If you hang out with technologists, you have heard Amara’s law. Humans tend to overestimate the short-run effect of technology and underestimate its long-run effect. Decades of experience inform this bit of wisdom. Roy Amara worked as a policy analyst at two think tanks, the Stanford Research Institute and the Institute for the Future. His …
Frontier Pick and Shovel Markets
A firm in a “pick and shovel” market produces a good or service that serves as an input to other businesses. A “frontier” pick-and-shovel supplier has made a significant technical breakthrough in applied science or engineering that has enabled capabilities in its product previously considered impractical, uneconomical, or impossible. Pick-and-shovel markets have been around for …
The Digital Year in Review: 2025
It is time to look back at digital technology in 2025 and make light of it. This review will be arranged much like the Oscars, with awards in various categories. Just as in past years, there are three criteria for the dozen awards this year:• The award must involve digital technology, such as viral videos …
Private Returns on Technology Adoption
From a firm’s perspective, the emergence of a new technology wave is a new opportunity to generate a financial return. The question is precisely how. That topic remains as salient today, in the era of artificial intelligence, as it was when firms first encountered smartphones, the commercial internet, and personal computers. Before we fully embrace …
Artificial Intelligence and the Jevons Paradox
What can a nineteenth-century economist teach a twenty-first-century Chief Executive Officer (CEO) at one of the largest technology firms? More to the point, why is Microsoft's CEO, Satya Nadella, quoting William Stanley Jevons? Jevons was a dominant figure in economic thought in Britain during the second half of the nineteenth century, but not today. His …
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Spillovers, Bottlenecks, and More Invention After Invention
Epiphany plays an outsized role in the reductionist two-step model of invention. Step one is when an idea pops into an inventor’s head, and step two is when the invention spreads in an economy over time. This model is misleading in numerous ways that would take a book to enumerate. Today’s column focuses on step …
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Commercial and Scientific Prototypes
A prototype is a product or service's early sample, model, or release. It is built to test a concept or process and serves as a tangible representation of an idea. Some prototypes are primarily commercial, while others are scientific. The advent of digitization has significantly revolutionized the prototyping process over several decades in both commercial …
Digital Year in Review — 2024.
It is that time of year again: Time to look back at information technology in 2024 and make light of it. As with prior year-in-reviews, this one will be arranged like an award ceremony. There are three criteria for the dozen awards given out this year:• The award must be for something involving digital technology.• …
A Review of Fei-Fei Li’s book, The Worlds I see.
The Worlds I See. Curiosity, Exploration, and the Discovery at the Dawn of AI—Fei-Fei Li (New York, NY, USA: Flatiron Books, 2023, 322 pp.) Fei-Fei Li is known for leading the development of ImageNet, which helped catalyze machine-learning approaches to vision recognition, and for being an essential voice shaping the science behind Artificial Intelligence (AI) …
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Party like It’s 1999?
Generative AI has created a gold rush today, but that rush has not yet grown into either a productivity boom or a financial bubble. There are good reasons to think this rush could become either one.Which one is just around the corner? Could it be both? In case you forgot, we did live through a …
Digitopoly 