From WSJ 5/1/13 By Dennis K Berman

An article that hits the nail on the head--something I have often wondered about: the economic impact of social media and the disproportionate valuations ascribed to companies that lead the charge, such as fb. This article talks more along the lines of economic impact of smartphones in our lives. How do you measure, is it even there?

• THE GAME
• April 30, 2013, 7:51 p.m. ET

Why Aren't Smartphones Making Us More Productive?

• By DENNIS K. BERMAN

Imagine you woke up each morning, strapped a keyboard, monitor, Wi-Fi receiver, desktop computer, camera and stereo to your body, and ventured clumsily out the door.

About 100 million smartphones have been unleashed on America's streets. So why isn't this computing power making us more productive? Dennis Berman joins the News Hub. Photo: Getty Images.

Of course, you're already doing it. You're using a smartphone, and today that thin slab has roughly the same computing power as the powerful desktops of 2005.

We regard these hand-held machines as game devices, Web browsers and messaging tools. But at heart they are like all computers before them. They are efficiency engines, a means of saving time, bridging distance, reducing cost.

Yet there's something bizarre going on. Even as an estimated 130 million smartphones roam the U.S. streets, economists can't quite find them.

European Pressphoto Agency

Facebook's Sheryl Sandberg, one of many smartphone power users.

By that I mean they can't find how these mobile devices are improving worker productivity, which computers have been doing quite ruthlessly for the last 70 years. Productivity is the reason living standards rise. It's why we have more goods and services than our grandparents could imagine.

The official U.S. productivity numbers are low when compared with the stunning 3% yearly gains of the first Web era, roughly 1995 to 2004. In fact, annual productivity growth since 2004 is about 1.5%, below even the long-term average of 2.25%. It's as if a time-wasting flock of Angry Birds has buried productivity like a worm.

Classically defined, an increase in productivity either reduces labor, improves output, or both. And by that measure, argues Northwestern University economist Robert J. Gordon, the iPhone "has done absolutely nothing" to improve productivity.

So is there something wrong with the government numbers? Or, more intriguing, are we overestimating how these little machines can affect living standards?

The answers are wonky and, inconclusive. For now, we're left in the fallible realm of impressions. Here the relevant question seems to be: Can you find an area of life and business not being affected by the devices?

Let's head to the cockpit of a small jet, which has just landed outside a major U.S. city. A year ago, that jet would have refueled there regardless of cost. Prices for fuel, provided by a patchwork of middlemen, were opaque and jumbled.

Today, its pilots are probably using a little mobile app known as FuelerLinx. It collects and analyzes the cost of jet fuel at airports around the globe, suggesting the best prices.

In 2008, FuelerLinx founder Kevin Moller started gathering prices at 1,800 locations by phone and fax, entering them by hand into a giant Excel spreadsheet on Wednesday mornings. Today the collection is largely automated, and pilots can access it from their cockpits via smartphone.

"Five years ago the processors and Internet speeds and tools weren't there. Now all of it has come together," Mr. Moller says. "People can take on more in their day."

In the realm of global commerce, this is a tiny change to a tiny market. But it's happening across industries, a creative conjoining of mobile-computing brawn, faster wireless speeds and data-crunching in the computing cloud. Author Nicco Mele calls it "radical connectivity." It's the power of that computational engine, finally made mobile and thus ubiquitous.

It's the difference between an artillery piece and a tank.

"If you think about almost any dimension of human activity, it will ultimately be touched by this ability to harness computational power," says Dan Sichel, a Wellesley College professor who argues the official productivity numbers understate technology's impact.

It's happening at eBay Inc., where Chief Executive John Donohoe describes users who are listing three million auction items a week on mobile devices. "They're taking photos and listing in two minutes," Mr. Donahoe says in an interview. "They're far more productive.

For the best example, look no farther than the taxi industry. There, new services are using mobile apps to help drivers and passenger locate each other quickly. The savings in time, fuel and hassle are obvious. Travis Kalanick, CEO of the Uber service, says taxi drivers who use his system take in $10,000 more a year than those who don't. Again, more output for less input.

For econ geeks, the hard part is capturing all these small improvements across the economy, especially among service businesses. Dr. Sichel calls the current productivity rates merely a pause.

There's another reason to pause here. Often technology changes faster than people. And the distribution of its spoils isn't always spread widely. One reason why corporate profits remain high and overall employment remains weak is that technology, not people, is doing more of the work.

Venture capitalist Marc Andreessen even describes the future as a world of two classes: those who program the machines, and those who are programmed by them.

In all, we are now veering toward the world that computer theorist J.C.R Licklider foresaw back in 1960: "In not too many years, human brains and computing machines will be coupled together very tightly," he wrote, and "the resulting partnership will think as no human brain has ever thought and process data in a way not approached by the information-handling machines we know today."

All this is really happening now, and fast.

You don't need numbers to understand that if you create friction in today's system, these forces will eventually hunt you down and they will eliminate you.

Write to Dennis K. Berman at dennis.berman@wsj.com or follow on Twitter: @dkberman

A version of this article appeared May 1, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Why Aren't Smartphones Making Us More Productive?.

The Silver Lining to Failing

All of us make mistakes, some big some small, so we should all be able to relate to what comes below. There is an old saying, "There's no success like failure". This sounds counter-intuitive, but is it really?

Let’s go through an example. I would like you all to take the simple test below. Then pause for a bit and listen to your instinct and take a note of it.

The Test

Look at the series of letters below and identify the numbered letter listed in the next column. Try to do as many as you can in 10 seconds.

String	Spot This Numbered Letter	Write Your Answers Here†
NNNNN	3
III1I	3
111II	4
MMMNM	4
NMMNM	4
NNMNN	1
NNNMN	5
MMMMN	4
WWWWV	4
VWWVV	5
MMMMM	1
MMNMM	4
NNMNN	3
VVVVV	5
WWWWW	3

Did you get them all? Now that you’ve done the test, pause and listen to what your instincts are telling you to do—are they asking you to take the test again? Do you want to give yourself one more shot to see if you could do better because you just know that you’ll improve the second time?

Scientist did this same experiment with a group of people who were wearing hats with electrodes on them to measure the brains electro-encephalographs (EEGs) right after completing the test to find out how they’d faired. They uncovered two astounding facts:

·         Almost all individuals had very similar looking EEG’s which showed two distinct activity zones: an almost instantaneous “error-related negativity” (ERN) which occurred after 50msec of realizing the mistake and occurs almost involuntarily. This is the “Oh crud!” signal. The second signal, which is known as error positivity (Pe), arrives somewhere between 100 to 500 milliseconds after the failure and it occurs when we pay attention to the error and dwell on the disappointment.

·        

hThe more interesting observation was that subjects that learn much more effectively are ones who’s EEG demonstrated (1) a larger ERN signal, suggesting a more potent initial response to the mistake and (2) a more consistent Pe signal, which means they were focusing on the failure and trying to learn from it.

As I pondered this, I asked myself--if we are wired to be reflective as individuals, do we always exhibit this behavior while working in groups, teams and organizations? Have we institutionalized retrospectives as part of every initiative, whether we succeed or fail? If not, in the spirit of this research, shouldn't we learn something from it (i.e. prolong the "Pe" phase) and institutionalize retrospectives across the board?

I am also cognizant of the pushback which would suggest that we can't always be driving looking at the rearview mirror, but don’t we agree that taking some time to evaluate why a product launch was delayed, a release botched, a customer account lost, or a competitive threat ignored--by making introspection a habit, will make us better professionals. As George Santayana aptly says “Those who cannot learn from history are doomed to repeat it.”

In fact every time, when the outcome doesn’t meet the anticipated, we should be doing a quick look back to understand the underlying reasons. Even at organizations that seem to be extremely successful and seem to be hitting one home run after another (such as our neighbor in Cupertino) there is an internal culture of failing fast or failing often. The conventional wisdom says that only large corporations with deep pockets can afford the "luxury" of failing fast or failing often, but I have seen many counterpoints to that wisdom as well. Recently, I came across a small gaming company of 12 based in Finland that seemed to have produced two wildly successful games, both of which reached the top of the iTunes charts within record time. This small group is making $500K per week selling just 2 games. In an interview in front of audience at an international gaming conference the CEO revealed a secret: the company had nixed a few dozen projects before these two games were released. He went on to say that he'd allow anyone with a compelling idea to virtually create an autonomous team within the company that had the full decision making authority on what the game would be and when and how it'll be released. The only time a higher level decision body intervened was when the prototype was readied. Clearly, failing fast is a "strategy" even at small start-ups. 

And this brings me back to Bob Dylan's lyrics, "There is no success like failure". If we believe that now, then in the words of another famed luminary who co-founded the tenants on 1 Infinity Loop, let us "stay foolish and stay hungry". 

Have a great weekend!