The Innovations Issue, The End of Moore’s Law, A Nod to the iPad, The Postal Service’s Automated Refugees and More!

• One-on-one with the future… details of our Juan Enriquez interview

• Has computer innovation reached a plateau? Industry guru declares death of Moore’s Law

• Patrick Cox on tomorrow’s tech, happening today… paper batteries, printable electronics

• Government blocks “creative destruction”… one reason the USPS is set to lose over $238 billion

  “We’re releasing the same energy from the sun that gets trapped in plants and converted over time into coal, gas and oil,” Juan Enriquez told us during an interview yesterday, “we’re just cutting out a few millennia in the process.”

Welcome to “the future is catching up with you” issue of The 5. When we look back in the years ahead, it may well have been the tipping point… your most profitable 5 ever.

  Yesterday, as part of a new documentary project we’re working on, we traveled to Boston to meet Enriquez in his office in the Prudential Center. Enriquez is a managing director of Excel Venture Management and the best-selling author of two books As The Future Catches You and The Untied States of America.

Specifically, we asked him about the algae harvesting project of Synthetic Genomics Inc. a company he co-founded with J. Craig Venter and Hamilton Smith. Venter, you may know, led the team that sequenced the human genome back in 2001. This new project uses genetic engineering to coax algae into using energy sunlight “to convert carbon dioxide into cellular oils and even some types of long-chain hydrocarbons that can be further processed into fuels and chemicals.”

In other words, they’re using an inconspicuous little lichen to convert those dreaded “greenhouse gases” into a renewable energy source… at a remarkable pace. The project officially began last July 14, when Exxon Mobil agreed to throw $300 million into the pot.

 When we were making the film I.O.U.S.A., we heard time and again that the government needs to spend money now to get the economy “back on track.” It was a mantra during the bailout period. And continues to be the rally cry of mainstream economists and many of the attendees of last week’s 2010 Fiscal Summit in Washington, D.C.

Once the economy recovers, the theory goes, then we can start worrying about restructuring the financial obligations wrought by the entitlement programs AND we can balance the budget … AND pay down the debt. Heh. That’s a tall order for any economy.

So we began to wonder… what does an economy look like when it’s “back on track”? Debt and unemployment seem to be the biggest impediments to a recovery. Who are the people that will provide jobs in this future nirvana? What’s stopping them from doing so now?

The line of inquiry led us to work with Odyssey Marine. You’ve heard us mention the underwater marine salvage group before. And you’ll hear us talk more about their unique commercial approach to underwater archeology that has the academic community, particularly in England, throwing hissy fits.

  But today, we want to stretch our legs a little more. We visited Juan Enriquez because he’s at the forefront of a revolutionary field of applied genomics… a field he expects will revolutionize every industry on the planet the same way the digital revolution just laid waste to the newspaper industry and many others… and create hundreds of thousands of jobs in the process.

Excel Venture Management has strategically positioned themselves to help bring new game-changing technologies out of academia and introduce them to the marketplace.

“Countries that fail to commercialize their research discoveries remain diminished,” Enriquez points out. “Take the U.K., for example: They discovered penicillin and DNA, but preferred to let the knowledge sit in a college lab somewhere, rather than let the professor, god forbid, benefit from the discovery. The moment we start adopting those same attitudes in the United States, we will begin to decay.”

As storytellers, we’re interested in the changes new technologies will bring to industry, politics, education, the markets and the economy as a whole.

As purveyors of financial advice for individual investors, we’re very interested in the companies that will start off very inexpensively and then grow to have market caps larger than many a third-world GDP. We’d like you to be a beneficiary of these early finds too. Read here to find out how.

  Rapid changes are about to get kicked into high gear, too. “We have reached the limit of what is possible with one or more traditional, serial central processing units, or CPUs,” Bill Dally wrote in a Forbes Op-Ed last week titled “Life After Moore’s Law.”

Dally is the chief scientist for Nvidia, a huge chipmaker. Moore’s Law is the 40-year-old principle that suggests the number of transistors on an integrated circuit doubles every two years or so.

“It is past time for the computing industry,” Dally asserts, “and everyone who relies on it for continued improvements in productivity, economic growth and social progress — to take the leap into parallel processing.

“Reading this essay is a serial process — you read one word after another. But counting the number of words, for example, is a problem best solved using parallelism. Give each paragraph to a different person, and the work gets done far more quickly. So it is with computing — an industry that grew up with serial processing — and which now faces a serious choice between innovation and stagnation.”

We suspect the movement toward cloud computing is going to speed up technological advance even faster.

  The delivery method of computer chips themselves is poised for a revolution.

“Xerox has developed a silver-based conductive ink that can be printed on everything from plastics to textiles,” writes our Breakthrough Technology maven Patrick Cox. “The ink’s melting temperature of 140 degrees Celsius is low enough to allow printing on plastics. Instead of expensive fabrication facilities, specialized inkjet printers will be able to print circuits that could be used as part of flexible signage, radio frequency identifier tags and even novelty clothing.

“Beyond logic circuits, energy storage devices will be printable as well. Two years ago, chemists at the Rensselaer Polytechnic Institute in Troy, N.Y., were able to place a thin film of cellulose over a surface of carbon nanotubes. This breakthrough will enable paper and CNT-based batteries.

“Paper-based batteries charge and discharge quickly, making them suitable for a wide variety of technologies. Together, these breakthroughs herald an era of ultra-cheap, easily manufactured energy storage…

“New nanotech-scale manufacturing and materials technologies in the semiconductor industry are going to power a revolution in how we make electronic devices, power our homes and collect and analyze information. Right now, the vast majority of people have no idea how profound these changes are going to be.”

  Until then, there’s already one established mainstream innovation that might be bigger than we first gave credit: The iPad.

“Marketers might actually ‘need’ an iPad, and soon,” writes our friend and colleague John Forde. Mr. Forde is mostly a “behind the scenes” guy, and although he spends far too much of his free time visiting cafes in Paris, he’s an articulate and influential writer and thinker here at the Agora Financial HQ.

“The iPad is the logical next step,” Forde contends, “after smartphones, to the always-on society. If you’re looking to build and sustain a marketing relationship with your customers, this is great news.

“What I’m most excited about isn’t the nifty factor, or even the always-on connection. What I like is that I can start writing marketing that works like a page, and not just a scrolling screen again. Online magazines that look like real magazines, bookalogs that look like real books, letters with inserts that pop out at you — they all took a hit when online direct response started to eclipse pricey print mailings. Now they can come back, digital, but just as engaging as ever.

“And of course, for anybody selling information products, there are lots of new tech possibilities too. If you can get your hands on an iPad, take a look at the BBC and NPR apps to see how you could get your news in front of readers. Take a look at the Gilt app for ideas on how to create a tablet-friendly catalog.

“Already the e-mailed promotions I’m receiving via the iPad come in looking strong. But imagine if your letter had a little image of a customer service that, when double-tapped, underscored the headline benefit or pushed the reader ahead.

“Imagine animated charts in or embedded product demonstrations right there ahead of you sales close. And maps, coupons, offers, even headline tests, all driven by these tablets’ abilities to lock in exact locations via GPS and Wi-Fi triangulation…

“The iPad and imitators could end up as just novelties. But I don’t think so. This looks like an open door to me… and to other seasoned marketers I know too.” If this kind of marketing strategy discussion interests you, definitely check out John’s Copywriter’s Roundtable.

  During wildly innovative times, “creative destruction” abounds. Here’s a fun example: The Government Accountability Office recently estimated the U.S. Postal Service faces “daunting financial losses” of over $238 billion over the next 10 years.

Following the USPS’ first-quarter loss of $297 million, the GAO issued its study, urging Congress to form a panel and start demanding more USPS cutbacks. “If no action is taken,” the GAO report warns, “the risk of USPS’s insolvency and the need for a bailout by taxpayers and the U.S. Treasury increases.”

Heh. Just what the postal service needs, a bailout and congressional oversight.

  Why don’t they try common sense, instead? The USPS loses 25% every time it delivers a periodical.

We’ll make it up on volume, they must be thinking.

According to Jim O’Brien, VP of postal affairs for Time Inc., “automation refugees” are to blame.

“Back in 1990, Halstein Stralberg coined the term ‘automation refugees’ to describe Postal Service mail processing employees who were assigned to manual operations when automation eliminated the work they had been doing. Since the Postal Service couldn’t lay off these employees, they had to be given something to do, and manual processing seemed to have an inexhaustible capacity to absorb employees by the simple expedient of reducing its productivity. The result was a sharp decline in mail processing productivity and a sharp increase in mail processing costs for periodicals class. Periodicals class cost coverage has declined steadily since that time.

“Fast-forward to 2010. More periodicals mail is manually processed than ever, and manual productivity continues to decline. Periodicals class now only covers 75% of its costs. How can this dismal pattern of declining productivity and rising costs continue more than two decades after it was first identified, especially when the Postal Service has invested millions of dollars in flats automation equipment?”

  Meanwhile, in the private sector, UPS and FedEx not only had profitable first quarters, but both beat earnings estimates. Both companies also upped projections for future earnings, based largely on overseas growth. 

  Last today, not exactly what we mean by “wealth creation,” but what the heck:

This peculiar, misshapen work of art is now the most expensive painting ever sold at auction. We wonder if any of Picasso’s friends snickered at the painting Nude, Green Leaves and Bust when he made it in 1932.

Auctioned on Tuesday night at Christie’s for $106.5 million… it’s even funnier now.

  “Good on yer for the Canadian who said, ‘Sell your assets,’” a reader writes of the Greek debt crisis. “Better than stealing from folks. And what if the Greeks ran their country like I run my household? No problem, eh? Gee, the Parthenon, you could get at least 10′s of billions if you were to sell it to Bill Gates or Steve Jobs or Oprah Winfrey. Don’t think Warren would bid — it wouldn’t fit in Omaha.”

The 5: The way things look in Greece today — or at least, they way they are being portrayed by the media — any and all organized sales look impossible. Lots of protests and even a few riots today.

But as our Rob Parenteau eloquently stated on Friday, the real danger is not to Greece or Greek banks… nor is it to Italy, Portugal or Spain… but to their creditors in France, Germany and the U.K.

  “Gentlemen, how about an update of the Odyssey Marine debacle now and then?” another reader asks.

The 5: As you’ve seen, our fixation with Odyssey’s battle with the Spanish government over $500 million in treasure they found has morphed into something bigger. There’s no “news” on the Black Swan case right now, but their plight has awakened something deep within us.

Stay tuned,

Addison Wiggin

The 5 Min. Forecast

P.S. Recession be damned, history shows that economic downtowns are the lifeblood of the innovation cycle. “We have this fixation with big,” Enriquez said yesterday “Wall Street, Washington, Detroit all are ‘too big to fail,’ but the real drivers of the economy are small private entrepreneurial efforts. Lone individuals can generate more wealth than entire countries.”

Those are the people we’re interested in. We’ve gathered some of the coming tech breakthroughs Patrick feels will be the most important — and profitable — in the coming years. You should really check it out, here.