Tag Archives: Amazon

Government and Innovation

Inspired by Amazon’s Jeff Bezos, who recently announced plans to use drones to deliver packages to Amazon customers thirty minutes from the time of placing an order, a Minnesota microbrewery, Lakemaid Beer, announced its own spin on drone delivery service: using drones to deliver cold beer to ice fishermen working on frozen lakes. Managing partner Jack Supple told the Wall Street Journal that he anticipated fewer safety issues for Lakemaid than for Amazon, as Amazon would have drones flying down city and residential streets, whereas Lakemaid would be flying the drones across flat, largely uninhabited lakes. Apparently Lakemaid had planned to start delivering beer via drone imminently—that is, until the FAA informed Supple that drone delivery of beer was indeed a commercial use of the technology, and therefore is prohibited until the FAA finally gets around to publishing regulations, sometime in 2015. Thankfully Lakemaid is willing to put its plans on hold until then. It is still unclear, however, how the FAA will compensate the ice fishermen unjustly deprived of beer.

Entrepreneurs in the United States are, unfortunately, well accustomed to the delays that come from government erecting obstacles along the path to innovation. What many are not quite as familiar with is government getting directly involved in the process, in an attempt to speed it up. The Wall Street Journal reports that ten companies are committed to…wait for it…a five-year plan, in which they will work alongside the National Institutes of Health to perform research leading to treatments or cures for Alzheimer’s, Diabetes, Rheumatoid Arthritis & Lupus. Some might see this effort to pool the best and brightest minds from leading drug companies as promising, but I’m skeptical. Can the “Accelerating Medicines Partnership” do what its name promises when, as WSJ reports, “NIH scientists will review progress and provide help with scientific decisions”? Given that our government will be picking up a larger and larger portion of the nation’s prescription drug tab in the near future, maybe the NIH scientists will “help” steer the “partnership” away from research likely to result in more expensive therapies? Even if they don’t, this program represents a significant expansion of fascist involvement of government in an industry that, with some exceptions and reservations, seems to be welcoming it.

Even though Steve Jobs is no longer at the helm, and even though it’s been unjustly harassed by antitrust litigation, Apple seems to be continuing its tradition of boldly expanding into new markets. The WSJ reports that the company is buying up Internet infrastructure at a rate consistent with its stated intention of revolutionizing the TV viewing experience. In addition, CEO Tim Cook recently said during a conference call that “Apple is on track to break into new product categories this year.” Moreover, Apple has hired executives with expertise in cable Internet infrastructure and TV research and development. (Read more here.) If our government stays out of the way, I am hopeful that Apple will provide an aesthetically pleasing, viable alternative to cable.

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Two Spoonfuls of Sugar to Make The Budget Deal News Go Down

In my last News Sandwich, I said I was skeptical about what could be achieved, today, by convening legislators for an Article V Convention to amend the Constitution.

There is, nonetheless, a lot that state legislatures can do to protect their citizens from our rights-trampling federal government. South Carolina, for its part, is poised to end Obamacare in its state. The Daily Caller reports that the “South Carolina Freedom of Health Care Protection Act” has already passed in the South Carolina House of Representatives, and is likely to pass in the GOP-controlled state Senate in January. The legislation contains several key provisions designed to counteract all effects of Obamacare, including a state income tax credit for any Obamacare fine paid, as well as a provision prohibiting any insurance company receiving Obamacare subsidies from operating in the state. The Caller’s Bruce Parker speculates that, should the bill be enacted and upheld as within the state’s power, which seems likely, South Carolina could serve as an example for other states eager to protect their citizens from the onerous burden of this unpopular legislation. Read more here.

I think we’d best focus on the good news coming out of state legislatures for a while. It seems that the House GOP–which many of us had hoped would use its power of the purse to keep the growth of government and spending in check–has agreed to a deal that former OMB director David Stockman describes as “the final surrender of the House Republican leadership.” The House “leadership” apparently agreed with the rest of the statists in Washington that even the modest “sequester” spending cuts were too much for them to stomach. Instead, says the Washington Post, we’ll get “roughly $63 billion in other policies, including fee increases for airline travelers, cuts to federal-worker and military pensions and higher payments for federal insurance of private pensions,” etc. Senators Ted Cruz and Rand Paul have come out against the deal, and even Mitch McConnell–no doubt in a desperate effort to save his seat–has said he’d vote against it. But all of that is just showboating with a Democratic majority in the Senate. David Stockman says that what this budget agreement means, practically speaking, is that there won’t be another opportunity to significantly reduce spending until 2020.

After that depressing bit of news, we may all need a bit of retail therapy (assuming we can still afford it). A trip to the mall is normally the best way to get instant gratification, but that may change in the not-too-distant future. In an earlier News Sandwich I discussed Jeff Bezos’s plans to use drone technology to deliver Amazon.com orders in as little as 30 minutes. According to the Wall Street Journal, DHL is also testing its own version of a speedy drone delivery service, increasing the chances that we will eventually get to see, with our own eyes, little flying robots delivering packages to our door. Drone deliveries, however, as we learned from Bezos, won’t be a reality for at least a few years, thanks to our federal government prohibiting any for-profit use of drones until the FAA gets around to writing the “necessary regulations.”

In the meantime, the Wall Street Journal reports that some retailers (Home Depot, Amazon, and eBay among them) are planning to expand their offerings of same-day deliveries. No, not 30-minute deliveries, and no, not carried by cute flying robots, but deliveries of wanted and needed items within a matter of hours. I am often amazed and grateful that companies are continuing to find ways, even in this dreadful economy, to make money by improving their services (and our lives).

According to the Wall Street Journal piece some of these companies, along with FedEx and UPS, are betting that, once you have same-day delivery service available, there won’t be much value added by offering a 30-minute delivery service. My advice to them: ignore the flying-robot-cuteness-factor at your peril.

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