Santa Clara University

STS Nexus

Technology Benefiting Humanity Through Economic Development

Alexander J. Field

Introduction: the Process

In this, the first year of the Tech Museum’s award program, the panel on economic development faced challenging questions not only in judging the thirty-three applications, but also in clarifying in practice what the intent of the awards was or should be. The announced criteria included “the use of technology to significantly improve the human condition in one of the five award areas” and “evidence that a serious problem or challenge is addressed by this use of technology,” but between these guidelines and the actual selection of finalists and a winner lay a considerable voyage of interpretation and evaluation.

Economists and economic historians often distinguish between invention and innovation. Invention refers to the process of discovery itself, innovation to the long path leading to the application of the technology. Clearly the intent here is to honor those who are actually using technology to make a difference. Still, if a technology is off-the-shelf and well understood, there will likely be many using it to make a difference. Should we honor just one? How distinctive must the use of established technology be to make it worthy of selection as a finalist or winner? Is it a matter of taking familiar components and combining them in new ways, as Steve Jobs and Steve Wozniak did with the Apple computer?

One test of the economic impact of an innovation is successful commercialization. We asked hypothetically whether we should honor Bill Gates for spearheading the development of Windows. After all, thanks in part to his efforts, roughly ninety percent of us use the same platform, which has led to tremendous economies in training and ease of communication. But if we answer that question in the negative, as we did, then we found ourselves asking, in regard to some of the applications we did receive: if the economic potential of this innovation is so great, why isn’t the applicant already as successful as Bill Gates? We were reminded in our deliberations of the old joke about the economist walking down the street with a graduate student. The graduate student sees $20 on the pavement, and points this out to her professor. The professor thinks about this for a moment and then replies, “No. Impossible. If there were $20 on the ground somebody else already would have picked it up.”

Markets for technology, of course, are never in the zero profit equilibrium referenced in standard economic theory. What we see at any moment of time is a snapshot of a dynamic trajectory, as markets move toward a constantly changing and elusive objective. At that never reached end state, there might well be an absence of $20 bills on the ground. But in the in-terim—and it is all interim—somebody has to do the arbitrage.

We knew we would steer clear of perpetual motion machines or their modern equivalent. For new innovations we wanted to see proof of concept. But we also recognized that the current state of technology is always in a process of becoming. Diffusion takes time. Potential users or investors in new technology must constantly screen the horizon, trying to separate the wheat of new useful designs from the chaff of perpetual motion machines, release 2.0. Acquiring and evaluating information is a costly process, and that is why ultimately successful innovations are often not so instantaneously.  In a larger sense, competitions such as this are part of that diffusion process.

We came back finally to an additional consideration. The program announcement emphasizes technology benefiting humanity, a reminder that the judging criteria were to be more inclusive than those provided by the market, where the votes are not necessarily one to each person. Thus, for an innovation to have significant commercialization potential was sufficient, but not necessary, for us to give it serious consideration. We were equally interested in innovative uses of technology, even those that might not be commercially lucrative, if they had the potential to transform the lives of hundreds or thousands of people, including those who might not have many economic votes. With these issues and thoughts in mind, the panel set to work evaluating the thirty-three applications received.

All of the judging panelists found consideration of these applications an interesting and often eye-opening experience. As might have been expected, several of the proposals involved software and telecommunications, two of the most technologically dynamic areas in recent years. But a surprising number involved electrification, particularly rural electrification in the developing world. For an economist or an economic historian familiar with the United States, rural electrification was, going into this process, a program that Franklin Roosevelt championed in the United States in the 1930s. It was sobering to realize how much mileage remains in diffusing technologies the developed world takes for granted. Similarly, a couple of the applications involved initiatives to diffuse telecommunication services to underserved populations in poor countries. Reading about villagers who live a two-hour ride away from the closest telephone is cause for reflection for those of us who routinely communicate via conventional phones, cell phones, fax, email, and pagers.

We also were impressed by the diversity of applications. Hardware initiatives ranged from the construction of artificial reefs to keyless entry systems to devices for measuring the heat content (not volume) of natural gas. Software applications promised to do everything from streamlining the delivery of local government and social services to predicting regional political conflict to delivering banking services to customers in the developing world to providing innovative enterprise software solutions. A number of the proposals we are not able to honor formally were extremely well presented and clearly have considerable economic merit and/or commercial potential. But ultimately we had to narrow the list down to five. For each of the finalists, the technology area and the innovations are briefly discussed below.

The Finalists
Fabio Luis de Oliveira Rosa, IDEAAS (Institute for the Development of Natural Energy and Sustainability)

A common problem in developing economies is the flood of people from the countryside to the cities, an influx that often overwhelms the infrastructure. de Oliveira Rosa and his group at IDEAAS believe that people are not so much pulled into the cities as pushed out of the countryside by conditions that become increasingly unbearable, in particular because of environmental degradation. The innovation was to adopt technologies for generating, distributing, and using electric power to low density rural conditions in a way that permits economically and environmentally beneficial changes in grasslands agriculture.

A key element is controlling the impact of grazing through the construction of fences, the cheapest of which are electrical. Because of low population density and relatively low per capita consumption, extending the electrical power grid using conventional technologies to many rural areas has not proved commercially viable. Thus 25 million Brazilians lack access to power.  Without power the use of electric fences to alter agricultural practice is ruled out, and alternative fence designs are prohibitively expensive.

The innovation of de Oliveira Rosa and his colleagues at IDEAAS was substituting steel and zinc for aluminum wires, using treated wood rather than cement poles, and economizing on poles by spacing them further apart, a change made possible by the shift in the type of wire used. Additional innovations included fence design, the use of smaller transformers, and the development of technical solutions to the high incidence of lightning strikes in grassland areas. Regions far from the grid use photovoltaic systems.

Inexpensive power allows inexpensive electric fencing, which in turn has permitted changes in grazing practices that are the key to addressing the varied economic and environmental and economic objectives of IDEAAS. These include increasing income and employment levels, reducing environmental degradation, and improving the quality of life for rural inhabitants. It has been the integration of insights from a number of different areas that has been key to their success.

For further information, see: David Bornstein, “Changing the World on a Shoestring.”The Atlantic Monthly (January 1998); available at: http:// www.theatlantic.com/issues/98jan/ashoka.htm.

MicroPlanet, Ltd.

Most electrical lighting and appliances in the United States are designed to work effectively at voltages ranging from 114 volts to 126 volts. Line voltage received by a particular household or business varies depending on distance from the central power station, as well as the nature of demands on the grid. Electrical power is ultimately what people pay for, and power consumption is related to voltage according to the following formula: voltage2/resistance = power. Consequently, if it is possible to reduce voltage towards the bottom end of the operating range of lighting and equipment, substantial savings in power consumption are possible.

This is particularly important when a grid becomes subject to peak loads, and in fact in such situations some utilities, such as those in California where voltage reduction is mandated by law, typically do reduce voltage to conserve power, leading to what are sometimes referred to as brownouts. The difficulty with this method is that voltage declines as one moves from a central power station to the end of a feeder line. The typical technique is to measure voltage at the end of the line and set it there at 114.5 volts, to insure that the customer furthest from the station gets the minimum acceptable voltage. But this means that all intermediately situated customers continue to receive power at higher voltages.

 MicroPlanet has patented a device that can regulate voltage at each individual residence or business at relatively low cost. Unlike traditional transformers, which step down voltage according to the ratio of turns of wire on the two parts of the transformer, this device works electronically, drawing a minimal amount of power for its own operation. Although the savings are relatively small for each individual household, they mount up for a system as a whole, perhaps obviating the need to build additional expensive and in some cases polluting power generating stations. The system can be installed selectively, requires no modification of the existing power system, and is compatible with those users who feed power to the grid as well as draw from it.

The device seems particularly promising should imbalances between the demand and supply of electric power continue, resulting in a consequently high price of electricity.  Given the costs of installation, a key question that arises is whether this equipment might be combined with a device for measuring consumption by time of day, as a prelude to fostering, through variable pricing, more efficient use of power during periods of high demand. For further information, see www.microplanetltd.com

PEOPLink

Artisan craftsmen in developing countries have access to Internet technologies, but are often subject to expensive connect charges. It is not easy for them to design a Web site, market their product to a broader audience, or track orders easily. PEOPLink has developed a hardware/software solution that allows artisans to construct Web sites and take orders for their product in a cost effective fashion that, from the standpoint of the customer, makes the buying experience indistinguishable from ordering from Land’s End.

PEOPLink provides groups with digital cameras so that images of products can be easily captured. Critical to the innovation is the fact that the catalog generating software can be quickly downloaded to a local machine and the data input, including input of digital images, can be done offline, then uploaded. Orders can then be taken using PEOPLink’s equipment and downloaded intermittently, thereby freeing the artisans from the need to maintain an online server twenty four hours a day. For further information see: www.PEOPLink.org  www.catgen.com

Scrub Oak Technologies, Inc.

The predominant portion of a nation’s capital stock consists of structures rather than equipment, and structures consume the lion’s share of a nation’s annual flows of gross and net saving. A significant portion of the structural capital stock is public infrastructure, and within this category, bridges. The amount of money required to build, strengthen, retrofit, and replace bridges is a large portion of most nations’ annual capital budgets. Scrub Oak Technologies is commercializing a technology designed to extend the life of bridges by 30 to 50 years by dampening the vibrations induced in them as trucks and other vehicles pass over. Using electronic sensors and a battery driven hydraulic piston, the device detects and measures vibrations and compensates for them, moderating the fluctuations that cause fatigue and ultimately failure.

The potential damage resulting from vibration is well known and not trivial. In extreme instances, for example, soldiers marching in cadence can induce harmonic vibrations that cause a bridge to collapse. In a manner somewhat analogous to the noise canceling technology used to make airline travel more bearable, this technology has the potential dramatically to reduce costs for maintaining a nation’s infrastructure, freeing saving flows that would otherwise go for this purpose for other uses. For further information, see:www.scruboaktechnologies.com, and Patten, W.N., C. Mo, J. Kuehn and J. Lee. 1998. “A Primer on Design of Semiactive Vibration Absorbers (SAVA),” ASCE Journal of Structural Engineering 124: 61-68.

The Beckman Institute for Advanced Science and Technology at the University of Illinois

All materials eventually succumb to fatigue. Beckman Institute has developed a new approach to dealing with this problem. Borrowing a metaphor from biology, they have developed plastics that, like human skin, are able to repair themselves without intervention. The trick is to distribute encapsulated drops of a healing agent in the plastic, and also seed the matrix with specks of a catalyst. Upon first manufacture, the two compounds have no contact with each other. But when micro-fractures develop, the tiny cracks in the material rupture the pods, releasing the healing agent that contacts the catalyst and begins a process of polymerization. Thus the crack is automatically sealed, restoring (according to tests reported in an article in Nature) up to 75 percent of the original load bearing capability of the material.

The technique is especially ingenious because the fractures tend to appear first along lines that lead to the healing pods, thus ensuring that the repair process begins rapidly. The approach should be particularly valuable when materials are not easily accessible, when they have for example been implanted in the human body, or sent into space.

For further information, see: S. R. White, N. R. Sottos, J. Moore, P. Geubelle, M. Kessler, E. Brown, S. Suresh, and S. Viswanathan. 2001. “Autonomic Healing of Polymer Composites.” Nature 409: 794- 797.

Conclusion

Readers of this article considering nominations or applications for future competitions should draw only general guidance from its description of the process, identification of finalists, and, ultimately, selection of a winner. Interpreting the criteria is and will be an ongoing process, subject to the evolution of the thinking of the panel as well as its composition. Many thanks to the nominators, applicants, and members of the judging panel, all of whom have contributed through their participation to a heightened sense of technology’s potential for benefiting humanity.

The Panel

Alexander J. Field, Chair, Michel and Mary Orradre Professor of Economics, Santa Clara University

William S. Carter, Vice President and CTO, Xilinx Inc.

Debra Engel, Director and Advisor to non-profit and corporate organizations

Laurence Iannaccone, Professor of Economics, Santa Clara University

Michael Kevane, Assistant Professor of Economics, Santa Clara University

Reiji Sano, Technology Advisor, Matsushita Electric Industrial Co., Japan

About the Author

Alexander Field

Alexander J. Field

Alexander J. Field is the Michel and Mary Orradre Professor of Economics at Santa Clara University. A member of Phi Beta Kappa and Beta Gamma Sigma, his research and teaching interests include American and European economic his­tory, macroeconomics, and the econom­ics of technological and institutional change. His administrative positions at Santa Clara University have included chair of the economics department, as­sociate dean and acting dean of the Busi­ness School, acting Academic Vice President, and member of the school’s Board of Trustees. Professor Field re­ceived his A.B. from Harvard University (1970), his M.Sc. from the London School of Economics (1971) and his Ph.D. from the University of California, Berkeley (1974). He taught previously at Stanford University.

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