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Has the ideas machine broken down?

silicon valley technological stasis paypal co-founder low impact innovations

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#1 Hum


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Posted 20 January 2013 - 00:59

BOOM times are back in Silicon Valley. Office parks along Highway 101 are once again adorned with the insignia of hopeful start-ups. Rents are soaring, as is the demand for fancy vacation homes in resort towns like Lake Tahoe, a sign of fortunes being amassed.

The Bay Area was the birthplace of the semiconductor industry and the computer and internet companies that have grown up in its wake. Its wizards provided many of the marvels that make the world feel futuristic, from touch-screen phones to the instantaneous searching of great libraries to the power to pilot a drone thousands of miles away. The revival in its business activity since 2010 suggests progress is motoring on.

So it may come as a surprise that some in Silicon Valley think the place is stagnant, and that the rate of innovation has been slackening for decades. Peter Thiel, a founder of PayPal, an internet payment company, and the first outside investor in Facebook, a social network, says that innovation in America is “somewhere between dire straits and dead”. Engineers in all sorts of areas share similar feelings of disappointment. And a small but growing group of economists reckon the economic impact of the innovations of today may pale in comparison with those of the past.

Some suspect that the rich world’s economic doldrums may be rooted in a long-term technological stasis. In a 2011 e-book Tyler Cowen, an economist at George Mason University, argued that the financial crisis was masking a deeper and more disturbing “Great Stagnation”. It was this which explained why growth in rich-world real incomes and employment had long been slowing and, since 2000, had hardly risen at all (see chart 1). The various motors of 20th-century growth—some technological, some not—had played themselves out, and new technologies were not going to have the same invigorating effect on the economies of the future. For all its flat-screen dazzle and high-bandwidth pizzazz, it seemed the world had run out of ideas.

Mr Gordon sees it as possible that there were only a few truly fundamental innovations—the ability to use power on a large scale, to keep houses comfortable regardless of outside temperature, to get from any A to any B, to talk to anyone you need to—and that they have mostly been made. There will be more innovation—but it will not change the way the world works in the way electricity, internal-combustion engines, plumbing, petrochemicals and the telephone have.

Technological progress does not require all technologies to move forward in lock step, merely that some important technologies are always moving forward. Passenger aeroplanes have not improved much over the past 40 years in terms of their speed. Computers have sped up immeasurably.

As early as 1987 Robert Solow, a growth theorist, had been asking why “you can see the computer age everywhere but in the productivity statistics”. A surge in productivity growth that began in the mid-1990s was seen as an encouraging sign that the computers were at last becoming visible; but it faltered, and some, such as Mr Gordon, reckon that the benefits of information technology have largely run their course.


#2 Phouchg


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Posted 20 January 2013 - 12:51

People are too fat and happy, that's what has stagnated. I'm just waiting for the big tragedy to strike the mighty IT and bring all that carelessly designed crap down. Solar superstorm or Russinovich's Zero Day scenario, both increasingly likely, but way past their due time already.

#3 Arkangel



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Posted 21 January 2013 - 09:37

Or maybe people are only now starting to realise that they have sniffled innovation through broken copyright laws, patents etc, I wonder how long it will take before it dawns on them that they themselves are responsible for the terrible system they have in place, I doubt it, greed can last a lifetime it seems.

#4 StrikedOut


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Posted 21 January 2013 - 10:43

I also think that there is a generation of people coming up who through playing with too much tech have forgotten how to use their imagination. This is stagnating innovation IMHO.

#5 +MikeChipshop



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Posted 21 January 2013 - 12:01

Problem is it's to hip to be in the industry now. No one wants to break-out of the boring routine and do something new. People are to scared, to reliant on pay cheques and to damn lazy!

#6 Crisp



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Posted 21 January 2013 - 12:32

Upon reading the article, it states about just America. I do believe technology is advancing with new ideas else where like the Giraffe suit.

I think another main cause for Americas technology halt, maybe just that people don't have the money to start up a company, mean your country has enough debt as it is :p

#7 Anibal P

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Posted 21 January 2013 - 18:42

I'd say it's more of a copyright and patent issue, you can't come up with anything before a troll or apple comes in with lawyers blazing because your idea is "similar" to some BS patent someone has, you can now get sued for workarounds so why innovate anything at this time?

Smart money is to wait for the whole broken system to implode on itself and then start being creative again

#8 threetonesun


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Posted 21 January 2013 - 18:48

Mr. Gordon is a pessimist, so that's what he thinks. It's a strange time to be a pessimist, quite honestly, considering we've got personal computers in our pockets and private industries are working on sending people into space, but I guess if you really want to believe that nothing got better after the telephone and the Model T, you'll believe that.

#9 Phouchg


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Posted 21 January 2013 - 19:24

It's a strange to be a pessimist

Behind every cynic pessimist is a disappointed idealist. I should know.

#10 threetonesun


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Posted 21 January 2013 - 19:29

Behind every cynic pessimist is a disappointed idealist. I should know.

The opposite of pessimism is optimism, not idealism. There's a big difference.

#11 Scorbing


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Posted 21 January 2013 - 19:32

Has the ideas machine broken down?

For Apple it has. :woot:

#12 Phouchg


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Posted 21 January 2013 - 20:20

The opposite of pessimism is optimism, not idealism. There's a big difference.

I figure idealism is a precursor to pessimism. When one is an idealist, he has constructed or continously transforms what he sees into an alternate clockwork world in his mind, one that follows mostly undefined, but rigid set of rules. And all fine and dandy except it's devoid of all irrationality (passions, feelings, emotion - all errors in logic) that makes us human.

Experience (unless discarded) may/does require to continuously alter/amend the rules. Which signifies that idealism has not been quite ideal from the start and is not, and will not be at any given moment. Reality is frequently innaccurate. According to ideals not only it is highly suboptimal, inefficient and unreliable, but should not work at all. Yet it does. In its face all ideals crash and burn.

If one keeps cultivating these ideals, he ends up in an asylum. If he doesn't, he should. On the other hand, if he acknowledges the inherent, unescapable irrationality of idealism, one ends up a pessimist and cynic, each to a different degree.

At least I'm wired like this.


#13 techbeck


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Posted 21 January 2013 - 21:05

To many people suing over little crap these days so i am guessing thats part of it. Why innovate and produce something when everything little thing is protected and you may get sued.

There are still companies innovating...just slowed a little.

#14 grik



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Posted 23 January 2013 - 16:16

The economy as it is cannot fund most of the new projects i guess.

#15 syobon999



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Posted 23 January 2013 - 19:29

The corporations now hold almost all the innovation and scientific output, it will be harder than ever to start something new and big.