Tuesday, April 26, 2011

Newsweek on BGI

Newsweek: The world’s largest genome-mapping facility is in an unlikely corner of China. Hidden away in a gritty neighborhood in Shenzhen’s Yantian district, surrounded by truck-repair shops and scrap yards prowled by chickens, Beijing’s most ambitious biomedical project is housed in a former shoe factory.

But the modest gray exterior belies the state-of-the-art research inside. In immaculate, glass-walled and neon-lit rooms resembling intensive care units, rows of identical machines emit a busy hum. The Illumina HiSeq 2000 is a top-of-the-line genome-sequencing machine that carries a price tag of $500,000. There are 128 of them here, flanked by rows of similar high-tech equipment, making it possible for the Beijing Genomics Institute (BGI) to churn out more high quality DNA-sequence data than all U.S. academic facilities put together.

“Genes build the future,” announces a poster on the wall, and there is no doubt that China has set its eye on that future. This year, Forbes magazine estimated that the genomics market will reach $100 billion over the next decade, with scientists analyzing vast quantities of data to offer new ways to fight disease, feed the world, and harness microbes for industrial purposes. “The situation in genomics resembles the early days of the Internet,” says Harvard geneticist George Church, who advises BGI and a number of American genomics companies. “No one knows what will turn out to be the killer apps.” Companies such as Microsoft, Google, IBM, and Intel have already invested in genomics, seeing the field as an extension of their own businesses—data handling and management. “The big realization is that biology has become an information science,” says Dr. Yang Huanming, cofounder and president of BGI. “If we accept that [genomics] builds on the digitalization of life, then all kinds of genetic information potentially holds value.”

BGI didn’t always seem destined for success—or even survival. “The crazy guys” was how Chinese colleagues initially referred to the two founders, Huanming and director Wang Jian. Refused government support, they muscled their way into the international Human Genome Project, mapping out 1 percent of that celebrated first full sequence before tackling the rice-plant genome on their own, beating a well-funded international consortium, and suddenly finding political leverage. Yang and Wang used it to set up the research center, which is nominally nonprofit but carries out commercial activities in support of the research. With an annual grant of $3 million from the local government in exchange for moving to the shoe factory in 2007, BGI first grew modestly, generating income from fee-for-service sequencing and conducting molecular diagnostic tests for hospitals. A $1.5 billion loan from the Chinese Development Bank in 2009 allowed the company to catapult into a different league, and its combination of sequencing power and advanced DNA data-management solutions for the pharma industry are now drawing international attention. Last year, pharmaceutical giant Merck announced plans for a research collaboration with BGI, as the Chinese company’s revenue hit $150 million—revenue projected to triple this year. “I admire their passion and the willingness to take risks,” says Steven Hsu, a physicist at the University of Oregon, adding that “it permeates the organization.”

... Li Yingrui, 24, directs the bioinformatics department and its 1,500 computer scientists. Having dropped out of college because it didn’t present enough of an intellectual challenge, he firmly believes in motivating young employees with wide-ranging freedom and responsibility. “They grow with the task and develop faster,” he says. One of his researchers is 18-year-old Zhao Bowen. While still in high school, Zhao joined the bioinformatics team for a summer project and blew everyone away with his problem-solving skills. After consulting with his parents, he took a full-time job as a researcher and finished school during his downtime. Fittingly, he now manages a project on the genetic basis of high IQ. His team is sampling 1,000 Chinese adults with an IQ higher than 145, comparing their genomes with those of an equal number of randomly picked control subjects. Zhao acknowledges that such projects linking intelligence with genes may be controversial but “more so elsewhere than in China,” he says, adding that several U.S. research groups have contacted him for collaboration. “Everybody is interested in intelligence,” he says.

A shoe factory becoming a genomics center, scientists replacing blue-collar workers—the Shenzhen research facility embodies the country’s economic and social ambitions. According to a 2010 report from Monitor Group, a management consulting firm based in Boston, China is “poised to become the global leader in life-science discovery and innovation within the next decade.”

... Yang, for his part, puts it simply: “Genomics is international,” he says. “We must collaborate to survive and develop.” Certainly, the scientists at his Shenzhen headquarters have their view on the world. The latest shipment of high-tech toys sits, still unpacked, on the floor; the stamp on the sides of the crates proclaiming: Made in the USA.

Click here for more: genes, clones, photos, supercomputers, geniuses, shoe factories and architecture.

Monday, April 25, 2011

Banker pay

Higher base, smaller bonus, more of the bonus in equity with long term vesting. I'd love to see the risk-adjusted return from a career in finance fall below that for a technology entrepreneur. But I doubt it has yet.

WSJ: ... the numbers—the real numbers—for mid-career investment-banker salaries.

The paymaster noted that median precrisis pay was about $2.2 million a year. On average, some $200,000 came in base pay, with the remaining $2 million coming in an annual bonus, about 60% of which was paid in cash.

That is roughly $1.4 million before taxes, leaving after-tax take-home cash of about $700,000 a year, he calculated. That is slightly less than at the banker-pay peak of the early 2000s.

Today, the paymaster said, median banker pay is about $1.6 million. Base cash pay is higher, at about $400,000. But now, the bonus portion has been flipped. About 60% to 70% comes in the form of deferred compensation, largely in company stock.

That means there isn't nearly as much cash coming in during the first year of the pay package. Roughly speaking, that comes to about $380,000 in after-tax cash. A princely sum by most standards, but quite a comedown for anyone conditioned to take home nearly double that.

The smaller annual cash payout might mean fewer days of vacation at the Atlantis or one less domestic helper, but the deeper issue is the amount of pay that is deferred and dependent upon the long-term success of the bank.

This calls into question the grand bargain of investment banking.

In the precrisis days, bankers would work ungodly hours, fly halfway around the world at a moment's notice and kiss up to clients and superiors, all for the promise that they would retire rich in their 40s or early 50s. It was like working a job that had a very lucrative pension.

Now, with so much of his or her compensation at risk, the prospect of the banker toiling deep into his 50s or even his 60s is very real.

The surprise is, this has less to do with direct regulation of pay and more to do with the profitability of the business itself.

A weak economy, tighter rules on using leverage and higher reserves are indirectly hitting salaries. Investment banks just aren't making money like they used to. "The reality has only partially sunk in," said the paymaster. "It's harder to put the kids through school."

The other dream for bankers was to hit it big with one great year. But that too is getting harder. Top bank officials across the Street report the number of $5 million earners has fallen significantly since the crisis. The once-vaunted "$10 million man" is the rarest of breeds. Today, a $5 million salary puts a banker at the 90th percentile for pay, according to the paymaster's figures.

The long-term deferred-compensation packages are chilling the banker labor market, because unvested shares disappear when a banker switches jobs. Even "garden leaves"—the mandated vacation time between an old job and a new one—have extended to 90 days from the precrisis 60 days. With fewer people switching posts, there is less activity in the entire system, which has the effect of keeping salaries down.

See comments for more! My guess at a career payoff table:

Individual is a smart, conscientious, driven kid with Tier 1 credentials. But no superpowers ;-)

startup / tech

mid: ~$200k/yr, no hits, stuck working for big company as VP, no early retirement

90th: small hit, makes a few million, still working as above

99th: big hit, makes >$10 million, retires early, maybe rinse and repeat

99.9th: big, big hit, $100M payoff, livin' large :-)


mid: ~$400k/yr, lives in NJ, can't retire

90th: ~$2M/yr for 10 years (mid-career), retires at 45-50 with $7-10M put away

99th: same as above but with several times higher net worth and earlier exit.

A professor comes out (financially) behind both of these tracks, but perhaps happier, more relaxed, more job satisfaction.

If we further restrict the group of individuals to Tier 1 PhDs in physics, it seems to me that the 90th percentile outcome in finance described above is more like 60-80th percentile.

Startups give you the possibility (but at long odds) of cashing out earlier. I would guess startup guys like their work better than finance guys -- they are often idealistic and want to change the world with their technologies. But risk-adjusted return seems higher on the finance track. I would be interested to hear how the payoffs for, say, an HLS or HBS or HMS grad compare to the above.

Saturday, April 23, 2011

James Salter 2

Thomas McGuane reads James Salter’s short story Last Night, and discusses it with The New Yorker’s fiction editor, Deborah Treisman.

From Last Night:

—Walter, she said.


—This is the right thing.

She reached to take his hand. Somehow it frightened him, as if it might mean an appeal to come with her.

—You know, she said evenly, I’ve loved you as much as I’ve ever loved anyone in the world—I’m sounding maudlin, I know.

—Ah, Marit! he cried.

—Did you love me?

His stomach was churning in despair.

—Yes, he said. Yes!

—Take care of yourself.


He was in good health, as it happened, a little heavier than he might have been, but nevertheless . . . His roundish, scholarly stomach was covered with a layer of soft, dark hair, his hands and nails well cared for.

She leaned forward and embraced him. She kissed him. For a moment, she was not afraid. She would live again, be young again as she once had been. She held out her arm. On the inside, two veins the color of verdigris were visible. He began to press to make them rise. Her head was turned away.

—Do you remember, she said to him, when I was working at Bates and we met that first time? I knew right away.

The needle was wavering as he tried to position it.

—I was lucky, she said. I was very lucky.

He was barely breathing. He waited, but she did not say anything more. Hardly believing what he was doing, he pushed the needle in—it was effortless—and slowly injected the contents. He heard her sigh. Her eyes were closed as she lay back. Her face was peaceful. She had embarked. My God, he thought, my God. He had known her when she was in her twenties, long-legged and innocent. Now he had slipped her, as in a burial at sea, beneath the flow of time. Her hand was still warm. He took it and held it to his lips. He pulled the bedspread up to cover her legs. The house was incredibly quiet. It had fallen into silence, the silence of a fatal act. He could not hear the wind. ...

Interview at the Harry Ransom Center (UT Austin), which houses the Salter archive.

Reynolds Price discusses Light Years at Duke.

Friday, April 22, 2011

Nature on the PhD glut

Nature reports on the worldwide glut of PhDs. The path to a permanent (tenured) position these days is nasty, brutish and long.

See related posts Supply, demand and scientists , A tale of two geeks , Survivor: theoretical physics

Nature: ... In some countries, including the United States and Japan, people who have trained at great length and expense to be researchers confront a dwindling number of academic jobs, and an industrial sector unable to take up the slack. Supply has outstripped demand and, although few PhD holders end up unemployed, it is not clear that spending years securing this high-level qualification is worth it for a job as, for example, a high-school teacher. In other countries, such as China and India, the economies are developing fast enough to use all the PhDs they can crank out, and more — but the quality of the graduates is not consistent. Only a few nations, including Germany, are successfully tackling the problem by redefining the PhD as training for high-level positions in careers outside academia. Here, Nature examines graduate-education systems in various states of health. ...

Japan: A system in crisis

Of all the countries in which to graduate with a science PhD, Japan is arguably one of the worst. In the 1990s, the government set a policy to triple the number of postdocs to 10,000, and stepped up PhD recruitment to meet that goal. The policy was meant to bring Japan's science capacity up to match that of the West — but is now much criticized because, although it quickly succeeded, it gave little thought to where all those postdocs were going to end up. ...

China: Quantity outweighs quality?

The number of PhD holders in China is going through the roof, with some 50,000 people graduating with doctorates across all disciplines in 2009 — and by some counts it now surpasses all other countries. The main problem is the low quality of many graduates. ...

United States: Supply versus demand

To Paula Stephan, an economist at Georgia State University in Atlanta who studies PhD trends, it is "scandalous" that US politicians continue to speak of a PhD shortage. The United States is second only to China in awarding science doctorates — it produced an estimated 19,733 in the life sciences and physical sciences in 2009 — and production is going up. But Stephan says that no one should applaud this trend, "unless Congress wants to put money into creating jobs for these people rather than just creating supply". ...

The problem is most acute in the life sciences, in which the pace of PhD growth is biggest, yet pharmaceutical and biotechnology industries have been drastically downsizing in recent years. In 1973, 55% of US doctorates in the biological sciences secured tenure-track positions within six years of completing their PhDs, and only 2% were in a postdoc or other untenured academic position. By 2006, only 15% were in tenured [tenure-track] positions six years after graduating, with 18% untenured ...

Some universities are now experimenting with PhD programmes that better prepare graduate students for careers outside academia (see page 280). Anne Carpenter, a cellular biologist at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University in Cambridge, Massachusetts, is trying to create jobs for existing PhD holders, while discouraging new ones. When she set up her lab four years ago, Carpenter hired experienced staff scientists on permanent contracts instead of the usual mix of temporary postdocs and graduate students. "The whole pyramid scheme of science made little sense to me," says Carpenter. "I couldn't in good conscience churn out a hundred graduate students and postdocs in my career."

But Carpenter has struggled to justify the cost of her staff to grant-review panels. "How do I compete with laboratories that hire postdocs for $40,000 instead of a scientist for $80,000?" she asks. Although she remains committed to her ideals, she says that she will be more open to hiring postdocs in the future. ...

Germany: The progressive PhD

Germany is Europe's biggest producer of doctoral graduates, turning out some 7,000 science PhDs in 2005. After a major redesign of its doctoral education programmes over the past 20 years, the country is also well on its way to solving the oversupply problem. ... [REALLY?]

Just under 6% of PhD graduates in science eventually go into full-time academic positions, and most will find research jobs in industry, says Thorsten Wilhelmy, who studies doctoral education for the German Council of Science and Humanities in Cologne. "The long way to professorship in Germany and the relatively low income of German academic staff makes leaving the university after the PhD a good option," he says. ...

Thursday, April 21, 2011

High investment parenting 2: quality vs quantity

The WSJ recently hosted a discussion about Bryan Caplan's book Selfish Reasons To Have More Kids.

In his arguments Caplan relies heavily on the behavior genetics findings I have discussed previously here and here. These findings show that it is very difficult for parents to shape their kids, and that genes have a larger impact than "shared environment" (i.e., effects from being raised in the same family). One can study these effects by varying genetic relatedness (e.g., identical twins vs fraternal twins) and environment (adoption into different families, variation of family characteristics such as SES, parental education, etc.).

This is from some correspondence (slightly edited) I had with a new father about Caplan's book.

The question is whether you accept the behavior genetics conclusions at the Tiger Mom/Dad extremes. That is, the twin/adoption data covers mostly normal people and probably cannot be extrapolated with confidence to exceptional cases like high IQ families with a strong focus on education and achievement.

I am very committed to helping my kids, although not in the Amy Chua way, and I wonder how well I could succeed if I had, say, 4 instead of 2 kids. As it is I can think of stuff almost every day that I could have done with them if I wasn't so busy with other things.

I take my kids out and play with them as much as I can. But not just random play. For example, I run races with them and I notice that at this age they can improve their running ability a lot by practicing. They have probably run hundreds (or maybe thousands!) more flat out sprints (say 40 yards) than a typical Taiwanese kid of the same age. (Cities there are very crowded, so it's not easy even to find a place to do something like this.) I can imagine that their self-esteem and ability to do well in school sports might be improved by my willingness to not only spend time with them but to insist that we do something modestly constructive while we are having fun.

I see lots of US dads already teaching their kids how to hit a baseball or do other sports specific things. I've spent a lot of time in sports and athletics, and while genes matter, training also matters, especially at the K-12 level where the threshold for making the team is much lower than in college. Even in football, basic skills like accelerating out of a 3 point stance are things you learn through early repetition and are hard to pick up later in life.

My dad was a professor but not a natural teacher. We had a neighbor who was a math professor and very extroverted and passionate about his subject. His kids really didn't like to discuss math with him but I loved it and it was one of the best experiences of my life. I could offer that kind of thing to my kids (in many subjects), assuming the dynamics are right. But I certainly couldn't if I were too busy or had too many kids.

Early success in anything (sports, math, etc.) can be self-reinforcing and have non-linear effects down the line. I realize the behavior genetics data suggests that *averaged over large groups* such effects are small, but the studies are still crude and could easily miss some relatively significant strategies that you or I might take advantage of. Are you willing to take the risk of forgoing such positive impacts you might have on your kids?

I like Caplan in general but I think he's a little too hardcore libertarian and also a bit robotic (autistic economist) and simple-minded in his thinking.

Monday, April 18, 2011

Gopnik on machine intelligence

Adam Gopnik on machine intelligence, including a review of Brian Christian's book on the Turing Test, previously discussed here.

New Yorker: ... We have been outsourcing our intelligence, and our humanity, to machines for centuries. They have long been faster, bigger, tougher, more deadly. Now they are quicker at calculation and infinitely more adept at memory than we have ever been. And so now we decide that memory and calculation are not really part of mind. It's not just that we move the goalposts; we mock the machines' touchdowns as they spike the ball. We place the communicative element of language above the propositional and argumentative element, not because it matters more but because it’s all that’s left to us. ... Doubtless, even as the bots strap us down to the pods and insert the tubes in our backs, we'll still be chuckling, condescendingly, "They look like they're thinking, sure, very impressive -- but they don't have the affect, the style, you know, the vibe of real intelligence ..." What do we really mean by "smart"? The ability to continually diminish the area of what we mean by it.

Sunday, April 17, 2011

Asian admissions in Boston Globe

Will disparate impact be applied in favor of Asian-American college applicants? Stay tuned! (Perhaps the NBA and NFL are next :-)

The article below appeared in today's Boston Globe Magazine. I'm sure that it will generate plenty of amusing comments there. A similar article in McLeans caused a furor in Canada.

Before commenting here, please peruse this earlier post and its 170+ comments to ensure you are contributing something new to the discussion ;-)

Competitive disadvantage: High-achieving Asian-American students are being shut out of top schools around the country. Is this what diversity looks like now?

... After all the attention given to the stereotype that Asian-American parents put enormous pressure on their children to succeed – provoked over the winter by Amy Chua’s controversial Battle Hymn of the Tiger Mother – came the indisputable reality this spring that, even if Asian-American students work hard, the doors of top schools were still being slammed shut in many faces.

And parents aren’t happy about it. “The entry barriers are higher for us than for everybody else,” says Chi Chi Wu, one of the organizers of the Brookline Asian American Family Network. “There’s a form of redlining or holding Asian-American students to higher standards than any other group.”

... However, in researching their 2009 book No Longer Separate, Not Yet Equal, Princeton sociologist Thomas Espenshade and researcher Alexandria Walton Radford examined data on students applying to college in 1997 and found what looks like different standards for different racial groups. They calculated that Asian-Americans needed nearly perfect SAT scores of 1550 to have the same chance of being accepted at a top private university as whites who scored 1410 and African-Americans who got 1100. Whites were three times, Hispanics six times, and blacks more than 15 times as likely to be accepted at a US university as Asian-Americans. >>Note: this is after controlling for grades, scores, family background (legacy status) and athletic status (whether the student was a recruited athlete.)<<

What about the argument that, in relation to the general population, Asian-Americans are already overrepresented at universities? “It’s both true that Asians are overrepresented and that they’re being discriminated against,” says Stephen Hsu, a professor of physics at the University of Oregon who speaks out against discrimination he says Asian-Americans face in university admissions. Both things can happen at the same time, he says.

Hsu and others allege that universities are more concerned about boosting black and Hispanic enrollment than admitting qualified Asian-Americans, and that old-fashioned xenophobia comes into play as well.

“My personal perspective is that if institutions are using race to keep Asian-American students out, it’s based on a fear [among non-minorities] that these ‘other’ students are taking over our institutions or taking ‘our spots’ at the best institutions,” says Sam Museus, a professor in the Asian-American studies program at the University of Massachusetts at Boston.

... Brookline organizer Chi Chi Wu, who is a lawyer and the mother of an 11-year-old, says it may be time to fight back, using a legal theory called disparate impact. “In other areas of civil rights law, when you have statistical disparities, you can often make a case. You don’t have to prove the university is saying, ‘We don’t want all these Asians,’ but just having those statistics and being able to point to disparities is enough.”

She adds, “If we Asian-Americans don’t organize, there’s no amount of piano practicing that will help us.”

Thursday, April 14, 2011

Goldman and Google

Two excellent podcasts I recommend.

William Cohan on his new book How Goldman Sachs Came to Rule the World. Cohan, a former banker, seems more knowledgeable than most financial journalists.

Steven Levy on his book How Google Thinks, Works, and Shapes Our Lives. Based on my own experience, Levy knows what he is talking about.

Wednesday, April 13, 2011

Bill Gross (Idealab) at Caltech

Went to a talk by Bill Gross (of Idealab, not Pimco) at the Caltech entrepreneur's club. Gross graduated in 1981 and is one of the most creative entrepreneurs in the world. Here's a great interview with him.

Tuesday, April 12, 2011

Back at Caltech

Just flew across the Pacific. Please allow for some latency in communication as I recover :-)

I'm staying across the street from Pasadena City College. It's a testament to the past glory of California that even a community college has such a nice campus.

A rare student protest at Caltech. Something about student representation and housing policies. At lunch one of the grad students commented he was amazed that this many undergrads were actually awake at noon :-)

Sunday, April 10, 2011

High investment parenting

I'm no tiger dad, but I do draw little cartoon stories to help the kids with their reading. My wife points out that Isabel's drawing ability has now far surpassed mine. You can judge for yourself here and here.

Someday I hope to write a children's book with my daughter doing the illustrations :-)

How to Get a Real Education

Scott Adams, creator of Dilbert, writes in the Wall St. Journal.

WSJ: I understand why the top students in America study physics, chemistry, calculus and classic literature. The kids in this brainy group are the future professors, scientists, thinkers and engineers who will propel civilization forward. But why do we make B students sit through these same classes? That's like trying to train your cat to do your taxes—a waste of time and money. Wouldn't it make more sense to teach B students something useful, like entrepreneurship? ...

Conquer Fear. ... Then I took the Dale Carnegie course. It was life-changing. The Dale Carnegie method ignores speaking technique entirely and trains you instead to enjoy the experience of speaking to a crowd. Once you become relaxed in front of people, technique comes automatically. Over the years, I've given speeches to hundreds of audiences and enjoyed every minute on stage. But this isn't a plug for Dale Carnegie. The point is that people can be trained to replace fear and shyness with enthusiasm. Every entrepreneur can use that skill. [ See this post from 2004 for a summary of How to Win Friends and Influence People -- a timeless classic! ] ...

Write Simply. I took a two-day class in business writing that taught me how to write direct sentences and to avoid extra words. Simplicity makes ideas powerful. Want examples? Read anything by Steve Jobs or Warren Buffett.

Learn Persuasion. Students of entrepreneurship should learn the art of persuasion in all its forms, including psychology, sales, marketing, negotiating, statistics and even design. Usually those skills are sprinkled across several disciplines. For entrepreneurs, it makes sense to teach them as a package.

That's my starter list for the sort of classes that would serve B students well. The list is not meant to be complete. Obviously an entrepreneur would benefit from classes in finance, management and more.

Remember, children are our future, and the majority of them are B students. If that doesn't scare you, it probably should.

Saturday, April 09, 2011

Update on NYTimes paywall

I posted before on miserly strategies to avoid buying a NYTimes subscription. It now appears to me their paywall is even wimpier than I had originally suspected. When I wrote the earlier post I hadn't yet experienced the paywall (either it wasn't on or I hadn't reached my limit of free articles for the month; I suspect the former). Having played around with it a bit, I've found the following.

If I try to read, for example, the Sidney Lumet obituary (btw, I highly recommend Dog Day Afternoon :-), the browser url bar shows the following when the subscription page has finally loaded:


If I eliminate all the cruft after "html" so that the url bar reads


then reloading lets me read the article for free. This has worked for every article I've tried -- probably 20 or so by now.

Thursday, April 07, 2011

Forever Young

I found these in my iPhoto collection :-)

Jogging near CERN. No goats were harmed.

With Robert Nozick, back in the day. All of my suits were hand me downs from my brother the management consultant.

Two physicists and a poet, Christmas dinner.

My brother visits the Society of Fellows.

Scene from a wedding, duly noted in the New York Times M&A section. Wellesley and HBS merge with Caltech, MIT and Sloan. (See Bobos in Paradise p.42 :-)

A meal by the Seine.

Les Deux Magots.

Sagres, Portugal. Once thought to be the end of the world :-)

Conil, Espana.

Future bomb boy using IBM XT "portable" to calculate some wavefunctions at 150 S. Chester, Pasadena.

Winter in Iowa -- our back yard.

Best viewed with Forever Young, Jay-Z and Alphaville. Photos and long term memory.

Taiwan photos 12

This lighthouse is at the southern tip of the island.

This is at the aquarium.

This is at Academia Sinica.

Best viewed with Forever Young, Jay-Z and Alphaville. Photos and long term memory.

Wednesday, April 06, 2011

Man vs Machine: inside the Turing Test

Brian Christian, author of The Most Human Human, tells interviewer Leonard Lopate what it's like to be a participant in the Loebner Prize competition, an annual version of the Turing Test. See also Christian's article, excerpted below.

Atlantic Monthly: ... The first Loebner Prize competition was held on November 8, 1991, at the Boston Computer Museum. In its first few years, the contest required each program and human confederate to choose a topic, as a means of limiting the conversation. One of the confederates in 1991 was the Shakespeare expert Cynthia Clay, who was, famously, deemed a computer by three different judges after a conversation about the playwright. The consensus seemed to be: “No one knows that much about Shakespeare.” (For this reason, Clay took her misclassifications as a compliment.)

... Philosophers, psychologists, and scientists have been puzzling over the essential definition of human uniqueness since the beginning of recorded history. The Harvard psychologist Daniel Gilbert says that every psychologist must, at some point in his or her career, write a version of what he calls “The Sentence.” Specifically, The Sentence reads like this:

The human being is the only animal that ______.
The story of humans’ sense of self is, you might say, the story of failed, debunked versions of The Sentence. Except now it’s not just the animals that we’re worried about.

We once thought humans were unique for using language, but this seems less certain each year; we once thought humans were unique for using tools, but this claim also erodes with ongoing animal-behavior research; we once thought humans were unique for being able to do mathematics, and now we can barely imagine being able to do what our calculators can.

We might ask ourselves: Is it appropriate to allow our definition of our own uniqueness to be, in some sense, reactive to the advancing front of technology? And why is it that we are so compelled to feel unique in the first place?

“Sometimes it seems,” says Douglas Hofstadter, a Pulitzer Prize–winning cognitive scientist, “as though each new step towards AI, rather than producing something which everyone agrees is real intelligence, merely reveals what real intelligence is not.” While at first this seems a consoling position—one that keeps our unique claim to thought intact—it does bear the uncomfortable appearance of a gradual retreat, like a medieval army withdrawing from the castle to the keep. But the retreat can’t continue indefinitely. Consider: if everything that we thought hinged on thinking turns out to not involve it, then … what is thinking? It would seem to reduce to either an epiphenomenon—a kind of “exhaust” thrown off by the brain—or, worse, an illusion.

Where is the keep of our selfhood?

The story of the 21st century will be, in part, the story of the drawing and redrawing of these battle lines, the story of Homo sapiens trying to stake a claim on shifting ground, flanked by beast and machine, pinned between meat and math.

... In May 1989, Mark Humphrys, a 21-year-old University College Dublin undergraduate, put online an Eliza-style program he’d written, called “MGonz,” and left the building for the day. A user (screen name “Someone”) at Drake University in Iowa tentatively sent the message “finger” to Humphrys’s account—an early-Internet command that acted as a request for basic information about a user. To Someone’s surprise, a response came back immediately: “cut this cryptic shit speak in full sentences.” This began an argument between Someone and MGonz that lasted almost an hour and a half. (The best part was undoubtedly when Someone said, “you sound like a goddamn robot that repeats everything.”)

Returning to the lab the next morning, Humphrys was stunned to find the log, and felt a strange, ambivalent emotion. His program might have just shown how to pass the Turing Test, he thought—but the evidence was so profane that he was afraid to publish it. ...

Perhaps one of the lessons that MGonz illustrates is that you can appear more intelligent by interacting confidently and aggressively :-)

Tuesday, April 05, 2011

Human capital and Indian development

Another story in the WSJ on human capital in India. Some readers objected to a related post I made last week, accusing me of Chinese jingoism for pointing out some qualitative differences in Indian and Chinese economic development. Let me say that I have nothing but respect for the many talented Indians I have known in physics and in technology. But it's important to clarify to what extent elite (highly selected) subgroups, such as, e.g., Indians in the US, or IIT graduates, are representative of the broader population upon whom India's continued economic growth depends. It's entirely possible, as the article below suggests, that India's IT and outsourced service industries are starting to experience real human capital limitations.

WSJ: BANGALORE, India—Call-center company 24/7 Customer Pvt. Ltd. is desperate to find new recruits who can answer questions by phone and email. It wants to hire 3,000 people this year. Yet in this country of 1.2 billion people, that is beginning to look like an impossible goal.

So few of the high school and college graduates who come through the door can communicate effectively in English, and so many lack a grasp of educational basics such as reading comprehension, that the company can hire just three out of every 100 applicants.

India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middle-class workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges.

Yet 24/7 Customer's experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its 8,000 employees are now based outside of India.

In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore.

"With India's population size, it should be so much easier to find employees," says S. Nagarajan, founder of the company. "Instead, we're scouring every nook and cranny."

... Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group.

But 75% of technical graduates and more than 85% of general graduates are unemployable by India's high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group.

Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance at 13,000 schools across India. It found that about half of the country's fifth graders can't read at a second-grade level.

At stake is India's ability to sustain growth—its economy is projected to expand 9% this year—while maintaining its advantages as a low-cost place to do business.

... Trying to bridge the widening chasm between job requirements and the skills of graduates, Tata has extended its internal training program. It puts fresh graduates through 72 days of training, double the duration in 1986, says Tata chief executive N. Chandrasekaran. Tata has a special campus in south India where it trains 9,000 recruits at a time, and has plans to bump that up to 10,000.

Wipro runs an even longer, 90-day training program to address what Mr. Govil, the human-resources executive, calls the "inherent inadequacies" in Indian engineering education. The company can train 5,000 employees at once.

Both companies sent teams of employees to India's approximately 3,000 engineering colleges to assess the quality of each before they decided where to focus their campus recruiting efforts. Tata says 300 of the schools made the cut; for Wipro, only 100 did.

Chinese university graduates would probably perform even worse on tasks requiring English-language skills. However, I do think that the strong performance of Shanghai high school students on recent PISA exams (administered in Mandarin) is a reasonable indicator of education levels in China. That is, although Shanghai averages are likely higher than national averages, the rest of the country is probably not that far behind.

Monday, April 04, 2011

Comment moderation

I'm getting a lot of complaints about a certain commenter (if you read the comments you will already know who I am talking about). So, I've switched the DISQUS settings, making registration required to comment. I may also start deleting inappropriate comments, as time permits. I don't want to get into full blown moderation as it's too time consuming. We'll see how it goes.

Sorry for the inconvenience but this is an all too common problem on blogs.

Sunday, April 03, 2011

Earnings effects of personality, education and IQ for the gifted

Thanks to a reader for pointing me to this recent paper by Heckman and collaborators, which makes use of data from the Terman study of gifted individuals (minimum IQ of 135 on the Stanford-Binet).

Of the personality factors, Conscientiousness and Extraversion had the largest (positive) effect on lifetime earnings: the most conscientious or extraverted individuals earned, on average, about 50% more than the least (see figures below). See here for more on Big 5 personality factors and a link to a personality test.

The Effects of Education, Personality, and IQ on Earnings of High-Ability Men

This paper estimates the internal rate of return (IRR) to education for men and women of the Terman sample, a 70-year long prospective cohort study of high-ability individuals. The Terman data is unique in that it not only provides full working-life earnings histories of the participants, but it also includes detailed profiles of each subject, including IQ and measures of latent personality traits. Having information on latent personality traits is significant as it allows us to measure the importance of personality on educational attainment and lifetime earnings.

Our analysis addresses two problems of the literature on returns to education: First, we establish causality of the treatment effect of education on earnings by implementing generalized matching on a full set of observable individual characteristics and unobserved personality traits. Second, since we observe lifetime earnings data, our estimates of the IRR are direct and do not depend on the assumptions that are usually made in order to justify the interpretation of regression coefficients as rates of return.

For the males, the returns to education beyond high school are sizeable. For example, the IRR for obtaining a bachelor's degree over a high school diploma is 11.1%, and for a doctoral degree over a bachelor's degree it is 6.7%. These results are unique because they highlight the returns to high-ability and high-education individuals, who are not well-represented in regular data sets.

Our results highlight the importance of personality and intelligence on our outcome variables. We find that personality traits similar to the Big Five personality traits are significant factors that help determine educational attainment and lifetime earnings. Even holding the level of education constant, measures of personality traits have significant effects on earnings. Similarly, IQ is rewarded in the labor market, independently of education. Most of the effect of personality and IQ on life-time earnings arise late in life, during the prime working years. Therefore, estimates from samples with shorter durations underestimate the treatment effects.

Here are a couple of interesting excerpts from the paper:

... Our third contribution is to show how the effect of personality on earnings varies through-out the men’s working lives. We find that without access to long follow-up data, the estimated effect would be understated. Note that even though the Terman sample has a restricted range of IQ, there is substantial variation in personality. In fact, the Terman men do not differ from the general population in terms of personality.

... note that even when controlling for rich background variables, IQ maintains a statistically significant effect on lifetime earnings. Even though the effect is slightly diminished from the un-controlled association of the first column, it is still sizable. Malcolm Gladwell claims rather generally in his book Outliers that for the Terman men, IQ did not matter once family background and other observable personal characteristics were taken into account. While we do not want to argue that IQ has a larger role for the difference between 50 and 100, for example, than for the difference between 150 and 200, we do want to point out that even at the high end of the ability distribution, IQ has meaningful consequences. [The syntax of this last sentence is strange. Presumably the impact of IQ variation from 50 to 100 (from severely handicapped to average) is larger than for 150 to 200, even though their results show a significant effect even in the very high range.]

Below are some nice figures (click for larger versions). Note the personality factor distribution among Termites was similar to that of the overall population, whereas the IQ range was restricted due to selection. Typical lifetime earnings for this group of exceptionally able men ranged from $2 to $3 million in 2008 dollars.

Compare the bottom right IQ graph with SMPY results which show the impact of ability (SAT-M measured before age 13) on publication and patent rates. Ability in the SMPY graph varies between 99th and 99.99th percentile in quartiles Q1-Q4. The variation in IQ between the bottom and top deciles of the Terman study covers a similar range. The Terman super-smarties (i.e., +4 SD) only earned slightly more (say, 15-20% over a lifetime) than the ordinary smarties (i.e., +2.5 SD), but the probability of earning a patent (SMPY) went up by about 4x over the corresponding ability range.

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