software and finance?

Dylan Matthews argues against Thiel’s thesis that innovation is only occurring in software and finance:

Generally, an industry is innovating if total factor productivity is going up, since that indicates that technology in that sector is improving.

But software and custom programming have innovated at roughly the same pace as manufacturing, trade and agriculture — the sectors Thiel alleges are banned from innovating. Information services actually wasn’t innovating until about 2000, when companies began to figure out how best to profit off this crazy Internet fad. Since then, it’s been innovating roughly as fast as manufacturing and other non-tech, non-finance sectors.

Good point, but of course this obscures something important. Productivity measures how good we are at converting labor and capital into goods and services, but it says nothing about how well we’re converting our labor and capital into new and better goods and services. Software and Internet services may not be improving productivity much, but I think there’s a very good argument that most of our gains in the last decade with software has been in making much better, much more useful devices, applications and services.

A programmer may only be marginally more productive in 2010 than they were in 2000, but they’re creating things like iOS, Yelp and Facebook. Whether it shows up in the statistics or not, there’s great gains there.

July 24th, 2012

Outlawed Everything to Do With Stuff

Peter Thiel offers his explanation for stagnation:

So, I think we’ve basically outlawed everything having to do with the world of stuff, and the only thing you’re allowed to do is in the world of bits. And that’s why we’ve had a lot of progress in computers and finance. Those were the two areas where there was enormous innovation in the last 40 years.  It looks like finance is in the process of getting outlawed. So, the only thing left at this point will be computers and if you’re a computer that’s good.

This is from a discussion (loosely used) between Thiel and Eric Schmidt at Fortune Brainstorm Tech earlier this month. Fascinating to read.

July 24th, 2012

Stories of Progress and Stagnation

Adam Gurri on stagnation:

Still, the productive capacity of these technologies was such that we coasted all the way into the 1970?s before the deadweight of government regulation and taxation slowed us down. Since then, our resources have shifted to developing technologies of resistance, which is why Brynjolfsson and McAfee see accelerating innovation. It is accelerating, but it’s accelerating in a very specific area because of how difficult it is to control that particular area.

We do see welfare gains from innovation in the technologies of resistance, but they are not nearly as big as we could get with the technologies of control, were they not so bogged down with regulation. Resources are spent on creating robustness against control that would have otherwise been spent on maximizing pure economic growth, in the absence of efficiency-reducing regulation.

Software and finance.

(Via Tyler Cowen.)

July 24th, 2012

America’s Economic Debate Time Warp

Jeffrey Sachs on our increasingly irrelevant, theatrical debate over the economy:

America’s economic debate is stuck in a time warp. On the one side, Mitt Romney’s conservative advisors defend tax cuts for the rich and spending cuts for the poor as if we hadn’t just lived through 30 years of failed Reaganomics. On the other side, Paul Krugman defends crude Keynesianism as if we’ve learned nothing in recent years about the severe limitations of short-term fiscal stimulus. Both sides merely raise their decibel levels at each announcement of bad news, as with last Friday’s data showing the failure of the US economy to generate sufficient new jobs in June.

Excellent article.

(Via Tyler Cowen.)

July 12th, 2012

Quantitative Easing

The Economist has an excellent look at quantitative easing:

THE conventional arms have run out. Central banks in America and Britain have long since pushed interest rates to close to zero. On July 5th the European Central Bank (ECB) joined them, slashing its rate on deposits to 0% and its main policy rate below 1%. A different sort of arsenal is now being deployed. Unconventional monetary policy covers everything from negative interest rates—now on offer in Denmark—to a change in inflation targets, but “quantitative easing” (QE), the creation of money to buy assets, has proved to be the most popular weapon of this crisis.

July 12th, 2012

Europe’s Dilemma is Financial, Not Fiscal

Arnold Kling:

Mauldin’s claim is that we are in what he calls the “endgame,” meaning that the Keynesian option of increasing government borrowing is no longer available to European countries. The only willing lenders are banks, which in turn need to be propped up, and ultimately they can only be propped up by printing money.

My take-away from Mauldin is that, contra the mainstream media narrative, the real dilemma in Europe is not fiscal–deciding whether to maintain government spending or not. The real dilemma is financial–whether to recognize losses and absorb defaults (by both governments and banks) or turn loose the monetary printing presses.

(Via Tyler Cowen.)

May 16th, 2012

What is austerity?

Tyler Cowen asks what the definition of “austerity” is, and sort of answers it:

I wonder if some Keynesians have in mind the baseline of “the expansionary policies which I think would be appropriate,” in which case doing less than the Keynesian optimum is always a form of austerity.

I have a more simple definition: it’s a word used to cast moral and emotional judgment on a set of policies without having to actually discuss what those policies are and whether they may be justified or have some basis.

May 14th, 2012

The Recovery

While the decrease in unemployment is encouraging, it isn’t reflected in GDP data. From the Economist:

This is hardly the unshackling of a Titan. As befits a recovery characterised by such fine gradations as the distinction between modest and moderate, there are a lot of caveats. For one, gross domestic product (GDP) does not look nearly as healthy as the jobs data imply. The drop in unemployment since August is on a scale that would normally be expected only if annualised growth were up to 5%, according to Ben Herzon of Macroeconomic Advisers, a consultancy. In fact GDP grew by only 3% (annualised) in the fourth quarter. It is tracking 1-2% in the current quarter. Most economists still expect growth this year of only about 2-2.5%. That is roughly the rate needed to keep unemployment stable; it is not enough to reduce it further.

We’re in much better shape than we have been since 2008, but the recovery is tenuous indeed.

March 16th, 2012

Stimulus Isn’t Quite What They Thought

Tyler Cowen:

Frankly, it is a bit of an embarrassment for many commentators that the (admittedly weak) recovery is coming right after the end of the fiscal stimulus. Of course this does not refute the standard account of fiscal policy, namely that it can work but is hard to pull off politically in a manner which contributes to sustainable growth. The correct answer for the timing of recovery, relative to the end of stimulus, is “confounding factors,” but that is exactly the point. The confounding factors are more important than we had thought, and the fiscal stimulus not quite as important as we had been led to believe. That is another point against the Old Keynesian view.

February 6th, 2012

Employment Rate Drops to 8.3 Percent

Good news: the unemployment rate dropped to 8.3 percent in January from 8.5 percent in December 2011, and 243,000 jobs were added. Most importantly, the drop in the unemployment rate was not due to people dropping out of the jobs market, as it has been in prior months—it was due to people actually finding jobs.

The economy does seem to be gaining some momentum, and while it’s still not strong (and we have a huge hole to climb out of), that’s absolutely good news. Hopefully Europe can remain stable enough to allow the economy to strengthen.

February 3rd, 2012

Tim Ricchuiti’s Reply

Tim Ricchuiti takes exception with my characterization of Greece, Italy and Spain’s problem as being too much debt:

Not quite. It’s not the heavy weight of debt (as Krugman has posted about at length the past week, most notably in this column) that’s causing European nations to struggle. What’s causing those nations to struggle is their inability (until recently) to finance that debt at any sort of tenable rate (7% or under). The reason those governments couldn’t finance their debt is that investors don’t want to purchase debt that might not be paid back. The reason the debt might not be paid back is that, unlike the case of the United States, Great Britain, Finland, and various developing nations, European countries like Spain, Italy, and yes, Greece, can’t print their own money (their own money being Euros). Therefore, they’re at risk of not being able to pay back their Euro-denominated debt. The United States, on the other hand, will never be unable to print dollars, and will always be able to pay back its dollar-denominated debt.

Greece and Italy used substantial amounts of debt to sustain their welfare states, and while their economies are doing reasonably well, there’s no problem—they can roll over their debt before it comes due at similar interest rates and everything works out fine. The problem they now face is their economies are not doing well at all, tax revenue has decreased, and thus their deficits have shot up as they continue to fund their expensive government programs.

As their deficits have continued to grow, and their debt has continued to grow as a percentage of GDP, investors became afraid that they would not be able to pay their debt. Which is why, as Tim says, investors would not purchase their new debt at a sustainable rate: because their debt burden is too high.

Tim argues that this is only a problem because Greece and Italy are on the euro—rather than their own currency—they cannot “print” more money, that is, devalue their currency so the past debts are worth less now than they were then and are thus more affordable to pay.1 Tim further argues that the U.S. will never have this problem, because since we do control our own currency, and our debt is denominated in our currency, we can inflate our currency to reduce the magnitude of our debts.

That’s perfectly accurate, but that does not happen in a vacuum. Everything else is not held equal. Investors will factor the risk of intentional inflation into their investments, and expect higher interest rates for future debts, too. Perhaps Greece and Italy (and the U.S., if we don’t right our ship in the interim) will leave the euro, re-denominate their debt, and pay their existing debt of a smaller magnitude. But what happens when Greece and Italy go back to those same investors, who just received substantially less than they were supposed to from their debt, and ask them to purchase their new debt? It’s going to be expensive, and unless Greece’s and Italy’s economies begin growing strongly, they’ll have the same problem all over again.

I never intended “…the heavy weight of their debt” to be a conclusive summation of Italy and Greece’s problems. Their problem is a confluence of a very poor economy, low tax revenues as a result, and debt used to finance an expensive welfare state. It’s but a piece. A very large, very heavy, piece.

  1. Let’s set aside normative criticisms of this, which are substantial—”inflating” your currency for the purpose of making past debts more affordable is essentially stealing from creditors, because in real terms, they receive less than they were supposed to. []
January 6th, 2012

The Missing Middle

Edward Luce:

In the words of David Autor, a leading labour economist at Harvard University, the labour force is suffering from a growing “missing middle”.

In short, the middle-skilled jobs that once formed the ballast of the world’s wealthiest middle class are disappearing. They are being supplanted by relatively low-skilled (and low-paid) jobs that cannot be replaced either by new technology or by offshoring – such as home nursing and landscape gardening. Jobs are also being created for the highly skilled, notably in science, engineering and management.

December 11th, 2011