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How to fix what the innovation economy broke about America

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How to fix what the innovation economy broke about America


Valerie worked at Bryan Metal Systems, making suspensions for Chrysler. She made good money there, but that company was taken over in 2005 by Global Automotive Systems. In 2010, Global shut down the Bryan plant and sent the work to Michigan as part of a “global optimization strategy.” Valerie traveled to Michigan to help train her replacements. After that, she bounced around, sometimes working temp factory jobs, until she landed at the Sauder furniture plant.

By 2019, unemployment was below 4% in Williams County, but higher-paying jobs had been replaced by work with low wages and “temporary” status that employers maintained—in name only—so they wouldn’t have to pay benefits. Menards, a big Midwestern home-improvement retailer, became the largest employer in the county. Menards wrangled a rich package of tax incentives and infrastructure out of local and state government in return for putting a distribution center about 15 minutes northeast of Bryan. By late 2019 people were starting at about $14 an hour, or about $28,000 per year, for full-time work. In the last 20 years, the median household income in Williams County (in constant dollars) has gone from $62,000 to $49,500. Defined-benefits pensions have given way to less-generous retirement savings accounts. Health insurance premiums have gone up. So have deductibles.

As the employment landscape changed, so did the county’s demographics. Young people, especially college-educated young people, left and didn’t come back. I asked Les McCaslin, the retiring chief of the Four County Board of Alcohol, Drug Abuse, and Mental Health Services and a native of the area, how he thought they might be persuaded to return. He remembered a recent economic development meeting: “We were talking about the town. And I simply said, ‘Why would you come here? Why would I bring my two kids?’ And there was silence in the room. You had commissioners there and they couldn’t come up with one reason.”

The Menards effect

Bryan’s hospital, Community Hospitals and Wellness Centers (CHWC), caught the fallout from these changes. As was true in many such communities, CHWC, an independent community hospital, became the largest employer in town. But it struggled to stay open and independent. Because the county’s population was getting poorer and older, many patients qualified for either Medicaid or Medicare, both of which pay lower reimbursement rates than private insurance. (The two government programs account for two-thirds of CHWC’s revenue.) So although, say, an MRI machine costs CHWC just as much as it would another hospital in a richer area, CHWC gets paid at a lower rate when it is used.

Former hospital CEO Phil Ennen calls this “the Menards effect.” The company was “a real problem for us,” he says. “Seventy-five percent of Menards [employee] accounts with us are Medicaid, charity, or some sort of self-pay. From a health-care perspective, they are a horrible employer.”

Many people were like Valerie: they just didn’t go to doctors. The spring after we sat in the basement of the church, Valerie was back there, this time counting Girl Scout cookie money with her daughter and a friend. She still worked three jobs. Her back ached from an old injury during her days at Bryan Metal Systems. And she was coughing from a bug she thought she’d caught from a coworker at Sauder. Valerie wound up with bronchitis, an inner ear infection, and a sinus infection, but she didn’t miss any work, because she had no paid sick leave. “No! I went to work every day,” she said, laughing, which called forth a brief coughing fit.

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Inside the conference where researchers are solving the clean-energy puzzle

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Inside the conference where researchers are solving the clean-energy puzzle


The Advanced Research Projects Agency for Energy (ARPA-E) funds high-risk, high-reward energy research projects, and each year the agency hosts a summit where funding recipients and other researchers and companies in energy can gather to talk about what’s new in the field.

As I listened to presentations, met with researchers, and—especially—wandered around the showcase, I often had a vague feeling of whiplash. Standing at one booth trying to wrap my head around how we might measure carbon stored by plants, I would look over and see another group focused on making nuclear fusion a more practical way to power the world. 

There are plenty of tried-and-true solutions that can begin to address climate change right now: wind and solar power are being deployed at massive scales, electric vehicles are coming to the mainstream, and new technologies are helping companies make even fossil-fuel production less polluting. But as we knock out the easy wins, we’ll also need to get creative to tackle harder-to-solve sectors and reach net-zero emissions. Here are a few intriguing projects from the ARPA-E showcase that caught my eye.

Vaporized rocks

“I heard you have rocks here!” I exclaimed as I approached the Quaise Energy station. 

Quaise’s booth featured a screen flashing through some fast facts and demonstration videos. And sure enough, laid out on the table were two slabs of rock. They looked a bit worse for wear, each sporting a hole about the size of a quarter in the middle, singed around the edges. 

These rocks earned their scorch marks in service of a big goal: making geothermal power possible anywhere. Today, the high temperatures needed to generate electricity using heat from the Earth are only accessible close to the surface in certain places on the planet, like Iceland or the western US. 

Geothermal power could in theory be deployed anywhere, if we could drill deep enough. Getting there won’t be easy, though, and could require drilling 20 kilometers (12 miles) beneath the surface. That’s deeper than any oil and gas drilling done today. 

Rather than grinding through layers of granite with conventional drilling technology, Quaise plans to get through the more obstinate parts of the Earth’s crust by using high-powered millimeter waves to vaporize rock. (It’s sort of like lasers, but not quite.)

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The emergent industrial metaverse

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The emergent industrial metaverse


Annika Hauptvogel, head of technology and innovation management at Siemens, describes the industrial metaverse as “immersive, making users feel as if they’re in a real environment; collaborative in real time; open enough for different applications to seamlessly interact; and trusted by the individuals and businesses that participate”—far more than simply a digital world. 

The industrial metaverse will revolutionize the way work is done, but it will also unlock significant new value for business and societies. By allowing businesses to model, prototype, and test dozens, hundreds, or millions of design iterations in real time and in an immersive, physics-based environment before committing physical and human resources to a project, industrial metaverse tools will usher in a new era of solving real-world problems digitally. 

“The real world is very messy, noisy, and sometimes hard to really understand,” says Danny Lange, senior vice president of artificial intelligence at Unity Technologies, a leading platform for creating and growing real-time 3-D content. “The idea of the industrial metaverse is to create a cleaner connection between the real world and the virtual world, because the virtual world is so much easier and cheaper to work with.” 

While real-life applications of the consumer metaverse are still developing, industrial metaverse use cases are purpose-driven, well aligned with real-world problems and business imperatives. The resource efficiencies enabled by industrial metaverse solutions may increase business competitiveness while also continually driving progress toward the sustainability, resilience, decarbonization, and dematerialization goals that are essential to human flourishing. 

This report explores what it will take to create the industrial metaverse, its potential impacts on business and society, the challenges ahead, and innovative use cases that will shape the future. Its key findings are as follows: 

• The industrial metaverse will bring together the digital and real worlds. It will enable a constant exchange of information, data, and decisions and empower industries to solve extraordinarily complex real-world problems digitally, changing how organizations operate and unlocking significant societal benefits. 

• The digital twin is a core metaverse building block. These virtual models simulate real-world objects in detail. The next generation of digital twins will be photorealistic, physics-based, AI-enabled, and linked in metaverse ecosystems. 

• The industrial metaverse will transform every industry. Currently existing digital twins illustrate the power and potential of the industrial metaverse to revolutionize design and engineering, testing, operations, and training. 

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The Download: China’s retro AI photos, and experts’ AI fears

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The Download: China’s retro AI photos, and experts’ AI fears


Across social media, a number of creators are generating nostalgic photographs of China with the help of AI. Even though these images get some details wrong, they are realistic enough to trick and impress many of their followers.

The pictures look sophisticated in terms of definition, sharpness, saturation, and color tone. Their realism is partly down to a recent major update of image-making artificial-intelligence program Midjourney that was released in mid-March, which is better not only at generating human hands but also at simulating various photography styles. 

It’s still relatively easy, even for untrained eyes, to tell that the photos are generated by an AI. But for some creators, their experiments are more about trying to recall a specific era in time than trying to trick their audience. Read the full story.

—Zeyi Yang

Zeyi’s story is from China Report, his weekly newsletter giving you the inside track on tech in China. Sign up to receive it in your inbox every Tuesday.

Read more of our reporting on AI-generated images:

+ These new tools let you see for yourself how biased AI image models are. Bias and stereotyping are still huge problems for systems like DALL-E 2 and Stable Diffusion, despite companies’ attempts to fix it. Read the full story.

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