Ted Talks

Erik Brynolfsson- Key to Growth Race with Machines

 Industrial revolution- first gen only replaced the steam with electricity and then the next gen
redesigned process
o Electricity- general purpose technology; key to growth
o Computer is the GPT of our era
 Technology is not destiny; we shape our destiny
 Productivity has become de-coupled from jobs and income is stagnating; often misdiagnosed as
end of growth
 New Machine Age- today productivity is at an all-time high despite the recession
o Mind over matter, brain and ideas over other stuff
o We keep getting more stuff for free- but not how economist measure GDP so they
aren’t weighted in GDP stats
o Music industry is half the size it used to be despite increase in use
o GDP numbers miss $300 billion per year in free goods
o Digital (perfectly replicated and instant delivery), exponential (growing exponentially;
child’s PlayStation is more powerful than military super computer in 1996 but brain is
ready for a linear world) , combinatorial (stagnation view- ideas get used up; reality is
that each innovation is building blocks for another innovation)
o Robots are revolutionizing cat transportation
o Watson on jeopardy- improved quicker than anyone else; surfed the internet
unsupervised and answered questions with profanities; getting jobs in call centers and
getting them
 Technology is not destiny; decoupling of productivity from employment; Turbo
tax over
 What can we do to create shared prosperity? Don’t slow down technology;
learn to race with not against machine (grand challenge)
 Example of playing with computer to play chess

The Currency of the New Economy is Trust

 Airbnb- reputation changed because of online innovation; got a cat to catch mice in his house
after reading a woman’s review
o In over 192 countries
o Power of technology to build trust between strangers
o People (former guests) emailed Sebastian to see if he was okay during Paris riots
o Its about empowering people to make connections; rediscover a humanness
o Instead of keeping up with the jones- people are getting to know the jones
o Rapid adoption of new technologies: mobile/social and technology lead to trust and
efficiency
 Example
o Task rabbit example – number one task done is assembling IKEA furniture
 Questions
o How to mimic the way trust is made online?

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 o How do we trust it?
o Marketplaces that depend on trust need a measure of accountability- reputation is the
measurement of how much a community trusts you-everyone leaves a reputation trail
o Wants reputation to travel with you in the reputation economy; people’s lives are too
complex to add these up or measure influence.
 Reputation is largely contextual
 Reputation capital- worth of your reputation- intentions, capabilities and values
across communities and marketplaces
 Reputations is becoming a currency more powerful than credit history in the
21st century
 People are starting to realize that the reputation they have in one place has
value in other places
 Empowerment unlocks a sense of your own power (stack overflow)

Philip Waves – How data will transform business

 Idea of strategy in business- central idea (Napoleonic idea): overwhelming the enemy- the more
experience you have the better you get
o Porter agreed but business actually have multiple steps and each component might be
driven by another experience
o Value chain- defining businesses, economizing on transaction costs
o Henderson- more experience/more return
o Porter- value chain
 Argument- those two premises are being invalidated
o Falling transaction costs (processing v. communication economics); communication cost
falling faster than transaction cost has
 Falling transaction costs allow deconstruction of value chains
 Ex. Encyclopedia business went out of business
 Replaced by Wikipedia- defines second decade- Internet as a noun turned into
internet as a verb and social networks become the dominant phenomen
 Individuals can take over where organizations were not needed
 Phases of the digital revolution
o Web 1.0- deconstruction
o Web 2.0- User creation
o Web 3.0- World’s stock of data
 Put together to see patterns when connected via internet
 35x10^21 (35 Zettabytes by 2020)
o First human genome- James Watson
 Cost of mapping genome dramatically decreased
 Used to be research and can now become clinical or retail
 What used to be vertically or oligopicalic is being restructured to a horizontal
one; polarization of scale economies towards small allows for communities to
grow
 Creation of new institutions

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  Not just about big data; can tell same story about fiber optics and big science or
energy
 Change
o Need fundamental change in how to think about strategy
o Need to work out how to accommodate collaboration and competition and very large
and very small simultaneously
o Need to accommodate social and amateur motivations

Kevin Slavin- How Algorithms shape our world

 Pictures follow the dow jones index- high point is the 2008 crash
 Hungarian physicist- figuring out how to break stealth
 What’s the black box for wall street- Black box trading or algo trading?
o Create a bunch of programs to hide and other programs to find them
o 70% of the stock market
o Flash Crash of 2:45- 9% of the market disappeared; no one can agree on what happened
o When finding big data, they can’t figure out- give it a name and story when running
through the market. You can find them once you know them
 Pragmatic chaos- trying to get a grasp on users so it can recommend what movie you want to
watch next; problem with algorithms running without human oversight can go very wrong
o Determines 60% of movies being rented
o What if you could rate those movies before they get made? Story algorithms to run your
script through it and it can tell you how successful it’s going to be; this is culture that
you are quantifying and these are the psychics of culture.
 Example- Roomba v. another robot vacuum
 Destination control elevator using bin packing algorithm- problem- people freak
out because they don’t have any buttons
o Algorithms- depend on speed (microseconds);
o Fiber optic cable from Chicago to New York to connect faster – 13.3 millisecond round
trip
o If youre trying to make money off the markets where the red dots in the picture is, you
have to put servers where the blue dots are; often the blue dots are in the oceans.
 Algorithms discussed by Kevin Slavin
o Algorithms for Financial Services: Algorithmic Trading/Algo Trading used for stocks
o Algorithms for Online Retail: Pricing algorithms on Amazon
o Algorithms for Product Recommendations: Movie recommender systems used by Netflix
o Algorithms for homes: Cleaning robots
o Algorithms for buildings: Bin packing algorithms used by some new elevators

Mikko Hypponen- Fighting Viruses, Defending the Net

 Our generation will be remembered that got online and built something that was truly global
 Internet does have some problems- security and privacy
 Shows floppy- infected by Brain. A- first virus in PC computers; the virus says where it comes
from in the code – “welcome to the dungeon’, ‘ Basseed and Amjad’ with the phone number
and address in the code

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 o 1986- PC virus problem started
o Mikko goes to Pakistan to meet the hackers; both of them had their computers affected
by other viruses
 Various viruses shown- centipede on the top of the screen, crash, and walker where a guy is
walking across your screen
o Used to be easy to know when you had a virus because it showed you
 Can make money off viruses
o Gangstabucks.com- website in Moscow to buy infected computers
o Key loggers- silently on computer and record everything you type and sends to criminal
 Looking for sessions with online purchasing and bank account information
o IMU- cybercrime operation where they netted millions; US Officials just recently froze a
swiss bank account; online criminals can afford to invest in their attacks
 Also use global nature of internet to their advantage
 Criminals can afford to watch how security people work
 Can afford to utilize global nature of internet
o Websites move countries as soon as detected and use the fact the people cant police
globally to their advantage
o Ending in rus; 78 is city code; track guy who is 26 in St. Petersburg with blog where he
blogged about getting in a crash; can see the license plate of the car which is relates to
the code in the backdoor
o Starkset infects system that runs entire buildings, elevators, buildings like factories or
plants- this creates a big problem as people have become really reliant on computers
running everything; people need to find someone way to continue to work even if
computers fail
o Preparedness- completing things when computers and technology fails
 Worried that people will run into problems because of online crime and
troubles with technology
 Need to fight online crime- running a risk of losing it all and it needs to be done
global and right now
 Need more global international legal work to define how to reprimand
online criminality
 Find people behind the attacks
 And find the people that are going to become part of the world of
online crime and give them the opportunity to use their skills for good

Bettina Warburg- How the blockchain will radically transform the economy

 Economists have studied how people act for years- new technologically instituition will
fundamentally change on people exchange value now= blockchain
o Blockchain technology is relatively new but is actually just a continuation of a common
human story (to lower uncertainty of one another to exchange value)
o Douglass North- Nobel economist that pioneered “new institutional economics” –
formal rules with informal constraints
 As we evolved, our institutions become more formal and then transferred into
online institutions (platform marketplaces created like amazon)

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  Institutions are a tool to lower uncertainty so that people can connect and
exchange value in society (facilitates interaction)
 Now we can lower uncertainty with technology institutions
o Blockchain- Decentralized database that stores a registry of assets and transactions
across a peer to peer network- like a registry of what everything everyone owns
 Transactions are secured through cryptography and over time the history gets
locked in blocks of data that are cryptographically locked together
 Unforgeable record of all transactions
 Closest in description to Wikipedia- constantly changing and being updated
where you can see where the changes have occurred. Wikipedia is an open
platform but block chain is an open infrastructure that stores many kinds of
assets
 Stores history of ownership, location and leadership of things like
bitcoin, title of ownership of IP, certificate/contract, real world objects
or even personal information
o How blockchains lower uncertainty
 Uncertainty- not knowing who we’re dealing with, not having visibility in a
transaction and not having recourse if things go wrong
 Identity management- block chains allow for a global platform to input
any information about any identity- user controlled portable identity;
more than a profile, you can selectively give out information that
actually matters with cryptographic proof
 Asset tracking- problem in many companies are that they are managing
all different vendors across a horizontal chain and the other companies
don’t have the same database so one cannot see product over time
transparently
o Can create a shared reality through all vendors or untrusted
entities through block chain and can use to monitor product
o Can use blockchains to see products going through process in
real-time and increases visability
 Reneging on deals- one of the most uncertain of the three; block chains
allow us to write binding contracts in code; means to some degree that
you can collapse institutions and more human economic activity can
become automated
o The thing that makes the block chain work- everyone’s mutual distrust; can harness
collective uncertainty to collaborate more
o Block chains- not just an economic evolution but an innovation in computer science;
gives people the technological capability to track various things by converting
uncertainties into certainties
 People need to start preparing themselves for distributive autonomous
solutions have a significant role in what we do.
 Estimation for rate of adoption- go enterprise and government route first since
it is so complex but then go to others.