Over at Marginal Revolution, Alex Tabarrok highlights a fascinating exchange between super-VC Peter Thiel (AI interview here) and Google’s Eric Schmidt on the future of technology. Do read Tabarrok’s excerpts, and don’t neglect to read the whole thing over at CNN. (In the interest of full disclosure, I should probably say here that I sit on the New America Foundation board with Eric Schmidt, am acquainted with Peter Thiel and Tyler Cowen is a colleague on The American Interest editorial board. Live long enough and you meet a lot of people.)Tabarrok thinks that Thiel’s arguments bolster Tyler Cowen’s “great stagnation” hypothesis: that most of the low-hanging fruits of technological innovation have been plucked, and that further innovations will tend to be less paradigm-shifting than those that built the American Century. Tyler distills his point like this in his thought-provoking e-book:
I’m forty-eight years old, and the basic material accoutrements of my life (again, the internet aside) haven’t changed much since I was a kid. My grandmother, who was born at the beginning of the 20th century, could not say the same.
Via Meadia thinks Peter Thiel is arguing two separate points which don’t really touch on Tyler’s main thesis.
- Google, Apple and Microsoft aren’t innovators any more. They’re more like techno-monopolists who are riding one or two big wins into a fairly comfortable future for themselves. Google has search and online advertising. Apple has their well-designed and user-friendly mobile ecosystem. And Microsoft is still trying to hold on to their Windows and Office monopolies. These big guys are merely content to sit on immense cash piles which they use to protect their golden geese.
- In a gracious turn to Schmidt, Thiel offers that it may not be that Google has run out of ideas, but that there are structural impediments (read: regulations) which prevent Google from innovating. Schmidt seems to agree with this point.
Peter Thiel’s second point, though tossed off as an aside, is an important one. The real impediments to technological advancements which improve people’s lives are from monopolies and guilds of all sorts which will fight change tooth-and-nail to preserve their old advantages. See some of the stories of technological disruption VM has been following for a while now: higher ed, the legal profession, medicine. These could have outsize effects on how we’ll live our lives, do business, and improve ourselves within our lifetimes.While Tyler Cowen is doubtless right that many of the easiest no-brainer gains have already been made, he perhaps minimizes the gains to be had from a robust and pervasive infostructure eventually wending its ways into all of our lives. And while Peter Thiel sounds right about the lack of palpable innovation coming from our “tech leaders”, he’s more right about the greater structural impediments to innovation which are firmly held in place by special interests and are usually backed by a captive government.The main issue seems to be that we have gotten much better at increasing our ability to process and transmit information, but that the process of harnessing that ability to improve daily life and to raise productivity is much slower, and it’s something tech companies and innovators can’t accomplish on their own.Universities, government and health care all have the theoretical capacity to be much more efficient if they deployed the full power of IT in the best possible way, but making the social changes and developing the managerial tools to capture these savings is hard to do — especially when so many powerful forces are fighting change. There’s a little bit of a chicken and egg problem here: until there is a big market for the software and hardware that could effectively restructure and reinvent these institutions entrepreneurs aren’t going to develop those products — but until those products exist there won’t be much effective pressure on the powers that be to make the systemic changes that would allow those products to enter the market.There’s another issue that surfaces when we think about next steps in innovation. Look at transportation, which has been one of the great drivers of change in the modern era. Here, we may have reached a point where change is discontinuous. Instead of doing the same thing better or faster, we may start to do something else entirely.For the last two hundred years, the point has been to make transport faster and to develop new modes of transport (rail, cars, planes). There are still some gains to be made here — faster jets, more fuel efficient cars and so on. And the whole concept of “Google cars” — smart traffic, self guided vehicles and so on — offers some interesting ways to use the existing traffic network much more effectively. Space flight may and hopefully will be another stage in humanity’s struggle to overcome distance, but until and unless we hit the “Beam me up, Scotty” phase of teleportation, the next two hundred years may not match the pace of transport innovation since 1800. We’re unlikely to go the Jetsons’ route to personal flying saucers, and I don’t expect to use the phrase “My hovercraft is full of eels,” in daily life.What may happen instead — what is already starting to happen — is that innovation will reduce our need to travel at all. As videoconferencing and other technologies improve, and as new generations grow up habituated to interacting at a distance, we are likely to find that we need to travel less. In a sense the telegraph and the telephone already began to reduce our need to travel in the 19th century; you didn’t have to go down to the store to place an order and you didn’t have to walk over to someone’s house to find out if they were home.Innovation now means reducing our need for travel more than facilitating it. That’s especially true of work and chore related travel. I don’t have to go to the mall as much when I can order everything online. Reducing the amount of business travel will free up enormous amounts of time and cut the costs of getting life’s business done. The travel system of the future may have less to do with multizillion dollar maglev trains whisking us from Albany to Schenectady on business than with telecommuting and virtual conferences. Our descendants may travel less for work than we do, and more for pleasure and education.We are also innovating less by changing the modes of travel than by changing the travel experience. Today I fly on the same type of jet, and in some cases on the actual same jet, that I flew on 30 years ago — but now that I’m working on my laptop online, the nature of that travel experience has totally changed. While I’m going from one place to another, I’m still free to do exactly what I would have been doing if I were still sitting in my home office here in the stately Mead manor in Queens.The 19th century waged war on space and time primarily by reducing the amount of time it took to cover a given amount of space. For most of the 20th century it was more of the same, but increasingly today we are waging that war by making space less relevant — making it possible for us to behave as if we were at any one of a number of places at the same time. When we have our morning Via Meadia Skype check-in, we are doing something better and more radical than commuting in our George Jetson sky cars along the skyway; we aren’t commuting at all.In any case, innovation remains America’s core business, and we need to keep thinking it through. People like Peter Thiel, Eric Schmidt and Tyler Cowen are doing exactly that, and Via Meadia will do its best to keep up.