Talk:Lecture 2

Lecture 2 Discussion

Welcome to the Discussion Page for Lecture 2. Please use the + sign in the top of the screen to add comments to the page.

Open Source Impact On Research

I was wondering what sort of impact the open source movement had on research and development in the IT world? It seems to me that the IT culture of sharing tools and resources in an "open" environment may be a factor of increasing technology advances even with little money spent on Research and Development. I would think this would not be the case with other industries; perhaps because other industries can’t produce these tools at “zero cost”. I understand that many "open source" projects have been funded by industry, and university alike, but it is also my perception, maybe it is a misperception that a large number of private individuals contribute to the open source community. It would be interesting to see information to prove or disprove this theory, and to see in the future if the open source culture will continue to grow or if it will give way to perhaps a more standard economic model. --DiggerCPRD

Are you considering pieces of open-source software to be "technology advances" themselves, or are you focusing on how open-source tools and libraries make it easier to write new software? Are you using "technology advance" in a narrow sense that includes only clever things like rsync and bayesian spam filtering, or does any improvement over competing software constitute a technology advance? I believe that proprietary, hidden-source software is a more recent phenomenon than open-source software. By the way, I am one of those "private individuals" who contributes to open-source software (specifically, Mozilla and Firefox). --Jesse Ruderman

SMM: We'll try to get to this stuff on Open Source night. For now, it's interesting to note that many goods -- like drugs -- have substantial information content, so the OS game ought to work almost as well in other places. To some extent it does, only we fail to notice. See the Eric Von Hippel reading. But it's also worth thinking about how to stretch the model.

Why individuals participate is a great empirical question, you might want to think about this as a paper topic.

It's true that open software is older, but that was natural since it grew up in a government labs/university world.

Finally, I'm not sure about the distinction you're making on technology. There's an interesting question whether OS needs some buggy program as a nucleus to get started with. In that sense, it might be less fundamental. For most purposes, I'd say "an advance is an advance." If OS does any kind of advance well, that's good to know!

TedZ: personally, I've contributed to several Open Source projects. I have two reasons: first (and primarily), it looks good on your resume. In another case, I made some fairly significant contributions to an open-source game physics engine because I was so annoyed at them having some stuff _wrong_ that I just had to go in and fix it. I just couldn't bear to have a bad meme propogate.

Matching royalties instead of fixed subsidies

In lecture, we saw how subsidies supplementing patent royalties can cause desirable research to happen. The research is desirable because v - c > 0, but it doesn't happen without help because πv - c < 0. (π is the fraction of value that the patent holder can receive in royalties.) As we can see from the graphs on page 3 of the slides, subsidies fund some useless projects (v - c < 0) unless the funder requires matching payments, and more importantly, subsidies fail to fund some expensive research where v - c is small but positive. I have an idea that seems to solve both of these problems: promise to match patent royalties paid by other companies at a fixed ratio. If the funder estimates π correctly and chooses the ratio m such that (1+m)π = 1, then projects will procede when and only when v - c > 0. --Jesse Ruderman

Avichal 14:39, 8 Oct 2004 (PDT) I found this idea quite interesting. Now I confess, I'm in IT, and my knowledge about Economy is shaky at best. But the idea seems intriguing, ofcourse there is the standard problem of observability - apart from judging that (v - c)>0, sponsor would also have to judge π. And there is the problem from the innovator side, that since the matching occurs 'ex post', there has to be significant assurance that the sponsor would not renege.

Avichal 08:07, 9 Oct 2004 (PDT) After thinking a bit further on this, I think I see one problem. How will the price be determined? And price and π are inter-related.

The incentive mechanism draws away the natural forces in the market which self-regulate it. If I hold a patent on , say a business process. I wouldn't sell it for too high, since very few people would buy it. I wouldn't sell it for too low since I would not make enough profit. However if I am going to be incented based on π then I may not care, and I may set the price really high. Since I know I will be incented by the sponsor instead.

Maybe this is simply a long way of stating that it is difficult to observe, and decide these values (π, v - c) 'ex ante'. But still since the incentive mechanism may affect the price and hence π, it may make it overly difficult for it to be adopted.

SMM: I think you've identified the main issues. The dirty secret in all this is knowing when Π is too low. If you just match all patent royalties in the economy, then you provide a windfall for projects that the patent system would encourage anyhow. This invites wasteful patent races and anyhow displeases the taxpayers. What you'd like to do is kick in some money for projects that won't be done otherwise, but then you have to figure out who really needs the extra money and who is lying to you.

Wduhon 18:27, 13 Oct 2004 (PDT): This is a bit tangential, but it is worth pointing out that "fixed" subsidies are an extreme case. The assumption of the graphs in the slides was that the institution providing the subsidy is utterly clueless with regard to v,c,and (v-c), and so not having any means to cater the amount to the individual project, it just hands out a fixed amount (how this fixed amount is arrived at is unclear). Presumably the only thing that varies in this case is whether or not a project gets funded at all, but on what basis is this decided if not some notion of benefits and costs? Since the institution is assumed to have no notion of benefits and costs, the picture we get is that it hands out money in fixed chunks randomly.

A more flexible subsidy program, based on the more realistic assumption that the institution giving up money has at least some knowledge of what it is doing, is a completely different animal and does not fit into the graph shown in the slides. The effectiveness of the subsidy program would then depend on more complex factors like the degree of skill the institution has in gauging projects and the degree to which the institution is free of corrupting influences.

WA State education and Classification of Research

Avichal 14:54, 8 Oct 2004 (PDT) I browsed through the slides which we could not cover (and I would encourage others to do so, if they haven't already), and the data presented about the state of education in WA state was alarming, to say the least. Actually, I must say, the tone of the whole lecture was a bit like a 'prophecy of doom'. But really if you look at the statistics, you do wonder, "How the hell have we managed to stay afloat so far?"

Coming back to WA state, the data basically shows that we have been importing talent from elsewhere to fill the jobs created in WA state (uh..thanks Microsoft for doing that almost single-handedly).

To jump on another topic, we discussed how research in DARPA Cyber Security research being classified and it's impacts. Now I don't remember the source (uh..my fading memory :-)), probably in the Asprey book, but there was something about Non-residents not being able to work on federally-funded university research projects (presumably the ones related to specific fields). Well, I think that would be catastrophic - given what I just learnt from the last slide (#113) that "roughly half of the Ph.D.s in engineering and computer science were awarded to non-residents"

Diwaker 21:53, 9 Oct 2004 (PDT): Just to add to your point about non-residents and federal funding -- most of the graduate fellowships (atleast in computer science), both federal and otherwise are not available to non-residents. Many a times this deprives non-resident students of funding, thus (potentially) impacting innovation in the long run (an extreme example would be where a talented student has to quit studies). I'm not sure if data exists to make a case in either direction.

USER:S.Schimler presents NEW evidence:

On the topic of importing jobs, here is some interesting information on the, dare I say, fraudulent H1B visa program. A UC Davis professor of Computer Science, Norman Matloff, supplies the evidence here: http://heather.cs.ucdavis.edu/itaa.html

I recommend everyone read that site. It is a long congressional testimony, but it is worth the time!

-Stuart Schimler

-UC Berkeley 2006

Avichal 20:57, 13 Oct 2004 (PDT) I would think most of the "importing" has happened from other US states and ofcourse some from other countries. Well, Ed Lazowska's slides do not present any data on this, and I don't have any either, but come on, the H1B quota has been reduced to 65,000. (BTW this quota was exhausted within a day or two of being released). That is a miniscule number. I think H1B is a non-issue now, outsourcing on the other hand is an entirely different matter :-)

Who Wins the Research Debate, Republicans or Democrats?

Okay, so now let's get a little bit controversial. In honor of an important election coming up in 3 1/2 weeks, I'd like to get opinions on which party people think typically makes a greater impact on university research. In class we spoke about issues which I think will continue to haunt us no matter which party is in power, but I also found a comment made in one of the readings for this week to be surprising. The comment stated that republicans typically prefer to fund basic research while democrats prefer to fund research for the "next big product." To me it seems like basic research is the goal of university researchers and this would point at researchers preferring republican candidates. However, I typically get the impression from the media that a great majority of university professors are democrats. Is this apparent inconsistency because professors have more important political concerns then what type of research is promoted, because the media is giving me the wrong impression, or because while republicans prefer basic research and democrats prefer researching the next big product the republican funding is still far less than democratic funding? --Jeff West (UW)

[John Spaith:] I think the key point, as you suggest above, is that professors have more important political concerns than just their funding. I'll add the proviso that they must think the Democrats will still put $$ into their pockets. If they think the $ will get cut off and their jobs are at stake, they may turn to the party they may not agree with on other issues. A good example is a former boss who came to the US as a physist to work on the (now canceled) particle accelerator down in Texas. Economically he was a hard-core Republican, socially he was a hard-core Democrat. This seems to point to him being a Libertarian, except that he wanted the government to massively fund stuff like particle accelerators. So up until Iraq he backed the Republicans. Also the company he and I work for had some anti-trust headaches back in 2000 and Bush was (rightly I think) viewed as more friendly. But this again is having the gun put to your head (research cut off, having your company sliced into 200 pieces by the Feds) that makes you favor one party of the other.

Assuming your research $ is reasonably secure with either party in charge, then you're going to vote along your other beliefs. I once had a PoliSci prof who had pictures of Fidel Castro and Khadaffi in his office. I imagine that even if Bush came out with a check for 5 million dollars and offered to give this prof a back rub, the prof would still would vote Nader. The rest of academia has a similiar (though not so extreme) leftward slant. I believe Knuth wrote something like over %90 of his collegues in CS were athiests or agnostics. If you look at 2000 Presidential elections, how this works out is pretty clear. 2/3 of people who go to church every week voted Bush, 2/3 who didn't voted Gore.

[Damon May:] It's pretty tough to figure out where, exactly, the candidates and their parties stand on discretionary spending on research. Consider this statements from georgewbush.com:

"The President commits 13.5 percent of the total discretionary spending to research and development – the highest level in 37 years."

Of course, as we know, the vast majority of that increase went to the life sciences; but at any rate, this statement on his website seems to portray him as a pretty science-friendly guy. What about this statement from the second debate, then?

"Non-homeland, non-defense discretionary spending was raising at 15 percent a year when I got into office. And today it's less than 1 percent, because we're working together to try to bring this deficit under control."

So he's made a marginal increase in the slice of the pie that goes to R&D... but he's slowed the growth of the pie by 93%.

That would be a very dangerous statement to make in front of a group of research scientists, whose livelihood depends on that spending! But when speaking in front of the nation, research takes a backseat to defense.

As for Kerry, we know that "The Kerry-Edwards plan will restore the discretionary spending caps of the 1990s to ensure that spending - outside of education and security - does not grow faster than inflation" (johnkerry.com). Again, "discretionary spending" seems to be almost a dirty word, with connotations of waste. And again, security is paramount. But I haven't been able to track down many details about how he plans to manage R&D funds, except for the repeated broad statement that he will "invest more in research and development". Has anyone else had more luck?

Bush has a record, so we have some idea of what he'll do to research spending in the future; but the issue is so far down on both candidates' list of priorities that it's hard to know exactly where they stand.

[Joanna Muench:] But research is about more than money coming in. As we've been discussing in class, the product of research is knowledge, and deriving value requires that knowledge be broadly disseminated. The Bush administration's tendency to quash dissenting views does not endear them to researchers in any number of disciplines, notably earth sciences and life sciences. Back in June, 5000 scientists and engineers wrote an open letter to Bush denouncing his misuse of scientific research in estabilishing public policy. Bush demoted the Presidential Science Advisor position to a level that no longer participates Cabinet meetings. Advisory panels are carefully selected to match administration beliefs. A friend of mine was approached by the Bush administration for a position on an advisory panel on Artic research, but turned down when she failed the global climate change litmus test. Almost all the Artic oceanographers failed that one (I believe they found someone with an MS who is not a principle investigator). What is the value of research that is stifled?

USER:S.Schimler: Historically, it was the republican party that helped to create public universities. The Land Grant Act of 1962 is what created universities such as Berkeley, Cornell, and MIT- as well as other top public universities. It shows the close connection between government and business that still remains to this day. I would place my bet with republicans who are bought off by business interests instead of union bosses. In truth though, I doubt that Kerry or Bush will impact University research much in the next four years. We'll have to wait and see, though.

-Stuart Schimler

-UC Berkeley 2006

Some related articles

Industry And Academia Weigh In:

In December, the Council on Competitiveness -- an organization of CEOs, university presidents, and labor leaders -- will release the recommendations from its yearlong National Innovation Initiative. The report seeks to identify key steps the U.S. should take to keep its leading role as an innovator in the global economy.

Panel: Kerry would take new approach to tech issues:

On the outlook by both the presidential candidate on tech issues.

Diwaker 22:44, 9 Oct 2004 (PDT)

Funding IT

Dr. Lazowska’s lecture was very informative and useful. However, one complaint that must be raised is that an actual suggestion for a budget cut was not explicitly stated. Instead, we saw how some fields/programs might be over funded- with special attention being given to farm subsidies.

Farm subsidies happen to be the major criticism of practically every academic at UC Berkeley. Every field/subject/department/program that doesn’t get funding decides to attack the farm subsidies. There is little doubt that this government spending is wasteful, but since these small states have equal representation in the senate, they are likely to stay. This means that a proposal must be given for cutting the budget of other programs and government agencies.. Dr. Lazowska should do his best to give a fair solution without worrying about offending anyone. Going after farmers is the easy way out!

-Stuart Schimler USER:S.Schimler

UC Berkeley 2006

Re:Farm subsidies!

Kiran Kalyan Farm subsidies are admittedly a step backwards in promoting progress-of any kind.However,especially in primarily agrarian countries like India, farm subsidies form a significant portion of the Govt.'s annual expenses. This is crucial for the Govt.'s survival and re-election and therefore, cannot even be negotiated or reduced.

In the last class,Dr.Lazowska made a very strong case for federal funding in IT research.In a situation like in India, however,where federal funding for research is definitely reducing, I do feel that funding for research has to be sourced from industry. The US, being primarily an industrial society, can maybe afford to pour funds into research at the expense of some farm subsidies. In economies like India, this may not be as easy - especially if, like in India, the economy is trying to move from a majority agrarian to a majority industrial economy. Therefore, i assert that the idea of federal funding, while inherently making sense , may have to be shelved in the face of ground realities which vary across the world. This , in my view, points to a need for greater involvement of industry in funding IT research.

What do you ppl think?

TedZ: This scenario makes me think of the following question: what research would industry fund/undertake if they KNEW there was no government funding available, no possibility of a grant or a bankroll, etc. Would industry then "self-tax" and fund some of the (v-c) < 0 research (in the hopes of long-term payoff)? Or would all such research just die off?

[apardoe] There's an article in the New York Times Magazine this week (sorry, I read the offline version so I have no link) about research being done on improving/proving health benefits of chocolate by M&M/Mars. It's being done with no specific product in mind, no guaranteed timeline or payoff and definitely no public support. Further, it's research whose benefit is quickly appropriated by M&M/Mars' competitors: every time someone asserts chocolate is healthy Hershey's benefits without any of the research costs incurred by M&M/Mars. Yet they're doing the research. So no, I'm sure that not all research would die off. Maybe "useful" research would be the only thing done but we'd still have blue-sky dreamers getting funded. [/apardoe]

To Ted Z: This is the situation that the drug companies find themselves in. They invest hundreds of millions of dollars in research for drugs that they will have a 20 year patent on. Unfortunately, the lectures did not evaluate their story closely. The truth is, the drug companies are in trouble. Due to European nations and Canada, drug companies cannot charge the fair price for their drugs, which means they have to charge us higher prices. America, in a sense, subsidizes the drug costs for the entire world. If our government hurts the domestic profits of companies, will they continue to invest in new drugs? I suspect that we will see cutbacks and we will all be at risk. So to answer your question, if there is enough incentive (a billion dollar drug that you can get a patent on), companies might be willing to take a risk!

-Stuart Schimler USER:S.Schimler

pmhalupt

I definitely agree that farm subsidies seem mind boggling wasteful in the USA. I think their signing into law by Bush (after being largely removed under Clinton) is to some degree just political pandering to the rural communities that worked well in the last election for Bush. We may not be so different than India in the motivations there.

I do agree that the government should be in the business of subsidizing good things for society like basic research where the benefits reaped are society wide and hard to capture by 1 person who put in the risk/effort to develop - and correspondingly I think they need to tax and regulate to discourage things that cost society wide but can't easily be born by the cost of consumption (using gasoline which produces pollution)

Politics and Research

I'm going to delve into the political discussion just a bit.

Support for basic research ought to be, and typically has been, non-partisan. I've spent a lot of time working Congress (under the auspices of the Computing Research Association) for increased support for computing research. I was so non-partisan in this that, although a lifelong Democrat, I was asked by Bush's Office of Science & Technology Policy to co-chair his President's Information Technology Advisory Committee.

Part of what I discussed last lecture was the "sausage-making process" by which the federal budget is enacted. The current administration can claim dramatic increases in federal research. The fact is that it is almost entirely either NIH or the engineering of new weapons systems; IT research has suffered under this administration compared to the previous one. But that's this administration, not a general commentary on R vs. D. (Republican vs. Democrat, not Research vs. Development!)

I was engaged in an email exchange last week with Craig Barrett from Intel, who at the annual meeting of the National Academy of Engineering had bemoaned the fact that *neither* Presidential candidate has much to say about research. I think it's fair to say that Kerry has better "warm fuzzies" than Bush, but that's as far as it goes, thus far. What Craig said was roughly "Look, cut the platitudes; if you are willing to say that you will add $5B to federal support for basic research in the physical sciences and engineering, I'm all ears!"

Educational investments in Washington State

I'll cover that material -- which I didn't get to last week -- in the "workforce" module.

The bottom line is just as Avichal described it. In every measure of educational investment, Washington State is the ass end of the donkey. To cite just a few statistics:

• Of every 100 students who enter kindergarten, only 71 graduate from high school. Of these, only 42 enter a community college or university. And of these, only 18 receive a diploma within 6 years.

• Per-capita, we are among the top states in the nation in the presence of people with Bachelors degrees, but we are among the bottom states in the granting of Bachelors degrees. In other words, our economy is creating great jobs, but they are going to other people’s kids, because we’re not offering our own kids the opportunity to be competitive!

It’s easy to blame inefficiencies in the system. As an educator myself, I understand the need to be ever more effective and accountable. But the fact is that Washington's public education system is running on fumes:

• There are 30,000 low-income 3- and 4-year-olds in Washington who are eligible for Head Start (or ECEAP, our state version), but nearly half of these kids are unserved because of funding shortages. National statistics show that low income children enrolled in quality preschools are only half as likely to be placed in special education, and more than twice as likely to attend college.

• Per-student K-12 funding in Washington is $745 below the national average. We currently rank a dismal 33rd among the states – a drop of 10 positions in the past decade! Even worse, Washington's per-student K-12 spending per $1000 of personal income ranks a shameful 46th in the nation.

• Washington ranks 48th among the 50 states in the participation rate in public 4-year higher education institutions (roughly, per-capita enrollment). And we under-fund those students we manage to accommodate: the University of Washington’s per-student state funding is 25% behind the average of a set of “comparative institutions” chosen by Olympia. (That's the state capital, for you Californians ...)

• Washington ranks 46th among the 50 states in per-capita state support of research – ahead of only Arizona, North Dakota, West Virginia, and Alabama.

How do financial markets affect innovation?

In the “Inventor’s Dilemma” portion of the lecture, Dr. Lazowska described how good management can be resistant to pursuing innovations. I think it’s likely that for public companies such decisions are often driven by the financial markets. Wall Street often prefers to see short term growth and profits even if the company’s investment in innovation will lead to greater returns in the long run. If an executive wishes to avoid a negative effect on his stock price, he may decide not to pursue an innovation that will require some time and money to develop.

There are lots of abnormalities in the way the “experts” think and the way they analyze companies. For example, branching out into a new business can actually hurt a company’s stock price even if it increases profits. The reason is that in some industries, the “experts” are concerned with the profit margin of the company as a whole. If your company sells high margin products, management may decide not to pursue an innovation because the margins aren’t as high as the current products, even though the product could be successful and beneficial to consumers.

What are your thoughts on how the financial markets affect innovation?

Financial markets and innovation

The preceding is certainly a point that Christenson makes in his book. The fact that public companies must grow relentlessly causes them to be reluctant to launch into what Microsoft calls "zero billion dollar businesses."

Is innovation slowing?

David Dorwin: This article states that "Fumiaki Sato, the top-rated technology analyst in Japan, says there is compelling evidence that the speed of innovation is slowing." That's a pretty bold statement, and the article doesn't really say why he thinks that innovation is slowing. But it is a good question. Is Moore's law slowing? What about innovation outside the realm (semiconductor manufacturing) of Moore's Law? Will Moore's Law continue to be true for the next decade? Will other innovation maintain pace or accelerate? Are we done now that we have the Internet? It seems that his statement is very similar to the fact that the group that developed the 1995 tire tracks diagram did not see much of what was on the 2003 diagram. Is Fumiaki Sato just unable to see the quiet innovation that is happening around the world?

Moore's law drives the economy

TedZ: getting back to something that struck me as funny at the time: near the end of "IT Research and Development Funding Issues" (Peter Harsha), in the "Basic Computing Research is Necessary for the President's Tax Cut", the author lays out how the CBO predicted a 5.6 trillion cumulative surplus over the next 10 years. Upon careful examination, this figure was based on the assumption that "information technology trends experienced over the last half of the 1990's continue over the next decade." This assumption was in turn based on the premise that Moore's Law would continue to hold. In other words, a huge policy decision was based on the vast assumption that an empirical law would continue to hold! And this fact was buried at least three layers deep. I found this somewhat analagous to the old saying about "for want of a nail, the kingdom was lost." Did anyone else find this to be a bit odd?