In an era of tech innovation, whispers of declining research productivity – Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

From The Wall Street Journal

Given the pace of technological change, we tend to think of our age as the most innovative ever. But over the past several years, a number of economists have argued that increasing R&D efforts are yielding decreasing returns.

Are Ideas Getting Harder to Find?, a recent paper by economists Nicholas Bloom, Charles Jones and Michael Webb from Stanford and John Van Reenen from MIT, shows that, across a wide range of industries, research efforts are rising substantially while research productivity is declining sharply.

Moore’s Law, the empirical observation that the number of transistors in a computer chip doubles approximately every two years, illustrates these trends. The paper points out that the number of researchers required to double chip density today is 18 times larger than those required in the early 1970s. In the case of Moore’s Law, research productivity has been declining at a rate of about 6.8% per year.

The authors conducted a similar in-depth analysis in the agricultural and pharmaceutical industries. For agricultural yields, research effort went up by a factor of two between 1970 and 2007, while research productivity declined by a factor of 4 over the same period, at an annual rate of 3.7 %. For pharmaceuticals, research efforts went up by a factor of 9 between 1970 and 2014 while research productivity declined by a factor of 5, an annual rate of 3.5%.

 

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Using System Dynamics to disrupt Nonprofits and help children in poverty – Chris Penny

From Africa-OnTheRise

Chris Penny, MIT EMBA 17

MIT Sloan’s mission is to develop innovative and principled leaders who will improve the world. This resonated with me, as I’ve always had a desire to help impoverished children, especially in the developing world. However, it wasn’t until I started this program that I was able to turn my good intentions into an actionable plan, much less a plan that might even disrupt the nonprofit world.

The key was utilizing the EMBA network, going to ‘see and assess,’ conducting small experiments, and learning from mistakes. In other words, I followed the MIT Sloan method for affecting change. Today, Broken Crayons has opened 15 businesses, which has positively impacted the lives of more than three dozen children in Ghana. Now, we’re scaling our approach to impact entire communities with plans to turn Broken Crayons into a self-sustaining organization.

Look for the root cause

The first step involved Systems Dynamics, which taught me to model the relationships in all parts of a system and how those relationships influence the behavior of the system over time. Applying this knowledge, I built models to identify the root cause of youths and poverty. The overarching question centered on how I could use simultaneous interventions to break the system of poverty.

Go see and assess

Another MIT principle is understanding the importance of observing the ecosystem you seek to impact. After connecting with a friend and former colleague Carl Dey, I decided to focus my efforts on the ecosystem of Ghana. The next step was going to ‘see and assess’ the ecosystem in Ghana. Read More »

What can a restaurant teach us about innovation? – Pilar Opazo

Pilar Opazo, Lecturer, Work and Organization Studies

From Modern Restaurant Management

When Chef Ferran Adrià shuttered his famed elBulli restaurant in 2011, foodie circles were stunned. elBulli was at the peak of its fame: it had three Michelin stars and a waiting list of two million diners. Adrià—widely considered one of the most imaginative culinary minds of the world—operated in an elite class of chefs. He kept his restaurant open just six months a year and served one meal a day, never offering the same dish twice.

Rumors circulated that the closure was due to a family feud or money problems. But the truth was that Adrià was petrified of repeating himself. (“Can you imagine this pressure?” he told The New York Times. “You cannot.”)

In 2014 Adrià reopened elBulli not as a restaurant, but as a foundation dedicated to studying and understanding the nature of creativity. It’s a subject in which Adrià has passionate expertise. When he arrived at elBulli in the early 80s, it was a French restaurant. By the 1990s Adrià was head chef and elBulli was transformed as a test kitchen for gastronomic invention.

But while he became known for dreaming up dishes like Escoffier’s classic peach melba and smoke foam, Adrià was engaged in a far more ambitious project—achieving and sustaining a culture of innovation. He and his team established a set of best practices for organizational creativity and systematic invention. The result: processes and structures that are applicable not just to restaurants but other organizations as well. Here are some elements of elBulli’s, ahem, secret sauce: Read More »

Is “murder by machine learning” the new “death by PowerPoint?” – Michael Schrage

MIT Center for Digital Business Research Fellow Michael Schrage

From Harvard Business Review 

Software doesn’t always end up being the productivity panacea that it promises to be. As its victims know all too well, “death by PowerPoint,” the poor use of the presentation software, sucks the life and energy out of far too many meetings. And audit after enterprise audit reveals spreadsheets rife with errors and macro miscalculations. Email and chat facilitate similar dysfunction; inbox overload demonstrably hurts managerial performance and morale. No surprises here — this is sadly a global reality that we’re all too familiar with.

So what makes artificial intelligence/machine learning (AI/ML) champions confident that their technologies will be immune to comparably counterproductive outcomes? They shouldn’t be so sure. Digital empowerment all too frequently leads to organizational mismanagement and abuse. The enterprise history of personal productivity tools offers plenty of unhappy litanies of unintended consequences. For too many managers, the technology’s costs often rival its benefits.

It’s precisely because machine learning and artificial intelligence platforms are supposed to be “smart” that they pose uniquely challenging organizational risks. They are likelier to inspire false and/or misplaced confidence in their findings; to amplify or further entrench data-based biases; and to reinforce — or even exacerbate — the very human flaws of the people who deploy them.

The problem is not that these innovative technologies don’t work; it’s that users will inadvertently make choices and take chances that undermine colleagues and customers. Ostensibly smarter software could perversely convert yesterday’s “death by Powerpoint” into tomorrow’s “murder by machine learning.” Nobody wants to produce boring presentations that waste everybody’s time, but they do; nobody wants to train machine learning algorithms that produce misleading predictions, but they will. The intelligent networks to counter-productivity hell are wired with good intentions. Read More »

Making the Middle Matter – Trish Cotter

MIT Sloan Entrepreneurship Lecturer Trish Cotter

From Xconomy

Call it the problem of the middle—the middle states and the middle class—two groups that have struggled with problems that, while they are inexorably linked, are different all the same.

Historically, most of the venture capital in America has been active on the coasts, leaving a vast portion of the country without seed money for innovative new startups. At the same time, the Midwest has suffered from a loss of manufacturing jobs and, as a result, has in some ways failed to flourish in the same ways as other parts of the country. And, of course, there is no shortage of news articles outlining the many struggles facing the middle class, in general, in America.

“We live in a fractured society,” argues MIT economist Peter Temin in an MIT News article on America’s two-track economy. “The middle class is vanishing.”

According to Temin, America now features two sectors: an FTE sector, where people who work in finance, technology, and electronics tend to thrive, and a low-wage sector, where workers often struggle. The middle class, traditionally an area of national strength, is starting to disappear. Moreover, the FTE sector, overwhelmingly focused and fixated on both coasts, has for a long time neglected investment opportunities in the Midwest.

Venture capital—specifically venture capital aimed at the oft-ignored middle states—could be part of the solution. The central part of our country is often ignored as an ideas hub. Most accelerators, venture capitalists, and startup programs are focused on a few key cities on the east and west coasts. The Kauffman Foundation, known for its emphasis on education and entrepreneurship, recently published an article focusing on both the middle class and the middle states, asking: “Is the Middle the New Edge?”

It states: “The middle ground is too often dismissed as unremarkable, when it is truly necessary. The middle should be appreciated as an admirable place to be – where people work together to solve big problems and move our nation forward.” Read More »