The Future of Innovation

What better resembles the future of innovation – this or that?

Innovation is the ultimate driver of economic growth. Innovations big and small are essential for us to be better off tomorrow than we are today. However, it is also critical to sort out good innovations from wasteful ones. Good innovations then have to be adequately financed and nurtured in order to develop to their full potential. Financing potential breakthroughs in technologies “like we’ve never seen before” requires expertise, vision, and guts, as most radically new ideas may initially sound like “crazy talk”.

I can’t help but wonder about where new innovations in the U.S. are going to come from… The private sector is typically the prime suspect of investing in and supporting new innovations, Silicon Valley being the poster child here. However, I have serious doubts about the long term vision and guts of the private sector nowadays (Silicon Valley venture capital community included), with its focus shifting more and more toward short-term success and low risk. Alas, long-term big investments in radically new technologies are not compatible with short-term bonuses for the people in charge…

Nowadays, it is fashionable to ridicule the government for its wasteful spending (and there is a lot of truth to that). However, I would like to point out that the Silicon Valley grew on the back of government investments in defense technology after the Second World War. The basic technology of the internet was also developed by the government as DARPAnet. The current DARPA projects are nothing short of amazing! It seems that some government programs do have expertise, vision, and guts, which are lacking in the private sector.

I think that the government in fact was, and still is, the fundamental driver of long-term economic growth by investing in education, scientific research, and pursuing bold projects like DARPA and space exploration. These projects are not likely to have commercial payoffs in the foreseeable future, but without them we are likely to miss out on the next Silicon Valley (in whatever form it may come), or whatever the next big thing will be.

What’s going to happen to the long term economic growth if the government stops investing in the future? Given the current priorities and incentives in the private sector, I really don’t want to find out…