The Technology Revolution
 Economic Predictions
 

Lecture Don Moskaluk

 

Topics

 

Laws of Technology Revolution

One of the most notable economic trends since World War II is the steady, steep decline in the price of computers. Certain laws of Technological Development have influenced this processes that have strongly influenced this price decline.   These laws are:

 

Using these law the economist Robert J. Gordon has estimated that the inflation-adjusted price of computing power dropped about 19.8 percent each year between 1951 and 1984 and that it has dropped by about 25 to 30 percent per year since then. This means that today the price of a unit of computing power is about 1/100,000 of its price in 1951.

 

Understanding the change

This 99.999 percent decline in the cost of computing has revolutionized information technology and, along with other technological improvements -- in fiber optics, for example -- has fundamentally altered the world's economies. Further improvements and cost declines in other technologies over the next 20 years will probably continue to cause radical changes in the way we live.

 

Take telecommunications. In 1956, notes Frances Cairncross in her book The Death of Distance, the first transatlantic telephone cable went online. It could carry only 89 simultaneous conversations between all of Europe and all of North America. Not surprisingly, the extreme scarcity of bandwidth led to high prices: in the '50s a three-minute call between New York and London cost about $60 in 1999 dollars. Then came fiber optics. The first transatlantic fiber-optic cable went online in 1988, with capacity for about 40,000 simultaneous conversations. The cables laid in the next few years will be able to carry more than 3 million simultaneous calls on a few strands of fiber no wider than a human hair. As a result, that same three-minute call between New York and London now costs about 50 cents -- a 99 percent reduction -- and you get a better connection to boot. Not for nothing does Ms. Cairncross call fiber-optic cables the "oil pipelines of the information economy." And now there's the Internet; competition from the Internet telephony service providers is reducing even further the price we pay for long-distance calls.

 

In his famous Essay on the Principle of Population, the economist Thomas Robert Malthus predicted in 1798 that geometric growth in population would bump up against increases in food production that were only arithmetic, causing mass starvation. Malthus was spectacularly wrong. Between 1800 and today, the world's population has sextupled, rising to just under 6 billion people. Yet during that same time, the price of wheat, adjusted for inflation, has fallen by over two-thirds. Prices of other foods and of minerals have also been on a long-term downward trend.

 

History of failed Predictions


What Malthus missed in his predictions was the knowledge revolution that was brewing even in his time. Increases in knowledge have allowed people to get more and more output -- measured by value, not weight -- from less and less raw material. When I was a teenager, macho guys would try to impress others by crushing aluminum soda cans with one hand. Now a four-year-old can do that. Why? Because manufacturers figured out how to reduce the amount of aluminum used in a can by about 80 percent. Pacific Bell once needed five tons of phone books to list the 90 million names and numbers of its customers. Now that same information can fit on one CD-ROM that costs less than $100 to produce. Ms. Cairncross points out that the weight of American industrial output is the same as it was a century ago, even though real gross domestic product is now 20 times higher. Because information is replacing materials, matter matters less and less.

 

In the '40s, the famed economic historian Joseph Schumpeter, in his classic History of Economic Thought, wrote of the pessimistic outlook of economists like Malthus: "The most interesting thing to remember is the complete lack of imagination which that vision reveals. Those writers lived at the threshold of the most spectacular developments ever witnessed. Vast possibilities matured into realities under their very eyes. Nevertheless, they saw nothing but cramped economies, struggling with ever-decreasing success for their daily bread. They were convinced that technological improvements and increase in capital would in the end fail to counteract the fateful law of decreasing returns."

 

Malthus's counterpart today is the Massachusetts Institute of Technology economist Paul Krugman. In his article in the July/August 1997 Harvard Business Review, Mr. Krugman wrote that "standard economic analysis suggests that we cannot look forward to growth at a rate of much more than 2 percent over the next few years. And if we -- or more precisely the Federal Reserve -- try to force faster growth by keeping interest rates low, the main result will merely be a return to the bad old days of serious inflation." Yet since 1994, a full two years after the U.S. economy pulled out of the mild 1990­1991 recession, real gross domestic product has grown annually by an average of 3.4 percent -- 70 percent higher than Mr. Krugman claimed was the economy's upper limit. And inflation has actually fallen, from 2.6 percent in 1994 to 1.6 percent in 1998.

 

In an article in the September 29, 1996, New York Times Magazine, citing the pressure of the growing world economy on scarce resources, Mr. Krugman predicted higher oil prices in the coming century. Granted, we'll have to wait a while to see whether that prediction comes true. So far, though, it's not happening. More than four years ago, David R. Henderson offered to bet Mr. Krugman $1,000 that the price of oil will have dropped by the year 2000 (see "Is There a New Digital Economy of Ideas?"). He never responded. When David R. Henderson made the offer, West Texas intermediate crude oil was selling for $25 a barrel; it is now hovering at around $17. Because of the IT revolution, pessimism makes for bad economics.

 

These days the Internet is doing for competition what trains, radio, and national magazines did earlier in this century. The Internet makes a Web-based retailer in New York compete with one in Dallas, or even in Bangkok. Markets that were previously regional are becoming national, sometimes international, and therefore more competitive.

 

Impact on the Common Man


We often hear that the information revolution, with its need for a highly skilled workforce, is making many types of jobs obsolete and leaving low-skilled workers behind. This is true: as the premium paid to people with knowledge skills increases, those without such job skills don't do as well. But many people jump to the false conclusion that the least skilled are worse off today than they once were. Economic well-being, over the centuries and over the last few decades, is actually improving for people in the lowest fifth of the U.S. income distribution, as well as for those in the top fifth.

 

In their recent book Myths of Rich and Poor, Michael Cox, the chief economist at the Federal Reserve Bank of Dallas, and Richard Alm, a reporter with the Dallas Morning News, drive home this point with a prodigious collection of data. Wages, they note, are a notoriously bad way to gauge people's well-being, for two reasons: First, the emphasis on wages leaves out non wage benefits, which is a growing part of employee compensation. Second, the Consumer Price Index -- which factors out inflation so that wages can be compared over time -- overstates inflation by not sufficiently adjusting for new products, quality improvements, and consumers' shift to shopping in high-volume, low-price retail outlets (the so-called Wal-Mart effect).

 

A good way to measure living standards is to see how people live. Using more than 30 measures, including what people have in their homes, the size of their homes, and what they do with their leisure time, Mr. Cox and Mr. Alm show that the vast majority of Americans are living better than they were 20 to 30 years ago. Moreover, they point out that in 1994 households officially defined as poor had more of the conveniences of modern life than the average household had in 1971. Surprising? The real surprise would be if this weren't true. With all the technological improvements in food production, clothing, transportation, and entertainment production and delivery, to name four major categories, the prices of those things have to fall. So even people who can't contribute to the knowledge economy as high-tech workers are gaining as consumers.

 

Social Consideration


Possibly as important as the impact of the IT revolution on our economic well-being is its impact on our freedom. In October 1997 column ("Trade Will Set You Free"), David R. Henderson  wrote that the worldwide growth of the Internet would hamper China's attempts to suppress information and that the increase in available information would help undercut the government's power. Sure enough, the February 7, 1998, issue of the Economist reported that the Chinese government expected the number of Internet users in China to rise from 250,000 in 1998 to 4 million by 2000. Although their leaders attempt to censor the Internet, they cannot censor it completely.

 

The Internet is freeing speech in other countries as well. According to the November 14 Economist, after Malaysia's prime minister, Mahathir Mohamad, imprisoned his free market oriented deputy, Anwar Ibrahim, a pro-Ibrahim Web site received more than 800,000 visits in a month -- many of them, presumably, from some of the 500,000 Internet users among Malaysia's 22 million people. The Web-based information competed with the pro-government spin of the country's major media. Even if repressive governments try to censor domestic Web sites, their citizens can still access servers in other countries, and at prices that keep getting lower. "Stopping such access," notes Ms. Cairncross in The Death of Distance, "would require cutting off international telephone service."

 

In the US, the ease of sending email through the Internet led more than 200,000 people to protest a proposed U.S. government regulation -- the so-called Know Your Customer regulation -- that would have destroyed much of the remaining financial privacy for Americans. The rule would have required banks to report to the government any unusual financial transactions. Had the outcry been limited to snail-mail or fax delivery rather than through mass emailing, the response from citizens would probably have been much weaker.

 

The information technology revolution, as well as technology generally, is creating a more prosperous and freer world, and it will continue to do so for at least the next 20 years.

 

Inflation and growth of world Economy

 

However, in 1997 Stephen B. Shepard wrote and article reviewing how fast the U.S. economy can grow without triggering inflation. He indicates that the revolution in information technology is affecting world markets.  

 

But who is benefiting from this revolution?  What is being affected?  Well this one is all around us--fax machines, cellular phones, personal computers, and modems, the Internet. But it's more than that. It's the digitization of all information--words, pictures, data, and so on. This digital technology is creating new companies and new industries before our eyes. Here's a statistic that should amaze you: In Silicon Valley alone, 11 new companies are created every week. Not all succeed, obviously. But enough do. Last year, on average, a Silicon Valley company went public every five days, minting dozens of new millionaires in the process.

 

All of this entrepreneurial energy is transforming Corporate America. You can argue about whether there is a New Economy, but there sure as hell is a new business cycle. Housing and autos used to drive the U.S. economy. Now, information technology accounts for a quarter to a third of economic growth. And remember, this is an industry that pays very good wages. And it is an industry; bless its heart, in which prices actually fall every year. How's that for non-inflationary growth? Furthermore, information technology affects every other industry. It boosts productivity, reduces costs, cuts inventories, and facilitates electronic commerce. It is, in short, a transcendent technology--like railroads in the 19th century and automobiles in the 20th.

 

These two broad trends, globalization and information technology, are undermining the old order, forcing business to restructure. If you want to compete in global markets or take advantage of rapid technological change, you have to move quickly--and that means getting rid of layers of management. Technology makes it possible: Put a PC on everyone's desk, network them together, and you don't need so many middle managers. The result: a radical restructuring that is making us more efficient.

 

These trends can combine in powerful ways to raise Americans' standard of living, create jobs, spur entrepreneurial effort--and do all this without boosting inflation. To the believers in the New Economy, we have here the magic bullet--a way to return to the high-growth, low-inflation conditions of the 1950s and 1960s. Forget 2% real growth. We're talking 3%, or even 4%. Forget double-digit inflation and the natural rate of unemployment. We're talking stable prices. Forget hopelessness in the developing world. We're talking about raising living standards in India and Brazil.

 

Reviewing the results

 

 How is this possible? First of all, globalization opens new markets for our goods and services. At the same time, global competition helps to keep at least some prices in check. As trade barriers fall, cheaper goods are available around the world. Cheaper labor, too, whether you're talking about software programmers in Russia or textile workers in China. The cheaper goods prompt people to buy more of them, and workers everywhere get the chance to share in economic growth. The result is increased global demand and a supply explosion that helps keep costs down for both labor and products. While this is happening, the information revolution is spurring capital spending and renewed efficiency.

 

O.K., it sounds great. But is it real? This is where things get tricky. A lot of the evidence for the New Economy is anecdotal. If you talk to business executives, they'll tell you they can't raise prices but that they don't have to. Why? Because they're getting productivity increases sufficient to pay wage increases and still boost profits.

 

Such talk is automatically suspect. After all, executives may know their own industries, but they usually lack a macroeconomic overview. Besides, many well-paid execs want eagerly to believe that their high-flying stock prices demonstrate their managerial genius in cutting costs and raising productivity.

But when executive after executive in industry after industry tells you the same thing in convincing detail, attention must be paid. This is the sort of thing that economists don't pick up quickly in their models or statistics--and often reject as mere anecdote. But such changes are precisely what journalists are often first to observe. As the late Washington Post publisher Phil Graham noted, journalism is often ''the first draft of history.''

 

Furthermore, there is at least some empirical evidence to back up the reportage. One clue is the coexistence of low unemployment and low inflation. Until a couple of years ago, most economists thought that if unemployment fell below 6%, inflation would start rising. They even had a graph to explain it: the so-called Phillips curve.

 

Well, here we are--well into the seventh year of an economic expansion, with unemployment under 5% and growth averaging 4% over the past 12 months. And guess what? Inflation isn't rising. It's falling. In the third quarter, GDP inflation was running at an annual rate of only 1.4%. Something is going on that traditional economists can't explain. So, defending their turf, they have become the leading skeptics.

 

In their view, if there really is a New Economy, it should be showing up in the overall productivity statistics. That is, if technology and globalization are boosting efficiency, productivity growth should be increasing at a faster rate than it was, say, 10 or 20 years ago. But according to government statistics, productivity has been increasing only about 1% a year for the past two decades. It was over 2% a year in the 1950s and 1960s. In other words, the stats show productivity getting worse, not better. Therefore, the non inflationary speed limit of the economy, skeptics say, is just 2% or so--1% from productivity growth, 1% from labor-force growth. The rest is wishful thinking. If you try to grow at 3% or 4% for more than a little while, traditionalists say, you'll end up with more inflation and an economic downturn.

 

The New Economy

 

The New Economy gurus counter by saying the statistics are simply not capturing what's going on. We know how to measure the output of widgets in the Old Economy. But we don't know how to measure output in a high-tech service economy. We don't know the value of a cellular phone or fax machine that costs less today than it did a year ago. In fact, these advances would actually show up as a decline in GDP unless the statistics are properly adjusted. But they're not. We do know inflation is overstated--by about one percentage point. That, plus other known statistical problems, suggests that both real GDP growth and the productivity rate are about one point higher than the official numbers tell us. In short, the New Economy is here right now, believers say.

 

And finally, they argue, we have the most powerful gauge of all telling us that something profound is going on: the stock market. Even with the recent correction, the market has more than quadrupled since the 1987 crash. In the past five years alone it has doubled. Sure, the market has boomed partly for demographic reasons--baby boomers and their 401(k) accounts--and partly because of the inflow of funds from other countries. But the market has boomed mainly because conditions have been perfect for corporate profits and thus for stocks--decent growth and low inflation. In its wisdom, the market got it right. Millions of decisions, by millions of people every day, provided the most accurate measure of what was happening in the underlying economy--even if there is a 10% or 20% correction.

 

The effect on Wages

 

The skeptics are quick with their rebuttals. Yes, there is a lot of money going into information technology. Yes, there's more globalization. Yes, the stock market has soared in the wake of rising profits. But none of this means there's a productivity revolution powering a New Economy. Rather, they say, all those profits are coming out of the hide of labor.

 

This is a hard argument to dismiss. It's true that wages have been stagnant for a long time. Only in the past year or two have they started increasing beyond the rate of inflation. If that continues, skeptics claim, say goodbye to rising profits, a rising stock market, and your so-called New Economy.

Furthermore, the skeptics say, we have been remarkably lucky. Oil prices have remained stable. The shift to managed care has restrained medical costs. The strong dollar has kept inflation down by reducing the prices of our imports. The end of the cold war has enabled us to slash military spending. A conservative tide has enabled us to balance the budget. And the U.S. has been remarkably free of external shocks.

 

So which is it? Are we just lucky to have a temporary confluence of events that have combined to produce decent growth and low inflation? Won't the Phillips curve reassert itself in higher unemployment or higher inflation?

 

Or is there a New Economy operating that allows faster growth, with all its benefits, without re-igniting inflation?

 

I vote for the New Economy, properly defined. Even though we haven't ended the business cycle, outlawed recession, or banished inflation, the business cycle really has changed. It is powered more these days by technology and trade. And this may well enable us to grow faster than before without renewed inflation. Perhaps the 4% rate of the past 12 months is too high--enough to justify interest-rate hikes by the Federal Reserve if things don't slow. But the 2%-to-2 1/2% speed limit is probably obsolete. In an era of stronger productivity growth, which may just now be starting to show up in statistics, the speed limit for the U.S. economy is probably 3% to 3 1/2% a year.

 

If that doesn't sound like much, remember, it is a 50% improvement over what the Old Economists deem possible. Think of it this way: If we had listened to the skeptics and held growth to a 2 1/2% rate over the past 18 months, we would have given up $150 billion in economic output. The unemployment rate would have been half a percentage point higher, putting 750,000 people out of work. Thanks to the magic of compounding over time, a speed limit one point higher is indeed something to crow about. And that's what the New Economy means--nothing more, nothing less.

 

The Past as a Guide for the Future

 

 “The full importance of an epoch-making idea is often not perceived in the generation in which it is made... A new discovery is seldom fully effective for practical purposes till many minor improvements and subsidiary discoveries have gathered themselves around it.” Thus Alfred Marshall, a British economist, writing in his “Principles of Economics” more than 100 years ago. Nobody today could doubt that the Internet is an epoch-making idea. And the minor improvements and subsidiary discoveries that will enhance its use are taking place at a speed unimaginable in Marshall’s day—partly because the process of invention has been refined and accelerated since then; partly because the Internet itself encourages improvements to spread instantly around the world; and partly because there is a lot of money available to back bets. Even so, it is still unclear what the greatest impact of the Internet will turn out to be.

 

New technologies have always changed the world in unforeseeable ways. Who could have imagined, when the first car rolled along a road, how that invention would alter shopping, urban design or courtship? When Faraday experimented with electricity, which foresaw the coming of the skyscraper, its lifts driven by electrical power, or the movement of women into the workplace, their domestic productivity transformed by the washing machine and vacuum cleaner? What connection did anyone make between the arrival of television and the future of political debate, or of branded goods? It is a cliché to say, “the Internet changes everything”: the challenge now is to guess what, how and how quickly.

Wiring the familiar

 

It may, as Marshall suggested, take a generation to see how the Internet reshapes society and human behaviour once it becomes a mature technology. But the reshaping of business is already happening, and much faster than is often appreciated (see our survey). Most popular guesses about the Internet’s commercial future have concentrated on fashionable new companies run by geek billionaires. It is dizzyingly rated firms such as Amazon, Yahoo! and eBay that have hogged the limelight. Yet far more significant is the effect the Internet will have on established companies. One forecast: although a few familiar names and even whole businesses may vanish forever, most large companies with established brands should survive and prosper from the spread of the Internet. Ten years hence, Amazon is unlikely to have wiped Barnes & Noble off the face of the earth, and E*Trade will probably not have killed off Merrill Lynch.

 

Indeed, it is the move of established firms on to the Internet that seems likely to drive this technology forward to maturity. “The storm that’s arriving,” said Lou Gerstner, chief executive of IBM, a few weeks ago, “is when the thousands and thousands of institutions that exist today seize the power of this global computing and communications infrastructure and use it to transform themselves. That’s the real revolution.” In the immediate future, that revolution will not be mainly about how business communicates with and sells to consumers. That is indeed changing, but it is likely to happen on a smaller scale, and more slowly, than the change in the ways that businesses communicate and trade with each other; and also than the changes within companies. Thus, business-to-consumer electronic commerce remains modest in scale—perhaps $8 billion last year in America, according to Forrester, an American consultancy, compared with $43 billion-odd of business-to-business e-commerce. In the near future, retail commerce may hit obstacles. It has grown faster inside the United States than outside it, even though the biggest impact of the new technology may well be felt when consumers learn to use the border-hopping properties of the Internet to shop all round the world.

 

In Europe, the Internet will help to turn the single currency into the foundation of a genuine single market for consumers. Yet Europeans are less prepared than Americans to buy electronically: they are less likely to have credit cards, have less experience of mail-order shopping, and are generally more conservative in their shopping habits. Even in America, reckons Forrester, business-to-consumer commerce in 2003 will be worth no more than $108 billion, less than Wal-Mart’s 1998 sales.

 

Business-to-business e-commerce, in contrast, might well top $1.3 trillion in 2003. For all sorts of reasons, businesses are more likely than consumers to buy and sell online. They are bettering equipped and connected, more used to trading at a distance, more cost-conscious. Besides, electronic corporate trading has a rapid multiplier effect. Once large firms move their purchasing online—as, say, GE has done with its Trading Process Network, on which suppliers can bid electronically for components contracts—business partners and suppliers will have to do the same. It will become progressively harder for firms that cannot or do not want to trade online to survive.

 Out sourcing

 

Nor will it be only trading between companies that are transformed. Companies themselves are likely to be reshaped. Managers will find that the Internet gives them lots of ways to do things better, faster and cheaper than now. Improvements in efficiency will come from switching paper-shuffling online, from reducing transaction costs, from making information more widely and quickly available, and from using it more effectively. The long-awaited computer-driven boost to productivity, not least in management, is about to arrive.

 

The boundaries of companies will also change. Once, a Hollywood studio employed everyone from Humphrey Bogart to the lighting technicians. Today, it is more like a finance-house-cum-marketing-department. Studios have retreated to their core roles: for a film, they now assemble the teams of self-employed people and small businesses that are today’s stars and technical support. The Internet will push other industries in the same direction. Companies will find it easier to outsource and to use communications to develop deeper relations with suppliers, distributors and many others who might once have been vertically integrated into the firm. Indeed, vertical integration is likely to become less attractive; instead, the diplomatic art of managing ad hoc partnerships and alliances will become a key executive skill.

Many companies may end up as loose agglomerations: networks of smaller firms or individuals bound together by corporate culture and communications. And not only companies; The public sector could follow suit, as governments find that provision of services becomes easier to monitor and measure—and so to outsource—in the new world of the Internet. Hollywood-style government: now there’s an epoch-making idea for our wired future.

 

 

 

10 Emerging Technologies That Will Change the World

 

February 2003 Massachusetts Institute of Technology identifies the developments that will dramatically affect the way we live and work—and profiles the leading innovators behind them.  The article reads as follows:

 

In labs around the world, researchers are busy creating technologies that will change the way we conduct business and live our lives. These are not the latest crop of gadgets and gizmos: they are completely new technologies that could soon transform computing, medicine, manufacturing, transportation, and our energy infrastructure. Nurturing the people and the culture needed to make the birth of such technological ideas possible is a messy endeavor, as MIT Media Lab cofounder Nicholas Negroponte explains’ in Creating a Culture of Ideas. But in this special section, Technology Review’s editors have identified 10 emerging technologies that we predict will have a tremendous influence in the near future. For each, we’ve chosen a researcher or research team whose work and vision is driving the field. The profiles, on the following pages, offer a sneak preview of the technology world in the years and decades to come.

 

Wireless Sensor Networks

Great Duck Island, a 90-hectare expanse of rock and grass off the coast of Maine, is home to one of the world’s largest breeding colonies of Leach’s storm petrels—and to one of the world’s most advanced experiments in wireless networking. Last summer, researchers bugged dozens of the petrels’ nesting burrows with small monitoring devices called motes. Each is about the size of its power source—a pair of AA batteries—and is equipped with a processor, a tiny amount of computer memory, and sensors that monitor light, humidity, pressure, and heat. There’s also a radio transceiver just powerful enough to broadcast snippets of data to nearby motes and pass on information received from other neighbors, bucket brigade–style.

 

This is more than the latest in avian intelligence gathering. The motes preview a future pervaded by networks of wireless battery-powered sensors that monitor our environment, our machines, and even us. It’s a future that David Culler, a computer scientist at the University of California, Berkeley, has been working toward for the last four years. “It’s one of the big opportunities” in information technology, says Culler. “Low-power wireless sensor networks are spearheading what the future of computing is going to look like.”

 

Culler is on partial leave from Berkeley to direct an Intel “lablet” that is perfecting the motes, as well as the hardware and software systems needed to clear the way for wireless networks made up of thousands or even millions of sensors. These networks will observe just about everything, including traffic, weather, seismic activity, the movements of troops on battlefields, and the stresses on buildings and bridges—all on a far finer scale than has been possible before.

 

Because such networks will be too distributed to have the sensors hard-wired into the electrical or communications grids, the lablet’s first challenge was to make its prototype motes communicate wirelessly with minimal battery power. “The devices have to organize themselves in a network by listening to one another and figuring out who can they hear...but it costs power to even listen,” says Culler. That meant finding a way to leave the motes’ radios off most of the time and still allow data to hop through the network, mote by mote, in much the same way that data on the Internet are broken into packets and routed from node to node.

 

Until Culler’s group attacked the problem, wireless networking had lacked an equivalent to the data-handling protocols that make the Internet work. The lablet’s solution: TinyOS, a compact operating system only a few kilobytes in size, that handles such administrative tasks as encoding data packets for relay and turning on radios only when they’re needed. The motes that run TinyOS should cost a few dollars apiece when mass produced and are being field-tested in several locations from Maine to California, where Berkeley seismologists are using them to monitor earthquakes.

 

Anyone is free to download and tinker with TinyOS, so researchers outside of Berkeley and Intel can test wireless sensor networks in a range of environments without having to reinvent the underlying technology. Culler’s motes have been “a tremendously enabling platform,” says Deborah Estrin, director of the Center for Embedded Networked Sensing at the University of California, Los Angeles. Estrin is rigging a nature reserve in the San Jacinto mountains with a dense array of wireless microclimate and imaging sensors.

 

Others are trying to make motes even smaller. A group led by Berkeley computer scientist Kristofer Pister is aiming for one cubic millimeter—the size of a few dust mites. At that scale, wireless sensors could permeate highway surfaces, building materials, fabrics, and perhaps even our bodies. The resulting data bonanza could vastly increase our understanding of our physical environment—and help us protect our own nests.

 

 

Others in
WIRELESS SENSOR NETWORKS

RESEARCHER                                PROJECT

Gaetano Borriello
U. Washington; Intel                         Small embedded computers and communications protocols

Deborah Estrin
U. California, Los Angeles                Networking, middleware, data handling, and hardware for distributed sensors and actuators

Michael Horton
Crossbow Technology                      Manufacture of sensors and motes

Kristofer Pister
U. California, Berkeley                     Millimeter-size sensing and communication devices

Grid Computing

 

In the 1980s “internetworking protocols” allowed us to link any two computers, and a vast network of networks called the Internet exploded around the globe. In the 1990s the “hypertext transfer protocol” allowed us to link any two documents, and a vast, online library-cum-shoppingmall called the World Wide Web exploded across the Internet. Now, fast emerging “grid protocols” might allow us to link almost anything else: databases, simulation and visualization tools, even the number-crunching power of the computers themselves. And we might soon find ourselves in the midst of the biggest explosion yet.

 

“We’re moving into a future in which the location of [computational] resources doesn’t really matter,” says Argonne National Laboratory’s Ian Foster. Foster and Carl Kesselman of the University of Southern California’s Information Sciences Institute pioneered this concept, which they call grid computing in analogy to the electric grid, and built a community to support it. Foster and Kesselman, along with Argonne’s Steven Tuecke, have led development of the Globus Toolkit, an open-source implementation of grid protocols that has become the de facto standard. Such protocols promise to give home and office machines the ability to reach into cyberspace, find resources wherever they may be, and assemble them on the fly into whatever applications are needed.

 

Imagine, says Kesselman, which you’re the head of an emergency response team that’s trying to deal with a major chemical spill. “You’ll probably want to know things like, what chemicals are involved? What’s the weather forecast, and how will that affect the pattern of dispersal? What’s the current traffic situation, and how will that affect the evacuation routes?” If you tried to find answers on today’s Internet, says Kesselman, you’d get bogged down in arcane log-in procedures and incompatible software. But with grid computing it would be easy: the grid protocols provide standard mechanisms for discovering, accessing, and invoking just about any online resource, simultaneously building in all the requisite safeguards for security and authentication.

 

Construction is under way on dozens of distributed grid computers around the world—virtually all of them employing Globus Toolkit. They’ll have unprecedented computing power and applications ranging from genetics to particle physics to earthquake engineering. The $88 million TeraGrid of the U.S. National Science Foundation will be one of the largest. When it’s completed later this year, the general-purpose, distributed supercomputer will be capable of some 21 trillion floating-point operations per second, making it one of the fastest computational systems on Earth. And grid computing is experiencing an upsurge of support from industry heavyweights such as IBM, Sun Microsystems, and Microsoft. IBM, which is a primary partner in the TeraGrid and several other grid projects, is beginning to market an enhanced commercial version of the Globus Toolkit.

 

Out of Foster and Kesselman’s work on protocols and standards, which began in 1995, “this entire grid movement emerged,” says Larry Smarr, director of the California Institute for Telecommunications and Information Technology. What’s more, Smarr and others say, Foster and Kesselman have been instrumental in building a community around grid computing and in advocating its integration with two related approaches: peer-to-peer computing, which brings to bear the power of idle desktop computers on big problems in the manner made famous by SETI@home, and Web services, in which access to far-flung computational resources is provided through enhancements to the Web’s hypertext protocol. By helping to merge these three powerful movements, Foster and Kesselman are bringing the grid revolution much closer to reality. And that could mean seamless and ubiquitous access to unfathomable computer power.

 

Others in
GRID COMPUTING

RESEARCHER                                                                    PROJECT

Andrew Chien Entropia                                                      Peer-to-Peer Working Group

Andrew Grimshaw  Avaki; U. Virginia                             Commercial grid software

Miron Livny U. Wisconsin, Madison              Open-source system to harness idle workstations

Steven Tuecke  Argonne National Laboratory               Globus Toolkit

Injectable Tissue Engineering

 

Every year, more than 700,000 patients in the United States undergo joint replacement surgery. The procedure—in which a knee or a hip is replaced with an artificial implant—is highly invasive, and many patients delay the surgery for as long as they can. Jennifer Elisseeff, a biomedical engineer at Johns Hopkins University, hopes to change that with a treatment that does away with surgery entirely: inject able tissue engineering. She and her colleagues have developed a way to inject joints with specially designed mixtures of polymers, cells, and growth stimulators that solidify and form healthy tissue. “We’re not just trying to improve the current therapy,” says Elisseeff. “We’re really trying to change it completely.”

 

Elisseeff is part of a growing movement that is pushing the bounds of tissue engineering—a field researchers have long hoped would produce lab-grown alternatives to transplanted organs and tissues. For the last three decades, researchers have focused on growing new tissues on polymer scaffolds in the lab. While this approach has had success producing small amounts of cartilage and skin, researchers have had difficulty keeping cells alive on larger scaffolds. And even if those problems could be worked out, surgeons would still have to implant the lab-grown tissues. Now, Elisseeff, as well as other academic and industry researchers, are turning to inject able systems that are less invasive and far cheaper. Many of the tissue-engineering applications to reach the market first could be delivered by syringe rather than implants, and Elisseeff is pushing to make this happen as soon as possible.

 

Elisseeff and her colleagues have used an inject able system to grow cartilage in mice. The researchers added cartilage cells to a light-sensitive liquid polymer and injected it under the skin on the backs of mice. They then shone ultraviolet light through the skin, causing the polymer to harden and encapsulate the cells. Over time, the cells multiplied and developed into cartilage. To test the feasibility of the technique for minimally invasive surgery, the researchers injected the liquid into the knee joints of cadavers. The surgeons used a fiber-optic tube to view the hardening process on a television monitor. “This has huge implications,” says James Wenz, an orthopedic surgeon at Johns Hopkins who is collaborating with Elisseeff.

 

While most research on inject able systems has focused on cartilage and bone, observers say this technology could be extended to tissues such as those of the liver and heart. The method could be used to replace diseased portions of an organ or to enhance its functioning, says Harvard University pediatric surgeon Anthony Atala. In the case of heart failure, instead of opening the chest and surgically implanting an engineered valve or muscle tissue, he says, simply injecting the right combination of cells and signals might do the trick.

 

For Elisseeff and the rest of the field, the next frontier lies in a powerful new tool: stem cells. Derived from sources like bone marrow and embryos, stem cells have the ability to differentiate into numerous types of cells. Elisseeff and her colleagues have exploited that ability to grow new cartilage and bone simultaneously—one of the trickiest feats in tissue engineering. They made layers of a polymer-and-stem-cell mixture, infusing each layer with specific chemical signals that triggered the cells to develop into either bone or cartilage. Such hybrid materials would simplify knee replacement surgeries, for instance, that require surgeons to replace the top of the shinbone and the cartilage above it.

 

Don’t expect tissue engineers to grow entire artificial organs anytime soon. Elisseeff, for one, is aiming for smaller advances that will make tissue engineering a reality within the decade. For the thousands of U.S. patients Others in
INJECTABLE TISSUE ENGINEERING

RESEARCHER                                PROJECT

Anthony Atala
Harvard Medical School                   Cartilage

Jim Burns
Genzyme                                          Cartilage

Antonios Mikos
Rice U.                                              Bone and cardiovascular tissue

David Mooney
U. Michigan            Bone and cartilage who need new joints every year, such small feats could be huge.


Nano Solar Cells

 

The sun may be the only energy source big enough to wean us off fossil fuels. But harnessing its energy depends on silicon wafers that must be produced by the same exacting process used to make computer chips. The expense of the silicon wafers raises solar-power costs to as much as 10 times the price of fossil fuel generation—keeping it an energy source best suited for satellites and other niche applications.

 

Paul Alivisatos, a chemist at the University of California, Berkeley, has a better idea: he aims to use nano technology to produce a photovoltaic material that can be spread like plastic wrap or paint. Not only could the nano solar cell be integrated with other building materials, it also offers the promise of cheap production costs that could finally make solar power a widely used electricity alternative.

 

Alivisatos’s approach begins with electrically conductive polymers. Other researchers have attempted to concoct solar cells from these plastic,but even the best of these devices aren’t nearly efficient enough at converting solar energy into electricity. To improve the efficiency, Alivisatos and his coworkers are adding a new ingredient to the polymer: nanorods, bar-shaped semi conducting inorganic crystals measuring just seven nanometers by 60 nanometers. The result is a cheap and flexible material that could provide the same kind of efficiency achieved with silicon solar cells. Indeed, Alivisatos hopes that within three years, Nanosys—a Palo Alto, CA, startup he cofounded—will roll out a nano rod solar cell that can produce energy with the efficiency of silicon-based systems.

 

The prototype solar cells he has made so far consist of sheets of a nanorod-polymer composite just 200 nanometers thick. Thin layers of an electrode sandwich the composite sheets. When sunlight hits the sheets, they absorb photons, exciting electrons in the polymer and the nanorods, which make up 90 percent of the composite. The result is a useful current that is carried away by the electrodes.

 

Early results have been encouraging. But several tricks now in the works could further boost performance. First, Alivisatos and his collaborators have switched to a new nanorod material, cadmium telluride, which absorbs more sunlight than cadmium selenide, the material they used initially. The scientists are also aligning the nanorods in branching assemblages that conduct electrons more efficiently than do randomly mixed nanorods. “It’s all a matter of processing,” Alivisatos explains, adding that he sees “no inherent reason” why the nano solar cells couldn’t eventually match the performance of top-end, expensive silicon solar cells.

 

The nanorod solar cells could be rolled out, ink-jet printed, or even painted onto surfaces, so “a billboard on a bus could be a solar collector,” says Nanosys’s director of business development, Stephen Empedocles. He predicts that cheaper materials could create a $10 billion annual market for solar cells, dwarfing the growing market for conventional silicon cells.

 

Alivisatos’s nano rods aren’t the only technology entrants chasing cheaper solar power. But whether or not his approach eventually revolutionizes solar power, he is bringing novel nano technology strategies to bear on the problem. And that alone could be a major contribution to the search for a better solar cell. “There will be other research groups with clever ideas and processes—maybe something we haven’t even thought of yet,” says Alivisatos. “New ideas and new materials have opened up a period of change. It’s a good idea to try many approaches and see what emerges.”

 

Thanks to nano technology, those new ideas and new materials could transform the solar cell market from a boutique source to the Wal-Mart of electricity production

 

Others in
NANO SOLAR CELLS

RESEARCHER                                                                     PROJECT

Richard Friend  U. Cambridge                                             Fullerene-polymer composite solar cells

Michael Grätzel  Swiss Federal Institute of Technology    Nanocrystalline dye-sensitized solar cells

Alan Heeger U. California,Santa Barbara                             Fullerene-polymer composite solar cells

N. Serdar Sariciftci  Johannes Kepler U.                            Polymer and fullerene-polymer composite solar cells

Mechatronics

 

To improve everything from fuel economy to performance, automotive researchers are turning to “mechatronics,” the integration of familiar mechanical systems with new electronic components and intelligent-software control. Take brakes. In the next five to 10 years, electromechanical actuators will replace hydraulic cylinders; wires will replace brake fluid lines; and software will mediate between the driver’s foot and the action that slows the car. And because lives will depend on such mechatronic systems, Rolf Isermann, an engineer at Darmstadt University of Technology in Darmstadt, Germany, is using software that can identify and correct for flaws in real time to make sure the technology functions impeccably. “There is a German word for it: gründlich,” he says. “It means you do it really right.”

 

In order to do mechatronic braking right, Isermann’s group is developing software that tracks data from three sensors: one detects the flow of electrical current to the brake actuator; a second tracks the actuator’s position; and the third measures its clamping force. Isermann’s software analyzes those numbers to detect faults—such as an increase in friction—and flashes a dashboard warning light, so the driver can get the car serviced before the fault leads to failure.

 

“Everybody initially was worried about the safety of electronic devices. I think people are now becoming aware they are safer than mechanical ones,” says Karl Hedrick, a mechanical engineer at the University of California, Berkeley. “A large part of the reason they are safer is you can build in fault diagnoses and fault tolerance. Isermann is certainly in the forefront of people developing technology to do this.”

 

Isermann is also working to make engines run cleaner. He is developing software that detects combustion misfires, which can damage catalytic converters and add to pollution. Because it’s not practical to have a sensor inside a combustion chamber, Isermann’s system relies on data from sensors that measure oxygen levels in exhaust and track the speed of the crankshaft (the mechanism that delivers the engine’s force to the wheels). Tiny fluctuations in crankshaft speed accompanied by changes in emissions reveal misfires. If a misfire is detected, the software can warn the driver or, in the future, might automatically fix the problem.

 

Partnerships with manufacturing companies—including DaimlerChrysler  and Continental Teves—merge the basic research from Isermann’s group with industry’s development of such technologies in actual cars. Isermann says that “80 to 90 percent of the innovations in the development of engines and cars these days are due to electronics and mechatronics.” Until recent years, mechatronic systems were found mainly in such big-ticket items as aircraft and industrial equipment or in small precision components for products such as cameras and photocopiers. But new applications in cars and trucks have helped prompt a surge in the number of groups working on mechatronics. The trend has been fueled by falling prices for microprocessors and sensors, more stringent vehicle-emissions regulations in Europe and California, and automakers’ wanting to enhance their vehicles with additional comfort and performance features.

 

Although the luxury market looms largest today—new high-end models from BMW contain more than 70 microprocessors that control more than 120 tiny motors—mechatronics will be moving into the wider car market within five years, says Lino Guzzella, codirector of the Institute of Measurement and Control at the Swiss Federal Institute of Technology. And with software like Isermann’s on board, the electronic guts of these new driving machines should be as sturdy and reliable as steel.

 

Others in
MECHATRONICS

RESEARCHER                                                                                     PROJECT

Lino Guzzella Swiss Federal Institute of Technology                        Engine modeling and control systems

Karl Hedrick and Masayoshi Tomizuka U. California, Berkeley    Control systems and theory

Uwe Kiencke  U. Karlsruhe                                                                  Digital signal processing

Philip Koopman Carnegie Mellon U.                                                   Fault tolerance in control software

Lars Nielsen Linköping U.                                                                   Engine control systems

 

Molecular Imaging

 

At Massachusetts General Hospital’s Center for Molecular Imaging Research—a bustling facility nestled next to an old Navy shipyard—Umar Mahmood uses a digital camera to peer through the skin of a living mouse into a growing tumor. Using fluorescent tags and calibrated filters, the radiologist actually sees the effects of the cancer on a molecular scale: destructive enzymes secreted by the tumor show up on Mahmood’s computer screen as splotches of red, yellow, and green. In the future, he says, such “molecular imaging” may lead to earlier detection of human disease, as well as more effective therapies.

 

Molecular imaging—shorthand for a number of techniques that let researchers watch genes, proteins, and other molecules at work in the body—has exploded, thanks to advances in cell biology, biochemical agents, and computer analysis. Research groups around the world are joining the effort to use magnetic, nuclear, and optical imaging techniques to study the molecular interactions that underlie biological processes. Unlike x-ray, ultrasound, and other conventional techniques that give doctors only such anatomical clues as the size of a tumor, molecular imaging could help track the underlying causes of disease. The appearance of an unusual protein in a cluster of cells, say, might signal the onset of cancer. Mahmood is helping to lead the effort to put the technology into medical practice.

 

It is challenging, though, to detect a particular molecule in the midst of cellular activity. When researchers inject a tag that binds to the molecule, they face the problem of distinguishing the bound tags from the extra, unbound tags. So Mahmood has worked with chemists to develop “smart probes” that change their brightness or their magnetic properties when they meet their target. “This is a big deal,” says David Piwnica-Worms, director of the Molecular Imaging Center at Washington University in St. Louis. The method, he explains, “allows you to see selected proteins and enzymes that you might miss with standard tracer techniques.”

 

In a series of groundbreaking experiments, Mahmood’s team treated cancerous mice with a drug meant to block the production of an enzyme that promotes tumor growth. The researchers then injected fluorescent probes designed to light up in the presence of that enzyme. Under an optical scanner, treated tumors showed up as less fluorescent than untreated tumors, demonstrating the potential of molecular imaging to monitor treatments in real time—rather than waiting months to see whether a tumor shrinks. “The big goal is to select the optimum therapy for a patient and then to check that, say, a drug is hitting a particular receptor,” says John Hoffman, director of the Molecular Imaging Program at the National Cancer Institute. What’s more, molecular imaging could be used to detect cancer signals that precede anatomical changes by months or years, eliminating the need for surgeons to cut out a piece of tissue to make a diagnosis. “At the end of the day, we may replace a number of biopsies with imaging,” Mahmood says.

 

In Mahmood’s lab, clinical trials are under way for magnetic resonance imaging of blood vessel growth—an early indicator of tumor growth and other changes. For more advanced techniques such as those used in the mouse cancer study, clinical trials are two years away. The big picture: 10 years down the road, molecular imaging may take the place of mammograms, biopsies, and other diagnostic techniques. Although it won’t replace conventional imaging entirely, says Mahmood, molecular imaging will have a profound effect both on basic medical research and on high-end patient care. Indeed, as his work next door to the shipyard makes clear, an important new field of biotechnology has set sail.

 

Others in
MOLECULAR IMAGING

RESEARCHER                                                                                     PROJECT

Ronald Blasberg  Memorial Sloan-Kettering Cancer Center               Imaging of gene expression

Harvey Herschman  U. California, Los Angeles                                  Tracking of gene therapy, gene activities

David Piwnica-Worms  Washington U.                                               Protein interactions, imaging tools

Patricia Price  U. Manchester                                                              Clinical oncology, imaging drug targets

Ralph Weissleder  Harvard Medical School                                        Cell tracking, molecular targets, drug discovery

 

Nano imprint Lithography

 

A world of Lilliputian sensors, transistors, and lasers is in development at nano technology labs worldwide. These devices point to a future of ultra fast and cheap electronics and communications. But making nano technology relevant beyond the lab is difficult because of the lack of suitable manufacturing techniques. The tools used to mass-produce silicon microchips are far too blunt for nano fabrication, and specialized lab methods are far too expensive and time-consuming to be practical. “Right now everybody is talking about nano technology, but the commercialization of nano technology critically depends upon our ability to manufacture,” says Princeton University electrical engineer Stephen Chou.

 

A mechanism just slightly more sophisticated than a printing press could be the answer, Chou believes. Simply by stamping a hard mold into a soft material, he can faithfully imprint features smaller than 10 nanometers across. Last summer, in a dramatic demonstration of the potential of the technique, Chou showed that he could make nano features directly in silicon and metal. By flashing the solid with a powerful laser, he melted the surface just long enough to press in the mold and imprint the desired features.

 

Although Chou was not the first researcher to employ the imprinting technique, which some call soft lithography, his demonstrations have set the bar for nano fabrication, says John Rogers, a chemist at Lucent Technologies’ Bell Labs. “The kind of revolution that he has achieved is quite remarkable in terms of speed, area of patterning, and the smallest-size features that are possible. It’s leading edge,” says Rogers. Ultimately, nano imprinting could become the method of choice for cheap and easy fabrication of nano features in such products as optical components for communications and gene chips for diagnostic screening. Indeed, NanoOpto, Chou’s startup in Somerset, NJ, is already shipping nano imprinted optical-networking components. And Chou has fashioned gene chips that rely on nano channels imprinted in glass to straighten flowing DNA molecules, thereby speeding genetic tests.

 

Chou is also working to show that nano imprinting can tackle lithography’s grand challenge: how to etch nano patterns into silicon for future generations of high-performance microchips. Chou says he can already squeeze at least 36 times as many transistors onto a silicon wafer as the most advanced commercial lithography tools. But to make complex chips, which have many layers, perfect alignment must be maintained through as many as 30 stamping steps. For Chou’s process, in which heat could distort the mold and the wafer, that means each round of heating and imprinting must be quick. With his recent laser-heating innovations, Chou has cut imprinting time from 10 seconds to less than a microsecond. As a result, he has demonstrated the ability to make basic multi layered chips, and he says complex processors and memory chips are next. Chou’s other startup, Nanonex in Princeton, NJ, is busy negotiating alliances with lithography tool manufacturers.

 

Chou’s results come at a time when the chip making industry has been spending billions of dollars developing exotic fabrication techniques that use everything from extreme ultraviolet light to electron beams. But, says Stanford University nano fabrication expert R. Fabian Pease, “If you look at what the extreme ultraviolet and the electron projection lithography techniques have actually accomplished, [imprint lithography], which has had a tiny fraction of the investment, is looking awfully good.” This is sweet vindication for Chou, who began working on nano fabrication in the 1980s, before most of his colleagues recognized that nano devices would be worth manufacturing. “Nobody questions the manufacturing ability of nano imprint anymore,” says Chou. “Suddenly the doubt is gone.”

 

Others in
NANOIMPRINT LITHOGRAPHY

 

RESEARCHER                                PROJECT

Yong Chen  Hewlett-Packard         High-density molecular electronic memory

John Rogers  Bell Labs                   Patterning polymer electronics

George Whitesides  Harvard U.     Contact printing on flexible substrates

Grant Willson  U. Texas;
Molecular Imprints                           High-density microchip fabrication

 

 

Software Assurance

 

Computers crash. That’s a fact of life. And when they do, it’s usually because of a software bug. Generally, the consequences are minimal—a muttered curse and a reboot. But when the software is running complex distributed systems such as those that support air traffic control or medical equipment, a bug can be very expensive, and even cost lives. To help avoid such disasters, Nancy Lynch and Stephen Garland are creating tools they hope will yield nearly error-free software.

 

Working together at MIT’s Laboratory for Computer Science, Lynch and Garland have developed a computer language and programming tools for making software development more rigorous, or as Garland puts it, to “make software engineering more like an engineering discipline.” Civil engineers, Lynch points out, build and test a model of a bridge before anyone constructs the bridge itself. Programmers, however, often start with a goal and, perhaps after some discussion, simply sit down to write the software code. Lynch and Garland’s tools allow programmers to model, test, and reason about software before they write it. It’s an approach that’s unique among efforts launched recently by the likes of Microsoft, IBM, and Sun Microsystems to improve software quality and even to simplify and improve the programming process itself. Like many of these other efforts, Lynch and Garland’s approach starts with a concept called abstraction. The idea is to begin with a high-level summary of the goals of the program and then write a series of progressively more specific statements that describe both steps the program can take to reach its goals and how it should perform those steps. For example, a high-level abstraction for an aircraft collision avoidance system might specify that corrective action take place whenever two planes are flying too close. A lower-level design might have the aircraft exchange messages to determine which should ascend and which should descend.

 

Lynch and Garland have taken the idea of abstraction further. A dozen years ago, Lynch developed a mathematical model that made it easier for programmers to tell if a set of abstractions would make a distributed system behave correctly. With this model, she and Garland created a computer language programmers can use to write “pseudo code” that describes what a program should do. With his students, Garland has also built tools to prove that lower levels of abstractions relate correctly to higher levels and to simulate a program’s behavior before it is translated into an actual programming language like Java. By directing programmers’ attention to many more possible bug-revealing circumstances than might be checked in typical software tests, the tools help assure that the software will always work properly. Once software has been thus tested, a human can easily translate the pseudo code into a standard programming language.

 

Not all computer scientists agree that it is possible to prove software error free. Still, says Shari Pfleeger, a computer scientist for Rand in Washington, DC, mathematical methods like Lynch and Garland’s have a place in software design. “Certainly using it for the most critical parts of a large system would be important, whether or not you believe you’re getting 100 percent of the problems out,” Pfleeger says.

 

While some groups have started working with Lynch and Garland’s software, the duo is pursuing a system for automatically generating Java programs from highly specified pseudo code. The aim, says Garland, is to “cut human interaction to near zero” and eliminate transcription errors. Collaborator Alex Shvartsman, a University of Connecticut computer scientist, says, “A tool like this will take us slowly but surely to a place where systems are much more dependable than they are today.” And whether we’re boarding planes or going to the hospital, we can all appreciate that goal.