Innovation is Essential and a Misguided Sideshow

A Solution and a Sideshow

Remarkable things can happen. Or not.

Can we solve climate change, food shortage, limited healthcare, and other global stresses — all with TikTok videos?

Innovation is unpredictable and astonishing — it can address the world’s most critical issues today, from hunger to efficient energy, to devastating diseases. It is also too often misguided, inefficient, and meaningless — creating nothing more than distractions and wastes of time cloaked in an image of technological wonder.

Misguided and manipulative business plans sit side-by-side with the groundbreaking disruptions that may address society’s greatest problems.

We don’t have time. Even though there is no clear argument for resources going to a new video-sharing platform or immersive game, that is beside the point. Technology delivers something, nothing else can. It is the only way to find solutions to otherwise intractable and potentially devastating global crises.

Technological breakthroughs are the only way to make a difference. Targeted legislation, encouraging speeches, and meaningless protests won’t do anything. Unfortunately, many people think that throwing a pie in front of the Mona Lisa somehow helps. None of this makes a difference — only technological innovation will.

The problem is that the future of technology faces increasing interference and inefficient policymaking and regulation. Innovation must ultimately win, but it is certainly going to be more difficult than ever.

It’s Magic

Looking to the past and understanding the present rarely grasps the future. The future is not a simple trajectory from what we know. The most impactful developments few could have predicted.

Examples abound, ranging from the transistor leading to the microprocessor leading to distributed computing power globally. Another is the mobile phone leading to the smartphone leading to a communication and computing platform impacting the global economy.

That simply was not on Dr. Shockley’s mind in the 1950s when he developed the transistor at Bell Labs, nor was it likely on Martin Cooper’s mind when he made the first mobile phone call in 1973 or even fully understood by the team at Apple developing the iPhone in 2007.

The technology that changes the world is the one we didn’t see coming, and after its development it’s indispensable.

It’s magic…

As Arthur C Clarke stated, technology can sometimes be indistinguishable from magic. But, unlike magic, it’s real. It’s not hidden in some mythical dark lab isolated from society, an ivory tower, or even a nondescript garage in Silicon Valley. Innovation belongs to the world quickly. It does not stay on the island with Gilligan and the Professor.

…and also, luck

Timing, opportunity, and location are more impactful than most innovators are willing to admit. Constraints are not simply the laws of physics, but communities, capital, ecosystems, and entrepreneurs combine idiosyncratic perspectives with visionary quests, and innovative technologies burst forth.

But there is a need filled, a desirable new product or service, or a more efficient way to accomplish important tasks. It’s not a smooth line, many products are distractions more than anything, simply delivered in a more efficient way (TikTok), but essential innovations are dramatic and positive.

More than ever, that unpredictable brilliance and innovative spark are needed. Quite simply, our future is dependent on innovation.

Does the Future Need Us?

In the 1990s, Sun Microsystems’ cofounder, Bill Joy, wrote an article titled, “Does the Future Need Us?” In it, he questioned if mankind would really put astounding new technological tools to their best use. If not, it won’t be benign. The impact will be the opposite — a downward spiral that will make mankind more of a nuisance than a contributor to the Earth’s ecosystem. Perhaps he was prescient.

Brilliance combined with quirkiness and rule-breaking perpetuates an image of daring entrepreneurs and risk-taking capitalists generating outsized wealth. This simply doesn’t happen unless what is created matters. While we might question how much one needs to play a videogame or interact with social media, an advanced society needs advanced solutions to the intractable problems it faces.

As John F. Kennedy said, “Our problems are man-made, mankind can solve them, as well.” Perhaps.

The harsh reality is that brilliant, hard-working entrepreneurs and thoughtful investors lose much more often than they win. We need their risk-taking and willingness to lose. It’s how we win. We need the benefits technological innovation delivers even if we don’t understand that innovation’s ultimate purpose.

Most importantly, given the existential issues we confront, there won’t be a future anyone wants without unfettered innovation and technological advancement. That is not a smooth path, but we are in no position to choose what technologies should win because we will never know the full breadth of what innovation can bring until it happens.

A Wish, a Law, a Mistake

An example of inefficient meddling is recent legislation requiring electric vehicles to be the dominant, and ultimately, the only, new vehicles allowed in California. This seems profoundly shortsighted because the electrical grid is still unreliable, especially during times of intense energy needs (a heat wave or frigid winter — which are more likely in the future), and it will not be replaced with renewable energy anytime soon. Hydrogen and other options might be a better solution, but inflexible regulation and policy are likely to eliminate them as options even before their capabilities are fully understood.

Therefore, predicting an innovation trajectory is foolish because it is based on what we know currently and cannot conceive of unforeseen innovation. As was said during the hunt for a polio vaccine, “if the federal government handled development, we would have the world’s best iron lung — but no vaccine.”

The same is happening now with too much government intervention and meddling. Innovation is a unique convergence creating an unpredictable future. It can’t be legislated or regulated into existence.

That is beyond what even the most brilliant and bright-eyed entrepreneurs can imagine. It is certainly beyond what policymakers and regulators can envision. Unfortunately, the latter want their hand on the rudder more than they should.

Don’t Talk About the War

Government investment in basic research can make an extraordinary difference. For example, World War II created an enormous technological push into basic science and applied research. This funding continued at an unimaginable pace, even after the war. It contributed to the creation of the first computer hardware and computer-based software, among other startling innovations — and there was that atomic bomb.

But the lesson is clear — pursuing discovery for its own sake with no specific commercial application is the essential foundation for all commercial innovation and value creation. This is a good role for the government in science and innovation, but it is increasingly ignoring its greatest value-add because today every innovation is supposed to have an immediate economic purpose. That’s just not the way scientific innovation should work.

Paranoia and Fear

The internet was a solution to the defense department’s fear of nuclear war disrupting computer networks. The paranoia driving the space race with the Soviets sparked remarkable software development and hardware designs with new applications creating unforeseen technological advancements. Space exploration was a wide-eyed dream, but extraordinary vision and relentless innovative work made it happen.

Essentially fear and paranoia drove government funding for unprecedented advancements in fundamental technological research and advancement. It drove semiconductor creation, cheaper computing power, and a digital and communication revolution. Otherwise, the government stayed out of the way because they knew better — or rather, they had no idea, and so they made the wise choice not to interfere.

All this sparked Silicon Valley and a generation of innovators benefiting from the US government’s largesse and postwar prosperity. While this may have been a time of counterculture, these entrepreneurs — from HP to Intel to Apple — were ruthlessly competitive businesspeople driving commercial success. Government allocations evolved into private wealth and the influx of private capital skyrocketed.

An unprecedented opportunity was created.

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.

What’s Next?

Predictions usually end up being nonsense. We simply draw a trajectory from what we know today. But innovation is a discontinuity. Things are unpredictable because innovation does not come from consensus thinking. It comes from small groups and individuals with a spark of entrepreneurship, intelligence, and vision.

One of the fundamental tenets of predicting technology is that most forecasters get things spectacularly wrong.

We know political friction, fragmentation, xenophobia, impatience, incrementalism, and ill-conceived regulation get in the way of innovation. Discovery for the sake of discovery is somehow discounted when it is fundamental discovery that brings unforeseen, dramatic, and extraordinary developments — the generation of electricity is only one of many examples.

Queen Victoria famously reacted to seeing Faraday’s electric motor generating an electromagnetic current, essentially the core technology behind the generation of electricity, was, “it looks awfully clever, but what would you ever use it for?”

That is basic science and discovery. A development that changed the world, and the modern world could not exist without the electrical grid, was something completely unforeseen when it was created.

The Faradays of the modern world must be allowed to thrive. Modern-day politicians and regulators are the equivalents of Queen Victoria. If they can’t see what it can be used for, they have no interest in it and don’t see what its value could ever be. It should not be their decision.

Let The Best Do Their Best

Tools exist today for the same scale of innovative development as Faraday’s. Artificial intelligence, nanotechnology, gene editing, quantum computers, and other technological advancements can solve our biggest problems.

Innovation enables opportunity. But how society collectively chooses to use those technologies influences their impact. Large problems of enormous magnitude that are addressed with current thinking will not be solved.

Climate change, access to energy, abundant food, effective healthcare and vaccines, and other global societal challenges will most likely best be solved through technological innovation that cannot be envisioned today. The freedom to pursue solutions is the essential first step. Letting the best people do their best is still the best policy. It will also generate the best outcome.

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