Entropy Economics

Do we really understand just how fast technology advances over time? And the magnitude of price changes and innovations it yields?

Especially in the realm of public policy, we often obsess over today’s seemingly intractable problems without realizing that technology and economic growth often show us a way out.

In several recent presentations in Atlanta and Seattle, I’ve sought to measure the growth of a key technological input — consumer bandwidth — and to show how the pace of technological change in other arenas is likely to continue remaking our world for the better . . . if we let it.

Bandwidth Boom – NARUC Seattle – Bret Swanson – 07.22.09

Over the July 4 weekend, relatives and friends kept asking me: Which mobile phone should I buy? There are so many choices.

I told them I love my iPhone, but all kinds of new devices from BlackBerries and Samsungs to Palm’s new Pre make strong showings, and the less well-known HTC, one of the biggest innovators of the last couple years, is churning out cool phones across the price-point and capability spectrum. Several days before, on Wednesday, July 1, I had made a mid-afternoon stop at the local Apple store. It was packed. A short line formed at the entrance where a salesperson was taking names on a clipboard. After 15 minutes of browsing, it was my turn to talk to a salesman, and I asked: “Why is the store so crowded? Some special event?”

“Nope,” he answered. “This is pretty normal for a Wednesday afternoon, especially since the iPhone 3G S release.” Read the rest of this entry »

See our new paper estimating the growth of consumer bandwidth – or our capacity to communicate – from 2000 to 2008. We found:

• – a huge 5,400% increase in residential bandwidth;
• – an astounding 54,200% boom in wireless bandwidth; and
• – an almost 100-fold increase in total consumer bandwidth

U.S. consumer bandwidth at the end of 2008 totaled more than 717 terabits per second, yielding, on a per capita basis, almost 2.4 megabits per second of communications power.

After the EU antitrust authority today leveled a €1.06 billion fine against Intel, the company’s general counsel Bruce Sewell gave an illuminating interview to CNBC:

We better come up with a better way to restrict the EU’s range of motion on these matters. Sewell called the action “arbitrary.” The CNBC reporters called it a “shakedown.” They’re both right. Read rest of post »