Disruption and Ingenuity

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Disruptive innovation is the core tenet of the startup scene everywhere, with young entrepreneurs proudly presenting what they view as an inefficiencies ripe for disruption, toiling away to find technological solutions to these problems. Whether it’s the retail industry with Amazon, or news outlet like The Huffington Post, the innovative products and services are being touted as the futuristic way of solving old problems. The established industries have either voted to join the revolution, going up in arms to protect their livelihoods, or simply resign to their fate and slowly die out.

I have recently stumbled upon this article from the Atlantic, discussing the automation and its effects both on the human workers and on the economy as a whole. It highlights how automation have reduced the bargaining power of manual labor, aggravating inequalities and reducing economic output as a whole. It is easy to view technological advances as reducing necessities for human labor, since the Industrial Revolution with the invention of steam engines up to the Information Era with the advent of personal computer, internet and now smartphones. What’s interesting, was that the article gave a quote from Farewell to Alms as a cautionary example :

There was a type of employee at the beginning of the Industrial Revolution whose job and livelihood largely vanished in the early twentieth century. This was the horse. The population of working horses actually peaked in England long after the Industrial Revolution, in 1901, when 3.25 million were at work. Though they had been replaced by rail for long-distance haulage and by steam engines for driving machinery, they still plowed fields, hauled wagons and carriages short distances, pulled boats on the canals, toiled in the pits, and carried armies into battle. But the arrival of the internal combustion engine in the late nineteenth century rapidly displaced these workers, so that by 1924 there were fewer than two million. There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed.

The disruptive technologies by the startup culture also has a strong efficiency streak: if the work can be done with less labour, less cost, less “pain”, it’s all for the better. But will these disruptions lead to lower employment as a whole, creating vast underclass while ever strengthening the winners? And as automation encroaches every part of our lives, will it lead to economic setbacks and even irrelevance for most of human labourers, the way horses vanished in 20th century?

Hmm.

I came up with an answer after a discussion about Japan with a friend of mine Mr. Jorge Blanco. You see, Japan is a highly mechanized country – with a culture that worships technology, probably hellbent towards mechanizing the world. And yet, in that very country, they actually have invented a business model called cuddle cafe. You know, where you actually pay to sleep in loving arms for an hour or more. Of which, aside from the Japanese idiosyncracies like Soapland and Pop Life Akihabara that we talked about that day, goes to show that human beings value human touch. Most importantly, though, I realized that

Human Beings are the Arbiters of Value

as economic value is the most basic human invention. Horses, on the other hand, don’t assign value to things other than green grass. It is humans who value them as transportation means, or as part of military muscle. The things that human beings value, on the other hand, evolve over time, thanks to human ingenuity. When manual labor went out of style, the health and fitness industry has grown to $19 billion in the US alone. Isn’t it ironic that ancient humans run across the field to chase their prey and nowadays we run only on treadmills and urban marathons?

Disruptive technology may cause job losses and obsolete trades, but in the long run, human ingenuity will ensure that new values will be created, and the economy will recover.

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Eureka

Winklevossgetty

A guy who makes a nice chair doesn’t owe money to everyone who has ever built a chair.

This is a line from The Social Network movie, Mark Zuckerberg’s retort on the allegation that he stole the idea for Facebook. 

The lawsuit by the Winklevoss brothers* against Mark is the subplot from the Social Network movie, providing a comical, if not contrasting background to the major internal struggles in the early days of Facebook. The scenes of the idea theft lawsuit are interwoven with the main narrative through flashbacks – summarily telling a story about a nimble, brilliant but rather nasty programmer who outrun the wealthy Goliathesque twin with an over-reliance on rules of conduct. This movie does not paint Mr. Zuckerberg in an especially unflattering light (some damning report about their conflict are actually missing from the movie), but it does raise the question on the uniqueness of a software, and how much can they borrow from one another’s playbook. This fits in nicely as a part of a broader debate on whether or not software should be patentable at all, but for the sake of brevity this essay will only discuss the arguments as spoken by the fictional Mark Zuckerberg in the movie.

The first argument by Mark was the line as quoted in the beginning of the movie: a guy who makes a nice chair does not owe money to everyone who has ever built a chair. However, using the same analogy, certain chair designs which fulfill several criteria may be protected by intellectual property law. A generic chair design is generally considered as public domain, and therefore cannot qualify for protection, therefore, it’s not incorrect to say that a chair designer is not liable to pay for the generic concept of chairs. But the intention of intellectual property law is to prevent a design from being ripped off by others – so the guy who made a nice chair which strongly resembles another nice chair is bound to be called a copycat or ripoff – and probably get embroiled in a lawsuit.

The second argument was the fictional Mark Zuckerberg’s quip that says if the Winklevosses have invented Facebook, they would have invented Facebook. Facebook might be different than the site that the Winklevosses had envisioned as HarvardConnection, but the former perceivably draws important aspects from the latter. Zuckerberg had collected photographs from all Harvard freshmen before on some prank project called FaceMash, but he had not thought about college freshmen directory being a social network before his encounter with the Winklevosses without which there’s small chance the idea will occur to him. Moreover, the early success of Facebook is attributed to its strengths within the college circles and exclusivity pertaining to university networks – something which was a central idea of HarvardConnection. Facebook’s inception is undoubtedly linked to that of the twin rower’s idea.

Certainly Zuckerberg had done things in a different way on the idea development department – he genuinely believed in the idea, and he worked really hard for it – even so far as to deliberately slowing down his rival project by paying lip service to their project. In the era of online competition where the product can be easily copied, he gave himself a critical advantage of brand recognition by being the pioneer. By contrast, the twins have had two programmers working on this idea for them before Zuckerberg was invited – neither have succeeded in creating a working solution. To the Winklevosses this was just another project to be managed; the only fault to their bureaucratic corporate instincts was the fact that they did not have a legal contract signed. Facebook has made several distinctive technology-oriented choices in its development that contributed heavily to their current success, namely opening its platform to third party developers and embracing the dynamic web interface. With his entrepreneurial spirit, technology savvy and some shrewd financial advice from Shawn Parker, Zuckerberg himself proved to be the most important factor to Facebook’s success. 

Creativity and ideas may provide the initial spark for a product, but its development and execution form a large part of what makes it successful – if not the largest part in software development contexts. Unlike a physical products whose qualities are visible, software embodies a service that can easily be offered by other similar software. Service, by its very definition, is uniquely tied to its subject and therefore does not require any legal protection from competitors. In the long run, software patents may become irrelevant if not hampering development by giving less incentive to innovate and improve development. 


(* their being a twin olympic rower is enough reason for me to pick their picture as the essay’s illustration 😛