via The Atlantic and NPR

Today, at least 90% of the country has a stove, electricity, car, fridge, clothes washer, air-conditioning, color TV, microwave, and cell phone. Take a moment to savor this graph from Visual Economics, which shows the adoption rate of new technologies across the century:

One way to parse it is to ignore everything at the top and trace your eye along the 10% line:

– In 1900, <10% of families owned a stove, or had access to electricity or phones

– In 1915, <10% of families owned a car

– In 1930, <10% of families owned a refrigerator or clothes washer

– In 1945, <10% of families owned a clothes dryer or air-conditioning

– In 1960, <10% of families owned a dishwasher or color TV

– In 1975, <10% of families owned a microwave

– In 1990, <10% of families had a cell phone or access to the Internet

In his final of 3 posts, Derek Thompson of The Atlantic notes: “In 1900, less than 10% of families owned a stove, or had access to electricity or phones, and the Model-T was still a full decade away.” His first installment of this series followed shifting family budgets between 1900 and 2003. The second explained why food seems so much cheaper at the dawn of the 21st century. The third is different because it goes beyond numbers, to include issues of quality of life and the question of progress: “It’s not just that life expectancy at birth has grown from 49 years in 1900 to 78 today, but also the quality of our lives has been improved by law (e.g.: new safety and anti-discrimination laws), by culture (e.g.: women’s ascent in college and the workplace) and by technology.” (Believe it or not, the boom box was the fastest-adopted gadget of the last 50 years.)

Another piece from NPR traces the Birth of Silicon Valley. Now a well-known hotbed of innovation stretching along the peninsula southwest of San Francisco Bay, the story that emerges from this timeline is the transformative power of venture capital, as well as the onward march of technology. Click on the image below to explore the timeline.

via Harvard Business Review

by Chandrakant Patel

I joined Memorex Corporation in the early 1980s as a mechanical design engineer. You may recall the commercial “Is it live, or is it Memorex?” featuring Ella Fitzgerald. Ella sings live, and the frequency of her delivery makes a wine glass shatter. The same delivery, recorded and played back on a Memorex audio tape, makes a structurally similar wine glass shatter, proving the high quality of reproduction of Memorex’s tape. The commercial was clever, and viewers understood it. In an era of physical innovation, people understood instinctively how things worked, even if they weren’t familiar with the underlying theories of physics. That understanding of why certain things happen in a given system, under given conditions, is equally necessary today, but over the last three decades, we have abstracted it away.

As advances in technology have allowed us to work in more virtual ways, we have literally and figuratively lost touch with the products we’re building. The result is that now have a crucial gap in our systems, because we no longer fully understand how each component of the system works. Not understanding the physical complexity of a given infrastructure may result in grave consequences for the IT industry. For example, if engineers don’t possess the know-how needed to limit the material and energy cost of setting up and operating cloud services, IT can’t scale as it needs to.

We’ve lost the capability of understanding such physical complexities for three reasons:

1. The rise of software. Layers of software distance consumers, designers, and engineers from the underlying physical infrastructure.

2. The trend toward off-site data storage. In the 1980s, I designed large hard drives the size of washing machines that stored about 1000 MB of data on 14-inch disks. Data storage was very tangible. Today, consumers and enterprises store their data in the more intangible “cloud.”

3. Offshoring manufacturing and design. In the early 1980s, those hard drives I worked on were manufactured right next door to our R&D facility. With their read-write heads rotating microns above the disk, their large mass, and their numerous components, they were highly susceptible to external shock and vibration. That meant applying meticulous analysis and experimentation associated with the dynamics of structures. Because the engineers who had designed the drives were right next to the factory, they understood how their designs fared in manufacturing. Since they knew the customer environment in which the hard drives operated, they were better equipped to understand system-level consequences. In the late 80s, manufacturing left the U.S. to lower-cost geographies, but the design work continued in the U.S. As hard drives became smaller and improved technology reduced the number of components, design and value-added engineering also left the U.S. At the same time, companies in the U.S. also realized that there was an opportunity in making large scale data storage systems consisting of hundreds of small hard drives. They achieved differentiation by adding software layers for management and application development, rather than by designing better hardware. The result is that today, most consumers and software designers don’t think about the thousands of physical rotating disks on which their software and storage needs depend. But the systemic challenges associated with physical design have not gone away.

In our “software and sheet metal” age, the knowledge of hardware design and operation must now exist at a system level. For example, the high heat density of racks that house multiple drives and computer systems necessitate high-speed fans for cooling. These cooling fans, rotating at high speeds, cause vibrations that may align in frequency with one of the read/write arm frequencies in the hard drives. As in the Memorex commercial of yesteryear, that stimulus causes read/write failures and reduction in data throughput. The vibration problem that we wrote off in the age of standalone drives has manifested itself in new large-scale systems installed in data centers.

Problems like this are becoming more and more difficult for today’s engineers to solve, because you can’t fix problems in a system without understanding its components. With design and manufacturing of components gone, the “out of sight, out of mind” scenario has resulted in a loss of engineering knowhow to get to the root cause. Therefore, when it comes to complex hardware, instead of taking a systemic perspective steeped in fundamentals to address the root cause, we make up for the hardware failures by adding redundancies. In the case of hard disk drives, the mantra is “drives are cheap,” so we over-provision with redundant drives and data replication. Indeed, our data is replicated in many drives in a given location to account for drive failures, and geographically dispersed to avoid regional catastrophes like a natural disaster. Such over-provisioning adds to the cost of service and, in a resource-constrained world, is not sustainable. While we have provided IT access to about 20% of the world, we will not be able to increase that scale — akin to Moore’s law of scaling in semiconductors — unless we reduce our total cost of ownership by at least 20%. Traditional scaling of IT to the masses is going to hit a wall.

Furthermore, in the future, we will need to build software-based applications to enable the efficient and reliable operation of physical systems such as pumps, motors, waste water systems, water distribution systems, and the power grid. In this expanded role for IT, how can we manage such physical systems without knowing how to design and manufacture them? While it is not practical to turn on a dime with respect to returning manufacturing and design to the U.S., we must take action now by building a cadre of people with “hands-on” knowledge garnered in high schools, vocational schools and universities. In addition, to facilitate IT-based management of physical systems, we will need to be analyzing data streams from power components, pumps, compressors, etc. The analyses of these data streams will require interdisciplinary scholarship in computer science and mechanical engineering.

To be able to build these applications, and run IT cost-effectively, the high-tech industry needs engineers with equal facility in computer science and mechanical engineering — people who thoroughly understand the physical complexity and limitations of these systems and who can use that knowledge to build smarter, more well-integrated software. Very few people have those skills today, so we must train them. As salaries begin to level off globally, this will allow a return of manufacturing and component design to the U.S.

CHANDRAKANT PATEL

Chandrakant D. Patel is an HP Senior Fellow and Director of the Sustainable Ecosystems Research Group at Hewlett Packard Laboratories. Chandrakant has been a pioneer in microprocessor and system thermo-mechanical architectures, management of available energy as a key resource in “smart” data centers, and most recently, application of the IT ecosystem to enable a net positive impact on the environment. He teaches at Chabot College, U.C. Berkeley Extension, Santa Clara University, and San Jose State University.

via Wall Street Journal

By JENNIFER LEVITZ

MANCHESTER, N.H.—Matt Marshall is still trying to determine which path he will take when he graduates from the University of New Hampshire in June. But the 23-year-old business major has pinpointed his general direction: out of the state.


“I definitely want to go someplace else. Where, I don’t know, but I’ve lived here all my life,” he said, mentioning a warmer locale as his possible future home. “I hate snow.”

New Hampshire is giving the spiky-haired Mr. Marshall anything but the cold shoulder. With census figures showing New England leads other parts of the U.S. in the decline of its under-45 age group, the Granite State and its neighbors are desperate to keep young people around.

Massachusetts is funding internships at private companies—$2.2 million this year, up from $1 million last year. In a pilot program started in July, Vermont is forking over cash to graduates who stay in the state.

New Hampshire, under the direction of a young-worker retention task force established by Democratic Gov. John Lynch, has launched a nonprofit called Stay Work Play to sell the state to college students. The state also is directing one-third of its entire marketing budget toward wooing and retaining younger people.

“I can’t think of anything more important,” said Steve Boucher, legislative director of the New Hampshire Division of Economic Development.

Despite New Hampshire’s relatively low unemployment rate of 5.4% as of September, officials have found that about half of all college students leave the state after graduation, believing they need to head to a big city to find a robust social life.

Among the events planned is a “college invasion tour,” featuring comedians and concerts, to help show a fun alternative to New Hampshire’s “traditional Yankee” side, Mr. Boucher said.

Regional officials say their retention programs are new, so they are still measuring the effects. Students who have been courted by the states have mixed reviews.

Ariana Chehrazi, a Massachusetts Institute of Technology senior, had been planning to return to her native Los Angeles after graduation, but changed her mind after landing a summer internship at a diagnostics firm through the state program. Los Angeles doesn’t “have the same feel as wanting to keep you here.…Massachusetts is trying harder to get young people,” she said.

But 22-year-old Brian Iwanicki, a New Hampshire native, said it wasn’t easy to find “a hip place that a young professional might want to go” in Manchester, New Hampshire’s biggest metropolis. “It’s a short list,” he said.

Still, 10 networking groups for young professionals have cropped up across New Hampshire—which state leaders see as an indicator that retention efforts are working.

The loss of young people is one factor in New England’s slow growth, which puts the region at the forefront of a nationwide aging trend. State leaders in the region say innovation depends on smart, young people and many officials see the signs of that base dwindling. Maine Gov. Paul LePage, a Republican, said last week that employers have been complaining to him about a shortage of skilled workers.

Another worry: potential loss of political clout. States that lost congressional seats after the latest census were primarily in the Midwest and Northeast, including Massachusetts.

New England’s population grew 3.8% in a decade, the 2010 census found, compared with the U.S.’s 9.7% overall growth. The population continues to shift South and West because of a combination of weather, cost of living and relatively low-skilled jobs for newcomers, said Brookings Institution demographer William Frey.

With fewer people arriving, New England leads in the graying of its population. Of just seven states with a median age of 40 or older, four are in New England: Maine (42.7), Vermont (41.5), New Hampshire (41.1) and Connecticut (40.0). There are bright spots—Boston continues to gain young people—but each New England state saw a decline in the under-45 group. Meantime, Arizona’s under-45 population jumped 16%.

On a recent night, Stay Work Play New Hampshire visited the University of New Hampshire’s Manchester campus. “It’s easy to get the perception there is nothing to do…but I’m constantly amazed that there is a lot of stuff happening” in the state, said Kate Luczko, the program’s executive director.

The message rang true to Brian Bishop, a 22-year old who said he wouldn’t likely head South or West. “I lived in Florida for a year and a half,” he said, with a sour expression. “It’s too slow-paced, too much small talk. Here we try to get things done.”

The share of federal student loan defaults rose sharply last year, especially at for-profit colleges and universities, where 15 percent of borrowers defaulted in the first two years of repayment, up from 11.6 percent the previous year.

According to Department of Education data released Monday, 8.8 percent of borrowers over all defaulted in the fiscal year that ended last Sept. 30, the latest figures available, up from 7 percent the previous year. At public institutions, the rate was 7.2 percent, up from 6 percent, and at not-for-profit private institutions, it was 4.6 percent, up from 4 percent.

“Borrowers are struggling in this economy,” said James Kvaal, deputy under secretary of education. “We see a strong relationship between student default rates and unemployment rates.”

Although the new overall rates are the highest since the 1997, when they were also 8.8 percent, default rates peaked in 1990 at more than 20 percent. The new rates represent a snapshot in time, covering the 3.6 million borrowers whose first loan payments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 320,000 of those borrowers defaulted during that period.

Although for-profit colleges, which typically serve low-income students, enroll only about 10 percent of the nation’s undergraduates, Mr. Kvaal said, their students made up 150,000, or almost half, of the defaults. The problem may be even greater. “Some research has shown that as few as one in five defaults at a for-profit college occur in the two-year window,” said Debbie Cochrane, program director at the Institute for College Access & Success, which runs the Project on Student Debt. “The extent of borrower distress is barely touched upon with these rates.”

A recent study by the Institute for Higher Education Policy found that for every borrower who defaults, at least two more fall behind in payments. The study found that only 37 percent of borrowers who started repaying their student loans in 2005 were able to pay them back fully and on time. The Department of Education is in the process of switching to a three-year default rate, in an effort to capture a more accurate picture.

The high default rate at for-profit colleges, the fastest-growing sector of higher education, has become an increasing concern for the government, since such institutions depend on federal student aid for more than 80 percent of their revenues. Last spring, in internal documents gathered from the publicly traded for-profit colleges for hearings on the student debt problem, the Senate Health Education Labor and Pensions Committee found that some companies estimated that their students had staggeringly high lifetime default rates — in one case, 77.7 percent.

Colleges with excessive default rates, either exceeding 40 percent in the latest year, or 25 percent for three consecutive years, can lose their eligibility for federal student aid programs. This year, five institutions — four of them for-profits — lost eligibility, Mr. Kvaal said.

In part because of the high default rates at the for-profit colleges, the department recently adopted regulations designed to curb recruiting abuses, and cut off eligibility for federal aid at programs that leave students with high debt loads and poor job prospects.

Student borrowing has been increasing in recent years, as tuition has grown faster than inflation or family income. And with the recession, and high unemployment rates for young workers, default rates may continue to rise for some years. Borrowers who default can face a lifetime of consequences, including inability to borrow for a car or a house, wage garnishment, seizure of tax refunds, or even, in an era when employers increasingly check credit reports, difficulty in getting a job.

Many borrowers, even those who are unemployed or earning little, can avoid default by participating in an income-based repayment program that began in 2009 but is not as widely used as might be expected. Under the program, borrowers who pay 15 percent of their discretionary income for 25 years — 10 years if they are in public service — can have the rest of their federal student loan debt forgiven; in 2014, that will go down to paying 10 percent of discretionary income for 20 years.

“In the age of income-based repayment, there is no reason for a student to default, since even a payment of zero dollars is acceptable payment, if you have zero discretionary income,” Ms. Cochrane said. “But as of April of this year, only about 350,000 borrowers have entered income-based payment, a small subset of the eligible population. Students need to understand the options, colleges need to share the information, and the department needs to make it as easy as possible for students to enroll.”

By TAMAR LEWIN
via NYTimes

via the NYTimes Economix blog

We at Economix have been fairly persistent in demonstrating why college is worth it. Say it together, now: you are overwhelmingly likely to earn more.

A new study from the Census Bureau confirms that the more education you get, the better off you are. A worker with a professional degree will receive median annual earnings nearly four times those of a worker with just a high school diploma, for example, and 87 percent higher than those of workers with bachelor’s degrees. (A post by our colleagues at SchoolBook also looks at the findings.)

But though the study concludes that education is the most important determinant of future earnings, the impact of demographic factors is still significant among those with comparable education levels. And even discounting other considerations, the gender gap is striking.

The Census study, by Tiffany A. Julian and Robert A. Kominski, looked at lifetime earnings for a typical worker from 25 to 64, and came up with estimates measured in 2008 dollars.

Among full-time, year-round workers, white men with professional degrees make nearly 49 percent more in lifetime earnings than white women with a comparable education level. The gender gap is narrower for blacks with professional degrees: black men with professional degrees earn 24 percent more in lifetime earnings than their female counterparts.

That gap is still pronounced at the bachelor’s degree level, where white men working full time and year round earn 40 percent more than white women with the same level of education. Black men with bachelor’s degrees earn 13 percent more than black women who also hold bachelor’s degrees.

Hispanic women appeared at the biggest disadvantage. Among those full-time, year-round workers with professional degrees, white men make 104 percent more than Hispanic women over their working lifetimes.

By Stacey Vanek-Smith
Marketplace, Wednesday, September 7, 2011

A big labor shift is underway as 42 million Americans settle for contract work and freelance gigs amid a shortage of traditional 9-to-5 jobs.

KAI RYSSDAL: This week, we’re doing something a little special. A week of jobs: where they’re going to come from, who’s going to pay for them, and today, what happens when people don’t have them. Best guesses are that in the face of 9 percent unemployment, as much as a third of the American workforce has some kind of non-traditional job. That’s a shift toward freelance gigs and contract work that’s nothing less than a structural shift in how our economy works.

Marketplace’s Stacey Vanek Smith reports the idea of working 9-to-5 for 40 years is going the way of the pension and the gold watch.

STACEY VANEK SMITH: Thirty-four-year-old Melissa Holsinger has a law degree from New York University. She has several years of corporate law experience and did a clerkship for a federal judge. But since she and her husband moved from Tennessee to New York last year, getting a job at law firm has proven impossible.

MELISSA HOLSINGER: I thought I would be snapped up, that I had good credentials and I wouldn’t have a problem finding a job. And for the first six months, I don’t think I had a single interview.

So Holsinger took a job at a coffee shop, where a customer told her about some contract work at his law firm. She’s worked for several firms now, with stints varying from a week to several months.

HOLSINGER: I just sort of just tripped into it. It wasn’t anything I’d planned to do.

More Americans are tripping into the world of contract work and out of the traditional workplace. Some 42 million people are freelancing, juggling part-time assignments and going from gig to gig. It’s part of a major shift in our labor market, says Sara Horowitz. She’s CEO of the Freelancers Union, which offers members access to health care and other benefits. Horowitz says 10 years ago, most of her members worked in areas like media and graphic design, but these days freelancing is a fact of life in every profession.

SARA HOROWITZ: It’s finance, it’s health care, the nonprofit sector.

The trend started as technology changed employers’ needs, but the sour economy has made contract work especially attractive to companies, says economist Ken Goldstein.

KEN GOLDSTEIN: It not only relieves them of having to pay for the whole benefit package, but also, if things indeed worsen, they can let these people go, because there’s no commitment to keeping these people. With less opportunity for real job security, many job hunters expect they’ll have to cobble together several gigs. Work and culture expert Andrew Ross hears that from his students at N.Y.U.

ANDREW ROSS: They’re terrified, quite frankly. Ross says students are preparing themselves for the freelance economy by becoming spreading themselves thin.

ROSS: More and more students are doing double majors or cramming in as many minors as they can to equip themselves with as many skills as they can amass. Twenty-seven-year-old filmmaker Malcolm Wallace Murray has been freelancing for four years. Between shoots, he writes and edits in his kitchen. He says he loves the freedom of the freelance life, but the lack of security can be hard.

MALCOLM WALLACE MURRAY: Especially now that I have friends who are settling into career trajectories and they can see 10 years out what their life is going to look like. And there still is quite a bit of risk in mine. And risk is the real problem a growing number of people face in the contract economy, says Sara Horowitz of the Freelancers Union. She says these workers have to take responsibility for their own health care, their own training, their own retirement savings.

HOROWITZ: We’re putting all of the risk and the cost onto the worker. So when you have enough gigs, you’re doing fine. When don’t have enough gigs, you’re not doing fine and to top it off, you’re not entitled to unemployment insurance. From her Brooklyn apartment, lawyer Melissa Holsinger says she’s one of the lucky freelancers. She gets health insurance through her husband’s job. Even so, she says the instability wears on her.

HOLSINGER: There are definitely times that I’ve said, what else can I do in my life and law school was a huge mistake. But I still really enjoy the work when I’m doing it, so, you know, just keep plugging along and eventually that full-time position will come through. Holsinger has an interview for yet another part-time position on Friday.

In New York, I’m Stacey Vanek Smith for Marketplace.