May 4, 2016
My point is a simple one: Innovations are rarely life-changing events nowadays. Almost as important, at least from a macro-economic point of view, they are not likely to have nearly the same impact on productivity as the car had on the productivity of my parents, or the washing machine had on my grandmother’s ability to free up precious time. Productivity enhancements simply get more and more marginal, even if we think that all these new gadgets are wonderful. ... I am aware that there are people out there who would disagree with that statement; they don’t think the marginal impact of innovations is diminishing at all, but the macro-economic data suggests otherwise. ... at the most fundamental level, the change in economic output is equal to the sum of the change in the number of hours worked and the change in the output per hour. ... The workforce will fall nearly 1% per year in Japan and Korea between now and 2050; it will fall almost 0.5% per year in the Eurozone but only marginally in the UK, whereas it will rise almost 0.5% per year in the U.S. Significant regional differences in economic growth are therefore to be expected, but economic growth will be weak everywhere, at least when compared to what we got used to between the early 1980s and the Global Financial Crisis (‘GFC’). Those who argue that GDP growth will be disappointingly low for many years to come are on very solid ground. ... Some dynamics behave in the New Normal no different from the way they used to, but many don’t. In the following, I will review some of the outliers, and I will explain why (and how) that is an opportunity for investors, as long as the investment strategy is adjusted accordingly. Only the most naïve would expect an investment strategy that worked well in the great bull market to deliver similar, spectacular results in the years to come.
Drones—or remotely piloted aircraft (RPAs), as they are known in the military—have quickly become one of the Pentagon’s tools of choice for precision surveillance and attack, and Holloman is responsible for training new pilots and sensor operators in order to meet swelling demand. This year the base will produce 818 RPA operators, more than double the number of projected F-16 trainees. All told, over 20,000 military and civilian personnel are currently assigned to the RPA program, representing nearly 5% of the Air Force's total capability. ... Base and squadron commanders say the RPA program is on track to become one of the Air Force’s largest divisions. In fact, for the first time ever, drones were responsible for more than half of the weapons dropped by the U.S. on Afghanistan last year. New recruits and pilots transferring to the drone program from other aircraft all pass through Holloman, sooner or later. ... If the pilot of popular mythology is intuitive and independent, the pilot of the RPA era must be analytical and collaborative. He (or sometimes she) must be comfortable multitasking, effective at communicating within and across teams, and capable of continually learning on the job. He or she may have a family to support, and the desire to be present at Little League games and piano recitals. ... Indeed, the daily reality for RPA pilots, as well as sensors, stands in stark contrast to the Maverick of myth. ... The new Maverick represents the future of work in a fully global world dominated by complex machines, complex communications, and fluid, remote teams.
The L.L. Bean Maine Hunting Boot has gone on expeditions to both Poles, and been commissioned by the U.S. military to go to war as well. They've popped up on the feet of Babe Ruth and Derek Jeter, Jake Gyllenhaal, Chloë Sevigny, and recently, as shown on Twitter, the feet of a woman dancing on stage during a Bruce Springsteen concert. They seem to wander college quads and main streets with equal ubiquity. And when the boots return to where they were made in Brunswick, Maine, to be repaired, each is tagged with its home port for resending ... last year alone: Roughly half a million Bean Hunting Boots were manufactured and sold, marking a 300 percent increase from a decade ago. Even the guys over in corporate can't explain it. They see it less as a fluke than as a question of longevity: If you stick around long enough, you become the trend again. ... All you really need to know is that the waiting list on back orders—from the sorority sisters of the SEC to old-school hunters—recently ran as high as a hundred thousand. Inside the company, where the boot is simply known as the Boot, they can't crank out product fast enough. ... The Boot was famously birthed in 1912 by one L.L. Bean, an orphan who came to love the Maine outdoors, and who swore, after a particularly miserable hunting trip involving cold, wet feet, that he'd never repeat the experience.
As we go about our daily lives, we tend to assume that our perceptions — sights, sounds, textures, tastes — are an accurate portrayal of the real world. Sure, when we stop and think about it — or when we find ourselves fooled by a perceptual illusion — we realize with a jolt that what we perceive is never the world directly, but rather our brain’s best guess at what that world is like, a kind of internal simulation of an external reality. Still, we bank on the fact that our simulation is a reasonably decent one. If it wasn’t, wouldn’t evolution have weeded us out by now? The true reality might be forever beyond our reach, but surely our senses give us at least an inkling of what it’s really like. ... Not so, says Donald D. Hoffman, a professor of cognitive science at the University of California, Irvine. Hoffman has spent the past three decades studying perception, artificial intelligence, evolutionary game theory and the brain, and his conclusion is a dramatic one: The world presented to us by our perceptions is nothing like reality. What’s more, he says, we have evolution itself to thank for this magnificent illusion, as it maximizes evolutionary fitness by driving truth to extinction.
If Las Vegas is the most profligate place on earth, where chance is king and the future is routinely gambled away, it is also possibly the most frugal and forward-looking American city in one respect: water. And now it’s trying to leverage that reputation by turning itself into a hub for new and innovative water technology. ... In the thirstiest city in the nation’s driest state (it gets just 4 inches of rain a year), water is the last thing Las Vegas wants to gamble on. After 16 years of drought, water levels in nearby Lake Mead, the city’s primary water source, have dropped so precipitously that white rings have formed on its banks. Las Vegas, like a bankrupt gambler who suddenly realizes that things have to change, has responded with a host of water conservation measures. ... The water industry is by nature risk averse, since a mistake can have catastrophic health consequences (see Michigan; Flint). But with more pressure on water supplies around the United States and the world, innovation is increasingly important. Las Vegas’ focus on water—and the constant pressure on its supply—has driven years worth of public experimentation, establishing the area’s umbrella water utility, the Southern Nevada Water Authority, as a nationally recognized leader in water quality treatment. The utility boasts a state-of-the-art laboratory that produces ground-breaking research and a roster of scientists who routinely publish in major academic journals.