The Greatest Creation of Wealth

in the History of the World

piero scaruffi

p@scaruffi.com

scaruffi@stanford.edu

Beijing, China

September 2014

Sections

1. History of Silicon Valley

2. Trends

3. The Best Kept Secret in Silicon

Valley 2

1. History of Silicon Valley

3

World War I

• The Navy and amateurs turn the Bay Area

into a hotbed of radio engineering

4

Meanwhile elsewhere…

• The automated office:

– typewriters (a field dominated by

Remington Rand),

– adding machines (a field dominated by

Burroughs),

– tabulating machines (a field dominated by

IBM)

– cash registers (a field dominated by NCR)

• Midwest and East Coast industries dominate

office automation 5

World War II and Cold War

• Fred Terman in charge of electronic

warfare

• Fred Terman's students at Stanford:

HP, Varian,…

• Stanford Industrial Park (1951)

• Main industry in Silicon Valley:

Defense

6

Meanwhile (computers)

• Main centers for research on electronic computing:

– Boston (Harvard and MIT),

– Philadelphia (Moore School of Electrical Engineering, BRL),

– New Jersey (Bell Labs, Princeton, RCA Labs),

– New York (Columbia and IBM)

• First commercial computers: large office-automation players (Remington Rand, IBM, NCR, Burroughs)

• AT&T Bell Labs’ transistor (1949) 7

8

Silicon Valley in 1950

Semiconductors in the Bay Area

• Shockley Semiconductor Lab (1956)

• Fairchild Semiconductors (1957),

the first venture-funded "start-up"

company of the Bay Area: Robert

Noyce, Gordon Moore, Jean Hoerni,

etc

• Fairchild moves from germanium to

silicon

• The semiconductor industry does

not require huge capital investment

9

Integrated Circuits

• 1958: Jack Kilby at Texas Instruments invents the integrated circuit

• Exponential growth in chip density

• Gordon Moore’s law (1965): the processing power of computers will double every 12 (18) months

10

Integrated Circuits

11 dsprelated.com/blogimages/RickLyons

Integrated Circuits

• A self-sustaining manufacturing community that

mixes Darwinian competition/selection with

symbiotic cooperation

• The system exhibits a form of collective learning

• Note: Texas Instruments in Texas, Motorola in

Arizona and RCA/GE on the East Coast do not

spawn a similar genealogical tree of

semiconductor startups

12

Integrated Circuits

• Role of the government

– The military serves as both a munificent

investor that did not expect a return (and not

even co-ownership) and as an inexpensive

testbed

– NASA's Apollo mission to send a man to the

Moon builds the Apollo Guidance Computer

(1961-64), the first computer to use integrated

circuits

13

Dynamic Memory

• Advanced Memory Systems (1968), Intel (1968)

and Four Phase (1969): semiconductor computer

memories instead of magnetic core memories

• Before the DRAM: the semiconductor firms make

money by building custom-designed integrated

circuits (small market but lucrative)

• The DRAM: a commodity sold in large numbers

at a low price

• Constant downward pressure on prices 14

High-tech Creativity

• SRI

– Doug Engelbart’s NLS (1968): a graphical user interface and a hypertext system running on the first computer equipped with a mouse and connected to a remote computer (9 Dec 1968)

– An implementation of Vannevar Bush's article "As We May Think“ (1945)

– Engelbart’s research program: “Augmenting Human Intellect” (not Artificial Intelligence, but augmented intelligence)

– "Shakey the Robot“ (1969) 15

High-tech Creativity

• Xerox PARC (1970) :

– Alan Kay’s Dynabook and Smalltalk

– Ivan Sutherland (University of Utah College of Engineering + Seymour Papert (MIT A.I. Lab)

– Not faster computation but better interaction

– Casual, informal and egalitarian workplace

16

High-tech Creativity

• Computer games

– Nolan Bushnell’s "Computer

Space“ (1971), the world's

first coin-operated

videogame (a free-standing

terminal powered by a

computer)

– Atari’s “Pong“ (1972)

17

Meanwhile elsewhere… • Arpanet (1969): Utah, UCLA, SRI, UCSB but run

by BBN (Boston)

• Unix (1971) – from Bell Labs (New Jersey)

• “The Unbundling” by IBM (1969) creates the

software industry

• Minicomputers (Digital Equipment, 1968) -

Boston

• Largest computer companies in the USA: IBM +

BUNCH (Burroughs, UNIVAC, NCR, CDC, &

Honeywell) – none of them in California 18

The Microprocessor

• Four Phase Systems’ AL1 (1970)

• Intel’s 4404 (1971), as powerful as the

ENIAC, but millions of times smaller

and ten thousand times cheaper

• Bill Pentz at California State University

in Sacramento proves that a

microprocessor can be used to build a

computer (1972)

19

The Home Computer • "Radio Electronics", "QST" and

"Popular Electronics" publicize the microprocessor among hobbyists

• Kits by mail-order for hobbyists to build machines at home: Scelbi (1974), …, Altair 8800 (1974)

• The microprocessor reaches a wider audience than its inventors intended to reach thanks to the magazines

• The most creative and visionary users are not working in corporations but at home

• The Homebrew Computer Club (1975) 20

The Home Computer

• IBM, the "BUNCH“ and DEC had the know-how, the brains and the factories to produce desktop computers for the home market. They did not do it.

• The market for home computers is largely created by a grassroots movement of hobbyists who work outside the big bureaucracies of corporations, academia and government.

• They create their own community (via magazines, stores and clubs)

• Journalists and store owners are the real visionaries

21

The Home Computer

• Obstacle to widespread diffusion: the home

computer is expensive (because the Intel

microprocessor is expensive) and pretty

useless (because it has no software)

22

Software: Databases

• Leadership in database technology: IBM’s

IMS

• IBM's Almaden Research Center starts the

“relational” database management system

System R (1973)

• Berkeley’s Ingres (1973)

23

The GUI • Leadership in user interface: IBM’s form-driven

3270 terminal to connect to mainframes

• Xerox PARC unveils the Alto, the first

workstation with a mouse and a Graphical User

Interface (1973)

24

The Apple Vision

• Apple I vision (1976):

– A computer without a programming language is an oxymoron

– A real programming language requires DRAM

– Enabling technology: the 4K DRAM, just introduced in 1974, much cheaper than the static RAM of the Altair

– Roberts had basically just dressed up a microprocessor to create his Altair. Wozniak dresses up a memory chip to create the Apple I

– Wozniak also writes the BASIC interpreter

– Target user: the hobbyist 25

The Apple Vision • Apple II vision (1977):

– Fully assembled, with a monitor

and a keyboard, requiring almost

no technical expertise

– The look and feel of a home

appliance

– The first affordable floppy-disk

drive for personal computers,

which replaces the cassette as the

main data storage

26

A New Office Tool

• VisiCalc (1979), the first spreadsheet program for

personal computers for the Apple II

• Apple’s IPO (1980) raises a record $1.3 billion

• Visicalc ported to the Tandy TRS-80, Commodore

PET and the Atari 800, the first major application

that is not tied to a computer

• Lesson learned: the value of software

• Venture capitalists move to Menlo Park

27

A New Office Tool

28

http://arstechnica.com

The Microprocessor Wars/ II

• Intel assigns the task of designing the 8086

(1978) to a software engineer

• 14 million microprocessors are sold in 1978

but only 200,000 personal computers are

manufactured

29

Communications

• 3Com (1979): Ethernet for personal

computers

• Ungermann-Bass (1979): Ethernet-based

local-area networks

30

The GUI/II

• Exodus of brains from Xerox

PARC towards Silicon Valley

companies (1977)

• Xerox 8010 Star Information

System (1981) that integrates a

mouse, a GUI, a laser printer,

an Ethernet card, an object-

oriented environment

(Smalltalk) and word-

processing and publishing

software 31

BSD

• Berkeley Software Distribution (1977) spreads in universities

• The world's most portable operating system

• Onyx (1980), Apollo (1980), SUN (1981), Silicon Graphics (1982): a microcomputer running UNIX, a cheaper alternative to the PDP-11

• DARPA chooses Unix for the Arpanet (1980)

32

BSD

• A technology ignored by the big computer

manufacturers and left in the hands of a

community of eccentric independents

• Dynamics that mirrors the dynamics of the

computer hobbyists who have invented the

personal computer

• Universities serve as community

aggregators more than magazines, clubs or

stores 33

Biotech

• Genentech (1976) to genetically engineer new

pharmaceutical drugs

• Applied Biosystems (1979) to build biotech

instrumentation (protein sequencer, DNA

synthesizer)

• The US Supreme Court rules that biological

materials (as in "life forms") can be patented

(1980)

• Calgene (1980), Chiron (1981), …

• Cetus’ IPO (1981) raises a record $108 million 34

Meanwhile elsewhere… • The IBM PC (1981), a personal computer

from off-the-shelf, widely available

components based on the Intel 8088

microprocessor and running an operating

system by Microsoft (derived from Unix)

• The “open” model of the PC creates an

industry of "clones" (Compaq, Olivetti) and

an industry of independent software

companies

35

Meanwhile elsewhere…

• Commodore 64 (1982) is sold in retail stores

instead of electronics stores

• Osborne 1 (1981), a portable computer

36

http://arstechnica.com

The Apple Vision

• Apple Lisa (1983), the first

personal computer with the GUI

pioneered by the Xerox Alto

• Apple’s added value: it looks cool

• Apple’s model: a proprietary Apple

operating system

37

Software

• Sales of personal computers skyrocket because they have become useful: Apple thanks to office programs (Visicalc, Context MBA) and the PC thanks to the DOS-compatible applications (Lotus 1-2-3, dBase ($700)

38

Software

• Activision (1979), Electronic Arts (1982): computer games

• Autodesk (1981): CAD

• Adobe (1982): desktop publishing

• Symantec (1982), Borland (1983): tools for software developers

39

Software

• 1950s-1970s: the hardware represents most

of the cost of a computer

• 1980s: the falling prices of hardware

components enables ever more

sophisticated software applications and

triggers a growing demand for them; and

the need to run more sophisticated

applications motivates the hardware

industry to produce more powerful chips 40

The Internet

• Just like the personal computer and the Unix, the

Internet too is largely shaped by a community of

eccentric independents

• Decentralized model that involves the very users

of the Internet to submit proposals for future

directions

• A government-mandated grass-roots movement

• The consumer is the producer

• E-mail itself is a user invention, never planned by

the Arpanet's bureaucracy 41

The Internet

• The Arpanet as a project in progress, a concept that is more likely to be accepted in military projects than in commercial product development

• The Arpanet changes mission over time, transforming from a military project to survive a nuclear attack into a system for interpersonal communication and knowledge sharing

42

The Semiconductor Wars • Japanese firms introduce low-cost 256K DRAM

chips (1984) and gain 70% of the market (1985)

43

Outsourcing the Fab

• 1985: The government of Taiwan hires Morris Chang who promotes the outsourcing of semiconductor manufacturing by US companies to Taiwan

• Whenever a Silicon Valley manufacturer outsources a project to a Taiwanese fab, it directly improves the Taiwanese plant both by injecting capital and by the project's new requirements and therefore does a favor to its own competitors who can use the same factory

44

The PC goes corporate

45

http://arstechnica.com

The Peacetime Dividend

• End of the Cold War (1991): Silicon Valley does

not depend anymore on the military industry

• The main change: need to generate a profit as

quickly as possible (the great investor of the 1950s

and 1960s, the military, thought long-term, with

no interest in return on investment)

46

Meanwhile elsewhere…

• 1991: Tim Berners-Lee invents the

World-wide Web

• 1993: Mosaic (later renamed Netscape in

Silicon Valley)

• 1994: WebCrawler (search engine)

• 1995: The US government blesses the

commercial use of the Internet

47

The Dot Coms

• The importance of Netscape’s browser:

– Free for ordinary users

– Illiterate computer uses can browse the Web the

same way that a pro does

– The non-intuitive cluster of digital information

that has accrued on the Internet becomes

intelligible to ordinary people

– More and more people are motivated to add

content to the Web 48

The Dot Coms

• The importance of Netscape’s browser:

– The personal computer boom of the 1980s has

placed a computer in millions of households

and the browser turns them into the audience of

the Web

– The computer monopolies are forced to adopt

open standards for the Web

49

The Dot Coms

• Netscape IPO (1995)

• Yahoo (1995)

• Excite. AltaVista (1995), Hotbot (1996), Google (1998)

• Java (1995)

• WebLogic (1995), Apache (1996)

• Craigslist (1995)

• HotMail (1996)

• GeoCities (1995)

• eBay (1995)

• Netflix (1997) 50

Cloud Computing

• 1990: General Magic

• 1996: Oracle's Net Computer

• 1999: Salesforce

• 2006: Amazon's Simple Storage Service

• 2007: Google Docs

51

Hotmail’s Lesson

• Founded by hardware engineers: a user’s idea, not

a technological idea; a sturdy no-nonsense

"product“

• Advertising as a source of revenues

• Internet startups offer free services because their

real product is the user base

• The boom of the Web is not a consequence of the

Internet but of the boom in advertising: cable

television revenues stage an 82% growth rate in

1994-95 just when the Web is maturing 52

Meanwhile elsewhere…

• East Coast: Human Genome Project (1992)

• Finland: Nokia introduces the smart phone (1996)

53

The Nasdaq Crash

• Between 1998 and 1999 venture-capital

investments in Silicon Valley firms increases more

than 90%

• The Internet and Y2K booms generate a bubble

that bursts in 2000

54

The Nasdaq Crash

• Venture capital investment never went back to the

2000 high

55

The Nasdaq Crash

• Silicon Valley before the crash:

– Personal computers: HP and Apple dwarfed by

IBM, Compaq, Dell and Japanese

– Videogame consoles: Japan rules

– Semiconductors: The Far East rules

– Mobile phones: Europe rules

– Chips for mobile devices: ARM rules

– Software: Microsoft and SAP dwarf Oracle

– Dotcoms: No profits 56

Beyond the Crash

• Paypal (2000)

• Apple iPod and iTunes (2001)

• Wikipedia (2003)

• Facebook (2004)

• YouTube (2005)

• Twitter (2006)

• iPhone and Androir (2007)

57

Beyond the Crash

• Facebook (2004)

58

Beyond the Crash

• Yahoo and Google de-facto turn the Web into an

advertising tool which incidentally also contains

information

59

The Age of Uploading

• Wikipedia

• Blogs

• P2P tools

• Social networking sites

• YouTube

• Flickr

• Digital cameras and camcorders

• Smartphones

60

The Gift Economy

• The audience “gifts” content to the companies that

make money out of it

• The companies are small but handle a huge

amount of content

• The companies make money as advertising

platforms

• The audience receives a free service but also

provides a free service

61

The Demise of the Computer

• The smartphone (a computer that also does voice)

• Cloud computing (an invisible, omnipotent, virtual

computer)

• Applications are written for social networks

(Facebook apps) and smartphones (iPhone apps),

not for an operating system

62

The Great Internet Wars

• Google vs Microsoft: Microsoft owns the

operating system but Google owns the search

engine (Internet traffic)

• Google vs Facebook: vying to become the premier

advertising platform

• Apple vs Google: proprietary or open smartphones

63

Diversifying

• Tesla

64

Diversifying

• Apple iPhone (2007) and Google Android (2007)

65

Diversifying

• Biotech

66

The 2010s

67

The 2010s

68

The 2010s

69

Silicon Valley 2014

• World's #1 company in…

– Internet services: Google

– Social Media: Facebook

– Semiconductors: Intel

– Personal computers: Hewlett-Packard

– Business software: Oracle

Most valued company in the world: Apple

Location with the most venture capital: 3000 Sand Hill Rd, Menlo Park

70

71

GDP ($million):

1 USA 16,800,000

2 China 9,240,270

3 Japan 4,901,530

4 Germany 3,634,823

5 France 2,734,949

6 Britain 2,522,261

7 Brazil 2,245,673

8 Russia 2,096,777

9 Italy 2,071,307

10 India 1,876,797

11 Canada 1,825,096

12 Australia 1,560,597

13 Spain 1,358,263

14 South Korea 1,304,554

15 Mexico 1,260,915

16 Indonesia 868,346

17 Turkey 820,207

18 Netherlands 800,173

19 Saudi Arabia 745,273

20 Switzerland 650,782

21 Argentina 611,755

San Francisco Bay Area ~600,000 (8 million people)

GDP per capita ($): 1 Qatar 98,814 2 Luxembourg 78,670 San Francisco Bay Area 74,815 3 Singapore 64,584 4 Norway 54,947 5 Brunei 53,431 6 United States 53,101 (World Bank, 2013)

Nobel Prizes (2013) 1. USA 349 2. Britain 116 3. Germany 101 4. France 66 San Francisco Bay Area 42 • Sweden 30 • Russia 27 • Switzerland 26 • Canada 23 • Austria 22 • Italy 20 • Japan 19

Today

72

1950

Lessons

1. Industrial park around university (Terman's model)

2. Ecosystem of small competitors instead of dominating giant (Fairchild model)

3. Government funding for advanced technology (DARPA, NASA)

4. People buy the application, not the technology (the VisiCalc lesson)

5. Big monolithic corporate research is slower to realize the potentiality of a new technology than a distributed system of independent eccentric hobbyists (personal computers, dot coms)

73

Lessons

6. Augmented intelligence, not just automation (SRI, Xerox PARC)

7. Inventions can come from anywhere, disruptive innocation comes from disruptive societies

8. Corporate and government platforms are opportunities for new applications (Internet, Unix)

9. The business model for a new technology is never obvious (the Hotmail lesson)

10. Technology does not exist in a vacuum

74

Trends…

• … the next SMALL thing!

75

Social Media

• Facebook (1 billion users!) and Twitter: age of

social entertainment (and political activism!)

• The next step: streaming your life live to the world

(Twitch.tv)

76

Social Media

• A different use of social media: investment and

services

– Crowdsourcing

– Sharing economy (collaborative consumption

77

Citylab.com

Sharing Economy

• Collaborative consumption

• A side-effect of the financial crisis

• Enabled by social mobility, by Amazon/Yelp

customer reviews (“trust”), and by… a wasteful

society (idling capacity)!

78

Citylab.com

Sharing Economy

• Technology is changing the

future of capitalism from

competing to sharing

• “By the end of this decade,

power and influence will shift

largely to those people with the

best reputations and trust

networks, from people with

money and nominal power…

giving a voice to what we once

called "the silent majority."

79

Craig Newmark

Sharing Economy

80

Sharing Economy

81 jwtintelligence.com

Mobile Computing

• Mobile payment

82

Mobile Computing

83

Big Data

• Very soon Homo Sapiens will be producing

more data every year than in the previous

200,000 years

• Artificial Intelligence

• Automated knowledge management

• But also…

84

85

Hessian matrix from a quadratic programming problem 86

Frequency-domain circuit simulation 87

Linear programming problem 88

Computational fluid dynamics: shallow-water equations 89

Linear programming problem 90

Social network: people and the web pages they like 91

Big Data

• What those pictures are: solving a large

system of linear equations with a large

number (millions) of unknowns

Images by Margot Gerritsen (Stanford Univ), Tim Davis & Yifan Hu

http://www.cise.ufl.edu/research/sparse/matrices/ 92

Cloud Computing

• Personal digital life synchronized through

devices

• Offering anything as a service

93

Cryptography

• Post-quantum cryptography

• Bitcoin blockchain

• Zero-knowledge proofs

• Indistinguishability obfuscation

• Secure multi-party computation

94

Education

• Massive Open Online Courses (MOOCs)

• The largest university in the world is Coursera with 5 million students

• There are thousands of MOOCs and they will adapt and evolve faster than traditional universities

• 2014: 81% of students in thge USA take at least one online course

• Talent identification and recruiting

95

Health Care

• In the USA 18% of GDP is $1 trillion, of which

70% is to cure the ill and 30% is diagnostics

• Expected to grow to 50% in 5 years thanks to

sensors and nanotech, to keep people out of

hospitals

96

Health Care

• Life expectancy is increasing: every year by 3

months

• Neurodegenerative diseases increase accordingly

• This means fewer doctors and more diagnostic

centers (and their staff)

97

Health Care

• The most dramatic and

rapid gains have occurred

in East Asia, where life

expectancy at birth

increased from less than 45

years in 1950 to more than

74 years today.

• Percentage Change in the

World’s Population by

Age: 2010-2050 (UN

estimates of 2010):

98

Wearable Computing

• Health monitoring

• Integration with

medical records and

social media

99

Fashion

100

Industry 4.0

• Innovation driven by scale:

– Until 1989 the scale was the millimeter

– In 2014 the scale is the nanoscale, heading

towsars quantum and biological scales.

– Biology and not the machine is the new

reference model (eg, build batteries with

viruses).

101

Industry 4.0

• Lower technological barriers to entry

– a distributed system of innovation: the

innovation system expands to highschool kids

– rapid diffusion of tools and know-how through

open source

– rapid prototyping

102

Industry 4.0

• 3D printing (2014: New Matter)

– will reduce transport costs just like Amazon

killed the bookstore

– but uses more energy

– print at home might be too expensive: where to

print?

103

Industry 4.0

• Amazon:

– 2010s: Amazon’s colossal PHX6 fulfilment

center at Phoenix (Arizona) is transformed into

an automated, robot-intensive facility

– The whole supply chain is made available to

other merchants as well

– Rapidly moving online business towards same-

day delivery and mobile shopping.

104

Industry 4.0

• Crowdfunding

– $3-5 billion

105

Industry 4.0

• What is changing:

– actors

– process

– investors

106

Hardware

• Quantum Computing?

107

Sensor revolution

• Thanks to progress in micro-electronics, batteries and wireless connectivity, sensors have become orders of magnitude cheaper

• The “cloud” enables them to communicate

108

Sensor revolution

• Networked sensors open virtually infinite horizons to a new generation of applications.

– Wearable computing

– Self-driving cars

– Embedded nanotechnology

– Robots

– Cashier-less payment

109

Internet of Things

• Communication standards

– AllJoyn (Qualcomm): objects can broadcast what they can do to all other objects nearby (WiFi or Bluetooth)

• Eg a television can announce that it can display notifications

– Industrial Internet Consortium (AT&T, Cisco, IBM, GE, Intel)

– Open InterConnect Consortium (Broadcom, Samsung, Dell)

110

Networked Cars

• 2014: 8% of cars have some kind of networking capability

• April 2014: all new BMW models will embed a SIM card

• 2020: 90% of new cars will have a SIM card

• Apps for the networked car:

– Search for parking space

– Communicate road hazards and accidents

– Exchange information about traffic

– Monitor driver’s behavior (eg, your son)

– Ride-sharing

111

Nanotech

• Nanomedicine

• Nanobots

112

Biotech • Moore's law vs Cost per genome

113

Biotech

114

iGEM Revolution • “Open source” biotech

• iGEM = International Genetically Engineered Machine

• Thousands of student bioengineers from all over the world create new life forms and race them every year at the iGEM Jamboree in Boston (since 2004)

• 2,500 competitors from 32 countries (2014), including high-school teams

• Global grassroots synthetic-biology revolution

• Repository of 2,000 genetic components called BioBricks.

• They create mostly microbes (e.g., organisms detecting and eliminating water pollutants)

• Drew Endy (Stanford) : cofounder of iGEM and co-founder of the BioBricks Foundation

115

Biohacking

• “Biology is technology” (Rob Carlson)

• A community of worldwide hobbyists

• Public domain database of genetic parts

• 20,000 biological parts

• Registry of Standard Biological Parts - MIT

– parts.mit.edu

– parts.igem.org

116

Biohacking

• Biocurious (Sunnyvale) - -20C Freezer

– PCR Machines

– qPCR

– Balance

– Autoclave

– Micropipettes, single and multi-channel

– Fluorescent Microscope

– Microcentrifuges

– Protein Purification System

– Vortexers

– Ultrasonic Bath

– CO2 Incubator

117

Biohacking

• OpenPCR (Polymerase Chain Reaction)

• PCR printers (identify a piece of DNA and make copies of it)

• Cambrian Genomics: a 3D printer for living beings

118

Biohacking

• Autodesk’s Project Cyborg: design tools for biohackers (quote: “Project Cyborg is a cloud-based meta-platform of design tools for programming matter across domains and scales”)

119

Artificial Intelligence

• Amazon (Kiva, 2012), Google (Industrial

Robotics, Meka, Holomni, Bot & Dolly,

DNNresearch, Schaft, Bost, DeepMind, 2013-14),

IBM (Watson project), Microsoft (Project Adam,

2014), Apple (Siri, 2011), Facebook (DeepFace,

2013), Yahoo (LookFlow, 2013), Baidu, Foxconn,

and others have made multi-billion dollar

investments in artificial intelligence and robotics

in the 2010s

120

Artificial Intelligence

• McKensey on A.I.

121

Artificial Intelligence

• Machine Learning

• Domestic robot

• Image recognition

• Voice recognition

122

Artificial Intelligence

• Today’s robot: you

123

Artificial Intelligence

• Robot of the future: thousands of eyes and

arms geographically distributed

124

Artificial Intelligence

• Programming:

– Sequential programming (deterministic)

– Nonsequential (AI, deterministic)

– Probabilistic (Baysian, nondeterministic)

– Probabilistic and distributed

125

Artificial Intelligence

• The 20-minute answer to a search (Peter

Norvig at Google)

126

Artificial Intelligence

• Memorable pictures

Following slides are from MIT’s AI Lab 127

Artificial Intelligence

• Memorable pictures

128

Artificial Intelligence

• Memorable pictures

129

Artificial Intelligence

• Memorable pictures

130

Artificial Intelligence

• Memorable pictures

131

Super-intelligence

• The Singularity?

• 2014: Deep Knowledge Ventures (Hong Kong) appoints an algorithm to its board of directors.

132

Management Science

• Transitioning into a new era:

– Hierarchical -> Network

– Proprietary -> Open

– Market Economy -> Gift Economy And Sharing Economy

133

Management Science

• "Design for loss of control"

(JP Rangaswami)

• Turn an organization into a

social enterprise

134

Management Science

• How to prepare the next generation of leaders to deal with extremely complex and rapidly mutating systems

• Grand challenges require interdisciplinary thinking

135

Stanford Entrepreneurship

136

Entrepreneurship Organizations

• Association of Industry-Minded Stanford Professionals – postdoc

networking to link entrepreneurship and industry

• Business Association of Stanford Entrepreneurial Students – business

plan competitions, E-Challenge and Social E-Challenge

• Center for Entrepreneurial Studies at the Graduate School of Business –

personalized counseling and mentorship

• Innovation Farm Teams – students and faculty/industry/OTL teams

• SPARK – School of Medicine and volunteers from biotech, pharma and

healthcare; seed funding to bridge basic science and pre-clinical

• Stanford Angels & Entrepreneurs – foster relationships between

potential investors and entrepreneurs

• Stanford Biodesign – needs finding and invention of biomedical tech

• Stanford Entrepreneurship Network – federation of organizations

• Stanford Technology Ventures Program – accelerate high-technology

entrepreneurship education and research on technology-based firms

137

Entrepreneurship Courses

• School of Engineering – over 30 courses within the Stanford

Technology Ventures Program

• Graduate School of Business – 20 courses related to

entrepreneurship

• Entrepreneurial Design for Extreme Affordability – jointly offered

by Graduate School of Business and School of Engineering

• Lean Launchpad – hands-on learning on what it’s like to start a

high tech company

138

Stanford University

• Interdisciplinary education promoted at the various schools at Stanford’s engineering, business, medicine, science, design

• Students from diverse majors encouraged to come together to solve real or abstract problems

• The goal is to have them become what are called “T-shaped” students, who have depth in a particular field of study but also breadth across multiple disciplines.

• Eg, Institute of Design, or the d.school, housed in the school of engineering

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Stanford University

• Stanford forms T-shaped people

140

Stanford University

• Faculty invest in start-ups launched by their students or colleagues.

• There are probably more faculty millionaires at Stanford than at any other university in the world.

• 2005: the stock grants that Stanford had received in exchange for licensing Google’s technology were sold for 360 million dollars.

• The real value for a student is the networking

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Art/Science/Tech Interaction

142

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Art/Science in the Bay Area

• Leonardo ISAST leonardo.info (Frank Malina, 1967)

• YLEM (Trudy Reagan & Howard Pearlmutter, 1981)

• UC Berkeley's Art, Technology, and Culture Colloquium (Ken

Goldberg, 1997)

• Zero1 zero1.org (Andy Cunningham, 2000)

• LASERs lasertalks.com (Piero Scaruffi, 2008)

• UC Santa Cruz's OpenLab (Jenifer Parker and Enrico Rameriz-Ruiz,

2010)

• Codame codame.com (Bruno Fonzi, 2010)

• BAASICS baasics.com (Selene Foster and Christopher Reiger, 2011)

• UC Santa Cruz's Art/Sci Institute (John Weber, 2013)

• Life Art Science Technology (LAST) festival lastfestival.com (Piero

Scaruffi, 2014)

• Djerassi's Scientific Delirium Madness (Margot Knight, 2014)

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www.nasonline.org

events.stanford.edu

www.lasertalks.com

Since January 2008

usfcalendar.usfca.edu

http://dma.ucla.edu

www.unex.berkeley.edu

arts.ucsc.edu/

artsciencefusion.ucdavis.edu/

londonlaser.net

145

• San Francisco: since Jan 2008 (SFSU, then USF)

• Silicon Valley: Feb 2009 (SETI Inst, then Stanford)

• Washington: Mar 2011 (National Academy of Science)

• New York: Sep 2011

• UCLA: Jan 2013

• Berkeley: Jun 2013

• Santa Cruz: October 2013

• Davis: October 2013

• London: February 2014

• Texas: 2014

• Kansas: 2015

• Toronto: 2015

146 www.lasertalks.com

147

LAST Festival Life Art Science Technology festival

June 2014: Silicon Valley - October 2014: San Francisco

www.lastfestival.com

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The Best Kept Secret in

Silicon Valley

• Why did it happen there???

149

Why did it happen here?

• The technology, the money and the brains were on the East Coast and in Europe (the great electronic research labs, the great mathematicians, Wall Street, etc)

• The great universities were on the East Coast (MIT, Harvard, Moore School, Princeton, Columbia), and in Europe (Cambridge)

• Bell Labs, RCA Labs, IBM Labs

• Britain and Germany won most of the Nobels

• Transistor, computer, etc all invented elsewhere

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Silicon Valley in 1950

151

Silicon Valley in 1950

(2007)

31

$4.4

$1.3

(2013)

152

Why did it happen here?

• The official history of Silicon Valley

– Defense/DARPA

– Fred Terman at Stanford and Stanford Industrial Park

– William Shockley’s lab

– Fairchild/Intel/semiconductors

– Xerox PARC, SRI Intl/computer-human interface

– Apple, personal computing, videogames

– Unix, Internet, Relational databases

– The dotcoms

– Google, Facebook, …

153

Why Silicon Valley?

• Until the 1950s the Bay Area was mainly famous for

– Eccentric artists/writers

• Student protests of 1964

• Hippies

• Black Panther Party (1966)

• Monterey’s rock festival (1967)

• "Whole Earth Catalog“ (1968)

• The first “Earth Day” (1970)

• Gay Pride Parade (1970)

• Survival Research Labs (1978)

• New-age movement (1980s)

• Burning Man (1986)

154

Why Silicon Valley?

The first major wave of immigration of young educated people from all over the world took place during the hippy era (“Summer of Love”)

The first major wave of technology

was driven by independents, amateurs and hobbyists (From ham radio to the Homebrew Computer Club)

155

Why Silicon Valley?

• Anti-corporate sentiment

• The start-ups implement principles

of the hippy commune

• SRI Intl and Xerox PARC:

computation for the masses,

augmented intelligence

Xerox PARC

The first mouse

156

Why Silicon Valley?

• The Bay Area recasts both Unix and the

Internet as idealistic grass-roots

movements

• Young educated people wanted to

change the world

• They did

157

Why Silicon Valley?

• Dysfunctional synergy between two opposite

poles

– The rational and the irrational

– Technologists and anti-technologists

– Hippies and engineers

– Amateurs and corporations

– Nerds and outlaws (the "traitors", Jobs,

Ellison, Zuckerberg, hackers)

158

Why Silicon Valley?

• Innovation is a vague word: everything is an "innovation". What kind of innovation does Silicon Valley specialize in?

159

Why Silicon Valley?

• What Silicon Valley does best

– Not invented here: computer, transistor, integrated circuit, robots, Artificial Intelligence, programming languages, databases, videogames, Internet, personal computers, World-wide web, search engines, social media, smartphones, wearable computing, space exploration, electrical cars, driverless cars…

160

Why Silicon Valley?

• What Silicon Valley does best

– Invented here: disrupting products

161

Silicon Valley 2014

• World's #1 company in…

– Internet services: Google

– Social Media: Facebook

– Semiconductors: Intel

– Personal computers: Hewlett-Packard

– Business software: Oracle

Most valued company in the world: Apple

Location with the most venture capital: 3000 Sand Hill Rd, Menlo Park

162

Why Silicon Valley?

• Culture of failure: it comes from the artists (risk inherent in being an artist)

• Culture of success: it comes from the artists (congrats if you make a lot of money out of the crazy ideas you had)

• Meritocracy: it comes from the artists (industrial power is usually inherited)

• Casual work environment - just like an artist’s studio

• Silicon Valley is about the garage (like the artists)

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Why Silicon Valley?

• Crowdfunding, peer-to-peer file

sharing, the gift economy and the

sharing economy are NOT natural

consequences of traditional industrial

capitalistic society

• but they are a natural consequence of

the artists' way of life

164

Why Silicon Valley?

• Immigration of young educated people from

all over the world (Note! USA gets brains,

Silicon Valley gets YOUNG brains)

• Young people are less specialistic (narrow

minded? parochial?) than older people

• Computer geeks and nerds are actually

more likely to absorb the influence of artists

(and even to become polymaths)

165

Europe vs SV

• Europe: no trust in a young person starting a business

• SV: young people are the ones who found new music genres and become rock stars

• Europe: frightened by new technology

• SV: what kind of party can I throw with this new technology?

TechCrunch Disrupt

September 2013

The first LAST festival

June 2014

166

Europe vs SV

• Europe: fear of “Big Brother”

• SV: please take my privacy and make me cool and famous (just like an artist)

Viviane Reding,

EU’s justice commissioner

Steve Jobs Sergey Brin

"It is better to be absolutely ridiculous than

absolutely boring“ (Marilyn Monroe)

167

Replicating Silicon Valley The rest of the world consistently failed to create

their own Silicon Valleys:

• Sophia Antipolis (France)

• Munich (Germany)

• Oulu (Finland)

• Skolkovo (Russia)

• Israel

• Hsinchu (Taiwan)

• Singapore

• Cyberjaya (Malaysia)

• Bangalore (India)

• Zhongguancun (China)

167

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Progress does not need SV

• One century ago, within a relatively short period of time, the world adopted:

– the car,

– the airplane,

– the telephone,

– the radio

– the record

– cinema

• while at the same time the visual arts went through

– Impressionism,

– Cubism

– Expressionism

169

Progress does not need SV

• while at the same time science came up with

– Quantum Mechanics

– Relativity

• while at the same time the office was revolutionized by

– cash registers,

– adding machines,

– typewriters

• while at the same time the home was revolutionized by

– dishwasher,

– refrigerator,

– air conditioning

170

Progress does not need SV

• while at the same time cities adopted high-rise

buildings

171

Progress does not need SV

• There were only 5 radio stations in 1921 but already 525 in 1923

• The USA produced 11,200 cars in 1903, but already 1.5 million in 1916

• By 1917 a whopping 40% of households had a telephone in the USA up from 5% in 1900.

• The Wright brothers flew the first plane in 1903: during World War I (1915-18) more than 200,000 planes were built

172

… but it may need the arts…

• Accelerating progress happened

simultaneously in the sciences and the arts

Monet Stravinsky Einstein Gaudi Edison

Piero Scaruffi

p@scaruffi.com

scaruffi@stanford.edu

www.scaruffi.com