September 25, 2007

False negatives in the selection of technology projects

I had developed this comment as part of a response to an article at amor mundi

I am in favor of using smaller amounts of money to try a lot of different approaches to solving societal problems or reaching societal goals. I am applying an extension of some of the arguments used in support of Open Innovation.

One of the proponents of open innovation tracked the projects that were chosen to have funding terminated by Xerox corporation. He found that those projects that went outside Xerox for funding and then formed companies over 20 years eventually exceeded the entire value of Xerox.

This was a demonstration of the opportunity cost of being unable to accomodate alternative business models and from making errors in judgement about what projects will or will not work. The cost of false negatives.

For society, large opportunity costs can translate into missed opportunity to save lives. We can look with hindsight on trillion dollar mistakes made by different countries in the past Those choices led to greater impoverishment and increased losses in life. China's grounding of the treasure fleets and destruction of the records of it in 1433. Collective "not invented here syndrome" that prevented China from successfully copying Japan's Meiji restoration, which was to adopt the industrial revolution from western countries. The choices in the United States and other countries to cut back on nuclear power development in the 1970's until recently instead of copying the move of France to 78% nuclear power has cost tens of thousands of lives every year from increased air pollution. I consider delays in pursuing space colonization, molecular nanotechnology and artificial general intelligence as being in the same category of historic mistake. I think these issues will be rectified but in hindsight the delays will be viewed as having been costly to society.

Could relabelling a MNT or AGI, bring success in mainstream funding?

Certain kinds of Artificial Intelligence (AI) actually have large (multi-billion $) mainstream success. Mainstream AI runs a lot of the financial trading in the world. However, many possibly high potential AI goals do not fit within the mainstream structures.

Mainstream nanotechnology also has large funding success, although most of that is relabelled from the chemical industry.

Tieing the two together
Sometimes superlative technology projects have to take root and thrive outside of the mainstream for a time.

We do not know when false negative (technological development choice) errors are being made. Therefore, we should strive to develop some efficient societal means to support potentially high value false negatives. If it is a mundane potential false negative then it would not be that bad a mistake and presumable mainstream progress could substitute for it.

Alternative technology and systems should be developed and piloted in small trials and then expanded. The systems should be adjusted to encourage and enable more experimentation so that better ways can be found and proven. I feel that the Google model of 80% of resources on the mainstream and 20% on nearly unlimited experimentation is something approaching the correct ratio. A larger share should be used on prizes based on actually developing various stretch goals, instead of constantly paying for institutions and buildings based on political considerations, reputation without any adjustment based on performance.

Proposals should not be penalized because the goals would target superlative performance.

Equality, democracy and technology and the connection to bad individual and societal choices.

I think that some levels of inequality are inevitable when freedom of choice is valued and exercised. If we want to let someone choose a lifestyle which ultimately makes them poorer then inequality would result when other people make choices that result in greater personal wealth.

If a person chooses never to learn how to become a moderately successful investor in any asset class, then they will end up poorer than those that do.

If a person chooses a career in a field which will not be as highly valued or even chooses no education then that is their choice.

China has had the economic burden of carrying the inefficient state sector. Other societies have the economic burden of carrying the segments of society who make what have proven to be economically bad life choices. Many of those choices could have been shown at the time that they were being made to be destined to almost certain to be bad. Choosing alcohol, tabocco and drug use. Choosing education in poorly compensated areas. Choosing inadequate education (like stopping before the end of high school). Choosing not to figure out aspects of how to become economically successful.

Societies makes what turn out to be bad technological funding choices. The NASA space program is often cited as technological funding. However, I would say it is predominantly driven as projects for political support with technology development or goals as a secondary or tertiary side effect and cover story.

There is a fraction of societal resources devoted to international and domestic charity, aid and support programs. A more rich and capable society will be able to continue those programs in an expanded way by just not lowering the fraction that is devoted to it. The China example shows that even though high growth increased inequality, more people were raised out of poverty by allowing high growth to occur. China also shows that it is not in the interest of those well off to not help those who were not able to benefit. The interest are prevention of societal unrest and the increasing in the numbers able to participate as consumers and as contributors to societal development.