A Window on the Future


Walk into the San Juan Island offices of Mark Anderson's Strategic News Service (SNS) and you're confronted with a panoramic view of Haro Strait, with Vancouver Island across the water. The scenic location fits one of the technology industry's favorite prognosticators.

Anderson's predictions and perspectives-which tech titans around the globe pay handsomely for-can be as crystal clear as his view.

Check out, for instance, his forecast for two Puget Sound giants: Boeing and Microsoft. The aircraft manufacturer is "dead-dead," he says. "Deader than they think. "I don't think Boeing understands Boeing's own future," Anderson says. "Boeing's future in Seattle is grimmer than Boeing's future in general. At a time when everyone is giddy over the Dreamliner, I take a bigger look. China, your No. 1 customer, has just turned into your No. 1 competitor. They've canceled orders and the internal edict from the Communist Party is 'Don't buy anymore outside guys' stuff.' That's horrible news. Russia is trying to build a whole new airframe company and in Europe, billions more in subsidies for your chief competitor."

He adds: "Don't rely on Boeing. If you're a Seattle Chamber of Commerce person, don't turn to Boeing; they aren't going to help you out."

Anderson does, however, expect great things from the next Microsoft operating system, due out this fall.

"Windows 7 will be the best-selling Microsoft product of all time," he predicts. "And Q4 will be much bigger than people think. That's a real driver of commerce for all."

Regional growth will come from wireless, biotech and the city's "retail DNA" of Nordstrom, Amazon.com, Blue Nile and others. Oh, and better civic leadership wouldn't hurt. Local leaders tend to be inoffensive and ineffective, he says. Leaders who believe in "less talk, more action," he says, include New York Mayor Michael Bloomberg, Utah Gov. Jon Huntsman, Homeland Security Secretary Janet Napolitano and former Maine Gov. Angus King.

Now consider the source, especially given Anderson's celebrated prescience. Since 1995, industry leaders and investors have forked over $595 to $895 a year for his weekly SNS newsletter with his predictions on the computer and telecommunications industries. A blue-chip roster of tech heavyweights, including Bill Gates, Mark Hurd, Michael Dell and venture capitalist John Doerr, are subscribers.

To extend the impact and influence of his newsletters, Anderson also organizes small conferences in southern California for the technology intelligentsia. Dubbed FiRe, for "Future in Review," the get-togethers attract an exclusive clientele, with attendance capped at 200, of high-level executives from world-class, tech-driven companies.

At these conferences, Anderson peels back the layers of technology's future. He probes nanotechnology, space travel, biology, medical diagnostics and other fields. His on-stage demeanor reflects his island lifestyle: easy-going but scholarly.

But Anderson's reputation stands in contrast to his humble surroundings. The Economist has called FiRe the "best technology conference in the world." Last year, noted BusinessWeek technology writer Steve Hamm named Strategic News Service "one of the most successful high-tech newsletters." The New York Times labeled Anderson "one of the technology world's more highly regarded pundits."

Larry Smarr, a computer science professor at the University of California at San Diego and director of the California Institute for Telecommunications and Information Technology (a joint program of UC San Diego and Irvine), says Anderson is someone who "lives in the future and reports back. He sees things coming, being invented before it gets to be visible to a significant portion of the population.

"We have this insane level of specialization in our culture," Smarr says. "Mark swims against that current. He's also brave. He will tell you exactly what he thinks."


The Big Picture

Anderson's ability to integrate complex subjects and forecast trends so impressed Rick LeFaivre, managing director at Kirkland, Wash.-based OVP Venture Partners, that he recruited Anderson to the VC firm as an adviser.

"Mark is a really, really good big-picture strategist," says LeFaivre. "He can see the big picture in many areas. Lots of guys are really big in their segments, their specialties. Few people step above that and see the big picture." He notes others in that category might include former Microsoft chief technologist Nathan Myhrvold, Sun Microsystems co-founder and chief scientist Bill Joy, and Stanford University futurist Paul Saffo.

In October, Anderson will bring FiRe to Seattle, including a special "sub-conference" of FiRe dubbed the CTO Design Challenge, in which technology executives will pool their problem-solving skills.

During the challenge part of the meeting, business technology chiefs first look at purely technological aspects of a problem-for example, in one recent meeting, the problem was firefighting strategies in wildfire-ravaged San Diego County. Then the participants take the discussion in a new direction and expand its reach.

"These guys are the smartest guys in the world," Anderson says. Referring to the wildfire exercise, he adds, "They came up with a stunning achievement that integrated NASA, university systems, technology and the existing firefighting structures and systems."

The specific topic of the Seattle conference, dubbed FiRe Global Challenge: West Coast, will involve computers and netbooks, telecommunications, alternative energy and smart grids, biotech and biomedicine, ocean health and eduction. Gov. Chris Gregroire and Dell CEO Michael Dell have committed to attend, as have Nobel laureate Lee Hartwell, former director of the Fred Hutchinson Cancer Research Center, and Roger Payne, founder of Ocean Alliance. Steering committee members for the event include executives from Microsoft, the state Department of Commerce, the University of Washington, Northwest venture capital firms and other regional leaders.

"Seattle is at a crossroads," Anderson says. "Seattle needs some leadership. That's part of what we want to do with this conference. There are lots of ways to create jobs in the Northwest and Seattle, but they require action and decision. Seattle can still have a great future."

Ebullient, intellectual and respected, Anderson has repeatedly staked his career on big ideas.

He keeps his fingers on the pulse of technology as president of Technology Alliance Partners, which provides trend and marketing assistance to telecommunications and technology companies. He also founded the WSA's Investment Forum (now the Fast Pitch Forum).

He claims to be among the first to predict the global liquidity collapse, on "CNN World News," back in February 2007. He says his accuracy rate of his predictions over 10 years-which his readers hold him to account for-is greater than  90 percent. He is best known for forecasts of major shifts, redesigns and events in the computing and telecom markets, such as Steve Jobs' return to Apple.

Last year, he predicted 2009 would see a boom in software for big screens and smart phones, wall computing and lightweight laptops. He's also said 2009 would see big advances in voice recognition and the integration of biology and chips.


Pattern Recognition

Where did all this envisioning come from? He was always good at science from an early age, he says. At age 8, he wrote a letter to the head of the United States space program suggesting a better way to deploy rocket fuel. That official ignored the letter and returned it, but the ideas behind it later became standard procedure. Anderson framed the hand-written letter. It hangs in his island office.

Anderson, 58, hails from Elmhurst, Ill., near Chicago. He excelled, both academically and in extra-curricular activities, at a large high school. Around age 20, he realized he was good at predicting things.

Anderson was intrigued by the scientific method, which starts with a theory, then tests that theory, using the results to refine the initial premise. "But where did the premise come from?" he asks. "The question is the hard part."

He consciously began to practice "pattern matching," a skill he honed while earning bachelor's and master's degrees in marine biology and marine biochemistry at Stanford University. Over the years, he says, he has trained his mind to ask the right "first question."

"The job that I'm doing in the newsletter is integration, a combination of pattern matching and integration," he says. "[I'm] looking for patterns that are being honored or violated and integrating the results of that across many places."

He has lived in the San Juans since discovering its "unmatched" combination of beauty and community while doing doctoral research at the University of British Columbia in Vancouver and teaching at the University of Washington's Friday Harbor Laboratories. 

Before starting his newsletter, Anderson was a technology consultant from 1989 to 1995, with clients including McCaw Cellular Communications and Aldus Corp. (now part of Adobe Systems). He has experimented with keeping an office in Seattle but now runs a mostly virtual company, whose staff includes his two sisters as his editor and program manager.

His workplace has ample space for conversation and thinking. At its center are two sofas, a globe and tripod-mounted binoculars for whale watching. A large flat-screen TV rests on top of a cast-iron wood stove, which is fronted by an array of consumer electronics gadgets-phones, remotes and other mobile devices.

From this setting, Anderson thinks big. In addition to newsletters and conferences, he chairs SNS Project Inkwell, a computers-in-education initiative. It aims to be a standards body for computing platforms in K-12 classrooms and advocates for every child to have a computer. Microsoft, AMD, Gateway, SanDisk, Intel and others have backed the project.

San Juan Islanders know him best for creating the Whale Museum in Friday Harbor and for founding the Orca Relief Citizen's Alliance, a group that urges tighter restrictions on popular whale watching boats.

"The boats cause the whales to lose sonar ability and they starve," he says. "The boats increase their [the whales'] requirements for food at a time when there are fewer fish, and their starvation accelerates."

Near his sea-view office, Anderson makes his home on a lush, inner-island farm where he raises sheep and blueberries. He zips around the island in a silver BMW M Roadster convertible.

Anderson talks exuberantly about theoretical physics, marine biology, chip sales in Japan and European heads of state. When pressed, he touches on more personal topics such as music and local artists. But he speaks most emphatically about the whale watching industry. "We are going to do something about it," he says. That's his prediction.


Welcome to the Drone Economy

Welcome to the Drone Economy

A new industrial sector is arriving — and nobody’s at the wheel.
Jim Tracy runs a company that maintains and repairs wireless communications towers, many of them in some of the most rugged and remote country across eight Western states.  Just getting to the towers sometimes requires off-road vehicles and snowcats, says Tracy, the CEO of Legacy Towers in the Kitsap County community of Burley. Then there’s the climb up the towers, which can range in height from 100 feet to 1,700 feet. Aside from the risk posed by the height, there are other hazards presented by things like the weather or nesting wasps. And if inspection of the relay antennas at the top reveals the need for a part or a tool the technician didn’t bring up on the first trip, there’s another climb down and back up to be made. If only there were a way to inspect towers for hazards and to diagnose the problem from the ground, reducing risks and time spent on the job.  But there is, one already known to amateurs and hobbyists and one increasingly being used in scores of businesses — the drone, or, more properly, the unmanned aerial vehicle (UAV).
Legacy Towers got its first UAV in late 2013 and has found them useful in making climbers safer and their tasks more efficient. “If you can throw a drone in there,” Tracy explains, “you can cover more ground with less fuel use.” A camera-equipped drone can be dispatched to the top of a tower to read the bar code on an antenna, look for damage or check to see if it has been knocked out of alignment.
“The first one you get, it’s kind of cool,” Tracy acknowledges. “[But] at the end of the day, it’s just another tool.”
The power and potential in that tool are such that people are finding applications faster than technology developers or regulators can keep up. They’re also finding more places to deploy these devices.  Most of the attention has gone to things that fly — think Amazon’s experiments with drone deliveries — or operate on the highway, with Google, Tesla and every major auto manufacturer pursuing hands-free operation of cars. But driverless/pilotless/autonomous vehicles are also finding their way to, and doing work now, on rail networks, on farms and on the seas.
In the process, the people who write the software; make the antennas, sensors and other pieces that make the technology possible; build the trucks, cars, planes and boats that employ it, and apply it to problem solving in virtually every industry, as well as to those who collect and analyze data from drones, are building what might be called, for lack of a better term, the Drone Economy.
This drone economy isn’t a “maybe someday” promise of a flourishing economic sector. It’s already here. Much like the developing local space-business cluster (Seattle Business, January 2016), Washington is becoming one of the nation’s centers of research, development and commercialization of drone tech, with dozens of companies actively involved in it.
Creation of a new job-generating tech sector won’t be the only way the Drone Economy’s influence will be felt, either in this region or globally. Entire industries, and not just those dealing directly in transportation, stand to be reshaped by the products and services they already are bringing to market.
The activity and potential of the Drone Economy has caught the eye of state government, which in October convened the first meeting of the Unmanned Systems Industry Council. John Thornquist, who heads the state’s Office of Aerospace, says the council’s purpose is to get people in the industry talking to one another and to officials at all levels of government, to hash out issues that may limit the sector’s potential and “to help that ecosystem thrive.”
The idea of cars, boats, trains and planes that pilot themselves has been the stuff of science fiction and futuristic museum displays for decades. Some pieces of the technology have been around for years as well, as any kid with a remote-control car, boat or plane can attest. Real-world, full-size applications aren’t rare, either. Sea-Tac Airport’s subway system between terminals operates without on-board drivers. So does the SkyTrain system in Vancouver, British Columbia. Remote-controlled locomotives have long been used in switching yards.
But those applications are in closed spaces or networks, and the rail industry has had much less success applying the technology to long-distance freight networks. The Drone Economy is being built on the idea of getting autonomous vehicles, aircraft and vessels onto roads, into the skies and on the water.
A convergence of factors allows this transition to happen. Paul Kostek, a past president of the IEEE Aerospace and Electronics Systems Society and a Seattle-based contractor and consultant to tech companies, says the technologies that make autonomous vehicles and aircraft possible started out as solutions to other problems. In aviation, for example, where “weight and space are always critical,” the continuous drive for lighter and stronger materials made drones possible by dramatically shrinking the size, weight and power requirements. In automobiles, technologies developed to make driving safer, such as parking assistance and collision warning and avoidance systems, can easily be extended to help remove a human driver from the process.
Jim Tracy of Legacy Towers sees drones as another handy item in the toolbox.
Drone development has also borrowed from technology developed for use in fields outside transportation. WiBotic, a University of Washington-based business developing wireless recharging systems for aerial, marine and land drones, started with a charging platform for implantable medical devices like artificial heart pumps. “Drones need a way to scale in a way that power is not going to be a limiting factor,” says Ben Waters, WiBotic’s cofounder and CEO.
Technology has improved not just the vehicles themselves but also the images onboard cameras produce (thanks to stabilization) and the flight controls for operating UAVs. Adoption of the technology in the commercial sector has been accelerated, Thornquist says, by the low cost to buy and try one, and the often quick return on investment.
Kostek cites one other important factor propelling the Drone Economy: “Very rich people are interested in this.” With people like Tesla’s Elon Musk and companies like Google putting money into drone development, Kostek says the sector, much like commercial space, is being driven by “outsiders with capital to spend.”
Consumers also deserve credit for taking what were dismissed as toys and demonstrating their commercial potential, particularly for aerial photography, Waters notes. “They provided a unique perspective on how to do things.”
The result: An explosion of R&D and commercialization, much of it driven by a passel of regional companies and institutions:
■ Boeing-subsidiary Insitu, based in the Columbia Gorge town of Bingen, has been regularly winning multimillion-dollar contracts from the military for its surveillance drones. The company has expanded its commercial products and services, set up a business unit specifically for that purpose and participated in a project with BNSF Railway to use drones to inspect rights of way in remote areas.
Aerovel, based in White Salmon and founded by Insitu alumni, has been developing drones small enough to be launched from a fishing vessel, to look for schools of fish. An Aerovel Flexrotor was used to provide aerial scouting of routes through the ice of the Beaufort and Chukchi seas for a workboat fleet retrieving mooring anchors.
■ Thanks to Insitu, the Columbia Gorge has developed a mini-cluster of drone-related companies like White Salmon-based 
Sagetech Corporation, which makes small transponders to identify and control military and civilian drones.
■ Bellevue-based Paccar was playing with remote-control technology at its Mount Vernon research center as far back as the 1990s. More recently, it showed at an annual meeting a video of a demonstration of maneuvering and parking a truck at a Walmart distribution facility. Its European subsidiary DAF was one of a half-dozen truck manufacturers participating in an on-highway test of platooning — a tightly spaced convoy of trucks in which the trailing vehicles are driverless.
■ Few industries have leapt into drone technology with the enthusiasm of agriculture. Washington State University’s Center for Precision and Automated Agricultural Systems in Prosser has multiple research projects underway, including using an eight-rotor octo-copter to monitor irrigation in vineyards.
■ If you’re going to have a drone industry, you might want to have people trained in their operation and maintenance. Green River Community College offers an associate’s degree in unmanned aerial systems and a certificate for UAV operators; Big Bend Community College in Moses Lake has launched programs in mechatronics, sensor analysis and flight operations.
■ The University of Washington’s College of Engineering, meanwhile, has its Autonomous Flight Systems Laboratory to “support advances in guidance, navigation and control technology” for UAVs, and to integrate the technology into flight mechanics and controls courses in the university’s Department of Aeronautics and Astronautics.
■ Tech-sector senior statesman Tom Alberg, cofounder and managing director of Madrona Venture Group, co-authored a widely discussed think piece proposing the devotion of part of Interstate 5 between Seattle and Portland to autonomous vehicles. “We cannot predict the specific adoption rate for autonomous vehicles, but we believe that widespread adoption of autonomous vehicles is inevitable and will be here sooner than most observers expect,” the essay says.
■ Alberg adds Madrona has been backing its belief in the coming of the drone/autonomous age with a significant investment in Bellevue-based Echodyne Corporation, which is developing small, lightweight radars that could be used in UAVs and autonomous vehicles.
Clockwise from left: Aerovel's Flexrotor is designed to operate over oceans and remote areas; WSU Professor Lav Khot
prepares to fly an octo-copter over a vineyard; an Autel Robotics drone equipped with WiBotic wireless power solutions.
A drone economy could well reshape businesses directly involved in the production or use of UAVs. Commercial real estate services firm CBRE recently issued a report on the impact of technologies including autonomous vehicles on its industry. Driverless trucks, for example, will increase the distance and hours those vehicles can operate, reducing costs. Supply chains will be able to operate with fewer but larger distribution centers, but those warehouses will have to be built to receive and deploy the new generation of autonomous delivery trucks.
The speed with which technologies are being readied for market is also one of the barriers to their adoption, as lawmakers and regulators scramble to keep up and deal with thorny practical issues like safety, liability and traffic management on the ground and in the air (e.g., how do vehicles and aircraft operate in the same space at the same time?), not to mention broader societal issues such as privacy and job gains and losses.
“The technology is going to be ready before the world is ready,” says Paccar President and CEO Ron Armstrong.
Mike Dozier, general manager of Kenworth, a Paccar subsidiary, says many of the technologies that make autonomous trucks possible have been showing up on trucks for years — lane-departure warning systems, drowsy-driver monitoring, even adaptive cruise controls that use GPS data to tell the engine to apply more power when the vehicle is approaching an uphill grade.
The truck is packed with data-generating sensors and equipment, for which costs have been steadily declining, adds Paccar SVP Kyle Quinn. The issue, Quinn points out, has been “how do you manage all the information coming off the sensors and interpret it?” 
Answer: creating breakthroughs in image processing and artificial intelligence. In other words, software is starting to catch up with the capabilities of hardware.
It may be some time before drivers are banished from the truck cab, the Paccar brass cautions. Drivers have duties beyond steering, accelerating and braking, such as securing the load and making sure it stays in place. They’re also needed to handle unexpected situations that autonomous systems aren’t sure how to manage.
Still, none of those barriers seem as daunting as what the commercial space business faces, and it’s been able to grow in spite of the challenges. Further, if regulators aren’t moving as fast as many advocates of drones and driver-free vehicles would like, they also aren’t saying, “No way.” 
For example, the Federal Aviation Administration issued its Part 107 compendium of rules in mid-2016 to govern use of commercial drones according to weight, speed, height, operator certification and other criteria. While it’s a long list, it does give those interested in the technology’s use some certainty. The FAA has also authorized research projects on flying UAVs beyond the operator’s line of sight, such as the Insitu-BNSF experiment.
The industry itself can do a lot to allay some of the safety fears of regulators and the public, Waters says, by “moving reliability from pretty high with top-of-the-line consumer devices” to commercial units with virtually no potential points of failure, and which have safety devices in place in cases of power loss or collision.
The technology also has the potential to mitigate problems it creates and solve others. Driverless trucks, for example, threaten the jobs of drivers. But the trucking industry has long been dealing with a chronic shortage of drivers; the American Trucking Associations reported the turnover rate at large fleets was 83 percent in the second quarter of 2016. And even as they eliminate jobs in some sectors, drones and other autonomous vehicles could create more in others. The FAA news release on approval of Part 107 says the new rules could help generate more than 100,000 new jobs in the next 10 years. 
Regulators and legislators will be under pressure to keep up with the explosion of applications. Forest fires can be monitored closely but safely. Insurance companies can inspect storm damage on homes — and transmit images to the home office — without sending an inspector onto a potentially precarious roof. Kostek, a resident of Seattle’s Green Lake neighborhood, came up with the idea of using drones to monitor the lake’s health. Farmers are already working with autonomous trackers guided by GPS. Underwater drones can inspect boat hulls. A local police department has used aerial drones to document auto accident scenes, allowing officers to reopen roads sooner.
Waters expects the boom to be even bigger in a few years, when companies now seeking  funding bring their products to market.
Kostek agrees. “We’re still early, early on as to how these technologies will be applied,” he predicts. “Somewhere, there’s a smart kid playing around with an idea none of us has thought of.”