As Maudlin writes in his letter
to readers of “Thoughts from the Front Line” of Sept. 1, 2014
to readers of “Thoughts from the Front Line” of Sept. 1, 2014
"…
This article from this week’s
Economist frames the story:
Economist frames the story:
Over the past
few decades it has become clear that innovation – more than inputs of capital
and labour – is what drives a modern economy. In the developed world, the
application of technological know-how and scientific discoveries by companies,
institutions and government establishments accounts for over half of all
economic growth. Because of its seminal influence on wealth-creation in general
and employment in particular, the manner in which innovation functions –
especially, the way it comes and goes in Darwinian bursts of activity – has
emerged as a vital branch of scholarship.
few decades it has become clear that innovation – more than inputs of capital
and labour – is what drives a modern economy. In the developed world, the
application of technological know-how and scientific discoveries by companies,
institutions and government establishments accounts for over half of all
economic growth. Because of its seminal influence on wealth-creation in general
and employment in particular, the manner in which innovation functions –
especially, the way it comes and goes in Darwinian bursts of activity – has
emerged as a vital branch of scholarship.
What
researchers have learned is that waves of industrial activity, first identified
by the Russian economist Nikolai Kondratieff in 1925, have a character all of
their own. Typically, a long upswing in a cycle starts when a new set of
technologies begins to emerge – eg, steam, rail and steel in the mid-19th
century; electricity, chemicals and the internal-combustion engine in the early
20th century. This upsurge in innovation stimulates investment and invigorates
the economy, as successful participants enjoy fat profits, set standards, kill
off weaker rivals and establish themselves as the dominant suppliers.
researchers have learned is that waves of industrial activity, first identified
by the Russian economist Nikolai Kondratieff in 1925, have a character all of
their own. Typically, a long upswing in a cycle starts when a new set of
technologies begins to emerge – eg, steam, rail and steel in the mid-19th
century; electricity, chemicals and the internal-combustion engine in the early
20th century. This upsurge in innovation stimulates investment and invigorates
the economy, as successful participants enjoy fat profits, set standards, kill
off weaker rivals and establish themselves as the dominant suppliers.
Over the
years, the boom peters out, as the technologies mature and returns to investors
slide. After a period of slower growth comes the inevitable decline. This is
followed eventually by a wave of fresh innovation, which destroys the old way
of doing things and creates conditions for a fresh upswing – a process Joseph
Schumpeter, an Austrian economist, labeled “creative destruction”.
years, the boom peters out, as the technologies mature and returns to investors
slide. After a period of slower growth comes the inevitable decline. This is
followed eventually by a wave of fresh innovation, which destroys the old way
of doing things and creates conditions for a fresh upswing – a process Joseph
Schumpeter, an Austrian economist, labeled “creative destruction”.
Back in the
late 1990s, Babbage noticed that the waves of innovation had begun to speed up
(see “Catch the wave”, February 18th 1999). The industrial waves Kondratieff
observed in the 1920s came every 50-60 years or so. By the late 1990s, fresh
ones were arriving twice as often. Fifteen years on, their frequency appears to
have doubled yet again. Waves of new innovations now seem to be rolling in
every 10 to 15 years.
late 1990s, Babbage noticed that the waves of innovation had begun to speed up
(see “Catch the wave”, February 18th 1999). The industrial waves Kondratieff
observed in the 1920s came every 50-60 years or so. By the late 1990s, fresh
ones were arriving twice as often. Fifteen years on, their frequency appears to
have doubled yet again. Waves of new innovations now seem to be rolling in
every 10 to 15 years.
I think those waves are going to
come at us even faster in the next 20 years, resulting in what I call the Age of Transformation. Literally, our
lives will be transformed, and at an ever-increasing pace of change. The Gartner Group has developed a cool
paradigm that they call the “hype cycle.” They basically see every technology
through the lens of five different phases in this hype cycle: the innovation trigger, the peak of inflated
expectations, the trough of disillusionment, the slope of enlightenment, and
the plateau of productivity.
come at us even faster in the next 20 years, resulting in what I call the Age of Transformation. Literally, our
lives will be transformed, and at an ever-increasing pace of change. The Gartner Group has developed a cool
paradigm that they call the “hype cycle.” They basically see every technology
through the lens of five different phases in this hype cycle: the innovation trigger, the peak of inflated
expectations, the trough of disillusionment, the slope of enlightenment, and
the plateau of productivity.
For the past 20 years, Gartner has produced an annual update
of various hype cycles that provide
snapshots of the progress certain technologies have made during the previous
year, where on the innovation cycle they currently reside, and how long they
will take to reach maturity (if ever). This year’s collection (published on
August 11) assesses the prospects of some 2,000 technologies, grouped into 119
aggregated areas of interest.
of various hype cycles that provide
snapshots of the progress certain technologies have made during the previous
year, where on the innovation cycle they currently reside, and how long they
will take to reach maturity (if ever). This year’s collection (published on
August 11) assesses the prospects of some 2,000 technologies, grouped into 119
aggregated areas of interest.
The chart below is the most
recent hype cycle, published by the Gartner Group last month. See if you can
find a few new technologies that you didn’t know even existed.
recent hype cycle, published by the Gartner Group last month. See if you can
find a few new technologies that you didn’t know even existed.
It would be nice if we could just
sit back and let growth happen. But as it turns out, our government seems to be
doing its best to retard growth. The bureaucracy of government has become what
Newt Gingrich calls “the prison guards of the past.”
sit back and let growth happen. But as it turns out, our government seems to be
doing its best to retard growth. The bureaucracy of government has become what
Newt Gingrich calls “the prison guards of the past.”
In field after field, regulators
feel the necessity to control the spread of technology in ways that are
consistent with the past they seem to want to perpetuate. Neither Newt nor I are
against reasonable regulation (it is a requirement for civilization); but
regulation run amok kills growth and jobs, and in the case of one federal
regulatory body, it is killing people. (Warning: this hits one of my personal
hot buttons.)
feel the necessity to control the spread of technology in ways that are
consistent with the past they seem to want to perpetuate. Neither Newt nor I are
against reasonable regulation (it is a requirement for civilization); but
regulation run amok kills growth and jobs, and in the case of one federal
regulatory body, it is killing people. (Warning: this hits one of my personal
hot buttons.)
This week I was confronted with a
single FDA bureaucrat slowing down a new medical technology by what may be five
months. Doesn’t sound like much time, does it? Except that this is a technology
that will literally save millions of lives per year. Not improve life,
understand: save lives. As in life or death. (Given the provision that the
technology must be proven to work as we expect it to.) Rather than focusing on
what we can do to move this crucial innovation along as fast as possible, the
regulator is forcing this company to spoon feed him information that has
already been provided in multiple forms. Because he evidently didn’t have the
time to read the massive amounts of information provided, he simply came up
with a bogus reason to excuse his inaction and delay further progress. The fact
that the lives of fathers and mothers and daughters and sons and spouses and
friends will be lost evidently doesn’t bother him.
single FDA bureaucrat slowing down a new medical technology by what may be five
months. Doesn’t sound like much time, does it? Except that this is a technology
that will literally save millions of lives per year. Not improve life,
understand: save lives. As in life or death. (Given the provision that the
technology must be proven to work as we expect it to.) Rather than focusing on
what we can do to move this crucial innovation along as fast as possible, the
regulator is forcing this company to spoon feed him information that has
already been provided in multiple forms. Because he evidently didn’t have the
time to read the massive amounts of information provided, he simply came up
with a bogus reason to excuse his inaction and delay further progress. The fact
that the lives of fathers and mothers and daughters and sons and spouses and
friends will be lost evidently doesn’t bother him.
I wish I could say it was just
this one instance, but we all know that this sort of thing happens many dozens
of times a year. The entire process of drug approval is broken. It is rigged to
benefit Big Pharma and largely prevents small startups from succeeding by
dramatically increasing costs beyond what is necessary.
this one instance, but we all know that this sort of thing happens many dozens
of times a year. The entire process of drug approval is broken. It is rigged to
benefit Big Pharma and largely prevents small startups from succeeding by
dramatically increasing costs beyond what is necessary.
If I could wave a magic wand and
change just one thing in our government, it would be to replace the FDA. Not reform it – I don’t want to tinker at the
margins. We need an FDA for the 21st century. I’m not advocating some wild west
scenario either – of course we need a regulatory process for the medical field,
but not one that is killing what should be the leading new technology in the
United States, not to mention delaying lifesaving and life-enhancing
technologies that are so needed. The majority of biotechnological research is
done in the US; but under the current regulatory regime, it is increasingly
likely that the early benefits will not be enjoyed by us, and that jobs that
should be created here will be shipped offshore.
change just one thing in our government, it would be to replace the FDA. Not reform it – I don’t want to tinker at the
margins. We need an FDA for the 21st century. I’m not advocating some wild west
scenario either – of course we need a regulatory process for the medical field,
but not one that is killing what should be the leading new technology in the
United States, not to mention delaying lifesaving and life-enhancing
technologies that are so needed. The majority of biotechnological research is
done in the US; but under the current regulatory regime, it is increasingly
likely that the early benefits will not be enjoyed by us, and that jobs that
should be created here will be shipped offshore.
Energy should not be the leading
job producer in the US – that should be new health and wellness technologies. I
am watching some of the most promising new technology companies involved in
extending life and healing bodies go shopping for venues outside of the US
because the regulatory process is so onerous and time-consuming that the
scientists literally don’t feel they can wade through it and don’t want to
wait.
job producer in the US – that should be new health and wellness technologies. I
am watching some of the most promising new technology companies involved in
extending life and healing bodies go shopping for venues outside of the US
because the regulatory process is so onerous and time-consuming that the
scientists literally don’t feel they can wade through it and don’t want to
wait.
By the time they can get a
process or drug approved, they are already three iterations beyond the original
process for which their applications were filed. The field is literally moving
that fast. We are going to be shipping jobs – high-paying, rewarding jobs –
overseas, along with the new technologies. Dear gods, Japan and other
forward-thinking countries are way ahead of us in the regulatory process. This
is just wrong on so many levels.
process or drug approved, they are already three iterations beyond the original
process for which their applications were filed. The field is literally moving
that fast. We are going to be shipping jobs – high-paying, rewarding jobs –
overseas, along with the new technologies. Dear gods, Japan and other
forward-thinking countries are way ahead of us in the regulatory process. This
is just wrong on so many levels.
Much of the US regulatory process
is actually a fence-building program to protect the current workers or
companies in a field. To use a rather odd example, why do some states feel that
a nail technician needs to have a license that requires a 750-hour training
program (at considerable cost) to learn something that every teenage girl knows
how to do by the time she is 13 or 14? Seriously, do you need 750 hours of
training (that you have to pay for) in order to be able to do a manicure for
which you get paid 20 or 30 dollars?
is actually a fence-building program to protect the current workers or
companies in a field. To use a rather odd example, why do some states feel that
a nail technician needs to have a license that requires a 750-hour training
program (at considerable cost) to learn something that every teenage girl knows
how to do by the time she is 13 or 14? Seriously, do you need 750 hours of
training (that you have to pay for) in order to be able to do a manicure for
which you get paid 20 or 30 dollars?
As I probably don’t have many
manicurists among my readers, I have hopefully not offended too many of you.
But what if I started talking about your profession? Just saying! Many regulatory regimes are simply barriers
to entry for new competition. Current participants basically capture the bureaucracy
they deal with in order to ensure their own positions…
manicurists among my readers, I have hopefully not offended too many of you.
But what if I started talking about your profession? Just saying! Many regulatory regimes are simply barriers
to entry for new competition. Current participants basically capture the bureaucracy
they deal with in order to ensure their own positions…
…The original point I was trying
to make is that the main driver of growth is not monetary policy,
notwithstanding the current fetish for dissecting every utterance of the
Federal Reserve. More important is US fiscal policy. Even more important is US
regulatory policy. I think we have to mention our educational system (which is showing signs of being increasingly
broken and inadequate for the 21st century) somewhere around here. But it’s
crucial that the natural innovative drive that is inherent not just in US
entrepreneurs but everywhere in the world is nurtured and encouraged.
to make is that the main driver of growth is not monetary policy,
notwithstanding the current fetish for dissecting every utterance of the
Federal Reserve. More important is US fiscal policy. Even more important is US
regulatory policy. I think we have to mention our educational system (which is showing signs of being increasingly
broken and inadequate for the 21st century) somewhere around here. But it’s
crucial that the natural innovative drive that is inherent not just in US
entrepreneurs but everywhere in the world is nurtured and encouraged.
is not to say that monetary policy
is not important. Get it wrong and we all lose. We all become poorer for the
impediments to growth misguided monetary policy can create. Burdening a country
with too much debt and crowding
out productive investments in the process is likewise destructive….
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