Innovation pessimism_ Has the ideas machine broken down_ _ The Economist

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Unformatted text preview: and early 20th c enturies ; then it s urged. The information­ age trajec tory look s pretty s imilar (s ee c hart 4). It may be that the 1970s ­and­after s lowdown in whic h the tec hnologic al pes s imis ts s et s uc h s tore c an be unders tood in this way —as a paus e, rather than a permanent inflec tion. The period from the early 1970s to the mid­1990s may s imply repres ent one in whic h the c ontributions of earlier major innov ations were ex haus ted while c omputing, biotec hnology , pers onal c ommunic ation and the res t of the tec hnologies of today and tomorrow remained too s mall a part of the ec onomy to influenc e ov erall growth. Other potential c ulprits loom, howev er—s ome of whic h, worry ingly , might be permanent in their effec ts . Muc h of the ec onomy is more heav ily regulated than it was a c entury ago. Env ironmental protec tion has prov ided c leaner air and water, whic h improv e people’s liv es . Indeed, to the ex tent that s uc h gains are not c aptured in meas urements of GDP, the s lowdown in progres s from the 1970s is ov ers tated. But if that is s o, it will probably c ontinue to be s o for future tec hnologic al c hange. And poorly c rafted regulations may unduly rais e the c os t of new res earc h, dis c ouraging further innov ation. Another thing whic h may hav e c hanged permanently is the role of gov ernment. Tec hnology pes s imis ts rarely mis s an opportunity to point to the Apollo programme, c rowning glory of a time in whic h gov ernment did not s imply fac ilitate new innov ation but prov ided an ongoing demand for talent and inv ention. This it did mos t reliably through the military ­indus trial c omplex of whic h Apollo was a s pec tac ular and pec uliarly ins pirational outgrowth. Mr Thiel is often c ritic al of the v enture­c apital indus try for its lac k of interes t in big, world­c hanging ideas . Yet this is mos tly a res pons e to mark et realities . Priv ate inv es tors rationally prefer modes t bus ines s models with a reas onably s hort time to profit and c as h out. A third fac tor whic h might hav e been at play in both t...
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This document was uploaded on 02/16/2014 for the course MGMT 237 at UPenn.

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