A Monster Is On the Loose

Anything to Anyone Anytime

A monster is on the loose.

The Internet, an extraordinary new platform for communication and business, became accessible to anyone. Companies like Netscape, eBay, Amazon, and Yahoo paved the way so that by 2000 the future was in the Internet’s vast expanse.

During this boom, fortunes were made and lost in months. But, after the renowned dotcom bust, formidable competitors grew larger, vast databanks were captured, and sprawling server farms created a cloud of valuable information and useful services.

Technology monsters emerged.

Data, Regulation, and Computing

Oceans of data, unfettered regulation, and massive improvements in computing power (Moore’s law remains in effect — astounding considering Gordon Moore postulated it in 1965) led to almost utopian visions of products and services interconnected among all and with only benevolent intent.

The future would be created by artificial intelligence, social media algorithms, gig workers, humanoid robots, and self-driving vehicles converging with massive, exponentially growing data and computational power creating new global industries and improving the lives of all.

Not quite.

Industrial power and wealth became highly consolidated and five US-based tech companies — Apple, Amazon, Google, Microsoft, and Facebook — would combine to be worth almost 20% of the entire S&P 500. Technological progress, combined with enormous wealth creation seemed continuous and inevitable.

A Worse Alternative

The government feels it needs to play a heavier hand. Suddenly global supply chains look increasingly at odds with nationalistic policy. A technological utopia also means lost jobs and low incomes for many. A handful of winners do not make the majority who would be losers feel any better about our new relationship with the computer industry, computing power, and the future of technology.

Stunning breakthroughs in science and engineering, on pace to have massive global impacts, have been placed in doubt because a global impact does not necessarily mean a positive change for many. Perhaps an interconnected world with a computer in every pocket able to connect anything to anyone anywhere is not an enlightened benefit for all.

This vision requiring heavier hands, majority approval, and clear predictions of outcomes is tragically naïve — and worse than those biggest fears.

Who Cares About the Metaverse…

If We Can’t Breathe or Eat?

There is room to dispute the “indisputable” benefit of technological advancement. Advancements in computing, software, interconnected networks, and an increasing presence permeating all aspects of life and society still do not address what is emerging as humanity’s greatest concerns.

Climate challenges, especially extreme weather and pollution, disease (the latest pandemic is merely a precursor of many more to come), and access to healthcare, food, and basic necessities are becoming more challenging and scarcer for more people in the world.

The future of computing feels more tenuous, and harder to map, and understanding the future is even more challenging.

But only technology solves the most challenging issues.

Does the future lie in the Metaverse, Blockchain technology, cryptocurrencies, and other platforms that demand enormous energy and whose benefits are questionable, at best? That’s a sideshow.

History teaches us that individuals and small groups can alter society, and technological tools can become the most potent weapons for social and political change. Focused properly, technological spark improves the lives of many.

There are limits, but those limits are unforeseen today and those limitations are not only technological. True innovation today must also confront the reality of politics and society’s majority approval, along with markets and culture.

Visions of technological utopia are not tolerated politically or culturally any longer. This constrains where technology will be implemented and shared.

All The Money in the World

Innovation creates extraordinary wealth, along with a narrow consolidation of that wealth. There is nothing unusual about this. The history of businesses is the history of consolidation. It is a “winner take all” environment, just as it is in every other endeavor where there is competition. Sports, industry, and even government-sponsored lotteries enable extraordinary consolidation of winnings because otherwise there is no incentive to participate.

But the rewards for innovative success have become enormous and unpalatable, especially among the five technological giants (Amazon, Apple, Facebook, Google, and Microsoft) forcing these firms to spend absurd amounts of money on lobbying in Washington DC. It’s an expensive and wasteful distraction, but essential in this brave new world. If nothing else, it clogs innovation.

It is to our detriment — and the world is literally burning while politicians fiddle — and even more disastrously — impede innovative activity. Applying friction to free thinking and new ideas never ends well.

Large and Regulated

Will the future of technology be large, regulated companies, along the lines of AT&T? It was a regulated monopoly for 70 years before its breakup in the 1980s, and its Bell Labs subsidiary was responsible for tremendous innovation, including monumental technological advancements in communication and basic technology — many of which form the foundation of all technologies today.

Now, there is a movement to force technological innovation to be immediately shared, compromising the incentive for that very innovation, and likely compromising innovation overall. It worked at Bell Labs. Of course, these same advocates forget that Bell Labs was part of a monopoly. The economics were quite attractive for this basic research and applied innovation.

There is a misguided perception that the greater good is served by involving everyone in decisions about what is good and how it should be shared. That’s the market’s job and people should simply stay away and let it happen. Policymakers are simply not smart enough to outwit the market.

Large technology companies spend, collectively, over $100 billion on research and development annually. But this extraordinary expenditure is also concentrated. Regulators are taking notice and don’t like it. Apparently, it doesn’t matter if this concentrated research and development bring exceptional benefits not otherwise achievable.

Policymakers simply don’t like the fact that too few are engaging in so much. Of course, these few are the only ones with the resources and risk-taking ability to make such extraordinary expenditures and take these large risks. But that is lost on regulators and politicians — much to our detriment — while the world needs innovative development more than ever.

So, while demanding outcomes, policy is restricting the essential inputs for those very desired outcomes. This is not a formula for success.

The Fragmented World

A Silicon Valley State of Mind.

Governments and private investors have been trying to create “the next Silicon Valley” for over 40 years. This is nonsense. The belief is that somehow location and physical infrastructure can be re-created so that all the other “soft elements” of Silicon Valley can also be re-created.

This doesn’t work because the environment is an interconnected and intangible network. While virtual meetings and digital nomads have an impact, there is no substitute. The best and brightest are focused there and that is why capital is also present.

A network that spiraled upward and enhances the best to be among the best and brightest cannot be re-created easily. After so many decades of trying, it is not a mystery that Silicon Valley remains the center of innovation.

Significant competition exists now from China. Not long ago, this was a cooperative beneficial environment. Both parties were much better off, and it raised the bar significantly. Now the politicians are in the way and nationalism is trumping logic on too many dimensions. There is a fracture that may not be healed anytime soon, and both parties, the United States and China, as well as global industry, will be worse off.

Corrosive stereotypes and lightly veiled xenophobia are too prevalent today. But true innovation and individual merit will still win, ultimately. That is still in the hands of the United States, and specifically, within Silicon Valley.

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