Sights Set on the Israeli Spectrum
The world economy is in a siege of unparalleled efflorescence.
No, I’m not crazy. I’m cosmic. (Speaking of which, you can attend the COSM conference in Seattle, October 23-25, with a special low price for my Prophecy readers found here.)
Yes, with the Greta Thunberg apocalypse, “the great technology stagnation,” the coming “climate change” extinction, the impeachment peloton, The Economist’s little Ice Age escape cover and hockey stick redux, the IPO collapse, the Damoclean debt, and the deficit super-tumor, you may not know where I’m coming from.
Israel, that’s where.
Our new prophet and leading Israeli venture capitalist, Jonathan Medved, has the most impressive portfolio I have encountered in 50 years of contemplating venture capital.
And Gale Pooley, economic revolutionary, has the theory behind the Israeli incandescence.
Time-Prices Spark Innovation
In the face of onrushing doom, I smile and welcome autumn. Around here in the Berkshires of Western Massachusetts, the weather is eudaemonic: a season of “mists and mellow fruitfulness.”
Beyond the glorious weather, giving the lie to apocalyptic pessimism are both Medved’s breakthrough portfolio and Gale Pooley-Marian Tupy’s time-prices — the plummeting level of what it costs in labor-hours to buy anything.
Time-prices are plummeting. Right now.
We’re headed toward a lavish Thanksgiving dinner that can be purchased by a blue-collar worker for under nine minutes of work. That compares to 32 minutes in 1986, when most economists believe that blue collar workers were enjoying their heyday.
This means that all the economic numbers, GDP, to CPI, to global interest rates, to inverting yield curves and all the ululating teenagers — miss the most important events, which always stem from innovation and new ideas.
The experts are measuring quantities, which according to the law of the conservation of matter, do not change. Our material resources, molecule by molecule, remain as they were in the stone age. What governs growth and progress is the advance of ideas.
Time-prices, combining in one number the decline of costs and the rise in incomes, capture much of the efflorescence of new ideas. Time-prices have been dropping by 3.4% a year since 1980. Ideas rule.
The Electromagnetic Spectrum Lives On
As Nobel laureate physicist Richard Feynman observed, James Clerk Maxwell’s discovery of the unity of the electromagnetic spectrum, governed by the speed of light, was the most important event of the mid-19th century, leaving the US civil war of the same year as “a parochial footnote by comparison.”
Today, in the form of 5G wireless, Maxwell’s rainbow of frequencies continues to reanimate the global economy.
With calls using low definition voice and taking some three kilohertz apiece, mobile wireless today is mostly confined to some 600 MHz of frequencies. That’s roughly 200,000 calls per cell. These bands are mostly in the low (sub gigahertz) and mid-frequency bands.
But as Maxwell proved, frequencies are infinite and cornucopian in their uses. 5G is opening up what my former colleague Bret Swanson of AEI calls a “spectrum big-bang.” Wireless spectrum, he says, could grow by a factor of 10 during the next decade.
Governments still want to control the spectrum, as if it were as scarce as “beachfront property” and engineers could not figure out how to use it effectively without the guidance of Federal commissioners and politicians. They auction it off to the most powerful companies for exclusive use, collecting tolls on the air. And then they harass and regulate the companies as potential monopolists of air.
A week ago, I returned from Israel, where the use of the electromagnetic spectrum thrives. For almost two decades I have been following several companies pursuing the grail of software defined or “cognitive” radios that can range across the spectrum and find empty stretches to use. Look Ma, no need for auctions or regimented air.
I have predicted the steady movement of data calls and communications from licensed to unlicensed spectrum, the ISM bands. Originally created for industrial scientific and medical uses, the ISM bands now are crucial for everyone’s internet access. Sure enough, this year more than half of all calls are completed using Wi-Fi and other unlicensed spectrum.
Over the next several years this movement will accelerate and auctions will be obsolete.
5G will as much as double, by more than a gigahertz, the amount of bandwidth currently available in the unlicensed bands of spectrum. Communications will migrate away from the toll lanes into EZ pass realms of relatively unregulated carriers.
Three of my Israeli spectrum companies — ASOCS, Celeno, and Camaro — appeared in The Israel Test and other of my writings. During my September trip, I learned that experience had not finally favored Camaro’s once promising plan for battlefield deployments that see through walls. Battlefields turn out to be tough for delicate spectrum manipulations.
But still prospering are ASOCS with its private 5G campus and corporate systems and Celeno with its programmable radio and radar technologies for homes and businesses.
Celeno is part of the Medved portfolio. Other companies in it zap cancer tumors without damage to surrounding tissue, cure Parkinson’s disease, revolutionize chemistry, massively improve weather prediction, enable self-driving automobiles, identify you reliably by your movements, and accomplish a dozen other miracles.
Between the time-prices that signal huge continuing advances in the world economy and the upside surprise of new Israeli (and Chinese) companies and the advance of unlicensed 5G communications, I believe the global economy is ready for huge upward expansion. Blown away will be the burdens of debt and hypertrophied finance.
During the next year, we will have breakthroughs against cancer and Parkinson’s. We will have a new architecture for internet security. We will have a proliferation of progress in blockchain and their applications. Around the world, central banks will vie with corporations and startups in launching new forms of digital money and Internet security based on blockchains.
We will come to grasp that the technological revolutions of the last three decades are real and permanent and convergent in the COSM. They have moved the human endeavor to a new level of productivity and accomplishment.
Based on spurious and misleading data, the trade wars, monetary conflicts, climate delusions, and debt disasters that dominate the media and politics will shrink to relative insignificance.
That will be the upside surprise of 2020.
Editor, Gilder’s Daily Prophecy