2012/03/13 Tim O’Reilly interviewed by Andrew McAfee, “Creating More Value Than You Capture”, SXSW Interactive

Digest of an interview of @timoreilly by @amcafee below, abstract from schedule.sxsw.com/2012/events/event_IAP100142:

Tim O'Reilly, SXSW 2012

One of the great failures of any company – for that matter of a capitalist economy – is ecosystem failure. Great companies build great ecosystems, one in which value is created not just for a single company or group of industry players, but for partners who didn’t even exist when the product or service was introduced. Many companies start out creating huge value. [….]  Since the cycle of capitalism depends on consumers as well as producers, and consumers are less and less able to find employment, at some point, we’re going to have to start thinking about how to put people to work, rather than how to put them out of work. At O’Reilly, we’ve always tried to live by the slogan “Create more value than you capture.” It’s a great way to build a sustainable business and a sustainable economy.

Andrew McAfee, SXSW 2012

Andrew McAfee, author of “Race Against the Machine,” will engage with Tim about these ideas, and about how rethinking the economy becomes even more urgent in the face of the trend he explores in his book, in which jobs are being outsourced not just to low-wage countries, but increasingly to machines.


[long introduction]

[… skipping ahead to focus on the ideas on policy  …]

[21:40 AM] A lot of what these people did was what you called the Clothesline Paradox.  Can you tell us more about that?

[21:42 TO] … It’s a paper I read in 1975 in Coevolution Quarterly …

[23:30 TO] … We kicked the can down the road …

[….]

[23:40 TO]  Back to this clothesline paradox.  Steve Baer had this insight.  He said, when somebody decides to hang their clothes on a clothesline, instead of putting them into a dryer, we don’t take that little energy savings, and move it from the fossil fuels column into the energy renewable column in our accounting.  It just disappears.

[24:05 AM] So it’s literally a shrinkage in the economy.

[24:07 TO] That’s right.

[24:08 AM] It looks small than it used to.

[24:09 TO] That’s right.  So you can look at a lot of issues — like in the SOPA — it’s a great metaphor for how we think about the Internet economy, when people entertain themselves by watching free Youtube videos, or interact with friends on Facebook, instead of watching Hollywood movies or buying copyrighted content.  The copyright industry says “look at the value that was destroyed, the free Internet is destroying value”.

[24:40 TO] But it’s quite clear.  It’s like the utilities people saying, those people hanging their clothes on clotheslines are destroying value.  They’re not using our product.

[24:52 AM] And by that definition, the open source software movement has shrunk the software industry.

[24:55 TO] Absolutely.

[24:56 AM] And therefore destroyed value.

[24:59 TO] Except, no.  That was exactly what Bob Young, who started Red Hat, said:  my goal is to shrink the share of the operating system market.  And you look at MySQL, shrunk the size of the database market.  But it didn’t really, of course, it actually grew it.

[25:17 TO] What we understand, now, is that when we now have these breakthroughs in generosity, you grow the market.  You grow value for society.

[25:28 AM] But you don’t grow the economy that we know how to measure, that we’re kind of pointing our measurement instruments at.

[25:35 TO] Often you grow it, we just don’t look at the instruments.

[…]  [The book, Race Against the Machine]

[28:35 TO] We really need to think about a new shape of the economy. …

[28:37 AM] And this is actually a great segue, because this is the next set of questions that I wanted to post to Tim.

[28:41 AM] So we have one set of challenges, which are pretty clear and substantial about measuring value in our economy.

[28:47 AM] We have another set of challenges around compensating people for contributing value in this economy.  Because, as Tim says, a lot of the people who are putting value out there, are doing it in ways that don’t immediately lead to recompense or compensation.

[29:02 AM] There’s another problem, which Eric and I dove in on, in the book, which is as technology just races ahead, and continues to demonstrate just weirdly powerful new capabilities and skills, the data are pretty clear that it’s leaving some people, and a larger number of people, behind, in our economy, over time.

[29:25 AM] And the super-shorthand way to talk about that is:  think about what happens when we hook up Siri to Watson, and let both of those technologies improve for a few years.  Cause if they follow the trajectory of Moore’s Law, and they’re going to follow them with at least that much acceleration, they’re going to be about 16 times better than they currently are, in 6 years.

[29:49 AM] Now I think that puts a lot of people who are doing what they are currently doing for a living right in the sights of the automation of the economy.

[… customer self-service …]

[… customers create jobs …]

[32:37 TO]  It’s a situation that’s been, first of all, framed by the race of our economy to take labour costs out.  What we’ve failed to do is to find a way to redistribute those gains.  We have them go disproportionately to a very small number of people.  I find it fairly inconscionable that companies are basically firing workers while paying hundreds of millions of dollars to a few top executives, because “we can’t afford …”  That’s just bullshit.

[33:09 TO] The fact is, we’ve made choices about who we’re going to reward, and they’re ultimately self-destructive choices for our society.

[33:17 AM Okay.

[33:18 TO] But now what we have is the race of technology, with more and more jobs being taken over by machines,

[33:35 AM] You and I had a fascinating conversation, a while back, because I was laying out the things I was saying.  And I found it really easy to find examples of encroaching automation in jobs under threat.  Tim did the best job of pointing me toward examples of job creation, not just among the data scientists and web designers of the world, which I was anticipating, but you’ve given great examples of people putting labour back into our economy.

[33:59 TO] Let me put it this way.  I’m looking for those examples, and I’m starting to find them.

[34:03 TO] The way my mind works, is I kind of have some notion, and then I start looking for some data to support that notion, or to disprove it.  In this case, the notion I came to was, oh, given what I said about if you don’t have any consumers, you don’t have any businesses, we’re going to have to put labour back into the economy.

[34:22 TO] We have to find a way to pay people. Or people will have to find a way to pay each other. Or we’ll have a very new shape to the economy.  That’s really what’s the heart of what I’m trying to talk about, here.

[… some green shoots, use of computers to add value to low-skilled jobs that we’ve been trying to ring out of society …]

[… The Apple Store …]

[… Walgreen … home health care IT people …]

[… Kickstarter, Etsy … examples of putting labour cost back into the economy]

[38:13 TO] Somebody basically took a commodity product, and lovingly added value to it, and then resold it.  I thought, that’s kind of an interesting data point.  I think we’ll be doing more of that added value for each other, in this future economy.

[ … Youtube economy, where artists are starting to make a living, based on an advertising economy]

[… P2P sharing economy … AirBnB …]

[39:25 TO] It seems to me that, when you see a sharing economy, it eventually does get monetized.  The early web, everybody was just equal, we were just doing things each other.  Then, this advertising economy grew up around it.

[39:46 TO] There’s still a huge distance ahead for the advertising economy.  The Internet average share of advertising is still a fraction of television, even though there’s more hours now spent on the Internet, entertaining each other, than there are spent on television.  So there’s a lot of money to come from industry into another.

[40:05 TO] So that kind of leads me to a policy recommendation.  Policy makers need to focus on protecting the future from the past, rather than protecting the past from the future.

[40:18 TO] Most of the policy that we see is oriented towards protecting incumbents, because of course they have the loudest voices …

[40:28 AM] … and the biggest chequebooks.

[40:30 TO] I had this interesting conversation with Nancy Pelosi about SOPA and PIPA.  It was eye-opening.  I was just explaining my experience as a publisher.  We’ve been publishing books DRM-free, and yes, some people steal them, particularly in countries where they weren’t going to pay us anyway.

[…]

[40:56 TO] It does not keep me up at night, because, in fact, our business is growing.  We were selling in markets we could never have sold in, before.  It’s a rapidly growing part of my business.

[41:08 TO] I’m trying to explain, and she says, we have to take into account the concerns of Hollywood.  I said, no you don’t.  You have to find the right answer for society.  Your job is to work for all of us.  It’s not to work for this interest group versus that interest group.

[… open for questions from the audience …]

[44:24 audience]  Do you have an axiom that you would consider for a startup founder who’s trying to make decision between where to create value for the investors, where to cleave the line and say that this should be something that goes into the ecosystem?  How you make that judgement call?

[44:47 TO] I think it should be scientific.  I remember having this argument with Richard Stallman about open source.  I said the difference between free software and open source is that open source should be science, not religion.  In other words, it should work.  The decision you’re making, if you’re looking over time, you should believe that it’s better for the investor, as well as for society.  Because, in fact, short-term thinking is not best for a long-term investor.  So that means, of course, that you also have to find an investor who is thinking in the long term.  Of course, great investors do think longer term.  They’re not looking for the quick exit.  They’re looking to build the great company that survives and grows and serves customers over the long term.  If you’re doing it right, you should, in fact, be looking at building a vibrant ecosystem around your company that creates value for a lot of other people.  You’ll find that’s actually better for your company.  So look fo rthat win-win .   […]  Although these days, win-win seems to mean we win twice for our team.

[more questions, audio ends at 1h01m01s

Audio replay available at “Create More Value Than You Capture” | SXSW Interactive | 2012 at  http://schedule.sxsw.com/2012/events/event_IAP100142

[download audio]

Subsequent blog post, Andrew McAfee, “Tim O’Reilly on Putting Labor Back Into the Economy” | March 2012 at http://andrewmcafee.org/2012/03/mcafee-sxsw-tim-oreilly-labor-automation-race-against-the-machine/

About

David Ing blogs at coevolving.com , photoblogs at daviding.com , and microblogs at http://ingbrief.wordpress.com . A profile appears at , and an independent description is on .

Tagged with: , , , , ,
Posted in Talk Audio Download, Talk Audio Streaming

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Translate
Beyond this media queue
This content is syndicated to Twitter. For professional perspectives, look to Coevolving Innovations; for a photoblog, look to Reflections, Distractions.
  • How do Systems Changes become natural practice?
    The fourth of four lectures for the Systemic Design course at OCADU SFI focused on (a) situated practice + history-making (reframing disclosing new worlds), and on (b) commitments and the language-action perspective (applying conversations for action).
  • Whom, when + where do Systems Changes situate?
    The third of four lectures for the Systemic Design course at OCADU covered value(s), the science of service systems, and the socio-technical systems perspective.
  • Why (Intervene in) Systems Changes?
    A lecture on ecological systems for the OCADU SFI master's program opened up opportunities to discuss wei and wuwei, and get beyond an anthropocentric perspective the Canadian beaver in its habitat.
  • Are Systems Changes Different from System + Change?
    The second session of the Systemic Design course in the OCADU SFI master's program was an opportunity to share the current state of knowledge on Systems Change, in light of recent interest in Systems Change and Theory of Change.
  • Ecology and Economy: Systems Changes Ahead?
    A workshop with David L. Hawk at the CANSEE meeting in May 2019 led to an invitation to publish an article, "Ecology and Economy: Systems Changes Ahead?" in WEI Magazine.
  • Open Learning Commons, with the Digital Life Collective
    Questions about governance of online social communities led to launching on the Open Learning Commons and the Digital Life Collective, while issues of content moderation on a Facebook Group has reignited.
  • 2020/02 Moments February 2020
    Winter has discouraged enjoying the outside, so more occasions for friend and family inside.
  • 2020/01 Moments January 2020
    Back to school, teaching and learning at 2 universities.
  • 2019/12 Moments December 2019
    First half of December in finishing up course assignments and preparing for exams; second half on 11-day family vacation in Mexico City.
  • 2019/11 Moments November 2019
    Wrapped up paperwork on closing out family buildings in Gravenhurst, returned to classes and technical conferences in usual pattern of learning.
  • 2019/10 Moments October 2019
    Tightly scheduled weekdays at Ryerson Chang School, weekends in Gravenhurst clearing out family building as we're leaving the town permanently.
  • 2019/09 Moments September 2019
    Full month, winding down family business in Gravenhurst, starting Ryerson Chang certificate program in Big Data, with scheduled dinners with family and friends.
  • Plans as resources for action (Suchman, 1988)
    Two ways of thinking about practice put (i) “plans as determinants of action”, and (ii) “plans as resources for action”. The latter has become a convention, particularly through research into Human Computer Interaction (HCI) and Computer Supported Collaborative Work (CSCW). While the more durable explanation appears the Suchman (1987) book (specifically sect […]
  • The best time to plant a tree was twenty years ago
    Does “the best time to plant a tree was twenty years ago and the second best time is now” date back further than 1988? It is time to look long and hard at the value of the urban forest and create the broad-based efforts — in research, funding and citizen participation — needed to improve […]
  • 2019/11/05 13:15 “Barriers to Data Science Adoption: Why Existing Frameworks Aren’t Working”, Workshop at CASCON-Evoke, Markham, Ontario
    Workshop led by @RohanAlexander and @prof_lyons at #CASCONxEvoke on "Barriers to Data Science Adoption: Why Existing Frameworks Aren't Working". For discussion purposes the challenges are grouped within three themes: regulatory; investment; and workforce.
  • Own opinion, but not facts
    “You are entitled to your own opinions, but not to your own facts” by #DanielPatrickMoynihan is predated on @Freakonomics by #BernardMBaruch 1950 “Every man has a right to his own opinion, but no man has a right to be wrong in his facts”. Source: “There Are Opinions, And Then There Are Facts” | Fred Shapiro […]
  • R programming is from S, influenced by APL
    History of data science tools has evolved to #rstats of the 1990s, from the S-Language at Bell Labs in the 1970s, and the
  • Bullshit, Politics, and the Democratic Power of Satire | Paul Babbitt | 2013
    Satire can be an antidote, says Prof. #PaulBabbitt @muleriders , to #bullshit (c.f. rhetoric; hypocrisy; crocodile tears; propaganda; intellectual dishonesty; politeness, etiquette and civility; commonsense and conventional wisdom; symbolic votes; platitudes and valence issues).
Contact
I welcome your e-mail. If you don't have my address, here's a contact page.
%d bloggers like this: