Economist 3/10/16

  1. According to his rule of thumb, known as Moore’s law, processing power doubles roughly every two years as smaller transistors are packed ever more tightly onto silicon wafers, boosting performance and reducing costs.But now, after five decades, the end of Moore’s law is in sight.Making transistors smaller no longer guarantees that they will be cheaper or faster. This does not mean progress in computing will suddenly stall, but the nature of that progress is changing. Chips will still get better, but at a slower pace (number-crunching power is now doubling only every 2.5 years, says Intel).And the future of computing will be defined by improvements in three other areas, beyond raw hardware performance.The first is software. This week AlphaGo, a program which plays the ancient game of Go, beat Lee Sedol, one of the best human players, in the first two of five games scheduled in Seoul.Go-playing system cannot simply rely on computational brute force, provided by Moore’s law, to prevail. It relies instead on “deep learning” technology, modelled partly on the way the human brain works.The second area of progress is in the “cloud”, the networks of data centres that deliver services over the internet.The third area of improvement lies in new computing architectures—specialised chips optimised for particular jobs.
  2. Five years on since the nuclear disaster in Japan, Fukushima is still an exclusion zone and tens of thousands are stuck in temporary shelter. Japan shut down all but two of its 43 reactors over safety concerns. And other countries have recently sped up efforts to replace nuclear power with greener renewables. Germany plans to close all 17 of its nuclear plants by 2022, a process that has already begun. France passed a bill last year mandating that the share of nuclear power in the country’s electricity mix be cut from 75% to 50% within ten years. Yet as countries try to cut carbon emissions, such closures often lead to the burning of more fossil fuels.Thus in Germany the proportion of electricity produced by coal-fired plants has increased since reactors were closed down, so pushing up carbon emissions.
  3. Academic research suggests that although presidential debates can inform a person’s view, they tend to do little to change it. In their book “The Timeline of Presidential Elections”, political scientists Robert Erikson and Christopher Wlezien looked at every American election featuring televised debates between 1960 and 2008 and found that the polling numbers of presidential candidates leading up to debates were almost perfectly correlated with their polling numbers shortly afterwards. But most research looks at the later stages of elections, when parties’ candidates have been chosen. Debates almost certainly matter more during the primaries for two reasons: first, voters will almost never know who all the candidates in a presidential primary are, which means there is more scope for shaping their perceptions. Second, many voters are staunch partisans; it is far easier to convince someone to choose another candidate from their own party than to defect altogether.
  4. Entrepreneur First (EF), Britain’s largest tech incubator had its “demo-day” on March 8th. Now the biggest event of its kind in Europe, 25 teams have three minutes each to pitch their startup ideas to an audience that numbers in the hundreds.After the show, the would-be entrepreneurs, often looking for investments of up to £400,000 ($570,000), press the flesh with the moneymen. About one-third of the startups go on to become sustainable companies.There are now scores of tech incubators and accelerator programmes in London, making it, by most accounts, the tech-startup capital of Europe. EF itself has come a long way in its four years.They have opened a branch in Singapore. In contrast to many similar outfits, particularly in Silicon Valley, EF picks people rather than ideas, and then matches them in teams. For an 8% stake in the startup, EF gives the teams a six-month stipend to ready them for launch.The average age is 26, up from 23 two years ago.
  5. IN MANY Western countries, including America and Britain, divorce lawyers are not allowed to represent a client in exchange for a share of whatever settlement they secure.Yet the same rules do not apply to financiers: they are free to fund legal battles over marital assets—and a growing number do.Novitas Loans, a British firm, is currently lending to 1,500 would-be divorcées (most are women) or divorcés, at 18% annual interest. The loans are intended to cover legal fees; applicants typically expect to win assets worth three times their borrowing. BBL Churchill Group is  an American firm with cases in 27 states.The firm’s average loan is $306,000 in New York state and somewhat less elsewhere. The typical interest rate is around 16%. The default rate is a modest 2%, although there is some forbearance for struggling customers.The big risk for divorce funders is that a couple might get back together. When that happens, assets are not sold and a borrower may not be able to pay back the lender. Novitas therefore prefers to fund cases that have been grinding through court long enough to make reconciliation unlikely. The Iceberg Partnership, Novitas’s biggest competitor in Britain, transfers this risk to the 374 law firms that refer clients for funding.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s