Trivial Tweeting

Silicon Valley's Superficial Spirit

tech companies-dpa-CHANGED
Not all Silicon Valley start-ups are serious heavyweights.
  • Why it matters

    Why it matters

    German tech entrepreneurs who want to make a real difference should take cues from U.S. research institutes, rather than being fixated on what is coming out of Silicon Valley.

  • Facts

    Facts

    • A Bavarian delegation is visiting the major companies in Silicon Valley.
    • Profit-focused ventures do not produce pioneering inventions, says a major U.S. venture-capitalist.
    • State-funded research brought the Internet and GPS navigation to the world.
  • Audio

    Audio

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Pioneers are heading west again. Right now  a Bavarian state ministry delegation is seeking salvation in Silicon Valley, singing the gospel of “digitilization of the economy” whilst visiting Google, Facebook and Twitter.

In Hamburg, about 800 entrepreneurs were singing a different tune at the federal government’s IT summit Tuesday. Their lament was that the “digital agenda” is inching along in Germany, and Silicon Valley is zooming ahead.

That’s the German view, but Peter Thiel, 47, one of the best-known venture capitalists in the United States, sees things differently. Silicon Valley hasn’t been making pioneering inventions, contends Mr. Thiel, who helped finance some of the technology industry giants such as Facebook, PayPal and LinkedIn.

“We were expecting flying automobiles, but instead of that, we got 140 characters,” said Mr. Thiel, referring to the maximum number of characters in a Twitter tweet. Short-messaging systems may be a big change, but such innovations aren’t what Mr. Thiel dreams about because they don’t fundamentally change lives.

Despite all the glitz and glamour of Silicon Valley, the heyday of U.S. innovation was between 1950 and 1970.

Compare it with the technological progress made in former times. The first man on the moon, long-haul jet travel, medicine for all types of illnesses. The 1968 film “2001: A Space Odyssey” with a script by director Stanley Kubrick and sci-fi writer Arthur C. Clarke predicted deep-space travel and artificial intelligence.

But 45 years after the Apollo moon mission, we are still just orbiting the Earth. The human genome was decoded more than 10 years ago, but the development hasn’t revolutionized medicine. We are still traveling in pollution-belching cars, and flying via rocket-powered backpacks remains a novelty.

Why is this? It is not a question of money. Today, the United States spends just as much on research and development, as a proportion of gross domestic product, as it did in former times. But the structure has changed. In the 1960s, two-thirds of such expenditures were made by the government and a one-third by companies. It’s the reverse now.

Of course, it is good and necessary for companies to spend a lot of money on science. But the focus is fundamentally different. The government takes the long view. We can thank state-funded research for the Internet and GPS navigation system. Companies act more in the short-term, researching better technology to bring a rapid return on investment.

The world needs more inventions than ever before. By 2050, the world’s population will grow from 7 billion to 11 billion people.

Sure, the new iPhone has a better camera or we can locate old school friends using Facebook – but does that make us more productive? Despite all the glitz and glamour of Silicon Valley, the heyday of U.S. innovation was between 1950 and 1970. The productivity rate then was nearly double that of the years 1990 through 2010, according to French economist Thomas Piketty.

Bryan Johnson, an investor and founder of online payment service Braintree, is putting up $100 million to fund “crazy ideas.” He finances companies that have lofty ideas and only a small chance of success. He urges entrepreneurs not to make the next app, but to change the world.

Mr. Johnson, like Mr. Thiel, is justifiably unhappy with the venture-capital culture: Since the end of the 1990s, it has no longer been about “transforming technology,” like the development of semiconductors, but more about trivial “incremental technologies” or even nonsense like the sale of dog food via the Internet. Mr. Thiel complains about “fake technologies” that aren’t even new.

The world needs more inventions than ever before. By 2050, the world’s population will grow from 7 billion to 11 billion people. Hunger abounds globally, and clean drinking water is just a dream for many. Deadly problems, such as the Ebola virus, still break out.

German delegations should not make pilgrimages to Silicon Valley. Instead, they should visit the campus of the U.S. National Institutes of Health in the city of Bethesda in Maryland or Chicago’s Argonne National Laboratory, one of the oldest and largest research institutes. That’s where visitors can see scientists working on far-sighted projects such as supercomputing and renewable energy sources.

The researchers will never feature in rankings of the super-rich. Instead, they will really change our world.

 

To contact the author: jahn@handelsblatt.com

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