Brookings: Topics - Innovation

Going Global: Greater Houston’s Economic Future

Wed, 15 May 2013 13:30:00 -0400

Event Information

May 15, 2013
12:30 PM - 2:00 PM CDT

Baker Hall
Rice University, James A. Baker III Institute for Public Policy
6100 Main Street
Houston, TX 77005

As the United States emerges from the Great Recession, it is clear that the nation’s economy must be purposefully restructured from one focused inward and characterized by excessive consumption and debt to one that is globally engaged and driven by production and innovation. A growing chorus of leaders is calling for a new growth model, one that creates more and better jobs by engaging rising global demand and attracting global talent and capital. These leaders recognize that only by harnessing the power of cities and metropolitan areas can the country hope to foster job growth in the near term and restructure the economy for the long haul.

On May 15, the Metropolitan Policy Program at Brookings and JPMorgan Chase hosted a forum at Rice University, “Going Global: Greater Houston’s Economic Future,” the second in a series of domestic and international forums being convened this year by the Global Cities Initiative. This is the second year of the five-year initiative. The forum explores how metropolitan-led economic growth—including global trade and investment—are important for job creation, and how Metropolitan Houston can leverage its position in the global market.

Speakers and panels provided context on the region’s position in the global marketplace and offered insight into how area leaders can work together with international partners to expand global trade and enhance Houston’s economic prosperity.

Join the conversation on Twitter with hashtag #GlobalCities. Photos courtesy of John Everett.

Roundtable Presentations:

View Bruce Katz's presentation on Houston's next economy »
Download Marek Gotman’s presentation on workforce development (PDF) »
Download Amy Liu's presentation on regional export planning (PDF) »

Bruce Katz, Brookings Vice President & Founding Director, Metropolitan Policy Program

Gina Luna, Chairman of JPMorgan Chase for Houston

Bruce Katz, Brookings Vice President & Founding Director, Metropolitan Policy Program

Video

Event Materials

Participants

Moderator

Amy Liu

Co-Director and Senior Fellow, Metropolitan Policy Program

Panelists

Bruce Katz

Vice President and Director, Metropolitan Policy Program
The Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy

Honorable Peter Ammon

Ambassador

Honorable Richard M. Daley

Former Mayor of Chicago
Chairman

Dr. David Leebron

President

Gina Luna

Houston Market President

Amy Liu

Co-Director and Senior Fellow, Metropolitan Policy Program

David McClanahan

President and CEO

Strengthening U.S. Manufacturing, Region by Region

Mark Muro — Mon, 13 May 2013 16:17:00 -0400

Last week President Obama used his trip to Austin, TX to announce the creation of three more public-private manufacturing research institutes as nodes of a $1 billion National Network for Manufacturing Innovation (NNMI). On the same day, though, there was another intriguing if lower-key announcement on the Obama administration’s manufacturing agenda.

That’s the new Investing in Manufacturing Communities Partnership, the first phase of a two-phase effort aimed squarely at communities and regions, announced by the Commerce Department’s Economic Development Administration (EDA).

Focused squarely on the fact that the locus of U.S. manufacturing prowess is emphatically local and regional, the new competitive solicitation will allow as many as 25 local communities to be awarded $200,000 this year to create smart strategies for leveraging and aligning their public- and private-sector assets to provide a promising environment for advanced manufacturing. These awards will in the near term allow ambitious communities to develop “bottom-up” plans for strengthening their regions’ intellectual, human, and physical infrastructure.

But beyond that, the small grants and the resulting regional strategies will also help prepare a cadre of U.S. regions to compete for the second phase the partnership, which will next year entail a competition that will award (contingent on congressional support) five to six U.S. communities with up to $25 million for the implementation of regional advanced manufacturing strategies. That’s real money that would—like the full build-out of the NNMI initiative—allow for real strides in advancing U.S. manufacturing in the country.

Yet, while such material awards would be welcome, what is key to the Manufacturing Communities Partnership is its four-square focus on the local and regional angle. For several years now we at the Metro Program have been harping on the sub-national underpinnings of manufacturing competitiveness and the importance of recognizing those underpinnings, establishing state and regional innovation centers to foster them, and making sure to embed regional advanced industries hubs in their surrounding industry clusters and supply chains. Most recently my colleagues Bruce Katz and Peter Hamp proposed creating a “Race to the Shop” competition aimed at calling forth bold regional visions for advanced industry growth, rewarding those visions, and better organizing disparate federal programs in support of the strategy.

We believe all of this is critical because advanced industry dynamism does not grow up just anywhere. Rather, industries reach critical mass in places—most notably, metropolitan places—where firms and workers tend to cluster in close geographic proximity whether to tap local supplier networks, work with local research institutions, draw on local workers, or profit from formal and informal knowledge transfer. In this respect, smart companies are more and more deciding where to locate facilities and hire workers based on the quality of a community’s infrastructure, institutions, and human capital—what the Harvard Business School scholars Gary Pisano and Willy Shih call its “industrial commons” and others its “industrial ecosystem.” The upshot: If U.S. regions—working with their states and the federal government—can bolster the density, efficiency, and vitality of the nation’s regional industrial clusters they will add to overall advanced industry competitiveness.

Broadly then, the EDA and its agency partners are not restricting themselves solely to broad (and needed) national and macro-economic policies on research, trade, taxes, and regulations. Instead, by going local, they are getting at the regional sites in communities where manufacturing supply chains actually come together and generate prosperity. That’s a good place for federal manufacturing policy to be.

Authors

Mark Muro

Image Source: © Aaron Josefczyk / Reuters

DOE’s Clean Energy Manufacturing Initiative Leverages Regions

Scott Andes and Mark Muro — Mon, 06 May 2013 17:26:00 -0400

This spring, the U.S. Department of Energy (DOE) is launching a new Clean Energy Manufacturing Initiative that will support both clean energy and manufacturing competitiveness by promoting greater energy efficiency in the U.S. production sector. Rolled out at Oak Ridge National Laboratory (ORNL) in Tennessee last month, the new initiative advances a smart take on both the nation’s energy and manufacturing strategies. But more than that it reflects a welcome new spatial and geographic emphasis at the Energy Department.

At the most general level, the new initiative marshals a number of DOE offices, research institutions, and private sector partners to map out and implement networks that promote clean energy production and energy-efficient manufacturing. Key to the effort is that this new push—like the Obama administration’s National Network for Manufacturing Innovation (NNMI) proposal—takes an explicitly regional approach to innovation and the diffusion of next-generation technologies.

In this respect, the initiative aims to engage with regional epicenters of advanced manufacturing such as smart automation in Austin, Tex. and low-heat stamping in Denver, Colo. to drive local and national advances. These areas have established production ecosystems and are driving the technological frontier within clean energy; they are prime sites of U.S. innovation. Along these lines, the initiative has already awarded a total of $15 million to five projects in five different regional manufacturing clusters.

Yet the new focus is not just about covering the geographic bases. By supporting centers of excellence close to regional industrial clusters, DOE is leaning on a large body of literature that suggests innovation results from an iterative set of exchanges between production and research activities that more often than not thrive on proximity.

To be sure, old-line thinking continues to maintain that R&D facilities develop prototypes out of whole cloth and then transfer design requirements to manufacturers, wherever in the world plants are located. However, while this may be the case for low-tech industries, the reality for advanced industries is often the other way around. The genesis of many new technologies comes from within the production process via daily interactions with production facilities. These “co-location synergies” emerge as manufacturers adopt new techniques and equipment to increase efficiency and R&D engineers build upon shop-floor technological competencies to create innovate products and services. And within strong regional clusters, particularly metropolitan regions, such co-location benefits are able to penetrate beyond the incumbent R&D performing firm into the local supply chain—creating high-value start-ups and upstream innovation.

And in fact the ORNL launch event highlighted all of this. Led by Assistant Secretary for Energy Efficiency and Renewable Energy (EERE) Dave Danielson with Tennessee Gov. Bill Haslam in attendance, the event highlighted both a very cool DOE facility—the Carbon Fiber Technology Facility (CFCF) at ORNL—and EERE’s emergent regional stance. CFCF is a production line-sized test bed for public and private sector researchers to explore new carbon fiber composites at scale. As such, it offers to both East Tennesssee and the nation a one-of-a-kind piece of shared industrial infrastructure as well as a focal point for local technical exchange. Currently, for example, 45 firms make up the carbon fiber composite consortium that work with CFCF researchers—many of which are small-and medium-sized firms located in East Tennessee. In that way, the CFCF is emerging as the hub of an nascent “industrial commons,” where firms of all sizes can leverage not only CFCF resources but the broader R&D infrastructure at Oak Ridge, the University of Tennessee, and in firms. In other words, the carbon fiber hub and cluster being fostered in East Tennessee—like Austin and Denver—epitomizes the increasingly “bottom-up” feel of U.S. and global innovation systems and likewise highlights a new region-oriented stance at DOE.

While it’s too early to judge the impact of the Energy Department’s Clean Energy Manufacturing Initiative, the new push looks promising. By focusing more of DOE’s efforts on regions, a historically isolated, sometimes obtuse agency may be beginning to align itself with some of the most dynamic technology development exchanges of all—those that happen locally.

Authors

Scott Andes
Mark Muro

Image Source: © Jason Reed / Reuters

How Not to Die: Revolutionizing End-of-Life Health Care

Jonathan Rauch — Tue, 30 Apr 2013 16:32:00 -0400

Editor’s Note: This short blog post is based on the longer The Atlantic article, “How Not to Die,” by Jonathan Rauch. It focuses on revolutionizing end-of-life care by utilizing entrepreneurs in the medical system.

Here in Washington, we talk obsessively about reforming health care as something the government needs to do. Which it surely does. But one thing we forget is that a lot of reform is coming up from the grassroots, and this bottom-up reform, by showing the way forward, will be every bit as important as top-down reform, and a lot less subject to political gridlock.

Example: Dr. Angelo Volandes, of Harvard Medical School and Massachusetts General Hospital, has a gold-plated medical-establishment pedigree. But he’s also a zealous reformer who believes that much of the treatment administered to people nearing the end of life is not only unnecessary but, much worse, actually unwanted—because patients are not given the information they need in order to set treatment goals. He and colleagues are pioneering short, easily understandable videos that illustrate treatment options and goals of care visually, giving patients a clearer idea of what their choices really are.

Read about it here. The U.S. medical system is not friendly to disruptive entrepreneurs. But if we're going to improve value, reduce medical inflation, and make patients' experiences better, we'll need to make the most of entrepreneurs like Volandes.

Authors

Jonathan Rauch

Tech Transfer Policy: Bayh-Dole has Distributional Consequences

Walter D. Valdivia — Fri, 26 Apr 2013 08:59:00 -0400

Editor’s Note: This article first appeared in Innovation: America’s Journal of Technology Commercialization (April/May 2013; Volume 11, Number 2).

The sequester will have a negative effect on federal R&D of $9.6 billion, that is about a 7 percent cut with respect to the 2012 budget. These cuts will renew the urgency of figuring out how to maximize the social return on public R&D investments. That is a complex question because social returns are not only a function of the pace of innovation but also depend on how the benefits of innovation are distributed across society. Federal agencies that fund research as well as universities and national laboratories have an important role to play here. Not only can they rebalance their research portfolios but also they can improve technology transfer—the dynamic exchange of knowledge between research organizations and the private sector.

One important channel for technology transfer is patenting and the licensing of those patents to industry. These activities are primarily regulated by the Bayh-Dole Act of 1980. Think privatization of public assets where the assets are public patents—patents derived from federally funded research. The act introduced in this way the profit incentive to develop commercial products from public research. Under this act, the research contractor (generally a university or national laboratory) can take title to patents and to subsequently license those patents to private companies or other agents with the only proviso that the licensee takes reasonable efforts to practice the patent, that is, to develop it into a practical application.

The ostensible goal of Bayh-Dole was precisely to maximize the social benefit of federal R&D investments. We must then ask if this policy has delivered and if taxpayers are receiving a social return commensurate to their investment in research. The answer is inconclusive. There is some evidence that the translation of federally funded research into market products has increased but Bayh-Dole has also had unanticipated consequences—patenting has moved upstream to research tools creating what legal scholars Michael Heller and Rebecca Eisenberg have characterized as the tragedy of anticommons. In addition, it is not at all clear how widely the benefits of public patents have been distributed. Therefore, a fair assessment of Bayh-Dole must address at least two questions: Are the unanticipated consequences undercutting efficiency gains? And, are social returns from innovation concentrated or broadly distributed?

Regarding efficiency, a concern of the first order is that universities are patenting research tools. Scientific research is a collective effort that requires an active intellectual exchange at the outer boundaries of knowledge. Among the goods traded there are research tools, materials, and data. The patenting of reagents, cell lines, chemical compounds, raw datasets and other materials and the strict enforcement of those patents poses the risk of slowing down innovation at the headspring. A sensible answer to this problem would be to modify the statute to allow an exemption for non-profit research institutions. The exemption must at least apply to public patents. Universities and laboratories wanting to negotiate exclusive licenses on research tools would then be required to demonstrate that such an arrangement is in the interest of science and the public good. Complementing this solution, federal research contractors could benefit greatly from organizing a system-wide consortium for sharing research tools. This patent pool, chartered as a not-for-profit organization, would guarantee access to its patents (or at least patents on research tools) to all its members at fair licenses fees.

Beyond efficiency, there is an equity concern. That a public patent is developed into a product doesn’t directly imply maximum social benefit. If a new product is priced so high that only very few people can afford it, the social return will be minimal. Consider the effect of innovation in the pricing of drugs. If pharmaceutical companies are allowed to charge as high prices as they wish, only patients with prescription drug coverage in their health insurance will afford new medicine. If health insurance is universal, the effect will be deleterious for society because insurance prices will have to keep pace with drugs prices. A good indicator of the social return on public investment in biomedical research is therefore affordability. Amidst budget cuts and inflationary pressure on prescription drugs, policymakers are taking this issue seriously; for instance, Senator Ron Wyden (D-OR) has recently asked the NIH to “revisit the idea of striking a better balance between encouraging profit, innovation, accessibility and affordability.”

If public patents are a steady source of innovation in the biomedical sector, pricing excesses should be disallowed or at least regulated. Let’s be clear that companies that take a public patent and commit significant resources to its development are justly entitled to recoup their investments and even to retain a profit margin. But they did not incur in the full back-to-back investment—they did not invest in the expensive portfolio of blue-sky research out of which one program resulted in the patent they have come to license—it was the taxpayer that incurred in that high-risk investment. Put shortly, companies cannot assume a right to maximum profit when selling products based on public patents.

Federal agencies should be empowered, under Bayh-Dole, to promote competitive markets in high-tech sectors. One area where this can be done is defining better the conditions for exclusive licenses. While exclusive licenses are well justified in the case of start-up companies—they use these intangible assets to raise investment capital—the same rationale does not hold for large companies with high liquidity or easy access to credit. This kind of safeguard was part of the original intent of the act; Bayh-Dole originally limited to five years exclusive licenses for large companies. Another safeguard is the march-in rights provision. Federal agencies retain a royalty free license to all public patents and they can practice their licenses if the private sector shows no active effort to develop the patents or to satisfy public health and safety needs. Executive action should allow federal agencies to apply this provision to curb pricing excesses, for instance by linking need to affordability. The sole threat of intervention would curb pricing while still allowing companies to make some profit.

Congress and the federal government can help universities and national laboratories maximize the social returns of research by encouraging licensing practices that ease scientific collaboration and by curbing pricing excesses.

Authors

Walter D. Valdivia

Publication: Innovation

Building on Recent Advances in Evidence-Based Policymaking

Jeffrey B. Liebman — Wed, 17 Apr 2013 08:00:00 -0400

Abstract

The current fiscal environment makes it imperative that we produce more value with each dollar that government spends. Doing so will require better use of evidence in policymaking. The good news is that over the past decade new government strategies have begun to emerge—at the federal, state, and local levels—that simultaneously offer the potential to make better use of taxpayer dollars and speed up progress in addressing serious social problems. These strategies: subsidize learning and experimentation so that new solutions are developed, increase the amount of evidence on the effectiveness of existing and potential new programs, make greater use of evidence in budget and management decisions, make purposeful efforts to target improved outcomes for particular populations, and spur innovation and align incentives through cross-sector and community-based collaborations.

This paper describes the new strategies. It also proposes several steps to advance the use of evidence-based policy in the federal government, including giving agencies the authority to reserve a percentage of program spending to fund program evaluations and expanding the use of tiered evidence standards in grant competitions. Finally, it recommends two initiatives that would supplement the diffusion of these evidence-based practices with a more-focused approach that aims to supply solutions for specific high-priority social problems. The Ten-Year Challenge would tackle ten social problems by establishing data-driven, outcome-focused initiatives in one hundred communities. A federal Pay for Success initiative would help state and local governments establish Pay for Success projects in areas like early-childhood education where state and local activity has the potential to achieve important federal policy objectives or produce significant federal budget savings.

Downloads

Building on Recent Advances in Evidence-Based Policymaking -- Full Text

Authors

Jeffrey B. Liebman

Publication: The Hamilton Project

Revving Up Manufacturing, Region by Region

Mark Muro and Jessica Lee — Thu, 11 Apr 2013 14:44:00 -0400

For some time now we’ve argued that one of the best ways to drive innovation and economic growth is by connecting critical R&D-focused anchor institutions—like the Department of Energy’s Energy Innovation Hubs or the Advanced Industries Innovation Hubs that we advocated establishing earlier this year—to broader regional strategies that seek to strengthen a region’s innovation ecosystem. In providing intentional support for regional innovation clusters, such strategies nurture these major centers of research by fostering knowledge sharing and spillovers, expediting technology transfer and commercialization, and fostering entrepreneurialism.

Now, a pair of items in the new Department of Commerce budget has picked up on that logic by placing side by side two welcome manufacturing policy initiatives.

Going beyond its funding request for the proposed $1 billion investment in a National Network of Manufacturing Institutes, the first of which was launched in Youngstown, Ohio last August, the budget also calls for the creation of a $113 million Investing in Manufacturing Communities Fund to reward and support regions that develop strategies “that build on the region’s comparative advantages and leverage private-sector resources.” Through these twinned proposals, the Commerce budget seeks funding not only to establish new manufacturing innovation institutes but also to provide incentives for manufacturing-strong regions to craft what are in effect metropolitan business plans—carefully tailored strategies that help regions strengthen their economies by capitalizing on their distinctive assets and attributes.

We’re encouraged that these proposals made it into this year’s budget request. Ideas like the Investing in Manufacturing Communities Fund offer a glimmer of the kinds of smart thinking needed to boost economic growth, one region at a time.

And though the fate of this particular budget request is uncertain at best, it points to the types of pragmatic action that production-oriented metros can take on their own to make the most of their manufacturing prowess and strengthen their economies in the process.

Authors

Mark Muro
Jessica Lee

Going Global: Boosting Metro Atlanta's Economic Future

Wed, 20 Mar 2013 11:30:00 -0400

Event Information

March 20, 2013
11:30 AM - 2:00 PM EDT

Historic Academy of Medicine
Georgia Institute of Technology
875 West Peachtree Street NW
Atlanta, GA 30309

On March 19, the Metropolitan Policy program at Brookings and JPMorgan Chase hosted a forum at the Georgia Institute of Technology, “Going Global: Boosting Metro Atlanta’s Economic Future,” the first in a series of domestic and international forums being convened this year by the Global Cities Initiative. This is the second year of the five-year initiative. The forum explored how metropolitan-led economic growth—including global trade and investment—are important for job creation, and how Metropolitan Atlanta can leverage its position in the global market.

Roundtable Presentations:
View Bruce Katz's presentation on Atlanta's next economy »
View Adie Tomer's presentation on global aviation »
View Amy Liu's presentation on global trade »

Other Resources:
For more information on the Global Cities Initiative, please visit the project's homepage.

Read the forum's press release » (PDF)
Read the forum's program » (PDF)

Video

Participants

Panelists

David Balos

Market Manager, Middle Market Banking

Education Technology: The Next Generation

Wed, 20 Mar 2013 14:00:00 -0400

Event Information

March 20, 2013
2:00 PM - 3:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Education technology is an accepted and integral component of reforming and improving the American educational system. The educational possibilities made possible by today's technology and mobile devices are expansive, with mobile phones apps, interactive games, distance learning programs, and environment software readily available to most students and teachers in the United States. Now that these tools are a common feature in the classroom, how can technology’s integration in education be expanded to best benefit students? How can educators incorporate the latest technologies to improve education and assess what proves effective? What future innovations can be expected in educational technology?

On March 20, Governance Studies at Brookings hosted a public forum to discuss the next generation of education technologies. A panel of experts discussed recent advances in educational technology and what new innovations are on the horizon. Participants can join the conversation on Twitter at hashtag #TechCTI.

Read the related paper: Education Technology Success Stories, by Darrell West and Joshua Bleiberg

The United States Transitions to a 'First-Inventor-To-File' Patent System

John Villasenor — Mon, 11 Mar 2013 00:00:00 -0400

The United States has long had a “first-to-invent” patent system in which the date of invention could trump the date of filing a patent application in determining patent rights. However, that is set to change due to the America Invents Act (AIA), a sweeping patent reform bill signed into law by President Obama in September 2011.

For patent applications with an effective filing date of March 16, 2013 or later, the United States shifts to what is often – and only partially accurately – called a “first-inventor-to-file” or “first-to-file” system. The reality is more complex than those designations imply, as patent rights in the United States under the first-to-file system will depend on the interplay between the dates of filing and of any pre-filing disclosures of the invention.

As I explained in an article in Fast Company last year:

Consider, for example, the case of an employee at Company A, who conceives an invention in May, works diligently to reduce it to practice, and files the corresponding patent application in August. Suppose, further, that an employee at Company B independently conceives the same invention in June and files for a patent in July.

Who gets the patent? Under the pre-AIA first-to-invent rules, Company A can get the patent because its employee invented first. However, under the new first-to-file system, things will be more complicated.

If Company A does not make any public disclosures regarding the invention before the August filing, Company B can get the patent by virtue of its earlier filing date. This is exactly what would be expected given the term "first-to-file."

On the other hand, suppose that Company A describes the invention in detail (or in more formal terms, provides a disclosure) at a trade show, before a disclosure or a filing by the second company. In this case, Company A can get the patent even though it filed after Company B.

Pre-filing disclosures, however, have a very important downside that wasn’t changed by the AIA: They can eliminate the ability to obtain rights in the many international jurisdictions that do not recognize a “grace period” for disclosures made in advance of filing a patent application. What has changed is that under first-to-file silence can be more costly than before with respect to U.S. patent rights.

Under first-to-file, an inventor who does not take prompt action to protect his or her invention faces a higher risk that a later inventor will end up holding the associated U.S. patent rights. In part for this reason, the U.S. Patent and Trademark Office is likely to see increased numbers of provisional applications, which if done properly can be a cost-effective way to obtain an early priority date for a patent application.

Much ink has been spilled debating the merits of the move to a first-to-file system. It is often suggested, for example, that it will favor larger companies with more financial resources. However, as I explained in this Forbes article, that isn’t necessarily true. Larger companies may have more money, but they also have more people creating inventions. Smaller companies can be more agile in identifying which innovations are worth patenting, and then acting quickly to take steps to protect them.

While first-to-file has gotten significant attention, the AIA contains many other provisions [PDF] as well, most of which have already taken effect. Companies, universities, individual inventors, and other patent-seeking entities should update their procedures and training accordingly. A good patent attorney or patent agent can play a vital role in helping inventors navigate first-to-file and the other changes provided under the AIA.

Authors

John Villasenor

Publication: Forbes

Image Source: © Pichi Chuang / Reuters

The Predator Comes Home: A Primer on Domestic Drones, their Huge Business Opportunities, and their Deep Political, Moral, and Legal Challenges

Peter W. Singer — Fri, 08 Mar 2013 15:09:00 -0500

At the turn of the last century, a strange new technology began to appear in America. As a January 4, 1900 article about one of the very first sightings in the state of Florida described, “The Locomobile resembles a rubber-tired driving buggy in its outward appearance, except that no allowance is made for attaching a horse…A brake is attached to the rear axle that will stop the machine in a much shorter space than a horse can be stopped.”[1]

The locomobile, or “horseless carriage,” caught people’s fancy and powered a huge new industry. Businesses opened up in places that ranged from Basic City, Virginia, home of the Dawson Steam Auto-Mobile, a two-cylinder runabout with single chain drive and tiller rather than a steering wheel, to the Southern Automobile Manufacturing Company of Jacksonville, which assembled five cars a day that sold for a princely sum of $400 each.

Soon, the industry rippled out into all sorts of directions. It was only two years after the first car hit the roads of Florida that the first car dealership was created. This led to new endeavors in areas like the logistics and support “garages,” which had ripple effects out into other areas. For instance, just three years after the first news article on the locomobile appeared in The Florida Times-Union & Citizen, the very first newspaper advertisement for one appeared.

But this new technology also brought strange new questions, such as how to protect people from them. The first fine for “speeding” came just a year later in 1904, when a man was arrested for endangering the lives and property of pedestrians in downtown Jacksonville. He had exceeded the 6 mile per hour speed limit

The new technology also created new demands on governments, like an entire new type of infrastructure. Staying in Florida for the moment, it was in 1907 when the first of what we now call “snow birds” arrived via horseless carriage. Mr. Ralph Owen “accomplished the amazing feat of driving an Oldsmobile motorcar from New York to Florida in only 15 days.”

The reason this took so long is that no one was ready for it, especially the government. There were no real roads, at least as we think about them now, and no truly reliable maps for the pathways that did exist. Indeed, as late as 1921 the Automobile Club of America recommended that motorists traveling from New England to Florida simply bypass the entire state of Virginia because of these problems.

It wasn’t just the poor state of transportation that required a network of roads and highways to be funded but also basic issues like what safety equipment the new technology required. For example, early horseless carriages often had headlights but no turn signals. Drivers had to use hand signals to indicate their intentions to turn or slow down. A new business started selling a seeming solution, Devilseye Reflector Rings.[2] Drivers would wear large red rings on their fingers at night so that when they held their hand outside the car the rings reflected other headlights and allowed other drivers to see the signal. Soon, this concept was replaced by the novel idea of requiring the reflector be embedded in the car rather than carried by the driver.

These stories of the early days of “horseless carriages” and “locomobiles” aren’t just fascinating but they should serve to help us frame the issues we face today in “unmanned systems” and robotics. They were a technology that once seemed alien but we figured it out.

Where are we now? Robots and War

While unmanned systems have a long history dating back to Da Vinci’s designs for a robotic knight, and first emerged in war with German remote-controlled torpedo boats in the First World War, it wasn’t until just a decade ago that they truly took off.[3] Advances in technology made unmanned systems more usable, especially through the incorporation of GPS technology that allowed such systems to locate themselves in the world. At the same time, the new conflicts that followed 9/11 drove demand. When U.S. forces first went into Afghanistan, the U.S. military had only a handful of unmanned aerial systems (UAS, also called “remotely piloted aircraft” or, more colloquially, “drones”) in the air, none of them armed, and zero on the ground. Now it has a force inventory of more than 8,000 in the air and more than 12,000 on the ground. Another example of how far the change has gone is that last year, the U.S. Air Force trained more unmanned systems operators than fighter and bomber pilots combined.

But when we think about technologies like the Predator or the PackBot, we need to remember that they are just the first generation, the Model T Fords and Wright Flyers compared to what is already in the prototype stage.[4] We are still at the “horseless” stage of this technology, describing these technologies by what they are not rather than wrestling with what they truly are. These technologies are “killer applications” in all the meanings of the term. They are technologies that advance the power of killing. They are also technologies that have a disruptive effect on existing structures and programs. That is, they are akin to advancements like the airplane or the steam engine in allowing greater power and reach in war, but they are also akin to what iPods did to the music industry, changing it forever.

What Next? The Robotics Revolution

While many are surprised by the existing use of robotics, the pace of change won’t stop. We may have thousands now, but as one three-star U.S. Air Force general noted in my book Wired for War, very soon it will be “tens of thousands.”[5]

But the numbers matter in another way. It won’t be tens of thousands of today’s robots, but tens of thousands of tomorrow’s robots, with far different capabilities.

One of the laws in action when it comes to technology is Moore’s Law, which states that the computing power that can fit on a microchip doubles just under every two years or so.[6] It has become an encapsulation of broader exponential trends in technology that have occurred throughout history, with technological power constantly doubling in everything from power to storage to broader innovation patterns.[7] If Moore’s Law holds true over the next 25 years the way it has held true over the last 40 years, then our chips, our computers, and, yes, our robots will be as much as a billion times more powerful than today. But Moore’s Law is not a law of physics. It doesn’t have to hold true. What if our technology moves at a pace just 1/1000^th slower than it has historically? In this slowed-down scenario, we’d only see a mere 1,000,000 times the change.

The bottom line is that what was once only fodder for science-fiction conventions like Comic-Con is now being talked about seriously in places like the Pentagon. A robotics revolution is at hand.

We should be crystal clear here. The robot revolution happening is not the Robopocalypse that Steven Spielberg was preparing to film.[8] It is not the type where you need to worry about the former governor of California showing up at your door, à la The Terminator.[9]

Instead, every so often, a technology comes along that changes the rules of the game. These technologies – be they fire, the printing press, gunpowder, the steam engine, the computer, etc. – are rare but truly consequential.

The key to making technology truly revolutionary is not merely its new capabilities but its questions. Revolutionary technologies force us to ask new questions about what is possible and consider things that weren’t conceivable a generation before. But they also force us to relook at what is proper. They raise issues of right and wrong that we didn’t have to wrestle with before.

The historical comparisons that people make to the robotics revolution illustrate this. When I conducted interviews for my book, I asked people to give historical parallels to where they think we stand now with robotics. As I noted earlier with the comparison to the “horseless carriage,” many of them, especially engineers, liken where we are now with robotics to the advent of the automobile.

If the horseless carriage is the parallel, think of the ripple effects that cars had on everything from our geopolitics to our law enforcement. A group of people who were, at the time, desert nomads became crucial players in the global economy simply because they lived over a sticky black substance previously considered more of a nuisance than anything else. The greater use of that same – now crucial – resource has changed the global climate. The growing use of cars, in turn, led to new concepts that reshaped the landscape, whether through highways and suburbia, or through new social notions, like dating (teens previously could only court on parents’ front porches).

And of course a whole new world requires the establishment of rules of the game, or rather new rules of the road. It wasn’t just a matter of fines for “speeding,” but also changes to the very structure of American law enforcement. The rise of easy cross state crime enabled by the speed and reach of horseless carriages, such as the string of bank robberies by Bonnie Parker and Clyde Barrow, helped lead to the rise of the then Bureau of Investigation, now the modern FBI.[10]

Others, such as Bill Gates, make a different comparison to the computer in 1980.[11] Much like robots today, the computer back then was a big, bulky device for which we could only conceive a few functions. Importantly, the military was the main spender on computers’ research and development and a key client driving the marketplace, again comparable to the development of robots.

But soon, computers changed. They got smaller. We figured out more and more functions and applications that they could perform, both in war and in civilian life. And they proliferated. It has reached the point that we have stopped thinking of most of them as “computers.” I drive a car with more than 100 computers in it. No one calls it a “computerized car.” I have a number of computers in my kitchen. I call them things like “microwave” or “coffee maker.”

The same thing is happening with robotics – not just the changes in size and proliferation, but also the reconceptualization. Indeed, if you buy a new car today, it will come equipped with things like “parking assist” or “crash avoidance” technologies.[12] These are kind ways of saying that we stupid humans are not good at parallel parking and too often don’t look in our blind spots. So, the robotic systems in our car will handle these things for us.

But again, just as the story of the automobile reveals more than just the shift from owning horse stables to garages, so, too, was the computer about more than never having to remember long-division tables again. What were important were the ripple effects. The game-changing technology reshaped the modern information-rich economy, allowing billions of dollars to be made and lost in nanoseconds. It led to new concepts of social relations and even privacy. I can now “friend” someone in China I’ve never met. Of course, I may now be concerned about my niece social networking with people whom she’s never met. It became a tool of law enforcement (imagine the TV show CSI without computers) but also led to new types of crime (imagine explaining “identity theft” to J. Edgar Hoover).[13] And it may even be leading to a new domain of war, so-called “cyber-war.”

This comparison is a striking one because it illustrates how bureaucracies often have a hard time keeping up with revolutionary change. For example, the FBI director was so averse to computers that he didn’t have one in his office and never used email as late as 2001. Sound amazing? Well, the current Secretary of Homeland Security, the agency in charge of the civilian side of American cyber-security, doesn’t use email today.[14]

The final comparison that is made is perhaps a darker one: work on the atomic bomb in the 1940s. Scientists, in particular, talk about the field of robotics today in much the same way they talked about nuclear research back in the 1940s. If you are a young engineer or computer scientist, you will find yourself drawn towards it. It is the cutting edge. It is where the excitement is and where the research money is.

But many worry that their experience will turn out just like that of those amazing minds that were drawn towards the Manhattan Project, like a moth to an atomic flame.[15] They are concerned that the same mistakes could be repeated – of creating something and only after the fact worrying about the consequences. Will robotics, too, be a genie we one day wish we could put back in the bottle?

The underlying point here is that too often in discussions of technology we focus on the widget. We focus on how it works and its direct and obvious uses. But that is not what history cares about. The ripple effects are what make that technology revolutionary. Indeed, with robotics, issues on the technical side may ultimately be much easier to resolve than dilemmas that emerge from our human use of them.

How Our Robots Are Changing

The first generations of aerial robots were much like the manned systems they were replacing, even down to some of them having the cockpit where the pilot would sit looking like it’d been painted over. Now we are seeing an explosion of new types, ranging in size, shape, and form. With no human inside, they can stay in the air not just for hours, but for days, months, and even years, having wings the length of a football field.[16] Alternatively, they can be as small as an insect.[17] And, of course, they need not be modelled after our manned machines, but can instead take their design cues from nature, or even the bizarre.[18]

The other key change is their gain in intelligence and autonomy. This is a whole new frontier. Traditionally, we’ve compared weapons based on their lethality, range, or speed. Think about the comparison between a Second World War B-17 bomber plane and a B-24 bomber plane. The B-24 could be considered superior because it flew faster, further, and carried more bombs. The same could be said in comparing the MQ-9 Reaper UAS with its earlier version, the MQ-1 Predator. The Reaper is better because it flies faster and further and carries more bombs. But the Reaper is also something else, which we couldn’t say about previous generations of weapons: It is smarter, and more autonomous. We are not yet in the world of The Terminator, where weapons make their own decisions, but the Reaper can do things like take off and land on its own, fly mission waypoints on its own, and carry sensors that make sense of what they are seeing, such as identifying a disruption in the dirt from a mile overhead and recognizing it as something that we humans call a “footprint.”

From these changes comes a crucial opening up of the user base and the functionality of robotics. Much as you once could only use a computer if you first learned a new language like “Basic,” so, too, could you once only use robotic systems if you were highly trained. To fly an early version Predator drone, for instance, you had to be a rated pilot. Now, just as my three-year-old can navigate his iPad without even knowing how to spell, so, too, can you fly some drones with an iPhone app.

The Civilian Side Opens

This greater usability opens up the realm of possible users, lowering the costs and spreading the technology even further. So, we are seeing the range of uses expand not just in the military, but also, once proved on the military side, moving over to the civilian world. Take aerial surveillance with UAS. It’s gone from a military activity to border security to police to environmental monitoring.[19] Similarly, the notion of using a robotic helicopter to carry cargo to austere locations was first tested out in Afghanistan, but is now being looked at by logging companies.[20]

A key step in moving this forward in the U.S. will be the integration of unmanned aerial systems into the National Airspace System (NAS) and expanded civilian use. While there has been a huge amount of energy around the topic of domestic drones, such that many politicians speak about them as if they are already “watching everything from above,” the present laws restrict civilian use. An ever growing number of special permits, however, have been issued to domestic operators, now summing 1,428.[21] These early users range from small police departments like Mesa County in Colorado, which found they cost over 90% less to operate than police helicopters, to universities conducting environmental research in Alaska.[22]

Congress has set a deadline of September 2015 for the Federal Aviation Authority to figure out how to make this happen on a more regularized basis, in essence opening up the national airspace to the civilian public and private sector use.[23] As part of this process, there are to be six test sites created around the nation, which some twenty states are competing to be awarded. While it is unclear if the FAA will meet the deadline, the step is coming, and with it, the next ripple effect outwards in the market.

Indeed, what the opening of the civilian airspace will do to robotics is akin to what the Internet did to desktop computing. The field was there before, but then it boomed like never before. For instance, if you are a maker of small tactical surveillance drones in the U.S. right now, your client pool numbers effectively one: the U.S. military. But when the airspace opens up, you will have as many as 21,000 new clients – all the state and local police agencies that either have expensive manned aviation departments or can’t afford them.

The scale of this market is estimated to be in the tens of billions in its first years, but it is frankly too early to know where it will end up.[24] If history is any lesson, we shouldn’t just focus on the sale of drones in roles we already know but recognize that there are many more ways we don’t yet know of where robotics might be applied to other fields. Who saw agriculture as a field to be computerized? And yet the application of computers has led to massive efficiency gains. So, too, is agriculture appearing to be an area in which robotics will drive immense change. Agribusinesses nationwide such as Monsanto are lobbying for the use of domestic drones in roles that range from the monitoring and surveillance of the fields to the crop-dusting to the picking and harvesting.[25]

Impact on U.S. military

There are a huge set of ripple effects that will emerge from the opening up of the airspace to domestic drones. One is a potential role reversal. What will be the impact on the U.S. military as a technology area that it once led in, blossoms on the civilian side?

Take the areas of acquisitions. What happens when manufacturers have a wider set of clients than just the DoD and therefore become less responsive to its needs? If the parallel is computers, microchips and IT networks, the U.S. military once was in the lead in the research and development and then purchasing of computing. Now it is often behind the civilian side and, indeed, in areas like microchips can’t get makers to shift to its unique demands.

Beyond the obvious applications moved over from the military side, the real change occurs when imagination and innovation cross with profit-seeking. This is where parallels to computer or aviation history hold most, as the civilian side then starts to lead the way for the military. For instance, the idea of moving freight via airplanes was not originally a military role. It started out in 1919 with civilians. Today, it’s both a major military role (the U.S. military’s Air Mobility Command has some 134,000 members) and an industry that moves more than $10 trillion in global trade.[26] And, yes, a number of airfreight firms are starting to explore drone air cargo delivery, from large-scale trans-oceanic movement to small movement of medical supplies or even fast food.[27]

Similarly, what will it mean for training, when more and more young service men will come in with experience using the technology at home, or even when they see more advanced versions on the market than what they get from the Pentagon? The bottom line is that discussions of the civilian side also matter to the military.

Economic Winners and Losers: Nations and Communities

A new industry raises another ripple effect: Who will be the winners and losers?

One can certainly think about this issue on the global level. The U.S. faces a strange situation of trying to compete in a world economy, where technologic knowhow is a key differentiator, and yet has an education system that too often moves in an opposite direction. American high school students rank 23rd in science and 31st in math among wealthy nations, and 27th in college graduates with degrees in science and math. And the trends aren’t improving greatly. In 2004, the number of American computer science majors was 60,000. In 2013, it had shrunk to 38,000. (It is all not bad news, we are graduating twice as many journalists.) [28]

But the issue of winners and losers isn’t just a matter for Washington policymakers; it should have huge resonance for state and local leaders. That is, if what is playing out in the field of robotics is comparable to horseless carriage, who is Detroit, which became the epicenter of this industry for the 20^th century, and who are going to be like Basic City or Jacksonville that had early automobile companies around the same period? Or, if the comparison is to computers, who is going to be akin to Philadelphia, a key node in the early days of computing, and who is going to be the robotics version of Silicon Valley?

Answering this question turns on challenging a false notion that has taken hold, that in today’s world of globalization distance doesn’t matter. But despite our new technologies, we have repeatedly seen at the state and metropolitan level, success happens in clusters.[29]

As Maryann Feldman writes in her study Location, Location, Location: Creating Innovation Clusters, “Grounded in place, innovation and entrepreneurship rely on an ecosystem of firms (both suppliers and customers), universities and community colleges, government agencies, and trade associations, all systematically aligned to encourage creativity and experimentation. Once started, concentrations of industries within places become self-reinforcing as talent is attracted to opportunity, the flow of ideas increases, and their potential is understood and appreciated. With that dynamic, it becomes easier and less costly for entrepreneurs to realize their dreams.”[30]

The role of the government is central in developing these clusters. While entrepreneurship is a private-sector activity, it is public policy that sets the stage. For example, I am from North Carolina. Like that old Saturday Night Live joke, we were really happy there was a South Carolina and District of Columbia whenever the education rankings came out, as that meant we had someone to look down on from our lofty perch of 49^th in the nation.

Yet, when North Carolina’s textile manufacturing economy declined, the local government did something brilliant. It fostered a new “innovation cluster” centering around the Research Triangle Park that is now the home to more than 130 research facilities and helped North Carolina become one of the hubs of the biotech industry. This boom then benefited the rest of the state and made it one of fastest growing states in the nation during this period. The success didn’t happen overnight. As Feldman noted, the policy world can nurture these kinds of success stories via “…steady and consistent state policy, investment tax credits, and quasi-governmental, sector-specific agencies.”

Job Gain and Loss

The rise of domestic robotics use holds the potential to create a number of jobs. Indeed, the AUSVI industry trade group has claimed some 70,000 new jobs will be created in just the first few years once the airspace opens up, arguing (with an obvious self-interest) that the US loses some $27 million per day in economic activity the longer it waits to do so.[31]

This boom for the robotics industry, though, raises deep questions not just of which areas will win out, but also which individuals will win and lose.

Just as the horseless carriage made titans of Henry Ford and Alfred Sloan, computers created a whole new generation of billionaires and millionaires. But, of course, just like with the craftsmen before the first industrial age, there were also losers. For hundreds of years, there was a highly skilled profession of men who did mathematics for hire. They were well paid, many making the equivalent of $200,000 a year. They were called “calculators.” They have gone the way of so many other professions reshaped by new technology like the blacksmith making horseshoes or the elevator operator.

Indeed, robots have already and will continue to shape the economy both as an issue of growth and job loss. As a recent MIT study found, automation is "destroying jobs and creating prosperity," explaining both the gains in efficiency and the loss of as many as six million jobs over the last decade.[32] Robots are a large part of the reason the automobile companies of Detroit are back, but so many automobile workers are not back to work. (Already, one in ten has been replaced by a factory line robot, with many companies across a wide array of industries planning to fully automate their assembly lines.)[33]

Such trends mean that a part of our economy will make a great deal of money from robotics, which is why there is so much lobbying behind the area today. Last year, drone manufacturers gave $2.3 million in contributions to the House Unmanned Systems Caucus, while the industry’s trade group spent a quarter million lobbying for the FAA bill that opens up the airspace (the group proudly told donors that “Our suggestions were often taken word-for-word” in the language of the bill).[34] But these very same trends also mean the expansion of the industry will be seen as a threat to livelihoods, further stoking tensions and underlying suspicions of the technology.

Law and Privacy

One profession that will be busy, though, is the lawyers.

While some say drones are no different than manned planes or fixed surveillance cameras on the street, and so raise no new privacy issues, this is incorrect at face value. There are similarities but also fundamental differences.

To operate, a robot is always gathering and storing information about the world around it. Always. This is different from a regular plane, for example, where the human operator is gathering most of this information but cannot store it for playback. A robot’s operating requirements mean that even in the course of regular operations, it is gathering and storing information about everything that crosses its path. This gives robots an advantage over human operated planes, where a conscious decision to acquire and store data must be made. The other main advantage of unmanned systems is their ability to loiter for long periods of time, which again allows them to draw in more information, and as the ACLU's Jay Stanley and Catherine Crump have written, also allows them to “...pose a more serious threat to privacy than do manned flights."[35]

Taking in vast quantities of information even unintentionally is a key part of the concern. For example, a robot on a “Where’s Waldo?” mission to hunt down one person in a city will still be gathering data on the entirety of the city throughout the search process.

Visual information is not the only type of data being gathered. Unmanned systems also carry out electronic surveillance. A drone unveiled at the DefCon hacking conference in 2011 can crack Wi-Fi networks and intercept text messages and cell phone conversations – without the knowledge or help of either the communications provider or the customer.[36] This type of drone draws in electronic information on a wide group of people beyond the intended target – and, different from a computer, includes those who have not signed a user agreement or otherwise signaled they accept this intrusion upon their privacy.

Finally, the size and mobility of robotic systems is fundamentally different – many are being designed in increasingly smaller sizes, and they are able to move and track targets covertly when required. A robotic system can watch from above, but can also get up close and personal, unlike a fixed security camera or a high altitude spy plane.

These differences lie at the heart of a lot of the worries over domestic use of unmanned systems. Such suspicion has mobilized left wing groups like the ACLU, but also those on the right, such as the Tea Party movement, perhaps best illustrated by the speeches and legislation of Senator Rand Paul, who has attempted in the words of one article to launch “a Preemptive Strike Against Domestic Drone Use.”[37] While some 20 states from Nevada to North Carolina are competing to be the home of the six FAA drone test sites, the anti-drone movement has crystallized into efforts to ban the use of drones in at least ten state legislatures, ranging from Virginia to Oregon. Indeed, Charles Krauthammer, a right wing commentator on Fox News, even urged Americans to use their Second Amendment powers to shoot down drones (something already done by a group of hunters in Pennsylvania, who shot down a drone doing environmental monitoring).[38]

Building Code

With these concerns brewing, we are starting to see some steps forward to respond. For instance, an industry “code of conduct” has been put forward by the same trade group that prompted the current controversy over domestic drones with its successful lobby to open the airspace. The AUVSI code took on many of the concerns circulating, grouping them into three core themes of Safety, Professionalism, and Respect.[39] It laid out how the industry and users would "commit" to not operating drones "in a manner that presents undue risk to persons or property;" to planning for "all anticipated off-nominal events;" and to share such contingency plans with "all appropriate authorities." It made great sense and was reported widely.

The challenge for the robotics code of conduct, however, is much the same as other industries' attempts at self-regulation, ranging from banking to the private military industry. It's a laudable start, but it doesn't change the underlying issues and concerns. Like such other would-be "codes of conduct," it lacks a key ingredient: consequences.

It is a voluntary code with no results if one violates it. Indeed, much of what is laid out is actually restatements of responsibilities the firms and users already should abide by, regardless of any code. For example, the code says that the firms "will comply with all federal, state and local laws." So, before the code, they could violate the law at will? Of course not.

But more importantly, the code is not able to deal effectively with all the areas where the law is absent or vague. It says that "We will ensure that UAS are piloted by individuals who are properly trained and competent to operate the vehicle or its systems." Who will determine this, and what does "trained and competent" mean in a world where some believe drones should only be operated by rated pilots, even though new versions can be flown by teens using iPhone apps?

Likewise, the code pledges to "respect the privacy of individuals," which is a bold statement. But "Respect" could be anything from avoiding the monitoring of individuals without their express permission to showing them "respect" only in the public-relations sense.

Of course, these are thorny issues. Indeed, it's their very thorniness that is why an industry self-regulatory code is the beginning of the discussion, not the final answer

The Police Weigh In

The same could be said of a push by police chiefs, who have offered a code of conduct for their use of drones.[40] This effort asserted that police wouldn’t let any images captured by unmanned aerial vehicles be open to inspection by the public, and that the images would not be stored, unless they are evidence of a potential crime or part of an ongoing investigation. Of course, that’s a pretty large out clause.

More importantly, the police chiefs’ effort is a proposal, not yet policy, with some huge gaps. Even worse, it has a big dose of unrealism. For instance, it suggests that police would use a “Reverse 911 telephone system to alert those living and working in the vicinity of aircraft operations. If such a system is not available, the use of patrol car public address systems should be considered.”

In reality, such a system would be unworkable and even laughable. Each and every time a UAS flies, the police are going to call all of an area’s residents’ home phone (setting aside the growing number who only have mobile phones)? Or, alternatively, the police are planning to ensure public awareness of potential privacy losses by recreating the scene from the movie The Blue Brothers, driving through the streets yelling out on a car’s bullhorn?

Similarly, we have next order questions, like whether drones should be armed. This is cast aside quickly in the proposed codes, but again definition and context matters. Law enforcement in Texas has shown interest in unmanned aerial systems armed with a shotgun that shoots “less than lethal” rounds.[41] One person’s shotgun or taser is another person’s unarmed drone.

The bottom line is that, as with revolutionary inventions of the past, no amount of handwringing by pundits late to the game will see a technology of such great promise banned.

Instead, a revolutionized world requires the establishment of new rules, which in turn requires an understanding of the new technology. Much of the substance of these rules will likely come from both public discourse and the private sector. For example, the origins of the modern way we drive can be found in Rules of the Road, published in 1903 by William P. Eno. Known as "the father of traffic safety,” Eno’s book contained such revolutionary ideas as cars only passing on the left, stop-lights and one-way streets. (Ironically he never drove himself; he was always chauffeured).[42]

We are seeing a similar evolution now, whether in the development of industry codes of conduct or guidelines for university research groups. But much like the early “rules of the road,” these will need enforceable laws to make them real. Early cars and planes, for instance, needed more than Eno’s book – mainstream use of these inventions demanded the drafting of traffic laws and the creation of regulatory institutions like the Federal Aviation Administration. Similarly, the increasing use of unmanned systems has highlighted a gap at the state and federal level that demands action.

Where the Law Goes Next

As these laws are hopefully built by Congress, we need to recognize that much of what is written in the law is just the first draft. For instance, federal district court judges have spoken about how, much like with computers and the privacy questions they created, questions over the proper use of drones by law enforcement will end up as Supreme Court cases.

But even then what will the Court decide? A case that is frequently spoken about as a potential precedent is 2001's Kyllo vs. U.S.[43] In this instance, a federal government agent used a "thermal imaging device" to scan a home in Florence, Oregon. They did not have a warrant, but it allowed them to learn that marijuana was being grown.

When the case made its way up to the Supreme Court, the majority opinion, written by Judge Scalia, was that when the "government uses a device that is not in general public use, to explore details of a private home that would previously have been unknowable without physical intrusion, the surveillance is a Fourth Amendment 'search,' and is presumptively unreasonable without a warrant."

Many point to this as evidence that the Supreme Court will be less likely to approve domestic use of drones in an intrusive way by police. But they ignore the caveat. What about when a technology becomes in “general public use,” as drones are evolving to?

Similarly, last January in the U.S. v. Jones case, the Supreme Court ruled that placing a GPS tracking device on a vehicle is considered a search under the Constitution and required a warrant. Notably, though, it was the physical placement of the GPS on the vehicle that mattered most.[44] The Court said other evidence obtained without using the GPS device was admissible because the suspect had no "reasonable expectation of privacy" for a vehicle on the public streets. One way to read it is that your car can’t be tracked without a warrant; another is that your car can be tracked without a warrant, just as long as the police don’t place anything on the vehicle, which is no longer required with our current technology.

The underlying point is that the precedents cited with certainty by analysts and lawyers are often not as clear as they might be. And, when there are questions, or even potential abuses, it will be years before the legal system resolves them. The GPS case happened in 2005, but didn’t get resolved until 2012, well after the technology of a physical tracker was no longer needed. Moreover, just because the Supreme Court ruled one way, doesn’t mean it won’t rule differently on very similar issues, just at a different time. As everything from voting rights to abortion rulings demonstrates, all it takes to reorder the law is just a few seats changed on the court. Neither technology nor laws are written in stone, and justices don’t live forever.

User Questions

The innovation spread of robotics represents another trend of opportunity and peril. An ever-wider set of users is innovating for all sorts of positive purposes with robotics, from the great work being done by young students at robotics labs at McGill University to the team in Australia that built an autonomous drone to help find lost hikers.[45]

But not all of the people behind machines have only the best in mind. Take the traditional notion of using a robotic drone for surveillance. The new users have not just been militaries or police, but have also been civilians. These include news journalists who have reported on natural disasters with drones, as well as parents who want new ways to watch their kids.[46] A father in the U.S. gave new meaning to the term “helicopter parent,” using an automated quadcopter drone to escort his child to the school bus stop.[47]

The problem is that each and every technology has its darker side. The technology is enabling a new field of drone journalism (already taught at University of Nebraska and University of Missouri) that reports important stories with a whole new level of fidelity.[48] But the same phenomenon also advances the field of paparazzi. For instance, Gary Morgan, chief executive officer of Splash News, a celebrity-photo agency, has already said he’d like to be buzzing his quarry soon with silent, miniature drones mounted with tiny cameras: “It would strike fear in the hearts of every celebrity having a birthday party.”[49] And, one has the sense that the child may end up telling a therapist one day about his father loving him a bit too much, to the extent of following him with a drone.

Open Source

More seriously, just as software has gone “open source,” so has warfare. Robotics is not a technology like the atomic bomb or aircraft carrier, where only the great powers can build and use it effectively. Instead, just like with the “app” in the field of software, it is not just the big boys who control the field. The barriers to entry are not exceptionally high, and that means that bad actors will be able to gain and use this advanced technology.

If history is any guide, the repurposing of a low-entry revolutionary technology tends to happen fairly quickly. The first car bomb was set off as early as 1905, used in an assassination attempt on the Ottoman sultan. Similarly, the first hijacking of a plane took place in 1931, very early in civilian air travel.

A particular area of concern, then, is the use of robotic systems by terrorists and other non-state actors. Israel as a state has long used drones, and now so does its non-state opposition. Hezbollah, for example, is not a major state military, but it has already operated UAVs, as too has Hamas.[50]

The impact of this trend is twofold. The first is that it reinforces the empowerment of individuals and small groups against the power of the state. During the Second World War, for example, Hitler’s entire Luftwaffe could not manage to reach across the Atlantic to strike at Canada or the U.S. Just a few years ago, a blind 77-year-old man managed to build his own drone that flew itself across the Atlantic.[51]

And one man’s hobby may be another man’s plot. In 2011, the FBI arrested Rezwan Ferdaus, a man who wanted to recreate the 9/11 attacks (not so ironically, he had been angered by drone attacks in the Mideast intended to stop terrorism).[52] Unable to hijack planes, he instead obtained a large drone and planned to fly it into the Pentagon. Fortunately, he made the mistake of asking an FBI informant where he could obtain C-4 explosives. The plot was averted, but it showed we are now in a world where it is easier to get the drone than the bomb.

This greater reach and power may also see a lowering of the bar. One does not have to be suicidal to carry out attacks that previously might have required one to be so. This allows new players into the game, making al-Qaeda 2.0 and the next-generation version of the Unabomber or Timothy McVeigh far more lethal.

Just as car bombs are not the only way automobile technology has been misused, we should not make the mistake of only focusing on terrorism when it comes to the potential criminals uses of robotics. The early horseless carriage may have been reworked into a car bomb by turn-of-the-century terrorists, but the main illegal use was as a getaway device for criminals. Similarly, the best example of innovation in the field of robotics last year might be the team of thieves in Taiwan, who used tiny helicopters equipped with pinhole cameras to carry out a jewellery heist. They made away with $4 million worth of loot before being caught.

Accountability

The challenge for the law is not just how to prevent bad guys from doing bad things, but what to do when things go wrong without someone having bad intent, such as when the Google car was in a wreck in August 2011. Like most wrecks, the various sides involved blamed each other, just now they did it via online social networks.

Now take these issues and move them into the air. Congressional investigators report that there were over 200 drone accidents in Iraq and Afghanistan over the course of four years. This doesn’t include the many that happened in the not so covert world of strikes in Pakistan and Somalia. Perhaps the most amusing, but also maybe scary case took place at a base in Djibouti in March 2011.

As The Washington Post reported, a Predator parked at the Camp Lemonnier started its engine without any human direction, even though the ignition had been turned off and the fuel lines closed. “Technicians concluded that a software bug had infected the “brains” of the drone, but never pinpointed the problem…“After that whole starting-itself incident, we were fairly wary of the aircraft and watched it pretty closely,” the Air Force squadron commander testified to an investigative board.”[53]

The issue here isn’t that Predators are poised to take over the homeland, but rather another vexing question of law, politics, and ethics. Robotics has a long history of what one Vice President of a technology firm described to me as “oops moments.” These are when things don’t work out with your machine as planned and you have to take it back from the field. With military robotics, the examples range from the machine gun armed UGV that went “squirrelly” and started spinning around during a demonstration to the automated anti-aircraft system in South Africa that had what investigators thought was a “software glitch” during a training exercise. It shot nine soldiers by accident in a real world version of the famous scene from Robocop.[54]

Today, these oops moments might even be intentionally caused by hostile man-made threats, including criminal or adversarial efforts at UAS communications interference or hacking. Here again, this scenario is not science fiction, but was recently demonstrated in a test in Texas, where a university team hacked the navigation system of a drone.[55]

The issues this phenomenon presents are not just how to avoid them through technology improvements and deconfliction protocols, but also more vexing questions of process, policy, and even philosophy. How do we investigate and apportion out accountability in a realm where more and more is happening outside our old concepts of control and responsibility?

For instance, aviation law and insurance right now focuses on determining if the problem was a hardware error (a widget broke), wetware error (the human pilot made an error), or spiritual (an “Act of God” caused the loss). Now we have much in between, the role that software plays. And in the software field, responsibility and accountability is not something easily assigned. It can be stretched over the long periods of time between design and use, over the large numbers of people involved in writing and selling and buying and upkeeping software, by a business approach that often intends to let the customer find the errors, and by the fact that software will repeatedly be put in real world circumstances for which it wasn’t originally designed. In short, we have to figure out how to catch up our 20^th century laws, with our 21^st century technologies.

The Psychology Side

The irony in all this is that while the future may involve more and more machines watching us, whether it is police watching city streets from above, or the NSA reading your email, or your phone letting Starbucks know you are walking nearby, how we react to it will still be driven by the very fuzzy combination of our human programming, our identity and emotions – our chemical makeup that drives human psychology.

So what then will be the reaction to this next level step in the surveillance state? Will we redefine our notions of privacy, reacting like how teenagers have handled their online behavior on Facebook and Twitter? Who cares if all my behavior is shared with the world? Instead, I’ll embrace a loss of privacy that would have shocked my parents generation, and even mock it. One can already see this in the new offerings of anti-drone “stealth clothing” for any “style-conscious” terrorists the U.S. seeks, as well as “fashionistas who value their privacy.” As its designer told the media, it also doesn’t fall along clear partisan lines, making it the “Project Runway” version of Rand Paul’s filibuster. “It interests people on the far right as much as it interests people on the far left. Ultra-conservatives see it as anti-government and ultra-liberals see it as anti-military.”[56]

Or will we fear it? And is this a good or bad thing? Some, such as one senior State Department official, believe that our unmanning of war “…Plays to our strength. The thing that scares people is our technology.”[57] The carryover of this belief to the domestic side is the belief that a world of more drones will be a safer world, via a deterrent value. Where’s Waldo won’t mug me if he knows he’ll be caught on screen,

But the psychology of scaring people with technology is a tricky business. It’s the domestic version of the problem we face in our counterterrorism today. Abroad the U.S. government is wrestling with the robot’s impact on our very human “war of ideas” that we are fighting against radical movements. U.S. troops in Afghanistan describe having drones overhead as reassuring, saying they can sleep better as they feel like someone is always above, watching out for them. On the other hand, many civilians there say it’s intrusive, and creates a climate of fear and distrust. That is, on the domestic side, the risk is that robotic surveillance will instead be perceived as an intrusive “Big Brother” figure, as the Russian police who have already used drones to monitor protesters have been called.

The broader issue might not be one of fear, however, but a redefinition of how those who are watched look at the watchers. There is the potential that the drone could become emblematic of those trying to police people they don’t know, on the cheap, from afar. The drone becomes like the cameras favored by the disconnected Baltimore police force of the TV show The Wire, who watch a world of crime play out that they don’t understand.[58]

Conclusions

The ripple effects of robotics will continue to push out into all sorts of domains, in ways both expected and unexpected. Through it all, though, one fundamental principle will hold true as it has in the past: There are always two sides to technologic revolutions. From our new technologies we gain amazing capabilities that seem like they are straight from science-fiction. But from our new technologies we also gain new human dilemmas that seem like they are straight from science-fiction. Moore’s Law is operative, but so is Murphy’s Law.[59]

The issues of domestic “drones” all seem futuristic, but notice how none of the examples that were explored in this article were from the distant future. The questions they raise are fundamental policy questions of today. We can ignore them, or we can embrace and engage in the opportunities and dilemmas of these exciting times.

The above paper includes sections explored in the article The Robotics Revolution, for the Canadian International Council. The author would also like to thank the Christopher Newport University Center for American Studies.

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[23] Rebecca Boyle, “Drones Will Be Admitted to Standard US Airspace By 2015,” Popular Science, February 7, 2012, http://www.popsci.com/technology/article/2012-02/under-newly-authorized-airspace-rules-drones-will-fly-alongside-piloted-planes-2015.

[24] TealGroup, “Worldwide UAV Market Will Total $89 Billion In 10 Years,” DefenseTalk (blog), April 13, 2012, http://www.defencetalk.com/worldwide-uav-market-will-total-89-billion-in-10-years-41581/.

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[26] “Air Force Mobility Command,” United States Air Force, http://www.amc.af.mil/.

[27] “Should Drones Fly Commercially?” MapsofWorld.com, 2012, http://www.mapsofworld.com/poll/should-drones-fly-commercially-infographic.html.

[28] Brian Fung, “You Call This an Army? The Terrifying Shortage of U.S. Cyberwarriors.” National Journal, February 25, 2013, http://www.nationaljournal.com/tech/you-call-this-an-army-the-terrifying-shortage-of-u-s-cyberwarriors-20130225.

[29] Bruce Katz and Mark Muro, “The New ‘Cluster Moment’: How Regional Innovation Clusters Can Foster the Next Economy,” The Brookings Institution, September 21, 2010, http://www.brookings.edu/research/papers/2010/09/21-clusters-muro-katz.

[30] Maryann Feldman, “Location, Location, Location: Creating Innovation Clusters,” Democracy, issue 21 (Summer 2011), http://www.democracyjournal.org/21/location-location-location-creating-innovation-clusters.php?page=all.

[31] “AUVSI Study Finds Unmanned Aircraft Industry Poised to Create 70,000 New Jobs in U.S. in Three Years,” Association for Unmanned Vehicle Systems International, March 12, 2013, http://www.auvsi.org/AUVSI/AUVSINews/AssociationNews/.

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[33] John Markoff, “Skilled Work, Without the Worker,” The New York Times, August 18, 2012, http://www.nytimes.com/2012/08/19/business/new-wave-of-adept-robots-is-changing-global-industry.html?pagewanted=all&_r=0.

[34]Congressional Unmanned Systems Caucus, http://unmannedsystemscaucus.mckeon.house.gov/.

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[35] Jay Stanley and Catherine Crump, “Protecting Privacy From Aerial Surveillance: Recommendations for Government Use of Drone Aircraft,” American Civil Liberties Union, December 2011, https://www.aclu.org/files/assets/protectingprivacyfromaerialsurveillance.pdf.

[36] Dan Goodin, “DIY aerial drone monitors Wi-Fi, GSM networks,” The Register, August 5, 2011, http://www.theregister.co.uk/2011/08/05/flying_spy_drone/.

[37] “Rand Paul Launches a Preemptive Strike Against Domestic Drone Use,” The Atlantic, June 12, 2012. http://www.theatlantic.com/politics/archive/2012/06/rand-paul-launches-a-preemptive-strike-against-domestic-drone-use/258422/.

[38] Amy Worden, “Activist group’s drone shot while filming PA pigeon shoot,” philly.com, November 21, 2012, http://www.philly.com/philly/blogs/pets/Activist-groups-drone-shot-while-filming-PA-pigeon-shoot.html.

[39] “Unmanned Aircraft System Operations Industry ‘Code of Conduct’,” Association for Unmanned Vehicle Systems International, http://www.auvsi.org/conduct.

[40] Stephen Dinan, “Police chiefs adopt drone code of conduct,” The Washington Times, August 16, 2012, http://www.washingtontimes.com/news/2012/aug/16/police-chiefs-adopt-drone-code-conduct/.

[41] Stephen Dean, “New Police Drone Near Houston Could Carry Weapons,” Click2Houston.com, October 29, 2011, http://www.click2houston.com/news/New-Police-Drone-Near-Houston-Could-Carry-Weapons/-/1735978/4717922/-/59xnnez/-/index.html.

[42] Sharon L. Cohen, “The History of Traffic Laws,” eHow, http://www.ehow.com/about_5436948_history-traffic-laws.html.

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[44] Jess Bravin, “Justices Rein In Police on GPS Trackers,” The Wall Street Journal, January 24, 2012, http://online.wsj.com/article/SB10001424052970203806504577178811800873358.html.

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[50] Zeina Karam, “Hezbollah says it sent drone over Israel,” USA Today, October 11, 2012, http://www.usatoday.com/story/news/world/2012/10/11/israeli-leader-accuses-hezbollah-of-drone-launch/1627315/.

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Authors

Peter W. Singer

Eye-Tracking Smartphones Have Arrived. What About the Privacy Implications?

John Villasenor — Tue, 05 Mar 2013 00:00:00 -0500

Last March, I wrote in Slate about eye-tracking, which could allow computers and smartphones of the future to collect information not only about what we read, but how we read it.

It appears that the future has arrived. The Samsung Galaxy S IV, which is slated for introduction next week, will reportedly include an eye-tracking feature to make it easier to scroll pages without physically touching the screen. Some people will view this as an added convenience, and for people with certain types of disabilities, navigating by eye-movement can be a vitally important way to interact with objects on a screen.

But there's also something a bit chilling about the prospect that our mobile devices might be watching us while we’re watching them. After all, there is information in what our eyes do when they scan a page. Where do they linger? What do they skip?

In a world where there is potential marketing and advertising value in every scrap of data about how we interact with our devices, it is hard to imagine that this rich new source of information will go untapped. It probably won't be long before terms of service for some mobile apps get revised to allow collection and resale of eye-tracking data. Clicking "accept" when downloading a new app may mean agreeing to have your eye movements sent to the cloud, analyzed, aggregated with other data collected from your device, and then resold into the mobile marketing ecosystem.

For the traditionalists among us who—how quaint!—prefer to keep our eye movements to ourselves when reading, there will presumably be an option to turn the tracking function off. But will turning it off mean that the smartphone stops tracking our eye movements altogether? Or that it still tracks them, but just doesn’t use the resulting information to alter the display on the screen? And, if history is any guide, there will be some third-party apps that "accidentally" collect eye movement information anyway, even when users explicitly request otherwise.

As I wrote last March, in a world without eye-tracking, our thoughts when we read something are largely our own, and we should enjoy it while it lasts. It looks like the curtain on one more form of privacy may be coming down a lot sooner than most of us expected.

This piece originally appeared at Slate.com.

Authors

John Villasenor

Publication: Slate.com

Invention and the Mobile Economy

Darrell M. West — Tue, 05 Mar 2013 15:00:00 -0500

In this paper released in conjunction with a Mobile Economy Project panel discussion, Darrell West argues the importance of invention to mobile communications and demonstrates that the mobile industry is one of our most vibrant drivers of economic development.

Highlights include:

• Examples of key inventors: West seeks to understand how to sustain invention and draws lessons for encouraging the critical innovation needed for future development.

• How different countries handle invention: In comparing and contrasting other countries as well as the United States, West adds perspective and paints a global invention landscape.

• Ways to facilitate invention: A number of factors affect the quantity and quality of invention (including but not limited to research and development, the quality of STEM (Science, Technology, Engineering and Mathematics) education, the nature of immigration, and the patent system. West emphasizes how we should maintain a culture of invention to encourage future prosperity.

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Authors

Darrell M. West

Invention and the Mobile Economy

Tue, 05 Mar 2013 15:00:00 -0500

Event Information

March 5, 2013
3:00 PM - 4:30 PM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

In the 40 years since the creation of the cell phone, creative engineers have developed a range of new products that enable mobile activity. From cellular networks and microchips to batteries and antennas, invention has been a big part of mobile technology, resulting in an industry that has become a vibrant driver of economic development. The mobile industry contributes significantly to GDP growth and job creation around the globe. In many countries, mobile is among the fastest-growing business areas. With mobile devices spreading at a rapid pace, it is important to understand how progress has been made and how government and business can facilitate continued development.

On March 5, as part of the Mobile Economy Project, Governance Studies at Brookings hosted an event focusing on key inventors, how different countries encourage and protect invention, and barriers that need to be overcome in order to promote mobile invention. A panel of experts discussed the culture of invention that has propelled the mobile industry to the economic forefront.

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The American Airlines-US Airways Merger in an Evolving Airline Industry

Clifford Winston — Tue, 26 Feb 2013 00:00:00 -0500

Introduction

In a 1995 book, The Evolution of the Airline Industry, Steven A. Morrison and I assessed the effects of various hypothetical changes in airline competition on air travelers’ fares. An extreme scenario that we considered was that Alaska, Continental, America West, Northwest, TWA, and USAir exited the industry, leaving Southwest, United, American, and Delta as the only major carriers in the U.S. domestic market. At the time, we thought this large scale exit would be a tremendous shock to industry competition—note, we did not assume that the carriers exited by merging with other carriers. We found, however, that fares increased modestly, about 8 percent, which preserved most of the decline in fares due to deregulation. We attributed our finding to the ability of Southwest to enter additional markets and discipline fares.

Today, this extreme scenario no longer seems so extreme because if American’s proposed merger with US Airways is approved, then, with the exception of Alaska, all the carriers that we assumed would exit the industry would have done so. My testimony provides some perspective on this scenario, indicates why its effects on fares would differ from the prediction that we reported in our book, and assesses U.S. airlines’ merger activity in the broader context of the industry’s eventual evolution to a highly competitive, global airline industry.

The Scenario and Reality

The scenario we posited in our book differs from an actual post American-US Airways merger environment because we assumed that carriers would simply exit the industry and would not merge and because we accounted for competition among only four remaining carriers.

In our scenario, when a carrier was assumed to exit a market, all of its assets exited with it. This assumption ignored the potential benefits of a merger and overstated the exiting carrier’s effect in raising fares because its assets could have been put to more effective use if that carrier merged with another carrier, thereby creating a more efficient competitor. Indeed, retrospective empirical assessments of airline mergers have generally found that the presence of a merged air carrier in a market does not lead to higher fares. At the same time, travelers benefit from the merged carrier’s more extensive network and from more opportunities to use frequent flier miles.

Our scenario also did not account for the fact that in addition to American, Delta, United, and Southwest, the carriers that would still compete in the industry include Alaska, JetBlue, Spirit, Frontier, Virgin America, Allegiant, and Hawaiian Air among others.

Accordingly, even though for the last decade or so the U.S. airline industry has been evolving in a way that is consistent with the extreme scenario in our book, as shown in Borenstein and Rose’s recent paper reporting U.S. airline industry operating characteristics through 2011, real yields have continued to decline since deregulation in 1978; real yields have been consistently below the Standard Industry Fare Level (SIFL) that was used by the Civil Aeronautics Board to determine regulated fares; low-cost carriers’ market share has steadily increased; route level concentration on hub and non-hub routes has stabilized during the past ten years; and the industry average load factor (the percentage of seats filled by paying passengers) has steadily increased. And, as reported in Tomer, Puentes, and Neal’s Brookings study, travel in U.S. international markets has more than doubled between 1990 and 2011 as U.S. carriers have taken advantage of open skies agreements to expand their international networks and increase flight frequency.

Similar to the mergers that preceded it, the merger of American Airlines and US Airways would preserve those positive long run trends. Carrier competition would continue to be intense and low-cost carriers would continue to put downward pressure on fares. Entry and exit would continue to be fluid in airline markets as a merged American and US Airways would optimize its network by exiting some routes and entering others, while other carriers would adjust their networks by entering some of the routes that American exited and exiting some of the routes that they entered. The merged American and US Airways would also strengthen its international network and benefit travelers by serving more foreign destinations.

In retrospect, the extreme scenario depicted in our book previewed a natural evolution of the industry in response to deregulation with the critical caveat that instead of completely exiting the industry, certain carriers have merged with others, which has enabled the industry’s capital stock to become more productive as, for example, merged carriers have been able to retire their least efficient aircraft more quickly and has enabled the merged carriers to strengthen their international networks.

Toward a Global Airline Industry

A proposed merger between large firms is often accompanied by concerns that the consolidation would reduce competition and raise prices. If policymakers are concerned that the proposed American-US Airways merger may have anti-competitive effects, notwithstanding any gains in operating efficiency, then an effective way to address those concerns, obtain the efficiency gains, and significantly benefit travelers would be to take steps to stimulate additional competition by creating a deregulated global airline industry.

In fact, U.S. and foreign policymakers have already begun that process by negotiating open skies agreements, which give U.S. and foreign carriers the freedom to enter and set fares in U.S. international markets. As expected, air travelers have benefited. In a recent paper, Jia Yan and I estimated that the reduction in fares and increase in flight frequencies in markets that are governed by open skies agreements has raised travelers’ welfare $5 billion annually. If the United States negotiated agreements with foreign countries so that all U.S. international routes were governed by open skies, we estimate that travelers would gain an additional $5 billion annually.

The final step to create a highly competitive global airline industry would be for the United States to allow foreign airlines to serve U.S. domestic markets. (Other countries should also allow foreign carriers, including U.S. carriers, to serve their domestic markets.) Clearly, competition would be even more intense in U.S. markets and travelers would benefit from lower fares and service improvements if their choice of carriers were expanded to include discount carriers like Ryanair and global players like Qantas and British Airways. Such airlines have never posed a threat to national security or to the safety of air travelers.

Whether it was part of their grand design, U.S. carriers have been preparing for decades for a truly competitive global airline industry. As part of this process, they decided that mergers would help them develop more efficient operations and networks. No evidence exists to question the effectiveness of that strategy; hence, policymakers have been wise to allow consolidation to move forward and they should allow American Airlines and US Airways to continue the process. Policymakers should also accelerate the airline industry’s contribution to globalization by creating a truly competitive deregulated environment that would benefit travelers in the United States and throughout the world.

Authors

Clifford Winston

Publication: Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary, United States House of Representatives

A Cheerful Welcome to the Robots, Our Future Work Overlords

Scott Winship — Mon, 18 Feb 2013 00:00:00 -0500

A surprising number of people seem to be freaking out about an imminent takeover by robots. It’s true that only at the fringe is anyone suggesting a Matrix-style dystopia where the machines rise up and enslave us. But the commonly-expressed conviction that technological innovation will immiserate broad segments of society is only somewhat less irrational.

A number of major news outlets and commentators have raised the specter of a doom-like “rise of the robots.” These alarmist speculations allege that technology will leave behind a large portion of the U.S. labor force. One recent piece goes so far to insist that taking on the robots “now poses the central economic dilemma of the Obama era.” The central economic dilemma? Does not compute.

There are two blind spots at work among the neo-Luddites. The first is the tendency to see economic stagnation or decline everywhere, which, it is said, will only worsen. The amount of economic insecurity—and the extent of its increase—have been greatly overstated, as I have argued in the pages of National Affairs. Median income has fallen notably since the onset of the financial crisis, but it was increasing before the recession, and it has been rising again for several months.

It is true that in recent decades, the rate of income growth has been much slower even in good times than in the Golden Age following World War II. However, CBO data indicate that during the expansion of the last decade median income growth rates were no worse than in the 1990s and better than in the 1980s. And as I argue in the latest issue of Breakthrough Journal, we get absolute economic gains today comparable to those of the 1950s and 1960s despite having lower growth rates, because we are so much richer than in the past.

Even if growth rates never return to their glory days, we are on the verge of realizing absolute annual gains that will be permanently larger than in the Golden Age. How those gains are distributed is an important consideration, but the situation is less dire than many believe. Median income has risen by at least one-third since 1979, and the evidence that the labor market is polarizing has been, in the words of Urban Institute and Georgetown economist Harry Holzer, “overblown.”

The second blind spot among the neo-Luddites is their failure to consider the gains we will receive as consumers from technological advances even as they misunderstand the reduced demand for labor technology may create. Technology makes us more productive—it allows us to produce the same stuff, but more cheaply. Too many people hear “producing the same stuff more cheaply” as “producing the same stuff with fewer workers” and see mass unemployment as our fate. Rising productivity actually means “producing the same stuff with fewer hours worked.” That can be achieved by having fewer workers do the same amount of work, but it is also consistent with the same number of workers all scaling back their hours.

It hardly seems worth arguing that most Americans would work less per week and for less of their lifetimes if they could. One hundred years ago essentially all men in their early 60s worked; today just six in ten do, and the typical retirement age has steadily declined (while life expectancy has increased). During their working years, men now have more leisure time than in the past. Work has increased markedly for women, but consistent with their rising education levels, longer delays in marriage and childbearing, and reduced fertility, this is mainly reflective of greater opportunities to balance work and family. Unpaid time doing housework has declined more among women than work has increased, meaning that they too have more leisure time than in the past.

Of course, people will only choose to work less if they can afford to. But technological advance will radically increase productivity—reducing demand for labor—only insofar as it also radically reduces the prices of what we buy. Ignoring this connection leads to absurd fears about the future. Some, apparently, believe we may have a robot economy down the road where machines produce everything, but few humans can afford the output.

Technological development will surely eliminate some specific jobs. But there is little reason to think that the future will look any different from the past in this regard. Productivity gains in manufacturing and other sectors will lower the cost of goods and produce more discretionary income, which people will use to pay other people to do things for them, creating new jobs. Mass leisure will also create other kinds of jobs, such as those devoted to entertaining and informing each other. To the extent that the least-skilled need help, we will be in a much better position to afford safety nets, and our main concern will be the age-old one of discouraging dependency. To the extent that technology increases inequality much of it will be to reward innovators for finding ways to drive our workweek and retirement age down or to induce some to keep working 40-hour weeks.

I, for one, welcome our future robot overlords.

Authors

Scott Winship

Publication: Forbes

Brookings: Topics - Innovation

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