Picking Winners

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• Of course. "What does it matter if you have huge giants or rich minnows?" And again, how is a person who only won a popularity contest, or carried the winner's sign in one, to make the decision? He can't, any more than Donald Trump can know the USA needs its manufacturing jobs back or Joe Biden can know miners should "learn to code."

  • PS - Networking is real, locating in Silicon Valley not only to poach competitors' employees but so everyone has a better social life. DEC, however, pursued economy by locating in a woolen mill 15 miles outside the Boston Route 128 fellowship, and eventually became anxious to sprinkle manufacturing plants nationwide despite logistics being a bit tougher. People will work things out.

• Please tell me I read this wrong, they don't really have a "Department of Digital, Culture, Media and Sport". They aren't p*ssing away taxpayers money on that.

  • Used to be known as the ministry of fun.

    The “digital” side is quite separate and has some good technical people. Whether they should be there or not is a different story.

• I’d rather we had 1,000 £1bn companies scattered around the country.

  • I think it's a more resilient model. Like there's loads of pharma, engineering, software and specialist manufacturing companies around Swindon. You've never heard of them. I hadn't until someone asked me to do some work for them. People making medicines, false hips, parking meters, banking software.

    It means it doesn't matter that much that Honda is going. Or what happens with Intel.

• Politicians consider picking winners and losers to be part of their job description. Winners are expected to pay back for being so selected. Losers didn’t offer enough.

• Sounds horribly like Wilson's "bright" idea 50 years ago. I can remember my then-boss telling me that Tony Benn managed to choose possibly the only North-Sea-Oil equipment manufacturer to fail and go bankrupt during the North Sea bonanza to back with government money.

  • You're reminding me of Churchill arranging for the British government to invest in the Anglo-Persian Oil Company to make sure that the navy had access to oil under British government control.

    While I'd argue that this meant that Britain had an expeditionary force ready to invade Iraq immediately war broke out with the Ottomans, the war itself appears to have resulted from a Turkish attack on the Russians. Of course it's claimed that if the navy had intercepted the Goeben and the Breslau, the parties that wanted to keep their heads down and their mouths shut during WW1 would have prevailed.

• I remember the Tom Sowell line about how hard it would be to set up a system to create wealth. You would have to understand how it's created in the first place. The best a government can do is observe some people are giving wealth creation a crack, and that some will be good at it, and to help them 'government should get out of their way'.

  • However, you have to have enough people vote to elect such a government. Right now the official view seems to be how do you stop such people from creating wealth?

    • Dittoes! There are no votes for a gov't that just "gets out of the way." You can't even point to it as an accomplishment. And no one cares enough to give massive campaign contributions for more of it. Minarchism is a casualty of "democracy," in which we're told we can vote for desired outcomes.

      Trump, like Truman, is running against a "Do-nothing Congress" and dabbling in price controls and questionable new regulation, though his platform and most of his record is opposite.

• Anybody remember MITI? The Japanese ministry set up to push developments inm various areas of technology Japan was perceived to be behind in. Mainframe computers was one, and airliners.

  MITI was, I recall, eventually done away with. Japan is still nowhere in mainframes (what?) and in airliners. AND Japan is doing Ok without them.

  • Fujitsu got into mainframes, but they are (of course) a much diminished (though still highly profitable) sector of IT. Japan builds significant chunks of Boeing airliners, but that's another industry that is now struggling.

    • Fujitsu preceded the MITI initiative, but didn't they just make plug-compatible IBM=like machines? Didn't they buy Amdahl? This all from memory, so subject to error.

      Plenty of countries get to build bits of Boeings. But not design them.

      • I think that's right about Fujitsu, they also bought ICL, but that was largely for the service operation. Mitsubishi have their own regional jet, a bit like Embraer.

        • Was that regional jet not bought from Bombardier in Canada?

        • Mitsi bought the Bombardier division that manufactures regional jets because development work on their own RJ wasn't going too well.

• Tend to agree with the notion that thousands of Billion dollar companies is more resilient.
  But then surely that is about ;
  1)increasing the number of companies that can get listed
  2)increasing the number of investors that can invest directly in said companies
  The main reason tech companies have reached trillion dollar valuations is that they have perpetual quasi-intellectual property through trade secrets and effectively perpetual intellectual property through copyright.

  • The question ought not to be which capital structure (big fish or little fish) is better; but how would policymakers arrive at the right answer? Surely not with unbiased analysis, as their world is resolving competing pressures from vested interests.

    Gov't currently investigates and threatens to break up companies that have gotten huge thru control of ideas - though it's not unheard of to have gov't on both sides of a struggle.

  • "The main reason tech companies have reached trillion dollar valuations is that they have perpetual quasi-intellectual property through trade secrets and effectively perpetual intellectual property through copyright."

    That's not true. Google have their search engine as secret, so you can have that one, but Apple don't have much that's special in terms of copyright, patents or trade secrets, nor do Amazon.

    And perpetual? I remember when IBM had 60+% of the mainframe (which meant all business computing) market share. When nearly all personal devices ran Windows (Android, based on Linux is now bigger), using Altavista for search, when people were talking about "the MySpace generation" and when Nokia ruled phones.

    There's people building search engines using GPT-3 and a proliferation of social network services. If people don't want their phone or laptops to be bling, Apple will collapse (seriously, £200 Android phones are excellent, not worth spending more now).

    • That's true. But it's been true before. The real reason for Apple's size is its nimbleness. We will see whether, before sales start to slump for the iPhone, Apple makes itself the dominant force in the next gigantic new industry built around a product we had never thought about.

      • "...in the next gigantic new industry built around a product we had never thought about.”

        And therein lies the crux of all the growing hostility by many big government types toward the tech industry. You just never know what they’ll come up with next without formal review and permission.

        All that time and venture capital money wasted when Obama or Bernie Sanders already knew what was needed.

    • I agree that Apple is overpriced and Android phones are excellent.
      Also agree that there are network effects, as you imply with proliferation of social network services, which don't seem to gain traction, but maybe one will break through like facebook displaced myspace. But mostly I see that displacement as a generation shift, myspace generation, then the facebook generation, then the instragram generation, then the tiktok generation.
      And I am not a software engineer, but still pretty sure that NOT everybody can look up the source code for any of the Trillion Dollar Tech companies, can you send me a link for the source code for Apple IOS, Apple OS, Microsoft etc. because I can send you the link for the IBM main frames designs when IBM had 60% market share.

      • I have no basis to believe Apple is overpriced, especially superior to the many people who have invested their own money in it.

        Also disagree that the new technology waves are generational. The "MySpace generation" is mostly still alive, and still like to stay in touch with people, and they went somewhere. Their exodus caused the demise of MySpace; they are not orphans of it.

        • It's still the case that the iPhone is better than a £250 Android phone (and I should add, so is a £600 Android phone than a £250 Android phone). It's just that the differences are so small now.

          Cheap phones used to have crap cameras, not so good battery life and feel slower. The expensive ones were definitely better. But it's all marginal now. A Moto G8 Plus will get you 2 days battery with casual use, they have zero lag and this is what the camera is like

          https://www.youtube.com/watch?v=ipkU2EcBcy4

          This is why I think a lot of having the latest iPhone is just jewellery now. It's a status thing.

        • I mistakenly meant Apple the stock not Apple the phone above.

          Mine's a Samsung J7 ($80), just as miserly with the battery and the camera isn't as good as my real camera but good enough to never want to carry a real camera. I like it so much that I bought a twin, a Walmart refurb for $39.

          Quite right that no one is paying/should pay for novelty anymore; emphasizes my point that Apple's strength is to segue to dominate an entirely different product next.

      • "And I am not a software engineer, but still pretty sure that NOT everybody can look up the source code for any of the Trillion Dollar Tech companies, can you send me a link for the source code for Apple IOS, Apple OS, Microsoft etc. because I can send you the link for the IBM main frames designs when IBM had 60% market share."

        I didn't say you could just download it, I said there's nothing particularly special about it. Like you can download Android as source and modify it and have your own phone OS. If you want to start an online shop, you can pay £15/month for Shopify or host a cart yourself.

        Apple's really about the total experience. The shops you can visit, the nice feel of the stuff, the packaging, the support lines, the, ahem, Genius Bar, the desktop/phone interoperability, the store that is managed for you etc.

        It's like why do people buy Red Hat Enterprise Linux when you can just download it? Well, because what you're really paying for is the service. Anything goes wrong, they give you support. From what I'm seeing using Microsoft stuff, their direction is about giving the software away and making money from their cloud.

• If Dominic Cummings or Boris Johnson want to play at being venture capitalists, I'm perfectly happy for them to do so as long as it's not with my taxes. If they were that good at it, and keen to try, why aren't they billionaires themselves?