All posts by Jim Muttram

Picking stocks

Many years ago when my boys were young teenagers we used to have to take them off every Saturday to play Warhammer, the strategy game you play in person with others with characters you bought and lovingly painted yourself. It became a big obsession with both of them, rivalling even Pokemon and I got to know Games Workshop well.

I spoke to colleagues at work and unless they also had boys of a similar age they were oblivious to the whole phenomenon.

These Warhammer characters were not cheap and the rules of game were so obtuse that it was amazing so many teenage boys became so hooked (or maybe not, knowing teenage boys).

Anyway, I figured this was an interesting business model so I bought a few shares. Today the company was featured in The Economist as the best performing stock in the FTSE 250.

I may have had to wait 15 years, but I can really pick a stock – this one has risen by over 526%.

Remaking Post-Industrial Cities

Interesting talk this lunchtime at the RSA from Don Carter about his new book Remaking Post-Industrial Cities, which looks at 10 cities in the US and Europe and charts their decline and recovery. 

Don Carter, Carnegie Mellon University

Carter looks at the history of the cities in three phases:

  • The industrial powerhouse phase, from 1865 to 1945
  • Renaissance, from 1946 to 1985
  • Re-invention from 1986 to 2015

He argues that there are clear parallels between all the cities he has studied and that lessons can be drawn. 

First up, turning cities around in the post-industrial period takes time and determination. It is important to realise the the scale is large – metropolitan and long-term. This means, a strong vision of what kind of city is being built it critical. And it means strong leadership and being prepared to take risks. Often it has involved very significant investment, such as the Olympics in Barcelona, but these grand plays aren’t enough on their own, as they can fail. 

The successful cases have all developed diversified economies, have strengthened the central city and have invested in culture, heritage and quality of life. 

The over-riding impression at the end though, underlined by perceptive questions from the audience, was that while the city may recover, many of the people who made their lives there often don’t and that tectonic societal upheavals, such as the election of Trump, or Brexit, or populism in Italy, may the cost.

Maybe we can look back on the cities themselves in 20 years with satisfaction that they recovered so well, but what happened to the broader society in the meantime is quite another question. 

Don Carter is an architect, urban designer and developer of international renown. He is currently Director of Urban Design and Regional Engagement at the Remaking Cities Institute, Carnegie Mellon University.

Elon Musk: good news or bad news?

The outcome of the SEC investigation into Elon Musk’s wayward tweet on taking Tesla private could turn out to be either very good, or very bad. 

The requirement by the SEC that Musk and Tesla each pay $20m in fines is trivial for both. The instruction to hire an independent chairman to oversee Musk is the crucial condition. 

Tech company founders have often found themselves in need of outside experience to lead once their enterprises reach a certain size . Those who can make the product, seldom have the characteristics or experience to morph into successful managers of much larger enterprises. 

The best example of this working well was Google founders Larry Page and Sergey Brin to hire Eric Schmidt to front up their rapidly growing company in 1998. It was the persistence of their VC backers which led them to find Schmidt eventually and the arrangement worked like a dream. 

However, there are several reasons why a similar successful outcome may be harder for Musk to pull off, and these are two of the major ones:

Time

The SEC has given Tesla 45 days for Musk to resign the chairman’s role, not a lot of time for such a tricky and sensitive search, especially so since it is unlikely Musk has spent any time thinking about what wants or needs from such a relationship. 

Temperament

Musk has a towering self-belief which seems to cover just about every walk of life – extra-terrestrial colonisation, combatting climate change, rescuing children from flooded underground tunnels. It is perhaps unlikely that he recognises the possible benefits which would accrue from a wiser corporate head, experienced in the ways of public companies. 

It would be very good for the world if a Schmidt-like outcome occurred. Whether it can or not remains to be seen. 

Climate Change: too true to be good

Great summary today at the RSA of climate change from Environment Agency head Sir James Bevan. He was concise and chilling on the enormity of the challenge of climate change and the catastrophic consequences of failure to act decisively. 

Sir James Bevan, Environment Agency head
Sir James Bevan

Sadly, but predictably, he was less impressive in his assessment of the progress being made in Britain and around the world. As a political appointee it would be naive to expect him to point out the inconsistencies between the current Government’s language and its actions – support for fracking, removal of support for on-shore wind, reduction in financial incentives for solar energy, tax breaks for oil and gas, freeze on petrol tax etc, etc. 

“If we don’t get it right Britain will be neither, green, nor pleasant, nor even have much land”

He says governments have to tread carefully because of their electorates, but that hardly covers it. Still, the fact that he is laying out the challenge so starkly (“if we don’t get it right Britain will be neither, green, nor pleasant, nor even have much land”) is a surely good thing.

Instant judgements

There is something very disturbing about the modern habit of making instant judgements about everything, simple or complex. This has been blamed on the 24-hour news cycle which is said to force quicker and quicker stories out for fear that a particular news outlet is going to look slow. It has also been blamed on the rise of social media which has encouraged us all to believe that our voice has a right to be heard and that our opinions are as valid as anyone’s. It has also been blamed on short, modern attention spans.

Whatever the cause, the net effect of all this is quite seriously bad, in my view. Of course it is a good thing that we are not all meekly waiting to be told what to think by those in power, elected or otherwise. In the past this mental attitude of deference has lead to some terrible iniquities, the details of which come out on a regular basis (think sex scandals involving children’s homes or Churches of one denomination or another, or the horror stories coming out thanks to the #MeToo campaign, even now touching China, it seems. 

But there is a downside, too. Take yesterday’s news that there was a terrorist attack on the House of Parliament. We don’t know much about Salih Khater, the driver of the car which crossed lanes in front of Parliament and injured three cyclists and pedestrians before crashing into the barriers. Yesterday he was a terrorist. Today, the police say they haven’t found anything to link him to terrorism and it seems his motives (or reasons, as it could be he or the car malfunctioned for all we know) are a mystery as yet. 

So yesterday it was a daring terror attack, today we are not quite sure, tomorrow or probably sometime later we will find out the truth. 

What effect does this have, though? It feeds the impression that we are living in dangerous times, that we are under attack from people who would harm us. And the initial conclusions are, I suspect, seldom reset. 

In this sound-bite and tweet-driven world there is little room for complexity or subtlety. So far we have reaped the benefits of transparency and ease of publication but at the cost of polarisation and populism.  Consider the reaction to the dreadful collapse of the motorway bridge in Genoa which is being blamed by Italy’s senior politicians on privatisation, corruption and the EU before any investigation has even begun. How could you possibly draw a conclusion like that so quickly? The answer is you can’t, but that doesn’t really work in a rapid-fire world. 

We have yet to work out how to restore some balance and reason in this new environment. But we really should be trying harder. 

Seeing with your camera

This photo illustrates a common theme – that modern audiences of anything spend too much time taking pictures of events they are attending rather than looking at them with their own eyes.

You hear the criticism levelled by musicians and sportsmen and women as well as by commentators.

I think we shouldn’t judge too harshly. This trend speaks to a deeper human need – to make our mark on the world, to record the fact that we were here.

These are hand stencils believed to have been created 39,000 years ago found in a cave in Spain – the earliest examples known to exist. This unknown cave dweller is making his or her mark on the world, very much as having a photo of an epic event you attended on your own phone is. The difference may not as great as we would like to believe.

Apple gets serious about content

Apple’s acquisition of Texture looks like a pretty shrewd move against the back-drop of “fake news” and worries about social media network enabled “bubbles”. Whether the company can turn Texture, which offers monthly subscriptions for unlimited content for hundreds of participating media, into a text version of iTunes remains to be seen. But having Apple, which does not have advertising as its principal business model, pushing quality paid-for content is an interesting and healthy development.

The answer to post-industrialisation

It’s not hard to see the effects of post-industrialisation in Britain. Today’s Observer carried a vivid account of its effects in Ebbw Vale, a once-thriving steel town.

And there are some sensible suggestions about how to deal with the aftermath, as well as the next wave of de-employment which will soon be upon us, brought about by the increasing use of robots and AI. As the article quotes:

“Automation is a risk to many occupations across Wales and the UK,” says Professor Julie Lydon, chair of Universities Wales who recently wrote an article entitled The Robots are Coming.

The key to avoiding a repeat of the devastation caused when the mines and factories shut is investment in skills, according to Lydon.”

So his solution, common to many, is to “focus on developing skills which are with you for life, and make you more adaptable and employable through your career.” This is easier said than done. He says it will mean “building on existing collaboration between universities, employers and colleges, and finding new ways to provide these skills, such as through degree apprenticeships.” This is all good stuff, and the right thing to be doing now, slightly ahead of the automation drive to come. But as automation pushes further and deeper into the economy, it won’t be enough.

This approach doesn’t address the longer-term. It’s hard to see many jobs which won’t be capable of automation in the future. And if we continue simply to focus on “jobs” as if this is a synonym for a fulfilled life, we will be attempting to solve the short-term problem while leaving the much larger challenge completely unaddressed.

We need to start teaching our children to develop meaningful lives with or without “jobs”, or we may find ourselves slipping into a world where we try to out-compete automation at any cost in a quest to hang onto the “jobs”, a losing battle and one which will cost dear.

The wrong way to do driverless cars

I’m a great supporter of driverless cars. I think they have the potential to dramatically change the world, making much better use of resources, revolutionising mobility for all and radically improving our towns and cities.

Paradoxically, however, I am not so keen on Phillip Hammond’s announcement that the UK aims to be the first country in the world to permit them on public roads without any “safety attendant” on board.

I’m just not convinced that the Government has developed a solid appreciation for the benefits of technology. After all, this is the country where more than half of schools don’t even offer a computer science GCSE, according to a report from the Royal Society.

In fact, I think this has, like it seems everything these days, more to do with Brexit than anything else.

Having alienated the conventional motor industry who  are warning of the dire consequences of leaving the customs union, it probably seems like a really smart move to become the go-to place for manufacturers to be testing and developing self-driving cars, which the smart money says are the future. This way we can secure our place in world when conventional car manufacturing relocates to the Continent.

But recklessly throwing off safeguards simply in order to pursue narrow short-term economic objectives could set the development of self-driving cars back decades. The implementation of self-driving cars is multi-facetted and complex, as much from a societal as a technical perspective. It will require careful collaboration across countries and disciplines, as well as exceptionally well calibrated communication with the populations they are supposed to be benefiting. None of these things seem to particularly in the UK’s skillset at the moment.

We’ve already witnessed the outcry over a fatal accident where a Tesla which was driving failed to see a lorry crossing in front. This is in sharp contrast to the coverage given to the 1.25 million people estimated to be killed by human-driven cars each year around the world. And this was in a case where there was a clear responsibility on the driver to keep alert and supervise if necessary.

The first (pretty-well inevitable) fatality by a self-driving car could quite easily set off a backlash which sets the development of this transformational technology back decades. And that would be a tragedy, not least for the millions whose lives would have been saved by the technology in the interim.

AI-powered robots and the future

This is a post over which I have been pondering for quite a while. While the debate rages on daily about whether AI (specifically AGI) is humanity’s great saviour or the biggest existential threat we all face, several stories which have emerged over the past few weeks seem to me to cast some light on the issue.

The first inspiration for the post was a Click Podcast from BBC World Service which had a number of items to do with robotics.

One was news that autonomous robots with “socially aware navigation,” are being road-tested by MIT researchers. What the researchers found was that it wasn’t difficult to make a robot which could autonomously avoid obstacles, but that once you throw humans into the mix life becomes much more complex.

The researchers found that humans in fact act quite unpredictably and follow a complex set of social rules like keeping to the right, passing on the left, maintaining a respectable berth, and being ready to weave or change course to avoid oncoming obstacles. And they do all this while keeping up a steady walking pace.

By using a kind of machine learning they taught their robots to navigate the world when among humans the way humans do, especially important if we are increasingly to share our environment with various helper bots, delivering goods or helping in hospitals and care homes, for example. And plenty of other work is going in to making humans and robots rub along more smoothly.

Another item on the Click Podcast addressed the same issue, but from a different perspective. This time it was training children to see robots as a natural part of their environment.  Cozmo, a tiny robot toy with a “brain” and personality, is like a robot version of the far more irritating Tamagotchi (which demanded constant attention or it would die0. Cozmo is a bit cuter and more socially rewarding and promises to offer expanding options for interactive play for children. In early tests young children quickly became used to the presence of the robot and treated him almost as a human play companion. This is the “get ’em young” approach to robot acceptability.

So now we have robots which navigate the world the way humans do, can communicate more effectively and which have human-like emotional responses.

The next step – at least in the University of Edinburgh – is to give some economic agency to a robot. In this case it’s a coffee machine called Bitbarista. The aim was to create a coffee machine which could explore attitudes to ethical trading and autonomously respond. The machine, which had its own Bitcoin account and a connection to the internet, asks students to rate the important of various attributes of the coffee they want – taste, ethical sourcing, price etc – and on the basis of the crowd-sourced information adjusts its future orders of replacement beans accordingly.

In addition the machine uses some of the Bitcoin it earns on each coffee to pay students to carry out various maintenance tasks for it, such as refilling water or beans.

In this case, though it clearly has some agency, the coffee machine has only a Raspberry Pi for a brain so it unlikely to become too carried away with itself. Maybe not so, though, as we move on to more powerful implementations such as self-driving cars.

It strikes me making robots economic players is a pretty silly thing to do. The philosopher Nick Bostrom famously warned of the difficulty of setting objectives for AGI which wouldn’t backfire on us. His thought-experiment explored how even a seemingly innocuous goal – such as making paperclips – could go disasterously wrong and end up destroying the world.

People are already thinking about the new kinds of models that fully self-driving cars might enable in the world. Will we still need (or indeed want) to own a car if we can summon one immediately from our smart phones? And why have just human-owned and run companies owning fleets of cars? Why not self-owning cars? People are already seriously suggesting this as a clear possibility.

But giving an AI-powered robot a capitalist goal framework would be a terrible plan. The idea starts out being quite sensible-sounding. Why not give the car a bank account (Bitcoin or otherwise) and enable it to use the money it makes to book itself in for servicing, pay for upgrades and so on? And, if it finds it is in great demand, it has been suggested it should be allowed to buy a second car and become a fleet. Why not?

Because paperclips, that’s why not.

Imagine – the car starts out being the best self-driving car it can, arriving when summoned, taking the most efficient route it can, ensuring it hovers in the right places to make itself as useful as possible.

Pretty soon, though, prompted by the desire to earn more money so it can buy more upgrades or buy other cars for its fleet, it figures out that blocking other cars is a more efficient way of acquiring more money more rapidly. So it starts sending false reports to other cars on the road to ensure it gets the best pick ups.

Other self-owning cars respond and bingo, you’ve re-created the Wild West. What was going to be a utopia of cheap, ubiquitous, convenient transport becomes a nightmare.

I draw a few conclusions from all this. First, there is so much work going on that AI-powered robots are a racing certainty – it’s not “if”, it’s “when”. Second, the current debate about AI (humanity’s saviour or its destroyer) is too polarised and strident to be particularly useful. What’s needed is far more active discussion of how to make this all work well. Its is abundantly clear to me that simply considering the advancements in AI and automation (like self-driving cars) another opportunity for the current capitalist model simply won’t wash. Technological unemployment is inevitable (see Calum Chace’s excellent work on what he has dubbed The Economic Singularity for an account of why) and without quite radical change enough buyers won’t exist for the goods and services which the AI promises to bring. Therefore, we need a new plan. As Calum puts it in a blog post:

We should aim for a world in which machines do all the boring stuff and humans get on with the important things in life, like playing, exploring, learning, socialising, discovering, and having fun.

There is a lot to be optimistic about. But political and economic orthodoxy needs to catch up fast with the technology.