24 March 2015

How software will make us healthy, wealthy, and wise


In his seminal editorial masterpiece Software is Eating the World, venture capitalist and tech entrepreneur Marc Andreessen makes the point that software is quickly penetrating, and disrupting, broad swaths of the global economy. Everything from agriculture to online government is beginning to see benefits from the application of software development. The world is now, more than ever before, being swallowed up by the digital and information economy.

As an example, Andreessen points to health care as one of the next big industries ready to be consumed by the software revolution. Particularly because this industry “has been highly resistant to entrepreneurial change”, it is now ”primed for tipping by great new software-centric entrepreneurs.”

Andreessen’s point is simply that the tools entrepreneurs have available to them today, in conjunction with plummeting prices in microprocessors, has created an explosive demand for new software applications, algorithmic functions, and data analysis:

“On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered-start-ups in many industries – without the need to invest in new infrastructure and train new employees. In 2000 … the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon’s cloud costs about $1,500 a month.

With lower start up costs and a vastly expanded market for online services, the result is a global economy that for the first time will be fully digitally wired.”

Decreasing costs, improved efficiency and productivity gains, and rapid disruptive growth are all contributing to changes in the way software firms and broader swaths of the economic landscape interact with, and benefit from, one another.

An Age of Miracles

Some of the most exciting developments in software and app development are currently occurring in tandem with advances in the Internet of Things (IoT) market. The IoT, broadly speaking, refers to the increasing number of complex network communications occurring between every day objects and the Internet, made possible by plummeting prices in microchips, sensors, and wireless communications technologies. Soon, even the most innocuous of objects will be equipped with smart technologies, networking things as disparate as home appliances, vehicles, and mobile devices.

As a result, many industries are poised to experience massive disruptions in their operational structures and logistics and distribution networks. The healthcare industry in particular is set to see especially dynamic changes in the coming years as the market for wearable, digestible, and implantable technologies begin to expand.

Thus far, the wearable health tech market has dominated many of the headlines in this space, with hardware like the FitBit and Jawbone fitness bracelets, which use real time sensors to digitally log the activity levels of consumers and adjust suggestions for how best to improve one’s health accordingly, contributing to significant improvements in everyday living. However, despite an almost 700% growth in this market over the second half of 2013 alone, the wearables market is just the beginning of an impending explosion in the IoT market. The ingestible and implantable health technology scene is set to see significant growth and will accrue benefits almost mind bogglingly unfathomable to present consumers of these products – everything from autonomous nano drug distribution robots that live inside us to sensor-rich fabrics that permit the incorporation of wearable technologies into our clothing. Although there are many amazing developments occurring in this space, many of these device innovations are already upon us.

Specific examples of these cutting edge devices include: SetPoint Medical’s nerve stimulator, an implantable device that can be remotely controlled with an iPad app that will be used to help treat rheumatoid arthritis; MicroCHIPS’ wirelessly controlled contraceptive implant for women; and the PillCam Colon, a digestive track sensor used to less invasively, and more accurately, screen for colon cancer. There are many other instances of such devices coming to market – too many to name here, in fact – but the important takeaway is that this is an area which is significantly expanding the power of individuals to start taking more and more of their healthcare responsibilities, and lifestyle preferences, into their own hands, without necessitating the involvement of medical professionals at every step of the process.

In a recent working paper on the Internet of Things and Wearable Technology, Adam Thierer, Senior Research Fellow at the Technology Policy Program at the Mercatus Center, writes:

“As they grow more sophisticated, wearable health devices will help users track and even diagnose various conditions and potentially advise a course of action or, more simply, remind users to take medications or contact medical professionals as necessary. In the process, these health and fitness devices and applications could eventually become “lifestyle remotes” that help consumers control or automate many other systems around them.”

If we accept that these devices and apps are likely to be of immense benefit to the health outcomes of consumers, it begs the question of how many regulatory roadblocks should be erected to ensure safety and privacy.

To Permit, or not to Permit?

The future certainly seems bright for innovations and advancements in healthcare technology, but we shouldn’t view this progress as an automatic function. Excessive and burdensome regulations, applied prior to any proven harm, are a worrisome prospect in this space. Rather than applying precautionary principles to regulations in this space, it would behoove government agencies to embrace an approach that prioritizes permissionless innovation; this is the idea that innovation and progress should be permitted by default and regulations, if needed, ought not be pursued until and unless clear harms are shown to result from market failures. This has been the guiding principle that has enabled the explosive, and revolutionary, growth of the Internet over the past quarter century, and the approach that modern lawmakers seem to be embracing towards the Internet of Things.

Returning to Mr. Thierer, he notes that:

“Simple legal principles are greatly preferable to technology-specific, micromanaged regulatory regimes. Ex ante … regulation is often highly inefficient, even to the extent of being dangerous. Prospective regulation based on speculation about future harms that may never materialize is likely to come at the expense of innovation and growth opportunities.”

If we embrace permissionless innovation in disruptive technologies, it seems likely that innovators will take advantage of the open opportunities, just as they did with the Internet, to the benefit of us all.

Just as Mr. Andreessen noted, software will be an all-consuming disruptive force on the industries of the world; none will be spared from the effects of a digitally interconnected world ruled by the laws of code and algorithmic optimality. As an Andreessen-Horowitz report from 2014 notes, by 2020 over 80 percent of the adults on Earth will possess a smartphone.[4] That means that 8 out of every 10 people will have the ability to benefit from the myriad health applications that will empower them to live healthier lives, with greater access to the wisdom of the global population, and the ability to capture a greater degree of wealth via their entrance into a global marketplace of ideas and exchange.

If past the past 10 to 15 years has shown us anything it is that the intersection of healthcare software and technological hardware will be immeasurably beneficial, especially to the least well off. Software is not just eating the world; it is making us all healthier, wealthier, and wiser.

Ryan Hagemann is a masters student in public policy at George Mason University and the co-author of a recent Mercatus paper, “Removing Roadblocks to Autonomous Vehicles”.  His research interests include decentralized peer-to-peer networks, Transhumanism, stateless social organization, robotics and automation, and studies at the intersection of sociology, economics, and technology.