I first learned about Glitch through my friend, Shelly Bowman, after sign up I immediately fell in love with this cute little browser based massive multi-player game. You can get a feel for the game from the trailer above  but some of the stuff the trailer doesn’t show is the intricate details such as the count down to the end of a skill training:

I enjoy it is it’s “sense of humor” and quirkiness. You can pet trees (which I swear must be a take from the fact this company is based near Berkeley, California), talk to yoga frogs, nibble on pigs, massage butterflies, and they may even want to discuss things of this world with you (see below). In order to increase skill training time you can get “Rock” to speed read. They say the devil is in the details. In this case, the joy of the game is in the details and all those details help tell the story. Tiny Speck has gone so far to make their site a joy to use on mobile. I believe Glitch has a lot of potential to be a run away success when it goes public.

Update:
Tiny Speck Closes $10.7 Million Second Round on Social MMO Glitch, Entering Closed Beta Also of note, in the article, it’s mentioned that Tiny Speck will release an API for the Glitch animation to be utilized in other projects.

Tiny Speck Expects Glitch but No Glitches in Launch: User will be able to grow the game in their own way by using the API to add streets and other sections of the game. A truly customizable experience.

Tiny Speck Founder, Stewart Butterfield, Talks Glitch

Fact Company recently posted about Craigslist going to Washington. The article points out:

Civil litigators have been considering class action lawsuits on behalf of minors who say their abuse was enabled through the site. Another of tomorrow’s witnesses, Tina Frundt, Founder of the nonprofit Courtney’s House, says that the majority of kids helped by her nonprofit “have been trafficked through Craigslist.” Their average age when they entered prostitution was 12, she adds.

However, the site is “protected by a federal law, Section 230 of the Communications Decency Act, which exempts sites like Craigslist from legal liability for content created by users.”

As a content creator and designer of the digital products we use, this got me thinking about the greater ramifications across the web for anything currently in distribution or created in the future. What happens if the government does suddenly step in and begins to censor the content we consume?

Don’t get me wrong as a proponent of ending modern day slavery (aka human trafficking), I am one of the first to tell you that Craigslist putting an end to their Adult section is a good thing. Though it does worry me about where that traffic will be driven to now. Redbook? Other sites? I am not certain either way about how this affects the push to end slavery. My concern would be that it drives it further underground. However this post is not about that so let me return to my point.

If the government censors Craigslist, then who’s next? With enough pressure from the public do we censor others who will attempt to claim the right of free speech? How does that affect those of us in the digital space? Is the freedom of the web dead? Guess we’ll find out around 1pm EDT tomorrow when an announcement regarding Craigslist comes out tomorrow. Then we’ll see how this changes (if it changes) our landscape.

With the latest in technology it could change the way we live, hear, and interact with the world around us. Everything we see and touch would be both a digital layer and a physical layer. Add to this it could be invisible. Our eyes could video tape everything we see. How would that change our communication with each other? What happens when our bodies are so completely connected with technology that we send and receive information at all times, even when we are asleep?

I’m rather far behind on the weekly UX Videos so I’ll “catch up” simply by starting my posts again. I ran across this video and am amazed by the facts. We have a fundamental shift on our hands of how we communicate with each other locally and internationally.

Similar to having a web site is required to even be seen as a legitimate business; it’s now vital to play a part in social media. Seventy eight percent of people will trust peer reviews verses the 14% that trust advertising. Some further facts of the video are as follows:

Social media is no longer a toy. It has grown into a leading tool that demands you partner with it in order to keep pace.

First I want to state that for 2010 I think I will be talking about User Experience in a more generalized way.  I find I put too much pressure on myself to say something profound in my blog. Like every blogger in the blog-o-sphere must say something profound that has massive universal impact rather than simply saying, “I think this about that.” Thus in order to take the pressure off and to encourage more blogging, I will blog about anything I think impacts experience or technology. I’ll ask more questions. I’ll talk about stuff that inspires my thinking. Speaking of, my biggest inspiration lately has been gaming.

Girls and Games.

Ask most females and they would tell you they are either 1) not a gamer or 2) there aren’t enough “girl games” out there for them. What does that really mean though?

Let’s start with point one: “I’m not a gamer”

Any girl who tells you this is simply lying. Truth is they have probably played several games as a kids. As a member of the female gender, they play games with their friends, lovers, and others they come across. They are just not the “normal” type of game we might think of. Girls are competitive in nature.  If you don’t believe me, watch females play soccer or volleyball. (Or fight over a man.)

That brings me to point two: “The games out there aren’t interesting to me.”

I had an interesting conversation with the people at Playdom during an interview a few weeks back. It turns out the game, “Sorority Life“, has a strong appeal to women in their 30/40/50′s whom have the desire at the end of the day to “kill”. (In other words they love the fight feature where they can challenge other women and win battles for money, power, status, or game items.) It is a release of stress for them.

While I was not a fan of Sorority Life (because it felt too girly),  ”Mafia Wars” (by Zynga) appealed to me for much of the same reason. Fascinating, isn’t it?

Why then aren’t more games built for girls that allow us to play to our competitive natures? The game industry is missing a key component to the type of experience girls would want in games. Perhaps there would be more peace in the world if we could take out our aggression within games?

Then again, probably not.

I also find it fascinating that blogs are growing increasingly important. What happens when blogs become part of every day life? When companies can start using them to get feedback about anything to do with thier business from thier internal clients (employees) to thier external clients (customers)? Also, content management systems similar to Documentum’s eRoom (http://www.documentum.com/eroom/) is revolutionizing the way business is done and the way people interact together much like Shirky says.

Most truly great user systems/social software has all that he recommends:
Barriers to participation (reigns in social drama to some extent)
Handles (user identity) – especially important when debating “hot” issues in a group forum
Members in standing (a way of belonging)

Games on mobile phones have come a long way since Snake or endless knock-offs of arcade classics such as Asteroids and Space Invaders.

Now many of the big name titles first created for consoles and PCs are turning up in shrunken versions for handsets that an increasingly large section of the population own.

But, says Thor Gunnarson of British mobile game maker Ideaworks3D, the whole industry is just getting started.

Handsets, he says, are getting powerful enough to cope with what he dubs “console class” gaming, which means they are able to cope with 3D graphics that scroll past at a rate of at least 20 frames a second.

Speed kings

Before now many of the mobile gaming conventions we are used to, such as competing against “ghost” opponents rather than real people, have come about because of the limitations of phone networks.

Data transfer rates on second generation networks are too slow to play real people in real time.

But, said Mr Gunnarson, such limitations disappear with 3G networks simply because they can ship more data back and forth more quickly.

Console class games are coming to phones
Once latency or delay drops below 3.5 milliseconds it becomes invisible to users, said Mr Gunnarson, and 3G networks will definitely ship data between handsets fast enough for that.

“That’s good enough for multi-player gaming and real time racing,” he said.

But what will also make a big difference is the way that people pay for the data they consume via their phone.

Currently most operators charge users for the megabytes they use. A pricing mechanism, said Mr Gunnarson, that does not encourage people to spend lots of time browsing the web or downloading extra levels for games.

Flat rate pricing transformed the net industry and drove a huge rise in the numbers of people going online.

In the US, Verizon’s VCast network uses flat rate pricing as does KDDI in Japan. Both have seen the numbers of mobile gamers increase rapidly.

If you can swap huge amounts of data in and out of a handset without incurring extra charges, it also changes the types of games you get on a handset. No longer do they have to be restricted to a file that the phone’s own memory can store.

Instead, extra parts can be added as they are needed. This also frees up game makers to think big, he said.

“Something like Need for Speed Underground 2 (NFSU2) would not be economically viable to deliver to the consumer before we saw flat rate data networks,” he said. “There are megabytes of data flowing back and forth.”

Flat rate pricing helps players and game makers
As a result, games can be much bigger. The mobile version of NFSU2 has about 40 hours of game play in it. All of it expected to be consumed in small chunks.

“It relies completely on network-based storage and only pulls down levels, cars and characters it needs at that point in time,” he said. “It’s constantly shuffling data back and forth.”

Another game that Mr Gunnarson expects to be big on handsets is Sims 2 Mobile – again which would be hard to do without the advent of 3G.

The key feature of this Ideaworks developed title is the connection with the PC version.

A Sim can be created for the PC version, converted to a mobile character and then uploaded to a handset.

Although the way the game is played has been changed for the handset, with floating menus and different modes for exploring or interacting, the experience is as close as possible to the full version, said Mr Gunnarson.

“It’s a big challenge to get a relatively complicated game like this on a mobile phone,” he said, “not least because you have to be able to play the game with one hand.”

Those were just the latest in a flurry of deals in recent quarters. Networking giant Cisco (CSCO ) remains a steady M&A machine, picking up small tech outfits such as KiSS Technology, which connects online entertainment devices. Oracle had already grabbed headlines with its hostile takeover of software company PeopleSoft and a succession of smaller transactions (see BW Online, 9/12/05, “Now, Oracle May Finally Rest”).

YESTERYEAR’S WOES. Internet companies, which lost much of their cachet and credibility after the market’s crash of 2000, are sought after once again. News Corp. (NWS ) has taken out gaming site ign.com, as well as Intermix (MIX ), the parent of social-networking site www.myspace.com. Yahoo! (YHOO ) bought Internet photo upstarts Flickr and Pixoria. Google (GOOG ) acquired photo service Picasa and mobile service Andoid.com. eBay has already picked up shopping.com.

A host of financial and technological currents are behind the resurgence in tech deals. A few years ago, just about everything seemed be going wrong at once for tech outfits. Business dried up thanks to a combination of financial instability, a weak economy, a murky regulatory outlook, and a slew of wireless and broadband innovations that weren’t quite ready for the market.

As a result, the number of tech deals plummeted to 36 in 2002, from 358 in 2000, according to researcher Thomson Financial.

CASH TO SPLASH. The outlook is cheerier for tech companies now. Buyers have cleaned up balance sheets and would-be targets are generating revenue. The economy is stronger, and technologies such as wireless e-mail, Wi-Fi, digital music, high-definition TV, and broadband work better and cost less. As a result, the number of tech transactions rose to 60 last year from 50 in 2003 and is on track to best that number by 10% or more in 2005, according to Thomson.

Finances are much more conducive to business and dealmaking. At the end of the second quarter, the 80 tech players in the Standard & Poor’s 500-stock index had some $229 billion in cash and equivalents on their balance sheets — more than twice the total at the end of 1999, according to S&P.

Many of those companies have been using that cash for M&A. And target Internet companies are healthier and therefore more attractive. The Interactive Advertising Bureau said in June that Internet advertising totaled more than $2.8 billion in the first quarter of 2005, up 26% over the prior year.

BROADBAND’S IMPACT. “During the bubble years, there were a lot of companies that had no right to be in business,” says Jack Flanagan, senior vice-president at market researcher comScore Networks. “The Internet companies that are around today have weathered the storm. They have strong business models, and they are executing well.”

The rise of faster, always-on broadband connections has been a particular boon to the tech M&A market. Many new Internet services — such as those delivered by Skype — are designed with broadband users in mind. Skype lets members make no-charge phone calls via computers loaded with the outfit’s free software. It’s one of many new technologies that just don’t fit with outmoded dial-up connections.

And software companies like Oracle are expanding their offerings and preparing for the day when pieces of software will interact automatically in new ways over faster networks. “The Internet is beginning a new chapter,” says Danny Rimer, a general partner at Index Ventures, an early investor in Skype. “Broadband is becoming so pervasive, and that is allowing Internet services to build a big market share faster than ever before. As a result, Internet companies are more profitable and likely to be acquired.”

BIG FISH, LITTLE FISH. Rimer says he expects the acquisition of Internet outfits and the tech-infrastructure companies that enable them to operate to continue. Internet companies will be in demand, he says, “because innovation is moving at such as fast pace, and big companies realize they can’t develop all of the innovations they need in-house.”

So where will the next deals occur?

The software industry will remain active. Big corporations increasingly want to purchase their software from a few major players. That’s forcing the smaller outfits into the arms of larger buyers. Salesforce.com (CRM ) is viewed as a likely takeover target, according to analyst Stuart Williams of Technology Business Research. Potential buyers could include big software companies, possibly even Oracle itself.

Consumer services will remain an important growth area. As broadband becomes ubiquitous in the consumer sector, the potential for revenue growth is enormous. Rimer is betting on companies that “disrupt” old business models, such as BetFair, which he describes as an eBay for the betting world. Rimer declined to say how much Index made from its investment in Skype.

TRAFFIC MAGNETS. News and information giant Reuters (RTRSY ) is viewed as a possible target for Google, which wants to beef up its news services so it can compete with Yahoo. If the idea of an Internet service owning a traditional news service seems strange, think again. Yahoo just hired its first reporter to cover global warfare.

And media sites such as ivillage.com and CNET (CNET ) have significant amounts of traffic attractive to a broad range of traditional media companies and Internet companies alike. Wedding site theknot.com has been in talks with Target (TGT ), too.

The pressures leading to more M&A activity are global as well. China is the world’s fastest growing Internet market, and may eventually overtake the U.S. to become the largest. Chinese sites such as IM giant tencent.com are drawing the attention of investors and investment bankers from around the world.

For investors, the main question is whether today’s deals will fare any better than those of a half-decade ago. The transactions now may seem smaller and more conservative, vs. the extravaganzas of the late ’90s, when Time Warner (TWX ) bought AOL and AT&T bought its way into the cable-TV business. Those megabuck deals didn’t work out.

A BOOM WITH LEGS? Still, and once again, valuations could again become an issue. eBay is paying $2.6 billion for Skype, which had just $7 million in revenue during its first two quarters as a revenue-generating business last year. While Skype expects to generate $60 million this year, there’s no guarantee that will happen.

The M&A boom is likely to go on for some time. Buyers have lots of cash, and sellers look much more stable than those of years past. Technology is challenging old giants and creating new opportunities — and the appetite for big bets is rising once again.

There’s an old joke that CIO (chief information officer) really stands for Career Is Over. Well, that can’t be the case if you accept the Watergate-era advice from Deep Throat and follow the money. According to consultancy Gartner’s 2005 survey of 1,400 CIOs, two-thirds of their companies are actually raising their information technology budgets faster than their operating budgets for the first time in years.

“It’s not so much that they’re expecting miracles [from technology] as much as they’re expecting serious contribution and significant results,” says Mark McDonald, Gartner’s head of executive-programs research. “We see companies that are looking to grow fast coming back to recognizing that there’s an investment in technology that they need to make.”

CIOs that turn in solid results get asked to join CEOs in mapping out corporate strategy and entrusted to manage projects outside of IT, says McDonald, who’s in charge of administering Gartner’s annual survey.

McDonald, who prior to joining Gartner was a partner at management consultancy Accenture, met recently with BusinessWeek Online reporter Olga Kharif to talk about how CEOs can use information technology to their best advantage and how they should evaluate the performance of their CIOs and IT departments. Following are the edited excerpts of the interview.

Q: The dot-com bubble and Y2K fiasco caused a backlash among some executives, who felt that technology was oversold. Is that view changing, and is information technology becoming more strategic in the eyes of top execs?
A: CEOs are recognizing that, of all the levers they have to implement their strategy, technology can push all those levers. You want to change the sales force? Part of that change revolves around technology. You want to change the supply chain, how much inventory you need to have? That has a technology component as well.
The big thing that everybody has learned [over the past few years] is it’s not technology alone but technology used appropriately, together with changed business processes, that can really deliver the big bang for the buck.

Q: Is that changing the role of the CIO?
A: We see CIOs’ credibility with CEOs being driven by two factors: One, by how well the CIO runs IT — are they managing their resources responsibly? Are they providing quality services? Two, by how well IT helps the business to achieve its goals.

Businesses that achieve their goals generally do that with a really effective IT organization. We don’t know the cause and effect quite yet, but we do know that at about half of those highly effective businesses, the CIO reports directly to the CEO.

Where they have low IT effectiveness, the CIO reports to some other officer. So the good news is, the CIO’s relationship with the CEO is a function of how well the CIO delivers business results — the same as with any other business manager.

Q: How would a CEO evaluate whether an IT organization is doing a good job?
A: On a basic level, is IT meeting its current obligations, such as providing services to users? Then, does the CIO understand the company’s strategic direction and are decisions made that support it, as opposed to just making decisions that support IT?

And the final criteria: Does the CIO bring multiple options to the table to help solve business problems? Oftentimes, CIOs will say, “This is the only way to do something.” But CEOs are business people, and they know that there are always options. So to present only one option really damages the CIO’s credibility.

High-credibility CIOs come with a business solution to a problem and a couple of technology options to solve it. Then they enter into a dialogue with the CEO about how to solve the business problem.

Q: What was the biggest surprise in Gartner’s 2005 CIO survey?
A: One was that there was definitely a group of CIOs who are contributing to the business and who play a substantially different role than all the other CIOs. They’re at the strategy table. Their priorities are markedly different, in terms of being focused on competitive advantage and growth.

Another interesting discovery was that a number of highly effective CIOs should probably be pursuing higher-growth strategies than they’re pursuing right now. They should be aiming higher.

Q: How do you know that?
A: We took the IT and business measures that we use, and then we looked at companies’ stated strategies. We had a number of companies whose stated strategy was to grow at the market rate. But their IT effectiveness was much higher than other companies’.

So there was some hidden opportunity. We found a lot more power in some businesses’ ability to execute than their strategy would entail. Their strategy is to just keep up with the traffic. But in reality, they’ve gotten a sports car.

Q: Whose fault is it that these companies aren’t taking advantage of the sports car?
A: I think part of it is that these companies have never looked at IT this way. One of the things that’s very hard to figure out when you’re sitting inside the company is: Who else is in the traffic? And how good are they?

When you evaluate 1,400 companies, [as we did in our survey,] you can begin to identify companies with a lot more power under the hood than they’re taking advantage of.

Q: This survey was done several months ago. What has changed since?
A: A couple of things. There’s now a real recognition from CIOs that they have an opportunity to be bigger business leaders, provided that they have an effective IT organization. CIOs that can say what they’re going to do, do what they say, and deliver the business results are really starting to get rewarded now with responsibilities outside of IT.

One example: IT departments are, generally, pretty good at managing their suppliers, whereas a lot of other parts of the organization don’t manage their vendors well. So we’ve seen CIOs starting to get responsibilities for managing vendors and managing alliances outside of IT. We’ve also seen CIOs that are good at project management being given responsibility to manage product launches.

Q: So it’s not a dead-end job anymore.
A: The door is unlocked for IT organizations that can deliver results and solve business problems. The door isn’t open, but it’s unlocked now. So the potential is there for them to play a bigger role.

That’s due to “near-monopolists” in many areas, says futurist Mark Anderson, whose newsletter is read by the likes of Gates and Dell

Mark Anderson just might be one of the most influential technology futurists around. His weekly newsletter, Strategic News Service (SNS), is widely read by a who’s who of investors and tech visionaries.

“Overall, your newsletter is good, which is why I ordered it,” reads one reader comment on Anderson’s Web site. Scant praise? Not when it’s coming from Microsoft (MSFT ) Chairman Bill Gates, an avid reader. Another fan is Dell (DELL ) founder Michael Dell. At least once a week Anderson says he gets an e-mail from Dell seeking his counsel. “He always wants to know what’s wrong with what he is doing,” says Anderson.
Who is Mark Anderson, and why are some of the biggest names in tech reading his newsletter? Anderson, 53, founded two software companies before becoming a consultant for computing and telecom clients, such as Dell and Microsoft. Most of his efforts nowadays focus on his “Future in Review” conferences, designed to showcase the hottest new technology ideas. Past conferences have attracted the heads of Hewlett-Packard Labs (HPQ ) and Microsoft Research.
When Anderson began publishing SNS in 1989, his newsletter was a tech pioneer. It was one of the first subscription-based newsletters on the Internet. An issue of the newsletter, which has a standard subscription price of $595 annually and can run between 15 and 50 pages, touches on everything from an analysis of a particular company’s earnings to Anderson’s thoughts on worldwide broadband penetration.
So what does Anderson see in his crystal ball currently? He says the tech industry is battling “a dearth of innovation,” due partly to near-monopolies that have formed within various tech sectors, from chips to PC software. But don’t fret. He says this status quo could be short-lived thanks to the rise of Linux.

His other major prediction: If companies would only use their computers more efficiently, say linking them in networks called grids, they might solve a myriad of problems — even helping to find a cure for cancer. Anderson talked with BusinessWeek Online reporter Olga Kharif on July 20. Edited excerpts of the interview follow:

Q: Are companies making good use of technologies they already have?
A: They’re not. Case in point: grids. A grid is where you manage all your PCs together as one computing resource. What you get is a supercomputer made up of individual computers. Companies today have nearly all the assets to make grids work. And CEOs are always concerned with return on assets. But if you’re not using grids, then you’re wasting computer cycles that are worth a lot of money.
Most businesses have not yet asked deep questions about their business, they still view computers as bean-counting machines. But [when that changes], once you have the power of a supercomputer, you could ask questions such as: Are there patterns in my customers’ relationship to me of which I’m unaware? Are there pricing patterns of which I’m unaware?
I think that my friend Jeff Immelt, [CEO of General Electric (GE )], who is making a point of driving technology into every one of his products, is not making use of the most obvious technology. What would be the change to GE if, instead of turning the lights off at night on their PCs, that company turned them into a giant, worldwide supercomputer? It could solve many of their problems.

Q: Do you think that, perhaps, companies aren’t implementing grids and other new technologies because they’ve become disappointed with the return on their technology investments?
A: There was a lot of hype about Y2K, and it’s true that many people felt betrayed. It’s also true that people reduced spending as the economy fell apart. But they got over that back in 2002. Now, they’re more interested in technologies that can perform specific tasks, reduce expenses, and have ties into revenue growth.

Q: Isn’t it difficult to find a direct correlation between IT and a company’s revenue growth, though?
A: This is brand-new stuff. There are very few companies that are good at this right now. But let’s, again, look at the grid example. Today, your customers might be in one place. Tomorrow, they might be somewhere else. And you need to be able to watch for patterns to know this is happening.
Just think about this: If people in retail as well as in other industries could effectively match day-by-day weather with product-sales results, they’d find lots of correlations. And that might be very useful. Or you might be able to find that people who buy toilet paper also buy toothpaste, and you’d put them on the same aisle. There are lots of patterns that grids can unearth for you.

Q: What are some other emerging technologies that companies need to be aware of to stay competitive?
A: If you look at communications, the reason that BlackBerry [mobile e-mail] devices are so successful is: It turned out we needed to improve communications when people travel. Next, what’s going to happen is improved communications not just between people, but also between people and machines.
Radio Frequency Identification [RFID, which are electronic tags used to track goods within the supply chain], and RFID-related technologies have opened a huge new area. All the people who run warehouses are going to have real-time information about what’s inside, which they don’t actually have today.
The definition of what a warehouse is is already changing. Volkswagen and Dell might store their products in the same warehouse, but where one warehouse ends and the other begins is determined by a dividing line on the floor. So getting to know where a product is becomes very important. Wal-Mart (WMT ) has gotten it, but most others have not. In the next five years, we’ll see an absolutely massive change in our ability to communicate with devices.

Q: We’ve gone through massive technology changes over the past decade, what with the spread of PCs and the Internet. Where does innovation happen now?
A: We tend to see it at the intersection between different markets. Places that are very interesting to me right now are where one industry overlaps with another, such as PCs, RFID, and grids. PCs, on their own, aren’t very interesting. RFID tags, on their own, aren’t, either. But how these technologies work together — [for instance, how grids can derive patterns from information gathered by RFID tags] — that’s really interesting.

Q: Which other industries are at this intersection?
A: The most exciting answer is computing and biology. As these two worlds start talking to each other, as we use computers to understand more about biology — like how the cell works — we can solve many problems, such as [find a] cure for cancer.

Q: Stem cells could, potentially, cure a wide array of disorders. Yet, there’s been a slowdown in stem-cell research in the U.S. because of ethics concerns. Is the U.S. falling behind other countries in research in this and other areas?
A: I think this is a deep mistake to allow religion to enter conversation about science. I do believe we need to look at ethics. But we certainly need to be careful not to hobble ourselves through our own biases and prejudices as we’ve done with stem cells. Stem cells offer so much promise, we will look like jerks [for not supporting research in this area].

Q: So many companies are moving their R&D overseas.
A: You bet. You know who’s gotten our stem-cell program? China. We’re just saying: “Here’s the most promising research in the world, and we’re not going to do it. Go ahead.” And [countries like] China are going as fast as they can, as they should.

Q: In the future, will companies do all their R&D and manufacturing in China? If so, what kind of an impact will that have on the U.S.?
A: There’s a big story in the question of how much outsourcing is there? A new study recently came up with a number that was five times the Dept. of Labor’s [number of jobs outsourced]. They’ve done the study by reading the newspapers every day about how so and so just announced a new outsourcing project affecting 30,000 people. They just added up the numbers.
The problem is one of pay. You can get a $30,000-a-year PhD in India, instead of a $140,000-a-year PhD here. We’ve got to solve this problem. Some people talk about free trade. But what if it turns out that one country — say, China — became the low-cost producer of all goods, or all goods and services? What would the implications be in terms of the human capital in the U.S.? Would it destroy human capital? At what point do you stop being an economy?

Q: Some futurists say the U.S. will become an economy of ideas, which will be turned into products elsewhere. Do you buy that?
A: I’m not buying any of it, I think that’s [bullsh--]. The people who’ll be the greatest innovators will live in an office above the shop floor. We’re not going to have all these storytellers.

Q: Do you see any new technologies that have been overhyped?
A: Right now, I see a dearth of innovation. The various innovations that I’ve mentioned are happening at the fringes.
One reason is, [as is the case with Wal-Mart suppliers,] companies’ margins are getting sucked up. Another reason is there are lots of dominant players — near-monopolists. There, the lack of innovation is natural. Areas that are more competitive are the areas of innovation.

Q: Do you expect this situation to change any time soon?
A: A lot of competition will arise. We haven’t yet seen an offering from the Linux crowd in terms of device drivers, [which help a particular device interact with an operating system,] or ease of installation. But if those two problems are fixed, I think you’ll see real competition to Windows.