Monthly Archives: February 2022

Scientists, billionaires and political sausage-making

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A while ago I read two of the books about the development of the Covid19 vaccines, Vaxxers by Sarah Gilbert and Catherine Green, and Spike by Jeremy Farrar. There’s also a fascinating Kate Bingham lecture about how she led the UK’s vaccines taskforce, dealing on the one hand with the manufacturers and scientists and on the other with the UK system of government. I also recommend a Petersen Institute report on the supply chains and how they evolved.

This by way of prelude to having this week read The Vaccine by Joe Miller, with the BioNTech duo Özlem Türeci and Ûgur Sahin. In some ways the story is similar to the Gilbert & Green account of the Oxford/AstraZeneca one, brilliant basic science done on a small scale. Like the Oxford scientists, the Mainz ones were sure early on that Covid19 was a serious threat and acted on that in an impressive display of foresight. What is equally amazing was the acceleration of the usual development process, and unbelievably complex scaling up of production and distribution in a fraught and political environment. The supply chains are mind-boggling: at the initial stages the BioNTech/Pfizer vials had to travel around Germany, Austria and Northern Italy but also – for packing into vials and labelling – to Northern Ireland, all at minus 70 Celsius. All this when it was tricky even getting sausages into N Ireland post-Brexit.

Some differences stand out. A key one is that BioNTech was able to deliver its mRNA vaccine thanks to having patient billionaire investors – German twins you’ve never heard of before – having been forced by private equity investors to sell their previous company. The political environment was interestingly different, including the intra-EU tussles. Some EU voices argued against purchasing BioNTech because its partner, Pfizer, was American, when after all Curevac and Sanofi were EU-only companies in the effort to develop vaccines. The path from basic research to products in mass use is so fraught it’s amazing anything could happen at all.

Anyway, The Vaccine is another fascinating read. Strange though how the past two years seem to have fallen into a black hole, with restrictions here going today and a Russian invasion of a democratic European country under way. Of course, the fundamental reason for that strange phenomenon of memory is the vaccines.

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Productivity everywhere

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The best museum I’ve ever visited is the Stasi museum in Berlin. Mainly text and photos, it gives a compelling image of life under surveillance socialism. It even had its own technologies, from the steam iron (to steam open letters), to the pinhole cameras and disguises for agents in the field, to the unique rotating filing systems and square punch cards to record the masses of information. (And how the ratio of information to physical mass – although not energy use – has changed over the decades. Nordhaus’s well-known paper on the cost of computation tries to measure a related phenomenon.)

All this by way of prelude to recommending The Stasi Poetry Circle by Philip Oltermann. Although vaguely aware of the cultural dimension to the Cold War, it was still striking to learn that the East German regime had a poetry initiative among its elite Stasi regiment to try to win hearts and minds. It’s a marvellous book.

One nugget I particularly enjoyed was this: “Publishers, like their customers, had to adhere to the principles of a planned economy: in terms of books printed, the stated aim was a yearly increase in productivity of four to five percent. Between 1950 and 1989 both the number of books printed and the proportion of those that were fiction more than tripled.” It seems to have had some payoff: one international survey in the late 1980s found that East Germans had a higher reading comprehension age than their West German counterparts. This is the kind of productivity initiative I can get behind.

Another anecdote that leapt out: one Stasi guard to one of the poets who refused to join the Party’s youth wing on the grounds of preferring his own interior world: “If you are a decent human being, then there’s no world inside you other than the world you can see from the outside.” The concept was the gläserne mensch, transparent person.

Highly recommended book, and museum.

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An economist in the real world

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I was a bit sceptical about John List’s The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale mainly because of its presentation as a how-to business book. This goes right through to the design, which would sit nicely in an airport bookstore (remember those?….) But my fears were groundless. It’s a terrific read, and despite the business gloss is full of good advice for all kinds of public and non-profit organisations too.

For those not familiar with his work, List runs field experiments and has done so across a huge range of organisations and contexts, testing behavioural hypotheses. He has also worked as chief economist for Uber and Lyft and so has hands-on experience of how businesses operate, a rare qualification among academic economists. The book clearly draws on this trove of experience, ranging from fishing villages in Brazil to primary schools in Chicago Heights to creating incentive programmes for Lyft drivers and riders. I don’t know Prof List but I admire any economist who has spent so much time out in the ‘real world’.

The book has two halves, the first covering five diagnostics to help assess whether an idea that works at small scale will scale up – whether that’s a policy to assist progress among toddlers in deprived areas to a new digital wellbeing app. The diagnostics boil down to some basic (but evidently challenging) statistical and economic analysis – for example, do you have a representative sample when you test an idea, can you identify false positive results, do you have economies of scale to capture or will costs go up with revenues? The second half is more general econ/business advice – sunk costs are sunk, risk compensation and other behavioural responses are a thing, focus on allocating marginal effort and identifying marginal revenues. I was particularly struck by the last point in the context of cost benefit analysis, List having also spent some time as an economist responsible for CBA in the George W Bush administration in 2002-3.

All in all, this doesn’t topple Shapiro and Varian’s Information Rules from my number 1 position as best ever business book (written by economists), or indeed Dixit and Nalebuff’s The Art of Strategy from number 2, but The Voltage Effect is definitely in the top handful and well worth a read by anbody who wants their organisation to succeed and grow.

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A quarter century of weightlessness

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It’s 25 years since my first book The Weightless World was published, back in 1997. We were early adopters of the online world at home, and in my job (journalism for The Independent at the time) I had been reporting on technology companies. So when approached by an agent, I knew what the subject would be. How does it stand up to the test of time?

The headline is that the central metaphor, of economic value becoming increasingly intangible, was spot on. The role of ideas and intangibles in how economies progress has become ever more apparent – watch out for the new Haskel and Westlake book on this shortly. The material intensity of economic output has declined. At the same time, I missed two big issues: energy use and climate change; and the adverse trends in concentration in digital markets & the power of big tech. The tone is more upbeat than it might be if I wrote it now, although to be fair to myself The Weightless World does flag trade-offs and the transition costs of digital adoption.

I’m most impressed with my young self in looking at the chapter headings. It was a time of higher unemployment than now so jobs are a focus, including flexibility and what we now refer to as the gig economy. As one of the jobs chapters points out, the technology offered a lot of potential for changing patterns of work but to date it had operated solely in favour of employers, not individuals. Perhaps the pandemic and WFH will finally shift that balance. Other chapters cover the impact of digital on globalisation, economic geography and clustering in cities, the need for a new social contract, the role of the third sector and reforming government. For example, I was very clear that the need for more and more exchange of ideas would enhance clustering, as has indeed happened over the past quarter century.  I even flag up the increasing scope of increasing returns.

It’s highly embarrassing reading one’s old work, so I’m not going to recommend others go back to it. This post is just to pat myself on the back for having been in on the ground floor of the digital economy. I published the book too early, probably – prescience is no use if nobody pays attention! With luck, though, digital transformation will keep me busy for the next 25 years.

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Here I am in 1996, writing The Weightless World too early

Here I am in 1996, writing The Weightless World too early