Tuesday, December 19, 2017

Vox Popoli: The decline of American innovation

It's been gradually becoming more and more obvious over the last two decades, but now entrepreneurs are starting to talk openly about the problems that increasingly limit innovation in the USA:

China, we've been told for years, never will overtake the United States because command economies can't innovate, only copy or steal. As a partner in a Hong Kong investment banking boutique, I saw plenty of innovation in companies we took to the stock market, notably by young Chinese scientists trained at America's best universities. China may be a tortoise in terms of innovation, but the American hare has been asleep. Bound and gagged might be a better description. Here's the quote of the year, from Sam Altman, the chairman of the start-up incubator Y Combinator, one of Silicon Valley's most successful innovators:

Earlier this year, I noticed something in China that really surprised me.  I realized I felt more comfortable discussing controversial ideas in Beijing than in San Francisco.  I didn’t feel completely comfortable—this was China, after all—just more comfortable than at home. That showed me just how bad things have become, and how much things have changed since I first got started here in 2005. It seems easier to accidentally speak heresies in San Francisco every year.  Debating a controversial idea, even if you 95% agree with the consensus side, seems ill-advised.


Corporate America is wallowing in political correctness, following our elite universities. That is all the more destructive in a winner-take-all world where there is room for just one search engine and Internet ad provider (Google), one social media site (Facebook), one standard business software maker (Microsoft), and so forth. The politically correct corporate culture that destroys the career of a Google engineer who wrote a thoughtful memo on the problems of recruiting female STEM professionals threatens to destroy our capacity to innovate at all.

Western Europe is pretty bad in this regard too, so those countries are unlikely to unseat the US as an innovative engine. But Eastern Europe is a very different matter, as those countries are a) unadulterated by the third world, b) not particularly PC, and c) totally uninterested in diversity. However, unlike China, Christianity is not aggressively growing there.

In any event, all of the factors that made the USA such a center of innovation are now seriously in decline. Which is why it will not be at all surprising if the USA continues to decline in this area, particularly if China gets around to addressing its corruption problem, which is probably the biggest single factor holding it back at this point.

Don't get me wrong, the USA is still the primary place to be with regards to technological innovation. But it is no longer safe to assume that it will continue to be.