4.22.2002
George Gilder talks about technologies in terms of abundances and scarcities.
At the public policy conference held mid-April by Seattle’s Discovery Institute and themed “Re-igniting the Tech Economy,” the man who wrote the law that “Bandwidth grows three times faster than computing power,” took time out to theorize the entrepreneur’s role in technology’s evolutionary process.
According to Gilder, a Discovery Institute Senior Fellow, the mission of the entrepreneur is to access those resources that are abundant and exploit them to address the critical bottlenecks and scarcities which obstruct economic progress. Those companies that effectively identify these “canonical abundances” gain market share against all others — companies, countries and individuals.
You can identify the “canonical abundance” of an era by the plummeting price of a major factor of production. During the industrial era it was power that plummeted in price from almost immeasurable cost per horsepower down to a few cents per kilowatt hour today, (maybe 2.4 cents at a nuclear plant, for example). Industries of that era who could exploit this abundance were victorious.
Next came the computer age where the plummeting price was that of transistors translated into MIPS and bits. The price of a transistor dropped from about $7 with support circuitry to what next year will equate to a billionth of a cent. Once your canonical abundance costs a billionth of a cent, that particular era is essentially over.
In software there has been an acute reversal of abundances and scarcities. Back when most of our software practices were being developed, it cost about $300 an hour to time-share a mainframe or minicomputer. And it cost about $300 a week to hire a software programmer. The rule in software was to save those expensive computer cycles.
But today for $300 you can buy a whole computer that is thousands of times more powerful than those that cost $300 an hour to time-share back in the 1960’s. It is the computer programmer that costs at least $300 an hour. The computer programmer’s time is the most precious resource while computer cycles are in overwhelming abundance.
In the new era of Web-based software services, a virtual renaissance for the software industry, it will be interesting to watch Seattle’s software expertise being capitalized, and not only by Microsoft. The new paradigm will require different kinds of software standards guided by the recognition that the computer programmers’ time, not the computers’ time, is the most valuable resource. All sorts of new programming models will emerge that allow the reuse of programming modules and the recycling of software code.
Seattle’s abundant knowledge and talent base ought to be a core driver in overcoming the scarcities that the recent market disruption has created. As cliche as it may sound, knowledge is indeed the power that is driving Seattle’s future.
The Discovery Institute’s Technology and Public Policy Center, headed by George Gilder, brings current regulatory challenges into focus. One current danger discussed at the symposium concerned laws like the Digital Millennium Copyright Act and the proposed security technology dictated by the Hollings Bill to stifle the birth of rich content applications. The government should continue to support research and development into broadband technology and applications. But to remain relevant to marketplaces changes, the Institutes position is clear. Standards development must be led by the industry, not be imposed by government.
