Russ: This is The BusinessMakers Show heard here and online at thebusinessmakers.com. And it is featured guest time on the show and as I mentioned in the lineup, today's guest is part two from last week's very popular guest, Jason Pontin the Editor in Chief and Publisher of Technology Review, the authority on the future of technology. And we enter the discuss where I just asked Jason to tell us about the fact that MIT brought him in as Editor in Chief and one year later they added Publisher to his title. So now he really was "the man".

Jason: My predecessor as the Publisher lost $38M of MIT's money over 8 years, in a way that wasn't exactly disloyal, but I had been out in the marketplace talking about how I thought media companies should be run. And MIT eventually told my predecessor that maybe it was time for him to do something else. And came to me and said if you're so smart why don't you try it. And I said well you know MIT editors don't really run businesses and they said we don't care. Either you take this over or we're really going to scale it back. There is a staff of 50 at Technology Review and I kinda felt beholden to them. And also to try out some of my ideas. So we did something very unusual. We decided that we were going to this electronic strategy and I went around to everyone of my staff and I said I will give you basically 6 months severance because MIT is real generous. If you will stay with me and you'll try a publishing company that no ones tried before, but if you want to go you can have 6 months severance. But if you stay, I really want your loyalty. So 18 people of those 50 decided they wanted to take the severance package.

Russ: Wow.

Jason: And walked out and said I'm not working for some editor kid that doesn't understand the publishing business. But it meant the people who stayed, it meant that they were really loyal to the idea. So part of the way we've done what we've done is not just because we had a generous and patient venture capitalist in MIT. Part was that we had a bunch of people who really believed publishing was broken and there had to be a better way to do it. There had to be a better way than cutting down dead trees and giving it to lots of people who didn't really want it. And then hoping to make up the enormous cost of this consumer marketing in a disappearing print advertising world.

Russ: Well being both editor and publisher is kind of unusual as well. Right?

Jason: It is so the question I get asked most often is do I have conflicts of interest. And when I do the Publisher speaks sternly to the Editor in Chief and tells him to grow up. By and large there really haven't been any conflicts of interest. The question I always ask myself is would you write about this company if it weren't an advertiser. And so I've never had any conflict in my heart. When we do our advertising products which are very innovative ones they're always clearly identified as sponsored material, but what it has allowed me to do is to do some really interesting stuff which if I was just the editor or just the publisher I'd never be allowed to go and do.

Russ: Right

Jason: So we're just doing some really interesting things which would be hard if I wasn't god. So it's useful being in charge of the entire thing.

Russ: I suppose that given that it's 2009, and a lot of the people that are sponsors in your magazine and online are having difficulties right now.

Jason: So we have been very fortunate. I mean advertising revenues throughout the world, not just in publishing, but on TV and radio are way down. The good news for us is what are called indemic advertisers. Our core advertisers are mainly from the technology industry. And technology revenues are basically down only 6% over the last 12 months in this recession which has been really useful and the cool thing about technology companies, bless their hearts, is that they regard technology buying as a capital expenditure of companies which in fact becomes more important in recessions.

Russ: Right

Jason: So big companies like IBM, HP, Microsoft, they may want more efficiency, and they may go and twist my arm behind my back to go and give them better value and they drive a harder bargain during recessions, but bless their hearts they still invest. They're still doing advertising. So for us so far it's not been that bad. So our online advertising is up 200% over the last 12 months.

Russ: Wow

Jason: And our print advertising is up about 24%. And just to give you some context, as I say everyone else Conde Nast, their advertising revenues, were down 58% this year.

Russ: Oooh, OK.

Jason: So my last Board meeting, filled with media types. The Board kind of, you know, walked in gloomily, and depressed and they said wow, and how are you doing this. And the answer is some smart people. A fortunate sector to be in and I watch my expenses and give good value back to my advertisers.

Russ: And it sounds to me like your strategic overhaul is working.

Jason: Yes. As I said in the beginning. The strategic overhaul is never finished. I think the great French poet Verlaine said that a poem is never completed, it's merely set aside when the pet dies. So one day I will leave Technology Review and it will have to be someone else's strategic overhaul. But the goals I set in 2005 to make a largely electronic publishing company that was sustainable from MIT's point of view - we've done that.

Russ: We're talking with Jason Pontin, Editor in Chief and Publisher of Technology Review. And we'll be back with more from Jason, after this. You're listening to The BusinessMakers Show heard here and online at thebusinessmakers.com.

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Russ: This is The BusinessMakers Show heard here and online at thebusinessmakers.com And continuing on with Jason Pontin of Technologht Review. We talked about how dismal it is right now for venture and angel funding, but there is these huge amounts of money, Jason, talking specifically about some of the stimulus funds. Share your perspective on that.

Jason: So there is about this huge windfall, about the time that VC's are not spending and everyone is hurting, the Obama Administration has promised $100 billion in technology funding for our friends in Silicon Valley, in Houston, in Boston. Just to give you some context-the entire sum spent on biofuels, in the history of the funding of biofuels in the world, is $4 billon. And the Obama Administration plans to go and chuck about $40 billion at that sector. So, here's the thing...

Russ: I must point out, you kind of roll your eyes when you say that too.

Jason: Yeah. Well, I was rolling my eyes so let me preface this by saying as a East Coast member of the liberal media elite, I find the president as dreamy as the next journalist. That said, I have profound reservations about the technology provisions in the stimulus package and here's why-I think it's bad macro economic policy. And I think it is probably not going to fund the technologies that will give the long-term economic growth of the future. So here's where it's bad economic policy. There are many, many better places to go and spend money if you want to create jobs in the short term and get people spending. Ironically, one of the best things is food stamps, because people who have food stamps are broke and spend it. You can also spend it on picks and shovel activities where you actually get people to work. Technology's a terrible thing to invest for stimulus, because technology eliminates jobs. Technology disrupts jobs and creates new businesses in the long term. In the short term it puts people out of work, that's what technology does. And even when it does succeed it creates jobs in seven years-it's a terrible thing to go and invest in for stimulus. You probably couldn't think of a worse thing to invest in if you wanted to go and create a stimulative effect. Let's go to the second half, which is funding the technologies of the future. I don't think governments are particularly good at making specific technology selections. And that's what the Obama Administration is planning to do. They're planning to fund very specific things, specific types of Wi-Fi, cellulosic ethanol. And I don't know about you Russ, but I don't think just because one has a law degree from Yale, served eight years in the House of Representatives, and now serves as the President's Chief of Staff, that one necessarily knows a lot about some of these really quite difficult areas of technology.

Russ: I totally agree.

Jason: And the thing is we have a way to do this in this country. The way we do it is the government should fund a lot of money into discovery research through traditional grant-giving bodies like the NSF, like the National Institutes of Health, and then technology transfer departments in universities push the technologies that have the most market pull out into the marketplace. And then VCs, who are called risk capitalists for a reason, fund them and then entrepreneurs take them to market. We've been doing this in this country for 50 years. We know how it works and it's made this country the economic engine over the world. It makes me scared when governments start to do this. There are three historical examples of governments-bad ones-of governments doing this. The first one is famously disastrous. The French decided in the early '90s of the Internet was just too Anglo-Saxon and too free market. And they wanted to have their own Internet, which they called Minitel, it's the French Internet.

Jason: The only thing that Minitel did was retard the growth of the Internet in France, by about a decade. In the '90s the Japanese had a great idea. They decided that the future of computing was the super computer. And so they poured billions into the super computer industry at the very time, when in this country we discovered that rack personal computers and in fact the personal computer revolution itself did everything that mini computers and personal computers did. An example from here at home, the ethanol industry-[Russ chuckles]-ethanol was the single worst fuel ever created. It has a higher carbon imprint than petroleum. It produces less power. And it is by definition, uneconomic. And that's why the government subsidizes it. So these are examples of governments choosing technologies, and I just wish we weren't going down this road.

Russ: It doesn't sound like any wins there that I can tell.

Jason: No, none of them were particularly successful.

Russ: There is a lot of this stimulus package that's directed at green technology. Should that have an economic upswing?

Jason: I think this isn't widely understood at all. So, the argument of the administration is that they are creating green jobs. That by investing in green technology, they're not only going to stimulate the economy by creating jobs that they're going to create this entirely new world, and the analogy they use is the PC revolution of the 90's which grew the economy in a way which we didn't even think was possible. For 12 years the economy grew faster than economists thought was possible without inflation. I think the analogy between green technologies and the PC revolution is an awful one and here's why. Green isn't going to increase productivity in any immediate future. It's simply going to replace a series of energy technologies that we have now. Furthermore, think of the basic difference. PC was meant to go increase the productivity of individuals. Green technologies by definition are uneconomic. If they weren't uneconomic they wouldn't need subsidizing. The government is really pulling a fast won here. They are using something which everyone excepts was an enormous boon to the American markets and saying if you invest in this new thing, green it's going to be exactly the same. I think it's a fast one on the part of the administration.

Russ: [Laughs]... My goodness - I agree totally. We are talking with Jason Pontin, Editor in Chief and Publisher of Technology Review. And you're listening to The BusinessMakers Show heard here and online at thebusinessmakers.com.

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Russ: This is The BusinessMakers Show heard here and online at thebusinessmakers.com And continuing on with Jason Pontin of Technology Review. Share with us your perspective on energy for the future.

Jason: The first thing to say is maybe to talk a little bit about the reason why we're so concerned about energy, and there are two reasons. One is that China and India are coming online, and they have a just desire to have the same standard of living that we have enjoyed in the west for the last hundred years. You need to bring three billion people, and you know there are quite a few people in Africa as well who we might want to go and improve their living status. And we actually don't have a clear idea yet how to go and meet the energy needs of these billions of people who want to share our standard of living. At the same time, there is legitimate concern that the way we did it in the west, burning hydrocarbons has created a looming catastrophe.

Russ: And you believe that that's a legitimate concern.

Jason: I largely accept the anthropogenic cause of global warming, and I accept there has been significant warming in the last century which seems as if it's going to increase. I do not know yet what the best response to that is. It might be that were we to create a carbon tax and retard economic growth for the next hundred years that we would do ourselves more harm than good. It might be that the best thing we could do would be to grow our market and increase wealth so that we could make some intelligent choices, particularly if it's true that the feedback loop for global warming is such that we're going to see 10-foot risers in sea levels no matter what we do. I accept that we've got a big problem. I don't know the best way to do it. I think one thing which we can all agree about is whether or not you want to think about bringing 3 billion people online or whether you're trying to go and fix global warming, this is a civilizational challenge. This is like building the pyramids. And it is a challenge that won't be solved in the next 10 years or 20 but over the next hundred. And furthermore that if we are realistic rather than affecting a kind of a back-to-nature green anti-industrial stance, any energy picture we imagine is going to involve the heavy use of hydrocarbons. So what I'm interested in as the editor-in-chief of Technology Review isn't simply exciting new energy technologies, but I want to see how we can use the petrochemical technologies we have now more cleanly, more intelligently and more usefully.

Russ: What you're pointing out is that regardless of what new cool alternative energies, for a long, long time we're still going to be dependent upon fossil fuels.

Jason: Yes, and look at cars. Everyone loves electric cars at the moment, but how are you going to create the electricity. The last thing in the world I want to see the Chinese doing is having 4400 million electric cars on the road created by burning coal.

Russ: -coal.

Jason: Yeah. And that pretty much the case in a lot of the United States as well. So I would like to see us go and refine petroleum more cleanly, and I would like to see better biofuel additives, better than ethanol.

Russ: What's your perspective on nuclear energy?

Jason: I'm a big nuclear fan. I think it's an important part of the future. The difficulty with nuclear is that you don't know how much uranium is in the world. So there's a resource problem here. And we certainly don't know if we have enough capacity to enrich uranium. So there are a couple of technologies here which would help. One is created by Intellectual Ventures. It's called the traveling wave reactor and it can use depleted uranium, uranium which we have already created a byproduct of medical experiments and of weapons research, and these traveling wave reactors are small and are entirely safe, can't explode and will work for a hundred years. I believe in the future of nuclear, but I don't think it is in building gigantic 20th century reactors. Even if I thought they were safe, I don't think you can convince the public they're safe.

Russ: Let's say suddenly you were anointed Energy Tsar of the world, and it was totally up to you, Jason Pontin, to decide how we proceed and you got to do it by edict.

Jason: I would begin by investing very heavily in nuclear energy. I wouldn't try and replace existing infrastructure of internal combustion engines, but I would try and move as quickly as possible to novel biofuels. I would invest in some wind; and solar, I think, has a number of problems. I would fix the energy grid, particularly in old-fashioned countries like the United States. And I would accept that we're using coal and natural gas and petroleum, and I would try and find ways to use those more effectively, efficiently and cleanly.

Russ: Alright, well we have run out of time on the radio broadcast with Jason Pontin the Editor in Chief and Publisher of Technology Review, but there is obviously more. So go to thebusinessmakers.com and check out the Jason Pontin WebXtra. You're listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.