General Electric, the massive industrial conglomerate, will not be content to let IT leaders like IBM and Google hog all the glory in the internet of things era.
It sure looks like General Electric — the conglomerate that builds stuff ranging from appliances to jet engines — is spending a ton of time and resources to boost its profile in high (as opposed to “low”) tech. In fact it looks like it’s waging a massive PR campaign to show that it is not some grimy industrial relic but a force at the cutting edge of big data and “the internet of things.” If you don’t believe it, just download its November report on the industrial internet, which we covered here.
The latest evidence of this push? An interview with William Ruh, VP of software for GE Research, in ComputerWeekly.com. In the piece, Ruh appeared to take a veiled swipe IBM — which loves to portray itself as the thought leader in bleeding-edge tech and the kingpin in tech patents. (For the record, in 2012 GE came in ninth in patents with a total of 1,652 compared to IBM’s 6,478 — but who’s counting?)
Ruh said the airline industry has gathered tons of data about how jet engines have performed over the past two decades and that historical data should help guide predictive maintenance going forward. Ruh told ComputerWeekly:
“In emerging markets, we are seeing dirt and sandy environments … How are these affecting aero engines? [Business intelligence] cannot answer this. Nor can a supercomputer … Watson cannot tell me when this machine part will break.”
Watson is IBM’s much-hyped computer that boasts human-like thought processes and beat the human champion in Jeopardy a few years back.
GE is banking on the growing acknowledgement that machine data — information generated and collected by the types of industrial gear it makes — gives it an entry into the booming world of big data. That’s probably why GE CEO Jeff Immelt has been cropping up in a lot of interesting venues, including in an interview with Om Malik last month. And why GE came to San Francisco to announce its “Industrial Internet Quests” and tap into the wealth of software and data expertise there. As my colleague Katie Fehrenbacher put it at the time, the quest “calls on developers, data scientists and designers to make algorithms and applications that can increase productivity for the health and aviation sectors” — all sectors where GE plays.
It may be easy for folks in the valley to forget that GE has thousands of its own software developers on staff and builds sophisticated medical imaging and other high-tech gear: it does have credibility. And, at a time when the emphasis on making and building actual products is more valued, GE has lessons to teach.
The conglomerate obviously wants to be seen as a leader in this realm and won’t be content to let the likes of IBM hog all the glory in the internet of things era. After all, it builds an awful lot of those “things.”
John Gapper, The Financial Times, January 16, 2013
Deleting private companies from the equation might allow savings but could reduce efficiency
The death of the internet activist Aaron Swartz at the age of 26 has rightly evoked tributes to his creativity and selflessness. Swartz, who faced jail for illegally downloading millions of academic papers from an electronic library, committed suicide last week.
Five years ago, Swartz signed a “guerrilla open access manifesto” in which he complained of “the world’s entire scientific and cultural heritage” being “digitised and locked up by a handful of private corporations” such as Reed Elsevier. He advised computer hackers to “take information, wherever it is stored, make our copies and share them with the world”.
In 2010, he disguised his identity and exploited the electronic network of the Massachusetts Institute of Technology to download most of the database of Jstor, a non-profit group that digitises academic journals and articles. He did not share or sell the material – he later handed it back – but prosecutors took the manifesto seriously and charged him with fraud.
Mr Swartz worked on projects from the news aggregator Reddit to the Creative Commons open copyright licence, and was widely liked and admired. But, in his analysis of academic research and publishing, he suffered from an illusion.
Free access to academic research – the system Mr Swartz advocated – could bring public benefits. It would enable anyone to read, analyse and build upon privately and publicly funded research. However, someone would still need to pay for it and the costs to universities such as MIT and Oxford would rise, not fall.
Critics of the current system, under which research libraries pay up to $50,000 annually to use online databases, tend to blame profiteering by companies such as Reed Elsevier and Springer for this cost. George Monbiot, the activist and Guardian writer, describes it as “pure rentier capitalism”, arguing that people should “throw off these parasitic overlords and liberate the research that belongs to us”.
Allied to this is the belief that publishing costs have fallen heavily in the shift from print to digital. Elsevier, the scientific publishing arm of Reed Elsevier, made profits of £352m on revenue of £978m in the first half of 2012 – an operating margin of 36 per cent. Remove the capitalists and distribute research through public utilities, and surely swaths of cost would disappear?
Well, perhaps. Elsevier could certainly do with a bit more competition. Its fee structure is opaque and it publishes journals in which academics vie to be published. It has what Warren Buffett calls a moat – it is a 130-year-old business with 20 per cent of the market that is hard to attack.
It did not, however, steal this advantage. It acquired it from the 1960s and 1970s onwards as research universities saved money by outsourcing their costly and subscale publishing presses. Elsevier employs 7,000 editors, manages a network of some 500,000 peer reviewers (whom it does not pay), publishes 300,000 new articles a year and runs a 100-terabyte database.
Printing is only a small part of the cost of academic publishing. The bulk lies in the labour-intensive business of editing and reviewing submissions (rejecting two-thirds of them) and managing data. These costs are similar for open access publishers such as the Public Library of Science (Plos) in San Francisco, a competitor to Elsevier.
An independent study by the Research Information Network in the UK found that the shift from print to digital may save £1bn globally – worth having but only 12 per cent of total costs. Removing private companies from the equation might allow further savings, but it might equally reduce efficiency.
In any case, there will still be a hefty bill. About 90 per cent of the industry operates on subscription – the model Swartz so hated. The other 10 per cent is now open access, under which researchers (or research funders) have to pay journals between $1,000 and $5,000 an article to cover publishing costs. Anyone can then read it free.
Open access is appealing and is supported both by research funds, such as the US National Institutes of Health and the UK Wellcome Trust, and by the UK government. The trust believes it makes no sense to invest £700m each year on research without paying an extra £10m to make it widely available.
Research is largely read by other academics at the moment, most of whom have access through libraries. But there could be big benefits to broadening reach – Plos One, the science journal, is a trove of fascinating material.
That said, open access mostly transfers the bill. The Research Information Network estimated that, if the market moves to 90 per cent open access, total costs would fall by £560m but universities would pay more. The UK would save £128m in library subscriptions but contribute £213m in fees because its universities publish a lot of research.
Open access also has its pitfalls. In the 1970s the credit rating industry turned from investors subscribing to ratings to bond issuers paying. That established open access but also gave agencies a motive to please issuers with good ratings, culminating in the triple A rating of flimsy mortgage-backed securities.
Open access journals have a similar incentive to widen access and dilute quality. It is worth noting that Plos One publishes 24,000 pieces of research every year – it accepts any submission that meets the hurdle of “valid science” – while the most prestigious journals (including other Plos titles) publish 200.
If Swartz’s sad death shifts the balance further toward open access, that will be a worthy legacy. But someone will always pay.
john.gapper@ft.com
Economics and Statistics Administration, U.S. Department of Commerce, April 10, 2012
WASHINGTON, April 11, 2012 /PRNewswire via COMTEX/ -- The U.S. Commerce Department today released a comprehensive report, entitled "Intellectual Property and the U.S. Economy: Industries in Focus," which finds that intellectual property (IP)-intensive industries support at least 40 million jobs and contribute more than $5 trillion dollars to, or 34.8 percent of, U.S. gross domestic product (GDP).
"This first of its kind report shows that IP-intensive industries have a direct and significant impact on our nation's economy and the creation of American jobs," said Commerce Secretary John Bryson. "When Americans know that their ideas will be protected, they have greater incentive to pursue advances and technologies that help keep us competitive, and our businesses have the confidence they need to hire more workers. That is why this Administration's efforts to protect intellectual property, and modernize the patent and trademark system are so crucial to a 21st century economy that is built to last."
While IP is used in virtually every segment of the U.S. economy, the report identifies the 75 industries that use patent, copyright, or trademark protections most extensively. These "IP-intensive industries" are the source - directly or indirectly - of 40 million jobs. That's more than a quarter of all the jobs in this country. Some of the most IP-intensive industries include: Computer and peripheral equipment, audio and video equipment manufacturing, newspaper and book publishers, Pharmaceutical and medicines, Semiconductor and other electronic components, and the Medical equipment space.
"Strong intellectual property protections encourage our businesses to pursue the next great idea, which is vital to maintaining America's competitive edge and driving our overall prosperity," said Deputy Commerce Secretary Rebecca Blank. "The report released today shows that wages for jobs in IP-intensive industries are higher than average and continue to increase, meaning that these jobs aren't just important for businesses and entrepreneurs - they are important for working families. The IP protections we put in place today are helping support economic security for America's middle class now and in the years to come."
The report has several important findings, including:
IP-intensive industries contributed $5.06 trillion to the U.S. economy or 34.8 percent of GDP in 2010.
40 million jobs, or 27.7 percent of all jobs, were directly or indirectly attributable to the most IP-intensive industries in 2010.
Between 2010 and 2011, the economic recovery led to a 1.6 percent increase in direct employment in IP-intensive industries, faster than the 1.0 percent growth in non-IP-intensive industries.
Merchandise exports of IP-intensive industries totaled $775 billion in 2010, accounting for 60.7 percent of total U.S. merchandise exports.
"Every job in some way, produces, supplies, consumes, or relies on innovation, creativity, and commercial distinctiveness," said Under Secretary of Commerce for Intellectual Property and USPTO Director David Kappos. "America needs to continue investing in a high quality and appropriately balanced intellectual property system that will promote innovative, open, and competitive markets while helping to ensure that the U.S. private sector remains America's innovation engine."
The report is a joint product of the U.S. Commerce Department's Economics and Statistics Administration (ESA) and the U.S. Patent and Trademark Office (USPTO). Secretary Bryson was joined today by Deputy Secretary Rebecca Blank, Under Secretary for Intellectual Property and USPTO Director David Kappos, U.S. Chamber of Commerce President and CEO Tom Donohue, and American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) President Richard Trumka at a White House event, to unveil the report.
The Department of Commerce and USPTO are unleashing new innovations and new industries by advancing a robust framework of intellectual property protections for a global economy. The USPTO has already implemented eight provisions of the recently passed America Invents Act, which are enhancing the speed and quality of patent processing, connecting businesses with the tools they need to develop their technologies, and speeding up patent applications. Since President Obama took office, the backlog has been reduced by nearly 15%, from about 750,000 to just under 641,000 today. That reduction has come despite the acceleration of American ingenuity, and patent filings in the U.S. grew 5% in FY 2011. By re-engineering the IP system from the ground up, the USPTO is creating a 21st century innovation architecture that's built to last and will help America remain a global leader going forward.
Patents, trademarks, and copyrights are the principal means for establishing ownership rights to inventions and ideas, and provide a legal foundation by which intangible ideas and creations generate tangible benefits to businesses and employees. IP protection affects commerce throughout the economy, including by: providing incentives to invent and create; protecting innovators from unauthorized copying; facilitating vertical specialization in technology markets; creating a platform for financial investments in innovation; supporting startup liquidity and growth through mergers, acquisitions, and IPOs; making licensing-based technology business models possible; and, enabling a more efficient market for technology transfer and trading in technology and ideas.
The full report can be found online at http://www.esa.doc.gov/Reports/intellectual-property-and-us-economy-industries-focus .
To learn more about the Department of Commerce's efforts to spur innovation and protect IP, visit www.uspto.gov . News Media Contact:Sarah Horowitz, Department of Commerce Office of Public Affairs, (202) 482-4883 SOURCE U.S. Department of Commerce
