Tag: Economy

Optimism in Innovation

On October 24th lecturer professor Vittorio Loreto came to lecture about innovation. Loreto talked about how to calculate the rate of innovation. Loreto’s thoughts on innovation was that the rate of innovation was decreasing and that only reason why innovation is increasing today, is that today, many more people are trying to innovate. By Loreto’s research most people try to innovate by trying to predict the future, and most analyze historical data to predict the future like analyzing past weather patterns in trying to predict tomorrow’s weather. Loreto believes predicting patterns in this way is inaccurate and this is one of the reasons why he believes that the rate of innovation is decreasing. He uses examples of tech companies like Wikipedia, Twitter, Last.fm, and Github and that the innovation rate is decreasing. Loreto says that innovation is getting tougher because successful patents are getting increasingly prevalent, which in turn achieving monetary return more difficult. Loreto believes that competition is increasing, which is increasing innovation today but the rate of change in innovation is decreasing.


Loreto’s arguments can be disputed that tech companies like Twitter, Wikipedia, Last.fm, and GitHub have been all old established companies. One cannot expect the rate of innovation and growth for these companies to have similar growth rates during the earlier days of the companies. As companies mature their rate of growth decreases because they fully capture their market share. As the rate for growth for these companies decreases and becomes a mature company their innovation might be affected depending on their investment in R&D (research and development). Most mature companies want to please their investors, so they look to spend less on R&D and look to increase their EBITDA for short term gains. Therefore, reducing innovation for mature companies, however the increasing competition within these tech companies is what drives innovation and the tech companies looking to increase their earnings before innovation dies out. If we trace the innovations that happened in our lifetime, we see an extraordinary progress made in people’s standard of living which can be directly related to innovation and our economy. The DJIA was about 81 a century ago, and now it’s around 23,500 today and at the current rate it could reach to be over a 1 million in another century from now. U.S.’s GDP per capita more than quadrupled between 1941 and 2017. You don’t need to be an economist to see that the world is innovating. In America alone we see 75 million home owners, 260 million vehicles, hyper productive factories, smart phones, electric cars, and artificial intelligence all net gains for America starting out around 241 years ago from a land of nothingness. U.S. has amassed a wealth totaling 90 trillion dollars. I am using past data to predict future growth and innovation, which Loreto seems to disagree with.  However, it seems that I, and along with many investors, have been right when we predict the future growth of America’s economy will increase with using historical data of U.S. economy.


However, this is not only in America, but technological innovation has brought globalization which uplifted people in low-income classes all over the world dramatically in the last 20 to 30 years.  The rate of innovation in our lifetime we see that we went from very small number of people who had access to information, now we have virtually everyone having access to world’s information in their own language, and made more convenient by devices such as our tablets, smartphones, and etc.. The strongest argument can be made with Moore’s Law that there is growth in innovation. Moore’s Law states that our transistor densities doubles every two years, which means that price performance of our technology is improving by factor of 10 to 20 which is phenomenal. Not only are transistors getting better, but our fiber optics, semi-conductors, storage, and etc.. all integral part of today’s technology is improving dramatically every day and year after year. The world only recently witness an artificial intelligent computer program, AlphaGo beat the Korean go champion Lee Se Dol. This phenomenon itself is a proof that world is only getting better and innovation is continuing.


It seems very optimisitic that our world is continually innovating and the getting better. People’s lives today are so much better in terms of compared to people even 50 years ago. The innovation and economic growth led to a creation of very promising and successful world. It seems in the lecture Loreto doesn’t seem to connect how origins, chaos or order has anything to do with innovation or novelties, but nevertheless I’m confident that the world will continually find growth in innovation in the future.

Colby Art Museum (Origins)

On Tuesday we toured the Colby College Museum of Art looking at artworks that had connections to the theme of Origins. Our guide Shalini Le Gall first talked about the Origins of art, more specifically visual art, she mentions that it is difficult to determine a specific time of the origins of art since art includes not only drawings and paintings, but also objects. Le Gall notes that many of the collections in the museum were from Maine and predominantly American art. Since there are many types of art, Shalini Le Gall, mentions it might be easier to examine the origins of abstract art or Avant-garde art.

We were asked to walk around the museum and look at some artwork. The most alluring art piece to me was the artwork called the “Wall of Lamentation XIII” by Santiago Montoya. The aesthetic appeal to this artwork was in the carefully folded rows of multiple international currencies that was cased in a stainless steel frame. Le Gall mentions that the artist intention of the artwork was to display that money was the cause of the dictatorial regimes that occurred in the countries of the currencies. Nations like DPRK, Soviet Union, Vietnam, and Uzbekistan had or still has dictator regimes where people live in fear, starvation, and lack of necessities. She mentions the artist was trying to say that money was the root of all evil and unethical behaviors. Le Gall also makes a connection to how the artist is a hypocrite because the artist, himself, is trying to sell his art for financial gains meanwhile criticizing the unethical motivation behind money and the art market.

Although I agree with the statement that Montoya tries to make with his artwork, I think there is more meaning to the artwork than saying that money is the root of all evil. Montoya’s artwork also gives meaning to the global economy and the financial system today. The endless amounts of paper bills folded in rows deliver a sense of astonishment but also uneasiness. The artwork reflected how extensive and interconnected the economy is because of globalization. Today the foreign exchange market is the largest market regarding trading volume, and the forex market affects almost all countries’ economy. The foreign exchange market has been known to be the closest example of perfect competition, however, because of the few that holds control over these financial markets, which are usually large international banks, the financial system is also fragile. The collapse of the financial system is just as dangerous as, if not more, than autocratic regimes. One country’s economy collapses this will affect other countries’ economy as well because of the world’s globalized financial system. Unlike autocratic regimes, the problem does not only pertain to the citizens of that country, but the crash of the global economy will affect billions of people all over the world. Therefore, it is imperative as we become a more global society that we have the right regulations in place, appropriate entities and agents to administer these regulations, and innovative financial institutions to pave new ways.