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This Nobel Prize winner thinks open source software is Canada’s ticket to growth

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In the last decade, Microsoft Windows has seen its market share more than cut in half, plummeting from nearly 100 percent to below 40 percent.

The competitor that did the damage was Google, a rival behemoth that now dominates the tech world with its Android operating system that runs on phones, tablets, and even stripped-down laptops.

But it wasn’t all Google. Android is open source software, which means anyone can download the code and play around with it. Other manufacturers can take the Android engine and use it to power a device, meaning they don’t have to build their own operating system or license one.

Windows is a closed, proprietary system and has always drawn the ire of the open source community. Android grew out of the Linux operating system, a long-time favourite of coders and assorted nerds who enjoy its versatility and reputation as an anti-Windows upstart.

Android’s rise is an example of how knowledge and ideas are vital to economic growth, the insight that won Paul Romer a Nobel Prize. It’s a phenomenon that British author Matt Ridley described as “ideas having sex with each other.”

Romer, who is also the former chief economist of the World Bank, made the case at a summit hosted by The Coalition for a Better Future in Ottawa last week that open source software and the creative energy that accompanies it could be one way to jump-start Canada’s lacklustre growth.

With so many smaller countries looking to build one big tech company, like Google or Microsoft, why not create an open source ecosystem that bristles with creative, innovative ideas?

“The rest of the world is going to specialize in trying to have tech giants that are monopolists and building ‘unicorns.’ There’s a huge opportunity for other countries to be the places that are the home for open innovation that’s really very much in the spirit of science,” said Romer.

Whether this community grows in the private sector or in a university research environment doesn’t matter much. It’s the ideas and knowledge that do all the work, said Romer.

“One of the messages I would give to Canada or any other country in a similar position is think about how you could make yourself the place which is the leader in all of these open source kinds of efforts,” said Romer.

“Get the collateral benefits of being close to those as generators of ideas. And you have the private activity which will build actively on the public activity,” he said.

The summit has drawn criticism, especially from more market-oriented thinkers, who see it as an exercise in central planning.

Although Romer issued a stark warning against picking economic winners and losers in his speech, he also joked to the National Post that he was a “recovering University of Chicago economist” and said he does see a role for government in juicing innovation and economic growth.

“History has shown that rapid, sustainable, and widely distributed economic growth is never the result of central planning,” wrote Matthew Lau in the Financial Post, in a piece that worried the summit was saddling businesses with all kind of goals beyond producing goods and services that benefit society.

Romer argued that the market works most of the time, for example when it correctly identifies beneficial and profitable ideas to pursue or harmful and unprofitable ideas that are not worth pursuing. Romer said he spends most of his time worrying about all the opportunities that are harmful and profitable, especially in the world of tech. Although he was originally enthusiastic about the potential in Silicon Valley, Romer now believes that it has spawned companies, like Google and Facebook, that are a “danger in terms of the social fabric.”

“The government has not been strong enough to stop firms doing things that are clearly harmful to the prospects for growth and the quality of life,” said Romer.

Paying people to get vaccinated doesn’t work (but nagging them might), study finds

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Bonuses given by governments to encourage people to get vaccinated against COVID-19 are having no effect and could even be making some people less likely to get the shot, according to a new study released this week by the National Bureau of Economic Research in the United States.

Since the shots became widely available in North America, governments at all levels have been throwing money and quirky prizes at people to increase the rate of vaccinations. The incentives have been especially prevalent in the United States, where the number of people who have received a single shot hovers around 66 percent, compared to nearly 80 percent in Canada.

Another study released earlier this month found no statistically significant increase in people getting vaccinated after a weekly $1 million lottery draw was announced to much fanfare in Ohio.

Even the raw numbers suggested early on that the results of these incentives would be underwhelming. Despite a small uptick in vaccinations after incentives were announced, it usually tapered off quickly in most jurisdictions.

In the NBER study, researchers tried to drill down on the particular effects of a few different methods for encouraging people to vaccinated. The researchers randomly assigned members of a particular health plan either a cash bonus, one of a few different health messages or a simplified vaccine appointment scheduler. After 30 days, the researchers then followed-up with each study participant to find out if they got vaccinated.

While the financial incentives showed no positive effect, and even reduced the likelihood of vaccination among Trump supporters in the study, a safety-focused health video caused a small boost in the vaccination rate.

A similar health video focusing on the negative consequences of not getting vaccinated caused the biggest reduction in the chances that a study participant would get a shot.

Graphic credit: Janice Nelson

Although a few previous studies noticed a significant increase in people’s intention to get vaccinated after cash prizes were announced, the NBER researchers found that these intentions rarely turned into action. The video that focused on the negative consequences of not getting vaccinated actually caused the biggest boost in people’s intention to get vaccinated, but ultimately made them less likely to get the shot.

Graphic credit: Janice Nelson

The researchers noted a few limitations of the study, most importantly that the participants of the study were recruited from a single health plan and so there’s no guarantee that these results will generalize beyond that group.

In Canada, where vaccine uptake has generally been strong, the federal government has focused on a few highly-targeted programs at specific groups, rather than splashy cash prizes. In Alberta, where the vaccine rate has lagged behind the rest of the country, the government unveiled a lottery with three $1 million cash prizes to be drawn throughout the summer.

In the U.S., states announced a bevy of prizes, lotteries and other inducements to get people vaccinated, with tens of millions of dollars going out the door. Private sector employers have also rolled out bonuses to encourage workers to get the shot.