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Innovation is a primary driver of economic growth and of the rise in living standards, and a substantial body of research has been devoted to documenting the welfare benefits from it (an example being Trajtenberg’s 1989 study). Few areas have experienced more rapid innovation than the Personal Computers (PC) industry, with much of this progress being associated with a particular component, the Central Processing Unit (CPU). The past few decades had seen a consistent process of CPU innovation, in line with Moore’s Law: the observation that the number of transistors on an integrated circuit doubles every 18-24 months (see figure below). This remarkable innovation process has clearly benefitted society in many, profound ways.

A notable feature of this innovation process is that a new PC is often considered “obsolete” within a very short period of time, leading to the rapid elimination of non-frontier products from the shelf. This happens despite the heterogeneity of PC consumers: while some (e.g., engineers or gamers) have a high willingness-to-pay for cutting edge PCs, many consumers perform only basic computing tasks, such as word processing and Web browsing, that require modest computing power. A PC that used to be on the shelf, say, three years ago, would still adequately perform such basic tasks today. The fact that such PCs are no longer available (except via a secondary market for used PCs which remains largely undeveloped) raises a natural question: is there something inefficient about the massive elimination of products that can still meet the needs of large masses of consumers?

Consider, for example, a consumer whose currently-owned, four-year old laptop PC must be replaced since it was severely damaged. Suppose that this consumer has modest computing-power needs, and would have been perfectly happy to keep using the old laptop, had it remained functional. This consumer cannot purchase the old model since it has long vanished from the shelf. Instead, she must purchase a new laptop model, and pay for much more computing power than she actually needs. Could it be, then, that some consumers are actually hurt by innovation?

A natural response to this concern might be that the elimination of older PC models from the shelves likely indicates that demand for them is low. After all, if we believe in markets, we may think that high levels of demand for something would provide ample incentives for firms to offer it. This intuition, however, is problematic: as shown in seminal theoretical work by Nobel Prize laureate Michael Spence, the set of products offered in an oligopoly equilibrium need not be efficient due to the misalignment of private and social incentives. The possibility that yesterday’s PCs vanish from the shelf “too fast” cannot, therefore, be ruled out by economic theory alone, motivating empirical research.

A recent article addresses this question by applying a retrospective analysis of the U.S. Home Personal Computer market during the years 2001-2004. Data analysis is used to explore the nature of consumers’ demand for PCs, and firms’ incentives to offer different types of products. Product obsolescence is found to be a real issue: the average household’s willingness-to-pay for a given PC model is estimated to drop by 257 $US as the model ages by one year. Nonetheless, substantial heterogeneity is detected: some consumers’ valuation of a PC drops at a much faster rate, while from the perspective of other consumers, PCs becomes “obsolete” at a much lower pace.

The paper focuses on a leading innovation: Intel’s introduction of its Pentium M® chip, widely considered as a landmark in mobile computing. This innovation is found to have crowded out laptops based on older Intel technologies, such as the Pentium III® and Pentium 4®. It is also found to have made a substantial contribution to the aggregate consumer surplus, boosting it by 3.2%- 6.3%.

These substantial aggregate benefits were, however, far from being uniform across different consumer types: the bulk of the benefits were enjoyed by the 20% least price-sensitive households, while the benefits to the remaining 80% were small and sometimes negligible. The analysis also shows that the benefits from innovation could have “trickled down” to the masses of price-sensitive households, had the older laptop models been allowed to remain on the shelf, alongside the cutting-edge ones. This would have happened since the presence of the new models would have exerted a downward pressure on the prices of older models. In the market equilibrium, this channel is shut down, since the older laptops promptly disappear.

Importantly, while the analysis shows that some consumers benefit from innovation much more than others, no consumers were found to be actually hurt by it. Moreover, the elimination of the older laptops was not found to be inefficient: the social benefits from keeping such laptops on the shelf would have been largely offset by fixed supplier costs.

So what do we make of this analysis? The main takeaway is that one has to go beyond aggregate benefits and consider the heterogeneous effects of innovation on different consumer types, and the possibility that rapid elimination of basic configurations prevents the benefits from trickling down to price-sensitive consumers. Just the same, the paper’s analysis is constrained by its focus on short-run benefits. In particular, it misses certain long-term benefits from innovation, such as complementary innovations in software that are likely to trickle down to all consumer types. Additional research is, therefore, needed in order to fully appreciate the dramatic contribution of innovation in personal computing to economic growth and welfare.

The post Out with the old? appeared first on OUPblog.

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Summer is almost here. It's always a challenge for a writer to find time to work on that latest project, but it's especially difficult in the summer. At this time of year, we tend to spend a lot less time indoors, tied to our desks.

Fortunately, over the last couple years, it has become increasingly easy to take your work on the road. I'll  leave it to you to decide whether that's a good thing, but it's certainly useful when you're up against a deadline or in the middle of a project to have your work available if you have some time to work on it or if an idea strikes you while you're sitting in a cafe in Paris. Or a McDonald's in Cedar City.

Over the next few Wednesdays, I'm going to give you suggestions for setting up a mobile writing office that can go everywhere with you. You might find many of these ideas useful for more than just your writing life, but because this is a blog for writers, I'm going to focus on writing.

I'm going to show you how to set up a mobile office, then I'll lead through using that office for the key phases of a writing project: planning, writing and revising, sharing and critiquing, and submitting. I'll provide brief overviews of useful apps and websites that will help you through each of those phases. Because my own portable office uses Android and Windows, there will be a slant toward those operating systems; however, if you use Mac and iOS, don't worry, I won't forget you. I promise.

I hope you find my suggestions useful. If you have questions, or have suggestions of your own, we love comments.

So, let's get started.

Setting Up Your Mobile Office: Your Portable Desk

The first thing you need if you're going to work away from your home office is something to work on. Until about five or six years ago, that meant a laptop, unless you wanted to carry your computer system on the road. The advent of tablets and smart phones provided more options, but until fairly recently, their usefulness for writing was pretty limited.

In the last year or two, the capabilities of those mobile devices have exploded. The devices themselves have increased tremendously in power, and the number of useful apps continues to grow.

When it comes to spending long blocks of time writing, nothing serves the mobile author better than a trusty old (or new) laptop. The keyboard is usually more comfortable and accurate than those little phone and tablet keyboards, and the larger screen is easier on the eyes. A laptop also lets you open more than one screen at a time, so you can have your notes and your writing program open next to each other.

If you're on the move, it's not always easy to carry a laptop everywhere you go. Even if you usually have a backpack with you, a laptop gets heavy and takes up a lot of space. A tablet is much more convenient. It's much lighter and can easily fit in a small backpack pocket or a purse. This series of articles will concentrate on tablets, under the assumption that you already have what you need on your computer.

But let's not forget the smart phone. Although the small size makes it less-than-ideal for serious writing for long periods, the size is an advantage for other writing tasks, such as making notes or taking pictures. If you are out somewhere and suddenly have an idea, you probably have your phone with you so you can jot your thoughts before they slip away. Or, if you see something that gives you an idea or would work well in your story, you can snap a quick picture.

Other Useful Gadgets

If you're going to do much writing on your tablet or even, if necessary, your phone, you'll want to invest in a Bluetooth keyboard. You can find a keyboard designed specifically for your tablet, one that comes in a case for your tablet that essentially turns it into a mini laptop. In theory, any Bluetooth keyboard should work with any Bluetooth-enabled device, but you'll want to scan reviews carefully before making a purchase in case others with your device had trouble with a specific keyboard. You might also want to check out keyboards in an actual store (remember those?) to make sure the one you pick is going to be comfortable for you to type on for a couple hours at a time. There are many types of keyboards with different styles of keys, and chances are good you won't like some of them.

Less necessary but definitely useful is a Bluetooth mouse. You can do without it, but chances are you'll eventually wish you had one.

You can also get an inexpensive little OTG (On-The-Go) cable that plugs into your tablet where you usually plug in your power charger and lets you connect any USB device, like a mouse of flash drive or external hard drive. If you get one of these handy little cables, just make sure you get the right connector for your device. A microUSB connector works for many tablets, for example, but won't work for an iPad, so if you have an iPad make sure you get an iPad-compatible cable.

For me, the ideal mobile office includes a laptop, a tablet, and a phone. Each is useful for different things.Although I don't think it's the perfect situation, having just one of these gadgets is enough to keep you writing when you're away.  I use the laptop in a hotel room, and a tablet if I'm away from a desk. Add a keyboard and mouse, and you can do just about anything on the road you would do at home.

Next Step

Come back next week and we'll discuss using your mobile device to organize your office.

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Stock illustrations.

Sevensheaven images and prints are for sale at sevensheaven.nl

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Stylized 3D illustration about cloud computing and the leaks that occur in it.

More at Sevensheaven.nl

Join me at Twitter [I mainly write in the Dutch language]

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Cate doesn’t write here anymore… Or to put it another way, my name is Cate and I have an internet problem.

A serious internet problem and I feel so guilty. I know many of you have children and finding the time to sit down and write is hard, well I have lots and lots and lots of time and I just waste it. When I’m sitting at my computer, my mental stream goes something like this…

“Open word, going to write today… Should just check blogs & LJ first… Now must check Twitter… Ooh, anything happening in any forums… Must check statcounter… God, I need to write… Open word… Ooh, meant to check Google groups… Anything happening on Twitter… Yay! Someone’s posted a blog… Twitter… Twitter… Twitter… Huh! How have two hours passed… Must do some writing… Open word, write two sentences… Oh, I need to research this bit… Research… Twitter… Forum… Blog… Stats… Twitter… Forum… Group… Twitter… Two more sentences… And repeat…”

I am going insane. It’s probably the equivalent of sitting in a room with twenty people talking to you all at once. Darn me, I even downloaded TweetDeck the other day so that I could manage Twitter. Not manage my writing, manage my tweets for Christsake. That’s bad. Soooooooo, and this was not my decision (I’m addicted remember) but a family one, I've bought a laptop. I've set myself up in the kitchen with no internet access and hopefully this means I'll write (or search the cupboard for food).

I’m not disappearing from the internet – good grief, no way José – but I’ll only be popping in for about half an hour when I finish work-work and then for another half hour or so (mentally I’m trying to up it to an hour even as I type) before I finish for the day. So an hour tops… That ‘thud’ was the sound of me fainting. You probably won’t even notice any less activity (twitter aside). If you’ve got any sense, you won’t even care… :)

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It's really crazy. I wrote an article the other night about submitting articles to free magazines and I can't find it. I've been having a lot of trouble with my computer lately. I'm hoping I saved it on my laptop which is trouble free...so far.

My troubles started with Microsoft Outlook. From the beginning if I tried to use it my computer hung and I had to reboot. Then my computer ate my Excel program - it literally just disappeared. After that MS Word started losing my files or saved them corrupted. I lost a 1200 word ms and several other research documents that I worked on for hours and hours and hours.

Thinking it might be the computer, I went out and got two zip drives. When working on my regular computer I only saved to the zip drive. Not wanting to lose any more files I did a backup of the zip I used (Zip A) to the second zip (B). Thank goodness, because I accidentally hit zip A while it was in my laptop and it broke. Talk about Murphy's Law.

I also thought maybe something happened to the Microsoft program so I had my husband delete it from my computer and he downloaded Open Office for me. I still had problems with files becoming corrupt or disappearing. Then, I lost Works Spreadsheet program - just disappeared. Is it Gremlins?

So, now I only use my regular computer for things I don't have to save. I also got a third zip drive (C) that I used to backup zip B. In addition to this, I'm going to get two more zips. One to backup (C) and another to keep just in case.

What's the moral to the story? Make sure you always back up your work! And, in cases like mine, backup your backup.

Karen

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At nineteen, using some of the vast profits from my second book, 'Twopence A Tub', I replaced my old cast-iron typewriter with a new, plastic one. It was baby-blue, I remember, and I could carry it in one hand. In truth it was a toy, intended for children, and I used to be asked how I could work on such a tiny thing. I never had problem with it (apart from the enraging task of changing ribbons, but that went with the territory in those days). It was an enormous relief not to have to practice weight-lifting every time I had to put it away.


I used the baby-blue for several years, but then decided to splash out on something for grown-ups. I bought a big, electric brute, but we never got on. Whenever I paused to think, it buzzed at me impatiently. I resented the buzzing. And I still had to change its ribbons.


It was about this time that a friend said to me, "Come upstairs and see my Amstrad..."


The Amstrad was an unlovely thing, but I was smitten as soon as saw how fast it printed off a page. At that time I wrote my books by hand, or pounded them out on a typewriter. The result was a heap of loose pages, full of crossings-out, rewrites, mistakes, notes to self. There would be mysterious signs - stars, arrows and loops - reminding me to hunt down the inserts written on yet other bits of paper. Before I could submit a book I had to turn this heap of jottings into a 'good copy'. It used to take me months.


I repeat, months. Just to copy out what I'd already written. Every single day, the first page I typed was so full of mistakes that it had to be redone. I would muddle the sequence of page-numbers and have to retype them. I had to estimate the word-number, which I hated almost as much as changing ribbons.


When I saw how you could skip about on the Amstrad's screen, changing words, shifting paragraphs, altering names, I was astounded. Find and replace! Spell-check! Word-count! A printer that didn't need a ribbon! I was ecstatic. And when I saw that it could print out a lengthy document in a morning, I had to have one.


But disillusionment always sets in. The first Amstrads never reminded you to save. Many a time I spent all day working on something, then switched off the machine and lost it all. I soon learned to save compulsively, every few words, a habit that's still with me.


The Amstrad printer could also be a trial. If you forgot to put the bale bar down (the bar that held the paper against the cylinder), the printer wouldn't work. It was easy to miss this small detail, and spend hours trouble-shooting, cajoling, phoning friends for help... Unlike modern computers, the Amstrad didn't tell you what was wrong, it didn't offer any hints or suggestions. The printer just sat there smugly, refusing to do the one thing it was made to do. It several times induced in me the kind of rage the early Plantagenet kings were famous for, when they rolled on the floor, foamed at the mouth and bit the rushes. If I'd had rushes, I would have bitten them.


You were also supposed to be able to leave the printer to do its thing, while you went and did something else, but in fact, you dared not leave it for a moment, because it used tractor-feed paper, and it always jammed. Even when you stood over it, watching, it frequently got out of sync and printed over the page perforations. Then there was nothing to do but stop the printer and start again.



Despite all this, I never, ever hankered to return to the typewriter, or pen and ink. I get quite irritated with writers who claim they could never sully their inspired creativity with vulgar technology, and that computers encourage sloppy writing. I think that's quite wrong. I think they encourage fierce editing rewriting and cutting, because they make it so easy. You don't have to retype and renumber pages because you decided to cut one out.



The solution to the Amstrad's drawbacks was to get a better computer, which I did, as soon as I could afford it. I'm writing this post on a laptop (much to my cat's indignation. He's sitting by me, glaring at the laptop, which is in his place. Occasionally he tries to climb on top of it). This light little laptop will check spelling, count words, print in different fonts and sizes, allow me to consult a thesaurus, and point out grammatical mistakes (though I never take any notice).



It connects to the internet, so if I need to check some fact, I log-on and Google. I can plug it into a printer which not only prints much faster than the Amstrad ever did, and never jams, but also faxes, scans and photo-copies. I don't even need to print very often, as I can submit my work by e-mail.



I can play music from the laptop's memory and load up my zen-stone for the gym. I can upload photographs from my digital camera and, minutes later, edit them on screen, and upload them to this blog. I can update my Tom-Tom, which guides me to schools on visits, and brings me home again.



I have more equipment and computer power on my lap than NASA used to put men on the moon. And I shall never have to change a typewriter ribbon again.



I remember my first, cast-iron typewriter with affection, but go back to it? You couldn't pay me enough.

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