Wednesday, April 11, 2018

Sore Losers in a 30 Year Game

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On August 14, 2017, U.S. President Donald Trump released a document he neither read nor understood.  In the Presidential Memorandum for the United States Trade Representative, he recited the tired echoes of the 34th U.S. Secretary of Commerce Donald Louis Evans about Chinese “unfair” “violations” of intellectual property rights.  In the memorandum, he asserted that China “potentially threaten United States firms by undermining their ability to compete fairly in the global market.”  The saber-rattling of the past few weeks has spooked markets and generated yet another media-fueled volatility that is a tempest in a teapot.

In July 1987, the Office of Technology Assessment of the U.S. Congress issued a report Technology Transfer to China.  Director John H. Gibbons, acting on behalf of the House Committee on Energy and Commerce and the Senate Committee on Banking, Housing and Urban Affairs, sought to conduct an objective review of the role U.S. technology could play in the transformation and modernization of China’s economic and social order.  In its preamble, the justification for technology transfer to China was based on the assumption that either U.S. or Soviet technology was going to support broader political and strategic implications on the future of China and the U.S. needed to use its technology as an agency for closer ties.  From GE’s first contract with the Chinese government for locomotive sales in 1976 until the time of the report, the company itself saw that the transfer of technology served its economic interests in securing contracts that had been going to German, French, Romanian, and Soviet suppliers.  The same could be said about AMC (which ironically was sold to the French the same year as this report), IBM, Wang Computers, and other early market entrants into China.

The media and markets are missing what the Trump Administration wishes to deny.

     
  • Most intellectual property in the United States does NOT represent invention and is not associated with any product or service.  Most intellectual property is either subtle modifications of existing patents in attempt to “ever-green” market protections in violation of the law, outright plagiarism of competitors’ patents, or “defensive” patents procured for litigation avoidance or cross-licensing conflict resolution.
  • China bought most of the technology (and associated intellectual property) from the companies that are alleging “unfair” practices.  When part of a sale includes know-how and intellectual property, alleging it to be stolen is not fair – it’s pathetic.
  • The United States Patent and Trademark Office has had evidence for over a decade that over half of its patents, when challenged in court, are invalidated in part or in whole.  Yet no fundamental quality reform has been implemented.  As a result, when China independently reviews unenforceable intellectual property claims and elects to commercialize goods or services derived or enabled by disclosures in wrongfully granted patents, they’re not stealing.  They’re shrewd. 


It’s time for investors, markets, and the media to grow up.  We made a number of assumptions in the 70s and 80s about the China we wished to influence.  In many ways we succeeded.  We simply failed to appreciate that China wouldn’t stay “poor” and “incapable” of being a competitor.  That’s on us, not on them. 



Sunday, April 8, 2018

IDEAS or Fixed Delusions?

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It may be my recent move into the Kew Asylum atop a bluff on the Yarra River in Melbourne that triggered my renewed fascination psychology.  Built in the 1870s as the institution for the insane, the inebriate, and the idiot (wow, did they nail the branding back then or what?) I often muse about which category would most closely approximate the diagnosis that would have placed me in line for a room with the view that I now call home.  Over the last few weeks, I’ve been on a speaking tour of Africa and have encountered plenty of all three diagnoses – mostly in the form of political, academic and industrial self-proclaimed “leaders” and those who seek to reinforce said egos.  And while there are countless observations that compete for my fingers’ attention at this keyboard, the one that has immediacy is my abject abhorrence for the proliferation of “ideas”. 




Image may contain: one or more people, car and outdoorIn his 1829 writings, Analysis of the Phenomena of the Human Mind, James Mill gave us the linguistic gift of the term “ideation”.  In his use of the term and throughout the ensuing few decades, “idea” and “ideation” were used to describe the synthetic process of placing perceptions and sensations into a representational construct.  In the Journal of Psychological Medicine and Mental Pathology (Vol 9), Dr. J. Russell Reynolds’ 1855 essay on “The Diagnosis of Diseases of the Brain, Spinal Cord, Nerves and Their Appendages” clarifies the concept of ideation as the abstraction of reality which, in the extreme, leads to a perverted construction of “fixed delusions”.  As I listened to countless speakers recite the unconsidered doctrinal mantras of humans as “markets” or “consumers”, education as a means to the illusory ideal of employment, enterprise as an industrial manipulation of finite supply to extinguishing consumption for the purpose of rent extraction, and money as the single arbiter of social relevance, I was amused at the number of times I heard the term “idea” being used.  In the past three weeks, whenever I heard the word “idea” mentioned, I found it helpful to appeal to Dr. Reynolds’ notion of “fixed delusions”. 


Now, just in case you’ve been living under a rock, let me catch you up on the hottest new idea.  Nearly all human challenges can be solved with a blockchain cryptocurrency mobile telephony technology funded with an ICO deployed by Gen Xers who use their parent’s horded wealth or reputation to occupy shared workspaces in which echo chambers of ideas proliferate at the speed of caffeine.  The “developing world” will be “developed” when each wanna-be Silicon Valley incubator funds the sufficient number of developers coding in Python powering their lithium and cobalt off-grid mobile devices to more rapidly get ever decreasing tolls on ever diminishing-in-relevance urban transactions.  Oh, and if you’re at the cutting edge, you’ll have a solar panel on the roof to trickle charge your “solutions” to the world’s most pressing problems like ordering take-out food, booking your Uber, or purchasing your tickets to the next crypto conference in a hackathon warehouse.

I suggested to a room full of academics, policy-makers, and industrial engineers that the integration of lithium and cobalt batteries (for which said miners have life expectancies of 45 and 37 years, respectively) into a pacemaker to animate the heart of a 67-year-old white collar, obese, sedentary, steak gobbling retired executive may be more industrial disease management than healthcare.  I challenged them to identify a single component of “innovation” that they integrate into their devices that didn’t have – somewhere in its engineering history or supply chain – the unconsidered life or livelihood of person for whom their engineering can never be effective due to price, access, or entitlement.  The room was silent.  But when it came time to talk about “ideas” to build the economy, the room was alight.

“I think we need a professional association.”
“I think we need more funding.”
“I think we need a way to take our ideas to market.”
“We’ve got great ideas but don’t seem to convert them into business.”
“We’ve got to patent and protect our ideas.”

In the nearly 2 hours of “ideation”, not a single word was mentioned that I haven’t heard in EVERY U.N. Development, World Bank, World Economic Forum, YPO, WPO, business school, venture conference, entrepreneurial gathering for the past 25 years.  There were no “ideas” – merely the recitation of “fixed delusions”. 

With roughly 4.5 billion people on Earth who struggle to access potable water, adequate nutrition, commonly available sanitation and health technologies, how is it that we can continue to suggest that humanity’s future is somehow mediated on the proliferation of smartphones and digital devices?  Doesn’t anyone see that our lemming-like race to the sea of Apple, Samsung, Microsoft, Google and Huawei is lubricated by the genocide of extractive industries that continue to perpetuate a system in which:
  • Utility is defined by Edison and Westinghouse at 60Hz on 110, 220, or 240 volts of distributed power;
  • Communication is defined on narrow RF spectrum at 3G, 4G, or 5G;
  • Value is defined by fiat currency accumulation; and,
  • Education is defined by consensus facility with approved technology?

We’re using 140-year-old distributed power models to power 95-year-old radio technology to rent airwaves to disseminate propaganda for which we pay subscription access fees on the “free” internet.  And we congratulate ourselves on “development” with our modern “ideas”. 

James Mill and J. Russell Reynolds offered us a view of the cognitive process in which we observe the world around us and then abstract it into social forms which allow for the consensus acceptance or rejection of values and norms.  Upon the fabric of these normative perspectives, we embroider embellishments which attract more or less attention based on what we seek to highlight or obscure.  But what we don’t do is challenge any of the underlying compositions of the threads that form the warp, the weave, or the enhancement.  And by this I mean we don’t engage in:
  • ·        the explicit consideration of the essence of matter and energy;
  • ·        the unmasking of incentives behind the animating utility energizing the apparatus;
  • ·        the beneficiary of the consensus technology that dictates incumbent modalities; and,
  • ·        the introspection on what alternative mode or method might achieve equal or better results with less phase inefficiency from which rent can be extracted.

Until each of these four steps is routinized into our acceptance, adoption and integration of technology or behaviors, we haven’t innovated, we haven’t ideated.  We’ve merely reinforced the fixed delusions and, in so doing, cost someone somewhere their liberty and in many cases, their life.

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