Back in the saddle and have to just find the time to put some thoughts down. In dealing with high tech and data issues one of the most frequent counterfactuals that I have been running into lately is in regard to the “cost” associated with data, especially data submissions. If one approaches this issue using standard economic theory pre-high tech then the positive correlation applies.
But we live in a different world now folks.
I find myself increasingly having to explain that, given that most data concerning business exists in some form other than human readable form, that the classical economic correlation no longer applies. This assertion is usually met with a blank stare.
Thankfully there is a concept that has been proven correct to support this assertion. It started out as an anecdote but has a great deal of credibility attached to it. It is Moore’s Law. For a pretty complete overview the Wikipedia entry works fine. When we inform Moore’s Law by Landauer’s Principle, that is, that the energy expended in each additional bit of computation becomes vanishingly small, it becomes clear that the difference in cost in transferring a MB of data as opposed to a KB of data is virtually TSTM (“too small to measure”).
The challenge that we have had to face in leveraging data is not in the cost associated with data, but in two other factors. These factors involve those of human intervention and software application limitations. Both of these can be ameliorated and incentivized toward maximizing the greater computational and media storage capabilities that appear every 12 to 24 months through the application of Public Sector economics.
This is an area that is ripe for contributions to the literature only because most of freshwater classical economics has been so blind to it because of ideological reasons. Our emphasis on free market fundamentalism has caused otherwise rationale people to artificially draw a solid line between the effects of public policy and expenditure, and private market activity. But it is not that neat and easy. One effects and influences the other.
The proof to this assertion can be found in practical form on K Street in Washington, D.C., for anyone interested. On the the macroeconomic front, practical experience since the 2007-08 crash has been a live course in the effectiveness of neo-Keynesian modeling. Furthermore, in this blog I have documented technologies that were developed in the public sector that were transitioned to the public domain and which created significant private industry market verticals, including the IT sector as it currently exists.
The area that I operate in most often is the Aerospace & Defense market vertical focused on project management where the connection is most strongly seen and felt. Because of this reason there have been a number of initiatives going back to the 1960s to incentivize this sector to strengthen this interaction between public and private resources in order to leverage technological, process, and other developments in order to optimize performance.
Full disclosure on my part: I have been an active participant in some of these successive initiatives over the years: first, during the round of Acquisition Reform under Defense Secretary Caspar Weinberger in the 1980s, and again in the late 1990s under Vice President Al Gore’s “reinventing government”, so I come to this subject with a bit of history and practical experience. I am also currently engaged on some issues related to Undersecretary of Defense for Acquisition Frank Kendall’s Better Buying Power initiative.
The danger in highly structured public sector industries is that “good enough” often rules the day. Incentives exist to play it safe and to avoid risk whenever possible. This creates an atmosphere of complacency. From the IT perspective, such concepts as Moore’s Law, which has been around for quite a while, tend to be seen as suspect. Thus, economic incentives must be established through policymakers to replicate the pressure for performance and excellence found in more competitive markets.
The way of doing this is to provide economic incentives that punish complacency and that force participants to encompass the latest developments in technology. Keep in mind that we’re talking an 18 to 24 month cycle. The complaint, of course is that this is seen as too rapid a change. Of course, how many Boeing 707s do you still find flying in commercial airlines these days? So the ground rules must be established to encourage a race to the top instead of a race to the status quo.