When Sharoda Paul finished a postdoctoral fellowship last year at the Palo Alto Research Center, she did what most of her peers do — considered a job at a big Silicon Valley company, in her case, Google. But instead, Ms. Paul, a 31-year-old expert in social computing, went to work for General Electric.
Ms. Paul is one of more than 250 engineers recruited in the last year and a half to G.E.’s new software center here, in the East Bay of San Francisco. The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.
The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years. Information technology companies, too, are pursuing this emerging field. I.B.M. has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”
“here in the United States we don’t have problems. We have challenges. And every challenge is an opportunity.”
MUNICH — In 1987, a recent engineering graduate named Norbert Reithofer wrote a treatise that in retrospect reads like a manifesto for the German economy. The only way manufacturers in a high-cost country with few natural resources could survive, he argued, was by becoming the most flexible and efficient in the world.
Mr. Reithofer, now 56 and chief executive of the automaker BMW, has since put that principle to work with a vengeance, delivering consistent profit through two crises and becoming something of an icon of the revival of German industry.
Though continuing to build roughly 60 percent of its vehicles in high-cost Germany, BMW reported another rise in quarterly profits this month despite the worst downturn the European car industry has had in decades.
As the auto crisis shows signs of spreading to the premium market, though, Mr. Reithofer faces a test of his management skills that will have implications for the whole nation. Cars are Germany’s largest export product. But the losses that companies like Fiat, Ford and General Motors have been piling up in the region raise fundamental doubts about the future of automobile manufacturing in Western Europe.
How a Robot Will Steal Your Job
On a visit to Standard Motor Products’ fuel-injector assembly line in South Carolina, Atlantic writer Adam Davidson asked why a worker there, Maddie, was welding caps onto the injectors herself. Why not use a machine? That’s how a lot of the factory’s other tasks were performed. Maddie’s supervisor, Tony, had a bracing, direct answer: “Maddie is cheaper than a machine.”
Davidson’s complex, poignant story, Making It in America, revealed some chilling data about where American manufacturing is headed. It’s a matter of simple math. Maddie makes less in two years than a $100,000 machine would cost, so her job is safe—for now.
Elsewhere in America, robots are getting cheaper and more sophisticated, and they’re landing better, more advanced jobs. They are driving cars, writing newspaper articles, and filling prescriptions, displacing people with years of schooling and training under their belts. It sounds like a classic sci-fi story, but that disconcerting future isn’t in the future. It’s here today.
US energy is changing the world again
American energy independence, for decades the preserve of quixotic rhetoric, has become a serious prospect thanks to the resurgence in US oil and gas output. The International Energy Agency this week projected that the US could overtake Saudi Arabia as the world’s biggest oil producer by 2020. Whether that happens or not, what is unfolding in the US will continue to change its economy and affect both international relations and the global energy outlook.
US energy independence is still far off. But a rebalancing of world oil production has already begun. The US will rapidly become much less dependent on oil imports and will soon join the ranks of exporters of liquefied natural gas. This is a dramatic change from the outlook just four years ago, when Barack Obama won his first presidential election. In 2008, the expectation was for decline in US oil production and an increase in imports. This fed a pervasive sentiment that American oil’s days were coming to an end.
The Trials of Fast Growing Greek Yogurt? Did a Traditional Yogurt Player Plant the Story?
A few months ago, I let you in on a little secret about Greek yogurt [Wikipedia]. Not all of this extra-thick, protein-rich yogurt is made the old-style way, by straining liquid out of it it. Some companies are creating that rich taste by adding thickeners, such as powdered protein and starch.
Judging by comments that I heard, a lot of people feel rather passionately that the original, strained version is morally superior. But here’s another little secret: That traditional process for making Greek yogurt is also quite wasteful.
At the Fage factory in Johnstown, N.Y., for instance, it takes 4 pounds of milk to make 1 pound of authentic Greek yogurt. What happens to the other 3 pounds? It’s strained out of the yogurt as a thin liquid called whey, and getting rid of that whey is actually a headache. Greek yogurt factories have to pay people to take it off their hands.
This may sound confusing if you heard my story about cheese-making the other week. That story described whey as a valuable source of lactose and concentrated protein that ends up in other food products (including the thickened version of Greek yogurt, in fact).
Disclosure: A former Stonyfield customer, I now enjoy fast growing Chobani yogurt, particularly the pomegranate variety.
An Afternoon with the Eugene Kaspersky, the Antivirus King with the Chesire Cat Grin
Mr. Kaspersky was in New York for the launch of a new ad campaign with the somewhat corny title of “Driving Toward Better Online Security,” starring Formula One driver Fernando Alonso. (Both men were outfitted in the appropriate shade of Ferrari fire-engine red.)
In person, Mr. Kaspersky comes off as unexpectedly jolly, for an antivirus kingpin. That Wired profile had us expecting more of a bear-wrestling Hemingway character. And while he did devote a fair bit of time to waxing poetic about off-the-grid vacations in Russia’s remote, volcano-heavy Kamchatka peninsula, Mr. Kaspersky also peppered his points with laugh lines and pulled goofy faces. Even while admitting that yes, he’s a paranoid man, he still flashes a Chesire Cat grin.
Learning to Love Volatility
Several years before the financial crisis descended on us, I put forward the concept of “black swans”: large events that are both unexpected and highly consequential. We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google GOOG +2.00% .
In economic life and history more generally, just about everything of consequence comes from black swans; ordinary events have paltry effects in the long term. Still, through some mental bias, people think in hindsight that they “sort of” considered the possibility of such events; this gives them confidence in continuing to formulate predictions. But our tools for forecasting and risk measurement cannot begin to capture black swans. Indeed, our faith in these tools make it more likely that we will continue to take dangerous, uninformed risks.
Some made the mistake of thinking that I hoped to see us develop better methods for predicting black swans. Others asked if we should just give up and throw our hands in the air: If we could not measure the risks of potential blowups, what were we to do? The answer is simple: We should try to create institutions that won’t fall apart when we encounter black swans—or that might even gain from these unexpected events.
ReThinking Schoolinfosystem.org
I’ve published www.schoolinfosystem.org for 8+ years. It is (over)due for a revamp.
I’ve been thinking about the next thing, as it were. In this case, I would like to support:
a) River of news focused on education along with subsets: music, math,
art, science, reading, special and so on.
b) Features: I do interviews from time to time and periodically readers will send in their analysis of a particular topic.
c) Vertical topics such as individual schools/districts/colleges.
d) I publish a weekly enewsletter to about 2200 recipients.
I appreciate any ideas/recommendations you might have. I can be reached @jimzellmer and zellmer@gmail.com
An A-Z of business quotations: Wealth
THIS is the final instalment of our business quotations series. Perhaps fitting, then, that we end with wealth. The creation of wealth is, after all, the ultimate purpose of business.
“Believe not much them that seem to despise riches, for they despise them that despair of them.”
Francis Bacon, philosopher (1561–1626), Of Riches“If I was as rich as Rockefeller I’d be richer than Rockefeller, because I’d do a bit of window cleaning on the side.”
Ronnie Barker (pictured), comedian (1929–2005)“Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.”
The Bible, Ecclesiastes 5:10
Surveillance and Security Lessons From the Petraeus Scandal
When the CIA director cannot hide his activities online, what hope is there for the rest of us? In the unfolding sex scandal that has led to the resignation of David Petraeus, the FBI’s electronic surveillance and tracking of Petraeus and his mistress Paula Broadwell is more than a side show—it a key component of the story. More importantly, there are enough interesting tidbits (some of which change by the hour, as new details are leaked), to make this story an excellent lesson on the government’s surveillance powers—as well as a reminder of the need to reform those powers.