Venture Capital Stays on the Sidelines

“In the first three months of this year a mere 35 US venture capital funds raised just $4bn – 12 per cent lower than a year before,” says Gillian Tett, noting that “in 2012, venture capital raised a mere $28bn of funds… lower than in 2011, let alone 2007.”

“If nothing else, it raises important questions about who will fund big speculative innovation bets in the future. After all, in recent decades…technological innovation in America has been driven by a combination of state investment (say, via the military) and private sector gambles on research and development (via venture capital). But government largesse is now drying up, even as private money appears to be wilting too.”

“Of course, if you believe in the self-correcting power of capital markets, this pattern should eventually change… But don’t bet on that happening yet… For the moment, in other words, the sector stands as a sad reminder of just how bifurcated the financial system remains.”

Obama Quietly Promotes Energy Efficiency

USA Today looks at one of President Obama’s least-known strategies to promote energy efficiency without any government spending: the Better Building Challenge.

“More than 110 partners — including schools, universities and cities, such as Atlanta, Chicago, Los Angeles and Seattle — have signed on to the voluntary Better Building Challenge, launched by President Obama in December 2011… which provides technical but no financial help to its partners.”

“Unlike some aspects of Obama’s ‘all-of-the-above’ energy strategy, efficiency has garnered broad support… the DOE program aims to provide strategies, already proven by leaders in energy efficiency, that other organizations can follow… the trick was getting companies to share data and tips — a sort of playbook — for what works.”

Will Congress Finally Update Chemical Safety Rules?

“The current U.S. law on chemical safety is 37 years old, riddled with exceptions, and widely seen as ineffective,” says Brad Plumer, but “that law could soon get a face-lift” after Sens. Frank Lautenberg (D-NJ) and David Vitter (R-LA) announced a deal to overhaul the Toxic Substances Control Act.

“Under the Toxic Substances Control Act, the Environmental Protection Agency (EPA) can only call for testing of a chemical if evidence somehow surfaces that the substance is dangerous. What’s more, tens of thousands of existing chemicals were exempt from review when the law was enacted in 1976.”

Under the proposed changes, the EPA “would review all actively used chemicals and label them as either ‘high’ or ‘low’ priority based on their potential risk to human health and the environment… The EPA will also have greater flexibility to take action on chemicals deemed unsafe, ranging from labeling requirements to outright bans on things like asbestos.”

US, EU Seek to End Solar Panel War With China

“The Obama administration is engaged in preliminary talks with the European Union and China to settle a dispute over trade in solar-energy equipment and avoid a conflict among the world’s largest economies,” according to Bloomberg.

“Government support for renewable-energy products including solar panels has led to disputes as the price of polysilicon, the main ingredient in solar cells, has dropped 64 percent since December 2010.”

The New York Times has details of a potential deal.

“The plan that is starting to take shape would essentially carve up the global solar panel market into a series of regional markets. It would sharply raise the price of solar panels exported from China, the world’s dominant producer, by requiring Chinese companies to charge more while limiting the total number of solar panels they could ship.”

“In exchange, Chinese companies would no longer be charged steep taxes on their exports of solar panels. The United States is already collecting tariffs totaling about 30 percent while the European Union is expected to impose similar tariffs of about 50 percent on June 5, and may backdate them to March 5.”

What You Need to Know About the Oklahoma Tornado

A massive tornado swept through Moore, Oklahoma on Monday, causing severe damage and over 50 deaths. Alexis Madrigal answers a number of frequently asked questions about tornados generally and this tornado in particular.

“Moore has a deep and tragic tornado legacy. The town could probably lay claim to being the very center of Tornado Alley… On May 3, 1999, Moore was hit by one of the worst tornadoes on record.”

“The National Weather Service’s Norman, Oklahoma office says that a tornado warning went into effect 16 minutes before the storm hit. That’s three minutes faster than the current average lead time for a warning.”

“Because there was a large tornado in 1999, we have detailed information on some of the problems with the construction methods in the area… much of the construction in the area does not follow best practices for resisting a tornado’s winds.”

Jeff Masters looks at the damage and expected costs of this tornado, noting that “after the damage tally from the May 20 tornado is added up, Moore will hold two of the top five spots on the list of most damaging tornadoes in history.”

Fusion Energy Research Funding Shifts Abroad

The Boston Globe looks at the latest trend in research of nuclear fusion technology as an energy source, reporting that a “long-running Massachusetts Institute of Technology research experiment…will shut down within a year” after federal funds dry up.

“The shutdown will leave only two fusion experiments in the United States, one at Princeton University and the other at General Atomics, a company in San Diego… The US Department of Energy is increasing its overall funding of fusion research, but is shifting money from its domestic program to a large, collaborative international project being built in France called ITER.”

“The fusion program’s funding was first cut in fiscal year 2013, from $25 million to $14 million… But the center is also dealing with the uncertainty of the sequester, the across-the-board budget cuts that began earlier this year.”

Will Cloning Return to the Agenda?

News that US scientists have successfully cloned a human embryo “seems almost certain to rekindle a political fight that has raged, on and off, since the announcement of the creation of Dolly the sheep in 1997,” according to NPR.

“But it’s a fight that has, over the past decade and a half, produced a lot of heat and light and not a lot of policy… About the only law that has been able to pass is language that gets added to the funding bill for the Department of Health and Human Services every year since the mid-1990s… It bars the use of federal funds for research that could destroy or harm a human embryo.”

Natural Gas Export Debate Continues

The Associated Press digs into the brewing debate over natural gas exports as policymakers wrestle with the proper way to manage the shale gas boom.

“If approved, the resulting export boom could lead to further increases in hydraulic fracturing… production has begun to level off as the glut of natural gas keeps U.S. prices down. In response, producers have begun pushing to export the fuel to Europe and Asia, where prices are far higher.”

“Approval of all the projects currently under review by the Energy Department could result in the export of more than 40 percent of current U.S. production of liquefied natural gas… But consumer groups and some manufacturers that use natural gas oppose expanded exports, saying they could drive up domestic prices and make manufacturing more expensive.”

“Federal law requires the Energy Department to determine that projects are in the public interest before granting export permits to countries that do not have free-trade agreements with the U.S.”

Let Drones Fly Free

The Federal Aviation Administration is working to implement new regulations on commercial drone use in US airspace, and Eli Dourado argues that while privacy concerns are important, “it’s even more important that we consider the effect of too-early, heavy-handed regulation on future innovation.”

“Regulation at this juncture requires our over-speculating about which types of privacy violations might arise. Since many of these harms may never materialize, pre-emptive regulation is likely to overprotect privacy at the expense of innovation… Imagine if we had tried to comprehensively regulate online privacy before allowing commercial use of the internet. We wouldn’t have even known how to.”

“Not only would such requirements…be overkill, but they’re unnecessary. Because there are already federal, state, and local laws that protect individuals’ rights to privacy… By allowing time for social norms to adapt, we may find that we’ll all become accustomed to drones.”

Pentagon Accuses China of Cyber-Espionage

The Financial Times reports that the Department of Defense’s latest Annual Report to Congress on the Chinese military “gives new emphasis to the threat of cyber-espionage from China, an issue that has been the subject of top-level complaints to Beijing by Washington.”

“In its report, the Pentagon paints a picture of a formidable and highly organised adversary which is using multiple methods to acquire technology, ranging from state businesses to students to old-fashioned human espionage… But while preparing for a potential conflict in the Taiwan Strait appears to remain China’s principal focus, the military has been expanding its reach around the world and contacts with the armed forces of other countries.”

Lies vs. Statistics and How to Tell the Difference

Betsey Stevenson and Justin Wolfers provide a simple set of tips to policymakers and non-statisticians for separating robust analysis from junk research.

“1. Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion… Are the findings fragile, changing as one makes small changes in how phenomena are measured, and do the results depend on whether particularly influential observations are included?”

“2. Data mavens often make a big deal of their results being statistically significant, which is a statement that it’s unlikely their findings simply reflect chance. Don’t confuse this with something actually mattering. With huge data sets, almost everything is statistically significant.”

“3. Be wary of scholars using high-powered statistical techniques as a bludgeon to silence critics who are not specialists. If the author can’t explain what they’re doing in terms you can understand, then you shouldn’t be convinced.”

“4. Don’t fall into the trap of thinking about an empirical finding as ‘right’ or ‘wrong.’ At best, data provide an imperfect guide. Evidence should always shift your thinking on an issue; the question is how far.”

“5. Don’t mistake correlation for causation.”

“6. Always ask ‘so what?’… The ‘so what’ question is about moving beyond the internal validity of a finding to asking about its external usefulness.”

Tyler Cowen provides his own thoughts on the subject.

If We Build It, We Will Need More STEM Workers

Matthew Yglesias highlights a new Economic Policy Institute study finding that there is not a “shortage” of science, technology, engineering, and math workers in the US.

“They look at this through a variety of lenses, but the key one is simply that you’re not seeing big wage gains for STEM workers of the sort that a shortage would cause. And since a lot of the rhetoric around H1-B visas for highly skilled guestworkers has focused on an alleged shortage, this kind of research constitutes a big blow to that whole frame.”

Tyler Cowen isn’t so sure that EPI is thinking about a “shortage” in the right way.

“The core claim is that STEM sectors will be those which produce the future social increasing returns for the economies which house them.  If true (I am not trying to prejudge this), that means we should invest in both more STEM workers and more complementary inputs, whether that be particle colliders, NIH funding, the right broadband infrastructure, legalizing driverless cars, better IP law, tougher schools, or whatever.”

“Similarly, it could have been pointed out that, before the rise of Hyundai, South Korea had just the right number of auto workers (not many) for their factories (also not many).  That could have been true enough, but still investing in more auto factories and more auto workers was for Korea a very good path forward.”

Addressing the Cyber Threat

Marc Ambinder lays out the various ways that the US can respond to the growing threat of cyber espionage and attacks, especially from hackers in China.

“It can build an electronic wall around the country, forcing all Internet traffic to be subject to deep packet inspection; and then, to compare those packets against known signatures from China; segregate them; eradicate the malware from them, and then let them through… It can require, or encourage, major technology companies that serve as Internet gateways for most Americans to boost their own cyber defenses, and then share, with immunity, suspected cyber threats with the government in real-time, allowing the NSA to swoop in and solve the problem.”

“It can secretly share with the big Internet companies the cyber techniques and tactics used by Chinese corporations and the military, giving U.S. companies a chance to develop cyber counter-measures… It can fight back, engaging in tit-for-tat  brinksmanship… It can provide significant incentives for individuals and corporations to protect themselves, allowing free market mechanisms to determine the structure and rules of economy-wide computer network defense.”

How the Justices Think About Gene Patenting

Lyle Denniston rounds up the Supreme Court oral arguments in Association for Molecular Pathology v. Myriad Genetics on the patentability of human genetic sequences, noting that the analogies of the day were “about how a baseball bat gets created, and how the sap of a plant in a forest in the Amazon might be analyzed for its powers to cure human disease.”

“Throughout a sometimes achingly complex argument over bio-science, the down-to-earth images of shaping a bat out of a tree limb, or swallowing the sap of an Amazon plant to test its medicinal value appeared to put the Court closer to resolving a truly fundamental issue of patent law, on the right to get a monopoly for tinkering with Mother Nature’s products.”

“The Justices worked, and at times over-worked, those examples, but it was clear that they were regarded as highly serviceable ways to think about Myriad’s patents.   And that might well be ominous for Myriad, since each of the examples made highly vivid the existence of two products: the natural one, and then something else that someone had the genius to create out of it.  The tree can’t be patented, and neither can the plant while it grows in the forest in the Amazon, the Justices kept pointing out.”

Amy Howe translates the legally and scientifically complex issues into plain English.

Can You Patent Genes?

As the Supreme Court prepares to hear oral argument today on whether human genetic sequences can be patented in the case of Association for Molecular Pathology v. Myriad Genetics, the New York Times looks at whether “the field of genetics moved so far so fast that whatever the court decides, it has come too late to the issue.”

The case “involves patents held by Myriad Genetics on two human genes, which, when mutated, give a woman a high risk of getting breast or ovarian cancer. The patents give Myriad a monopoly on testing for these mutations, a highly lucrative business.”

“It is often said that one-fifth of the roughly 20,000 human genes are patented. But in a study, Christopher Holman, a professor of law at the University of Missouri, Kansas City, found that many of those patents merely mentioned genes but would not block genetic testing, and many patents had been allowed to lapse.”

SCOTUSblog has a thorough preview of the legal issues in the case.

Breaking Down the Obama Budget

Federal Eye has a roundup of how President Obama’s budget proposal affects various government departments and agencies. Below are key highlights.

Department of Defense: “The most striking part of Obama’s proposed $526.6 defense budget request is that it fails to acknowledge the prospect that sequestration will remain in effect beyond this year.”

Department of Education: “Obama is proposing several new initiatives aimed at expanding pre-school to all low and moderate income four-year-olds…and streamlining federal programs that support education in science, technology, engineering and math. He wants to expand on the competitive grants that have become a signature of his education policy, this time creating a college version of Race to the Top, which would award $ 1 billion in competitive grants to states that make college more affordable… The budget calls for $300 million for a new program that would reward high schools that develop partnerships with employers and local colleges and redesign secondary education so that high school students are learning skills needed for careers and college.”

Department of Health and Human Services: “As expected, this budget repeats previous proposals by Obama to cut Medicare and other health programs by about $400 billion over the next decade… The budget would also increase Medicare premiums charged to higher income beneficiaries… On the plus side of the ledger are two measures with particular resonance in the wake of Newtown, Conn., school shootings: A new $130 million initiative to expand mental health services, including training for social workers and other professionals who work in schools; and an extra $30 million for programs that research ways to prevent violence.”

National Aeronautics and Space Administration: “The NASA budget includes $78 million, little more than starter money, for a mission that would use a robotic spacecraft to lasso a small asteroid and tug it back to a stable orbit a bit farther from Earth than is the moon. That asteroid could then be visited by astronauts in a spaceship under development.”

The Washington Post has also created a terrific interactive graphic digging much deeper into the budget.

As Fuel Standards Improve, Alternative Fuels Could Struggle

“The Environmental Protection Agency’s latest proposed tightening of limits on sulfur in gasoline, and its previous rules, will most likely have the perverse consequence of retarding the development of cars running on batteries, advanced biofuels or hydrogen,” according to an analysis by the New York Times.

“The E.P.A. last week announced its proposed new Tier 3 rules sharply reducing allowable amounts of sulfur in gasoline, which would help automobiles’ catalytic converters to capture more pollutants… Obscured by all the numbers is that the various technologies promoted as alternatives to gasoline — batteries, fuel cells or natural gas — are now facing a refined internal combustion engine.”

“At the same time, the federal government has established mandates for increasing amounts of renewable fuels in the gasoline mixture. While that mandate has not yet worked out on the schedule Congress intended, it is clear that gasoline…is actually a moving target.”

Sequester Begins to Shut Down Medical Research

“In anticipation of sequestration, the National Institutes of Health began trimming 10 percent off existing grants at the beginning of the fiscal year… Now that it’s reality, the NIH is facing a 5.1 percent decrease in its 2013 budget, or about $1.6 billion,” according to Bloomberg.

“Steven Houser, director of the cardiovascular research center at Temple University School of Medicine in Philadelphia, said he fears the cuts will hamper research for years to come, shrinking the number of research trainees hired or accepted into graduate programs, and causing still other students to question whether medical research is a viable career option.”

“The NIH isn’t the only research-supporting agency hit. The across-the-board cuts from sequestration reduce total U.S. research and development spending by $9.1 billion this year… That includes agencies such as the National Aeronautics and Space Administration, the U.S. Geological Survey and the U.S. Department of Agriculture.”

How Drones Will Revolutionize Agriculture

While unmanned aerial vehicles — commonly referred to as drones — are best known for their use in military operations, Miranda Green explains how “the controversial technology may prove to have its greatest impact in a peaceful endeavor: farming.”

“The market for agricultural drones lies in the technology’s ability to provide farmers with a bird’s-eye view of their land. Historically, farmers have walked their land to survey it—looking for areas that need more fertilizer or water. More recently many have begun using small passenger planes to look at their lots from the air. But since airplane rental and fuel costs can quickly run into five figures, there’s strong demand for cheaper alternatives.”

“Despite the potential benefits, UAV use by commercial farmers is currently prohibited under FAA regulations. Although the majority of drones fly under 400 feet, the FAA worries about complications with the national airspace.”

Where Has All the Productivity Gone?

John Cassidy explores why the Internet has not produced the immense productivity gains anticipated when it was first introduced.

“Between 1996 and 2000, output per hour in the non-farm business sector…grew at an annual rate of 2.75 per cent, well above the 1.5 per cent rate that was seen between 1973 and 1996… Since the start of 2005, productivity growth has fallen all the way back to the levels seen before the Web was commercialized, and before smart phones were invented… the dropoff in productivity growth predated the recession, which began in December, 2007. In the three years from 2005 to 2007, the annual rate of growth in output per hour was just 1.4 per cent.”

“But if the slump didn’t cause the slowdown, what did? One possibility is that, compared to things like the power loom and the internal-combustion engine, recent technological marvels, such as the iPhone and the iPad, aren’t really so marvellous.”

Obama Launches Initiative to Map the Brain

President Obama has unveiled a long-term neuroscience research initiative that will develop new tools and technologies to study human and animal brains on larger scales than currently possible, Science News reports.

The annoucnement follows through on a commitment he made in his State of the Union Address.

“The initiative is slated to begin in October, with $100 million budgeted for the project in fiscal year 2014. The National Institutes of Health, the Defense Advanced Research Projects Agency and the National Science Foundation will lead the effort, which Obama likened to the Human Genome Project in terms of its ambitious aims and the scientific and health benefits the initiative could yield.”

Technology is Killing the Middle Class

“The US has gained 387,000 managers and lost almost 2m clerical jobs since 2007, as new technologies replace office workers and plunge the American middle class deeper into crisis,” according to the Financial Times.

“One probable cause of rising inequality is new computing technologies that destroy some middle-class occupations even as they create jobs for highly skilled workers who can exploit them… Demand for people who figure out how to replace clerical workers – such as operations managers, management analysts and logisticians – grew substantially.”

Tyler Cowen: “When there is a liquidity crunch, as there was in 2008-2009, business owners must plan rather rapidly for the future, and decide which capabilities they will hold on to and build up, and which they will let go of and let rot. It is as if a big part of future plans is suddenly compressed into current decisions. Some unemployment will result, but it is both cyclical and structural at the same time.”

Addressing the Helium Crisis

Nearly one year after concerns emerged over the health of the Federal Helium Reserve, Jack Kemp provides an explainer on legislation in the House and Senate that “aim to avert the imminent shutdown of the Federal Helium Reserve…and develop a proper market to avoid a long-term crunch in supplies of one of the world’s most obscure but vital raw materials.”

“The 1996 Helium Privatization Act ordered the Bureau of Land Management (BLM) to close all government-owned facilities for refining helium. It froze the helium debt, and ordered the Bureau to start selling crude helium from the reserve…at prices sufficient to repay the debt and cover operating costs… But BLM has become such an enormous seller, in a market with few other competitors and substantial barriers to entry… The Bureau has raised far more money from its sales than expected, meaning it will meet its target of paying off the helium debt early.”

“At the end of September 2012, the outstanding helium debt had been reduced to just $44 million. BLM will meet its repayment deadline within a matter of months… Once the debt is repaid, the helium program will terminate automatically… The strategic reserve is dwindling. Much of it is being turned into refined helium and exported. As reserves have fallen, fears have grown about the long-term security of U.S. supplies.”

“Similar bills introduced into the House of Representatives and published in draft form in the Senate… would extend the authority for stockpile sales… Thereafter, the bills would permit further sales, but require at least some of them take place on an open auction basis… with the ultimate aim of stimulating the creation of a private helium industry to safeguard long-term supplies.”

Wind Power Won’t Serve All Our Energy Needs

Wind energy was the fastest-growing source of energy in 2012 and will likely continue to grow in the future, but NPR looks at the eventual limits of wind farms as an alternative energy source.

“Several scientists now say it’s actually possible to have so many turbines that they start to lose power. They steal each other’s wind… The blades on wind turbines make dirty air too, so engineers space the machines far apart… For the 45,000 big turbines now spread around in clusters throughout the U.S., that’s not a problem… But as you build more and more wind farms, spreading them out could present complications.”

“You can’t put them just anywhere — you need to have transmission lines reasonably close by, for example. Also, as you get more wind farms, more people are likely to complain about the view. And lots of places simply aren’t windy enough to be useful.”

Climate Panel Continues March Towards Executive Action

The President’s Council of Advisors on Science and Technology sent a letter to President Obama “recommending the creation of carbon emissions standards for existing pollution sources and continued expansion of shale gas production in order to confront global warming,” The Hill reports, signaling the most likely shape of future climate policy.

“The advisers note that broad policies to impose a cost on carbon emissions, such as a carbon tax or cap-and-trade, don’t have political traction. But other options to address emissions are available… The endorsement arrives as environmentalists are pressing the administration to begin setting standards for the current fleet of coal-fired power plants.”

“The letter to Obama includes a host of suggestions for ‘decarbonizing’ the economy. Among them are curbing regulatory barriers to deployment of carbon capture and storage technology… They include longer-term renewable energy tax credits, replacing the frequent Capitol Hill battles over short-term renewables and other tax code changes that would help finance green power projects.”