Copy of In Tech We Trust? A Debate with Peter Thiel and Marc Andreessen

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Peter Thiel is a modern day vampire. Look up the term 'Parabiosis'. Thats his bag.

👍︎︎ 11 👤︎︎ u/AntiHasbaraUnit 📅︎︎ May 29 2017 🗫︎ replies

Two wolves and a lamb are "arguing" over what to have for dinner.....

A more instructive video imo, addressing many of the same points---innovation, Role of technology, Government role/bureaucracy, Stagnation

Thiel vs Graeber https://thebaffler.com/latest/graeber-thiel

👍︎︎ 5 👤︎︎ u/dylanoliver233 📅︎︎ May 29 2017 🗫︎ replies
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good afternoon ladies and gentlemen welcome to our session earlier this year we the Economist newspaper published a cover story that looked at the topic of our session today innovation and whether it is accelerating or decelerating and on the cover we had a picture of Rodin's thinker always like this sitting on a lavatory and the title was will we ever invent anything this useful again it seems a little odd to be pessimistic about innovation at a time when governments universities and firms are spending about 1.4 trillion dollars a year on research and development we're living in an era of smart phones and super computers big data nanotechnology gene therapy and stem cell transplants so it seems a bit of as I so I'm preparing this session I looked at Quora the online question-and-answer site and I wants to see if anyone had answered the question is innovation slowing and the top rated answer was from an anonymous poster who wrote I checked on Twitter YouTube and Facebook then I verified it on all 203 channels on my TV and satellite radio i double-checked it via the iphone and the answer's no now there's another side to this argument though as we noted in our editorial nobody recently has come up with an invention that's had as much impact as the laboratory with its clean lines and it's sort of intuitive user interface and although they've been advances in communication and computing elsewhere there's been little to match the car the telephone the radio and antibiotics as well as the humble loo and they all sprang from late 19th century and 20th century Minds so perhaps we're not living that we're no longer living in an accelerating technological civilization instead of a new Sputnik we're seeing the world's innovation engines sputter to explore both sides of this fascinating issue I've got two most distinguished figures from Silicon Valley with me to share their perspectives to my left is Peter Thiel who's a tech investor to my right for you to my left for me is a tech investor if he steals a tech investor a philanthropist and an entrepreneur and he's been associated with many well-known tech companies he co-founded PayPal he was the first outside investor in Facebook and he's also founded or co-founded a global macro fund clarium and co-founded Palantir technologies which is a really interesting company that offers platforms for finance companies intelligence defense and law agencies to process all of the world's information to my right I have Marc Andreessen Marc's a partner and co-founder of andreessen horowitz he pioneered a software category that has been used by it was used by more than a billion people and he's established multiple billion-dollar companies he co-created the highly influential mosaic internet browser and he co-founded Netscape which sold to AOL for 4.2 billion dollars andreessen horowitz is a venture capital firm that provides seed venture and grow stage funding to tech companies and has 2.7 billion dollars under management and Marc serves on numerous boards including eBay HP and bump so two very very well-qualified people to address this this forum and we're going to have a quasi debate style to kick off I'm going to ask both Peter and Marc to speak for five minutes to make some opening remarks and then each of them will have a couple of minutes to respond to the others comments and then we'll have open discussion on stage I'll ask some questions of them both and then we'll end with a brief summary from each of them so Peter would you like to kick us off yes well Marc and I have been good friends for for many years and I think there are many things we agree on we agree that technology is a good thing and is gonna make the world a better place and we agree that it is the critical gating factor towards taking our civilization to the next level in the years ahead but I'm going to start by disagreeing with the moderator here excellent and I I'm not I actually wonder whether this sort of perspective that Marc and I have is actually a pretty odd perspective at this point and whether we actually live in a time when most people no longer think of technologies a fundamentally good thing and you can basically look at all the movies that Hollywood produces and I think they almost all portray technology that's destructive dysfunctional kills people and you have your choice is the future going to be matrix or Terminator or avatar and why not retreat into you know a Victorian house from the 19th century that seems like the best you can possibly do and so um you know I'm a little bit nervous about speaking the audience in Los Angeles and mark I will watch your back if you watch that I am now I think when you reflect on why there is so much hostility to technology in our culture and in our society one one explanation I would suggest is that it has not quite been delivering the goods that it's been promising and and you know you have as much power and an Apple iPhone as you did computer power that was available to time the Apollo missions but what it is being used for we can sort of debate how valuable that is and it's like it's being used to throw Angry Birds that at pigs it is being used to throw sheep at one another is being used to send pictures of your cat to people halfway around the world it is being used to check in as the virtual mayor of a virtual nowhere while you're riding a subway from the 19th century and and we may start to wonder whether perhaps technology's not quite lived up to its promise from the past now I'm sure mark will say that people have in the past always made fun of Technology and of technological innovation and they've said that they've underestimated what's happened but I think it has a very different character when people made fun of the Wright brothers or the inventors of the automobile and they were making fun of it because it was strange and different and today the jokes are driven because it is small and trivial in the past the humor hid the fact that people were scared about how much technology was going to change the world today the humor hides the the scary fact that people are worried that there's going to be no change at all and that we are living in fact in time of general stagnation and this is certainly reflected in very broad indicators wages have been stagnant in the US for 40 years 80% of the population in the u.s. thinks the next generation will be less well-off in the current generation and while I know you can't make a one-to-one mapping between macroeconomic data and technological progress it is certainly odd that there's been a 40-year lag and that the sort of technological cornucopia we were promised doesn't seem to filter down to to most people in our society on one of the great challenges in this debate about how much acceleration is happening involves this question how do you actually measure this and I think we will try to really hopefully drill down on this all-important measurement question my basic claim is that in every area outside of computers there has been deceleration since the 1970s there's been no meaningful innovation in energy energy prices are significantly higher after inflation than they were in 1972 we still have not recovered from the oil shocks of the 70s biotechnology we have 1/3 as many patents being approved by the FDA as were 20 years ago deceleration in biotechnology clean clean tech has been an abysmal disaster transportation on not moving faster but moving slower more generally you know even things as basic as food nanotechnology you have the whole range of things where we're not that much progress has happened the one the one sort of big exception to this over the last 30 40 years has been the ongoing computer revolution and and I think it doesn't seem to have been enough to really dramatically raise living standards in this country but we can sort of hope and pray that perhaps this revolution will accelerate in the years ahead and that computers alone will save us all and some of us are doing more than hoping and praying and are actually working to try to try to bring this this about but I would say that even if you measure the health of the computer industry I think there are some things you can point to that are not as healthy as you might say so if you look at you know there's a lot of progress 70s 80s 90s I think by a number of measurements the last decade the first decade of the 2000s saw a deceleration from the 1990s if you look at the number of people employed in information broadly in the US it went one 100% in the 1990s up another 17% in the years since 2000 and if you ignore the recession it's gone up about 38 percent since 2003 so slower absolute growth much slower percentage growth if you measure in terms of market capitalizations of companies you know the mark Google and Amazon companies created in the in the late 90s are worth perhaps two to three times as much as all technology companies and us combined created since the year 2000 so again whether you look at it from the point of view of labor or capital there has been some sort of strange deceleration and and if I have a sort of project in the in the next decade ahead I think we have to we have to at least be open the possibility that the computer era is also at risk of decelerating on we have a large computer rustbelt which nobody likes to talk about but it is companies like Cisco Dell hewlett-packard you know Oracle IBM where where I think the pattern will be to to become commodities no longer innovate correspondingly cut their labor force and cut their profits in the in the decade ahead there are many companies that are on the cusp Microsoft is probably close to the computer rustbelt and one that's uh that's shockingly and probably in the computer Rust Belt is Apple Computer is an iPhone 5 where you move the phone jack from the top of the phone to the bottom of the phone really the sort of thing where we should be all screaming hallelujah it's a miracle now I think the anyway though the one one concluding thought of my end is I want to underscore that I I think of myself as the optimist and Mark is the pessimist here and it is because I think we can be doing a lot better you know we I think we can be looking at a whole range of technologies futuristic computer technologies artificial intelligence quantum computing space technologies biotech next-generation life sciences we should be finding a cure for cancer for Alzheimer's and I think it is not a fact of nature that the slowdown has happened it's a cultural to we've become risk-averse within regulated death we've become incrementalist and we're not willing to really take the bold steps we've talked ourselves into thinking that that throwing throwing Angry Birds at pigs is the best we can do and that's and I think we can do better great thanks thank you so we move from our optimists there Demark great so so so thrilled to be here and it's a thrill to be debating out my friend Peter on stage those of you who have heard Peter in the past know that he's one of the smartest people in the world on all these topics and is also a very original thinker typically in our discussions I find I agree with exactly 50% of what he says 50 point zero percent I'm gonna try very hard today to find the 50 percent that I agree with out of what Peter is saying since I saying I do agree that we could be doing a lot better if there's a lot more we can do and we'll probably talk about that today but I also think the current situation is not is not dire in fact as I am quite an optimist on the on the current situation so let me start with with another thing that Peter has said in fact the the slogan of his venture capital firm Founders Fund which those of you who have not tracked founders fund Founders Fund has become one of the most important influential venture capital firms in Silicon Valley and it's actually well known for being a very innovative investor in areas like the ones Peter mention at the end a AI robotics transportation space and so forth and so is is is a is a is a very big deal in the valley the slogan of founders fund is a sentence that kind of crystallized ins I think Peters argument in a nutshell which is we wanted flying cars instead we got 140 characters I can't resist I would like to take on both sides of both sides of the slogan so I'd like to start with flying cars so flying cars are kind of representative right of the technological future that was promised to us and sort of mid twentieth century science fiction and if you like me like Peter you grew up reading the stuff it seems like everybody had a flying car many of the innovations interestingly of science fiction in the mid twentieth century actually have come through satellites which Arthur Clarke famously forecasted the the poem communicator the Captain Kirk used to carry we now have actually if you read watch Star Trek episodes now from the 60s they're all carrying tablets and actually people didn't pay as much attention to that because everybody wanted the communicator but if you go back they literally all have iPads in 1997 they even have little SD cards they put in them we have those even even you know very futuristic technologies laser surgery is an example which was a staple of science fiction have come true other innovations in addition to the flying car of course have not come true my favorite example is the meal as a pill at this point we were all supposed to be taking our meals as pills right it would save a tremendous amount of time beef stroganoff right as a pill I think given the state of our civilization I think that's probably a good thing that we don't have that because we would have figured out how to put 8000 calories in a pill and we would all be even 300 pounds heavier than we are so I think that one worked out ok on the flying car itself flying cars is a very interesting case because on the surface it seems like it must be a good idea I'd find myself though agreeing with Bill Gates which is a very uncommon thing for me which his comment when he was asked about Peters statement of the flying car he said did Peter really want flying cars flying cars are not a very efficient way to move things from one point to another in fact if you were going to have flying cars they would be incredibly inefficient from a power standpoint and of course they would be far more dangerous anybody who's been to a DMV in the recent past just imagine the DMV issuing licenses for flying car pilots I don't know about you I would build the thickest roof I could come up with and never go outside however even beyond that even beyond that even just cars even transportation Peter will talk a fair amount I think about transportation today Peter basically says we've stalled out in transportation because we're not going faster than we did in 1960 in fact in general we're going slower I actually think the flying car and the idea of the transportation is stalled out I think it's not quite right I think that there are very significant changes happening in transportation right now and there's actually three categories and those changes that I hope we'll get a chance to talk about today I think there's actually very fundamental innovation in transportation happening including advances in information technology that make transportation less necessary right video conferencing replacing trips ask any businessperson is a wonderful thing and you know even within families the ability for grandkids and grandparents to be able to communicate without having to drive six hours through the Midwest like I had to do and I kid I can guarantee you I consider that in advance that brings me to part two of flying cars versus hundred and forty characters which is the hundred and forty characters 140 characters of course is reference to Twitter Twitter of course makes an easy target because a lot of Twitter is in fact about what your cat had for breakfast and lunch and dinner and snacks in between but I think that that trivializes I think actually the statement actually the theory 140 characters is the best we've able to do actually trivializes what's happened in technology and I think also actually trivializes Twitter and so I will rise to Twitter's defense Twitter if you think if you just step back on a minute we're going to think about Twitter Twitter is instant global public messaging for free right instant global public messaging for free if you think about the impact of that if you go back into any previous era right the era of telegraph the era of telephone their television you know all Martin's predecessors at the Economist go back 150 years if you go back to any previous era and you tell them instead of having the communication technologies you had at the time I can give you instant global public messaging for free they would have thought that you had delivered it straight from heaven like it's the most astonishing communications breakthrough they could have possibly imagined and we actually have it and it actually works and is growing at an astonishing pace and I think everybody's going to be on it and I think it's a really big deal I think it's a really big deal for a business I think it's a really big deal for news I think every reporter in the room would agree with that I think it's a very big deal for politics and then I think it's also actually a very big deal for cultural discovery which is new online media like Twitter and Facebook make it easier for people to meet people who are not like themselves and make it easier for people to meet people from other countries and other cultures and interact with them and a lot a lot of experience of kids today is interacting with people from other countries from very early age in a way that at least my generation never did so I think it's a very very big deal across all those dimensions more generally I would certainly assert you know there's no surprise probably to Peter and anybody at assert the central role that information technology is going to play in our in our in our civil civilization advancing in particular communication technology like Twitter communication technology is often disregarded or trivialized as you know people talk to each other about all kinds of nonsense why does it matter the whole basis of our civilization in my view is occasion right without communication we would all be sitting in caves by ourselves right unable to do things unable to learn about things unable to form into groups and the ability for people to be able to communicate and being able to have communication costs come down the curve aggressively as they are I think is a very very big potential set up in platform for what happens over the next twenty thirty years and in particular I think communication will be the catalyst for a lot of innovations in a lot of other industries I think communication is the platform on top of which a lot of other innovation is happening by letting innovators communicate with each other letting innovators collaborate letting innovators team and combine expertise and information much more fluidly than they used to be able to to do that let me end with a comment of perspective Peter addresses briefly in history if you read history the great innovations in the past are now well understood as being very very important it's very obvious it's very obvious the innovations of the past they're trying to be very important in almost every case they were not widely understood as such at the time in fact I would say I would assert that they were often actually viewed as trivial ''tis or jokes I don't think that this is a new phenomenon to be this dismissive about new technologies early let me give three quick examples the telephone when when Thomas Edison first Thomas Edison was first working on the telephone the assumption of the use case motivating his early work on the telephone was the idea that telegraph operators needed to be able to talk to each other right it was considered so implausible that you would have a system that would let any ordinary person pick up the telephone and talk to another ordinary person like that was clearly implausible that was clearly not going to happen but you had all these telegraph operators so scattered throughout the world and you had all these coordination problems between telegraph operators as they sent messages to each other and they said boy if we could actually let the telegraph operators talk to each other that would make the Telegraph work a lot better right completely missing the larger opportunity the internet I have personal experience with this one the Internet it's hard to remember the internet was laughed at was laughed at it was heaped with scorn from 1999 1993 basically the 1997-1998 in fact those of you who were in the industry at that time will remember the New York Times had a reporter on staff named Peter Lewis hopefully he's here in the room I'm convinced he was specifically hired by the editors to just write negative stories about the internet it was like all he did and it was always the internet it was never going to be a consumer medium the Internet is not nearly as big as these people think nobody is ever gonna trust the internet free Commerce he was later like every week there was a negative story and the times about the Internet which you know causes me a certain amount of pleasure today watching the New York Times company tried to cope with the consequences of the technology that they laughed at oh I try not to involve in schadenfreude every once in a while yes sir finally my final example the car so the car was absolutely viewed as a triviality and a toy when it first emerged in fact JP Morgan himself refused to invest in Ford Motor Company with the response that's just a toy for rich people which is in fact what it was at the time if you had one of the first cars you actually had to be a rich person which meant you also had to have a drunk driver unless you were a very very advanced rich person you often actually had to also have a stoker with the early cars to keep the engine going and then you also had to travel with a full-time mechanic because the thing would break down every three miles so there were a lot of reasons to doubt the importance of the car my favorite example of skepticism about the car and in fact cultural rejection of the car there were a series of laws passed in the late 1800s in the UK and also in the u.s. called the red flag laws at the time so the UK red flag law worked as follows with respect to the cars firstly at least three persons shall be employed to drive or conduct any automobile which was actually not that crazy because it was already assumed that you had your driver and your mechanic with you secondly one of such persons while any automobile is in motion shall proceed such automobile on foot by not less than 60 yards and shall carry a red flag constantly displayed and shall warn the riders and drivers of horses of the approach of such automobiles and shall signal the driver thereof when it shall be necessary to stop so possibly a little bit of protectionism on the part of the blacksmith killed but still a good sign of the times in terms of just the initial shock and an initial rejection of the idea it turns out that's not even the really entertaining one the really entertaining one was Pennsylvania in 1896 legislators unanimously passed a bill through both houses of the state legislature which would require all motorists piloting their horseless carriages upon chance encounters with riders on horseback or cattle to number one immediately stop the vehicle number two immediately have to give pager a little bit of a chance to get back to you almost done no stuff okay immediately stop the vehicle immediately and as rapidly as possible disassemble the automobile and number three conceal the various components out of sight behind nearby bushes and salient equestrian or livestock is sufficiently pacified so the point is the great innovations of the present I believe are virtually guaranteed to be viewed as trivial and to be viewed as jokes I think history 50 hundred years from now will enshroud them in legend in our time they won't be recognized as such of course in the future when they become legends that our descendants will themselves have their own trivial innovations to laugh at great thank you Peter I'll give you some some time now to respond to that that was a extended five minutes yes well let's see I think you know I do think the question of the question of how one measures all these things is very important so it is it is true that it's hard to measure these things at the precise moment they happen but that is of course what we're trying to figure out you know we're trying to figure out are things accelerating are they decelerating and I suggested you know a number of different ways you could try to measure them look at how many people are working in the computer industry could look at the market capitalizations of companies you could look at I do think there's something to be said for a common sense intuition on this even though that you know obviously there ways the ways that that's gone wrong and one form another but I think the question really is how do we measure him some one of the questions I would have asked for March answer at some point would be what facts would convince him that were no longer living in an accelerating civilization because can always find some anecdotes where something's happening it may be a very big change you know the history of the 90s I think was complicated because even though the internet was initially underestimated it was perhaps in in the final stage of the 90s overestimated and so the mistakes have been made and in both directions where people under and overestimated things and and there's a sort of an important question what we're doing date my argument I might be today is that we're probably there's not as much hype as the late 90s but there's also not as much reality if you look at the market capitalizations the companies created in the last decade let me say one on transportation and and Twitter um I always like to start with a transportation example because at these sorts of conferences people have traveled and they sort of had first-hand experience with the great low-tech Airport security on that sort of has taken transportation speeds back to nineteen six or interstate four I find a Angelino here we'll know which is working less well yeah and did in 1950 or 1960 or think or things like that and while it's it's possible that we're just on the cusp of some dramatic improvement we have to differentiate the past from the future and so my argument is you know 1750 to 1970 accelerating technological change 1970 to 2010 deceleration maybe it will start reaccelerating but but one should be a lot more skeptical about things that are just on the cusp of happening versus things that have already happened you know we were promised in 1970 that we were on the cusp of curing cancer it was Nixon declared war on cancer solved by the Bicentennial 1976 43 years later you know obviously were 43 years closer to a cure but we would tend to think that given how long the journey has been it's maybe going to take a little bit longer than people think and most people no longer think we'll just be six years from now and so I think we have to differentiate very sharply things you know that have not happened versus things that are on the cusp you know sort of better voice communication technologies we're ready being talked about in the 1990s maybe they're about to happen you know hard hard too hard to say um certainly flying cars are are not realistic listening to listening however to what Mark described as the regulations in the car industry in the 1900s they were much nicer that than they would be to flying cars today and he's mentioned sequestration where all the FAA controlled his death yes so flying cars would they would not even get off the ground today no bad bad fun but but I think but I think the flying car issue and the transportation issue is really a link to a fundamental lack of innovation in energy and if I had to sort of say what sector is the one that really matters its energy when I when I've looked at this over over time you look at the amount of energy input into an economy is very close proxy for GDP growth and we've had a lot of progress and computers and we've had a lot of resource depletion and energy over the last 40 years and that's I think wife had a sort of sheer force on the American economy where it's like the Red Queen's race and Alice in Wonderland where you're running faster and faster and you end up staying in just the exact same place and so I think the the main reason we don't have flying cars is they would take up too much oil it's the main reason you don't you don't have helicopters going from the San Francisco Airport to the Oakland Airport to San Francisco which you did have in the 1970s it was a nice fast service it got stopped after 1973 with the oil shock has never been reintroduced and so I think there are sort of a lot of ways in which these technologies point to things that do not happen now the my general critique of Twitter is not of Twitter as a company should make that clear I think it is a perfectly fine company it's valued at about 10 billion dollars I think that's a that's probably a reasonable valuation they have a thousand people working there I think those thousand people have great job security for the next decade maybe better than some of us would think but they have great job security for the next decade and and it and and perhaps a lot more than people working at the New York Times well something like that sort of as a counterpoint but the question Peter I get from both sides okay but yeah but the question still is it is a specific success as a company but is this really the kind of change that will dramatically improve our economy will droughts it dramatically improve living standards and how do we measure it and if you measured in terms of GDP per capita incomes all these sorts of things it doesn't really seem to translate you know the 1930s we had a financial economic crisis as well and in the 1930s California was the center of technology and it was the best state in the u.s. Steinbeck Grapes of Wrath people moved from Oklahoma to California we had the aviation industry the movie industry all sorts of industries that got off the ground in California um California still is the center of innovation the finance crisis was centered on the East Coast if you if you just take those two packs you say California would be still the best states in the u.s. I think the demographics probably would suggest that people on net are moving from California to Oklahoma which again suggests something about the magnitudes of how big is the tech industry is it enough to save all of Western civilization enough to save the United States enough to save the state of California I think it's about enough to bail out the government workers unions in the city of San Francisco okay on that point I'd like to hand back to mark do you want to respond to some of that then I have some questions about dying to get in but I'd love to give you some chance to respond there so I think by now you probably did that we each have a response for everything so I will I'll try to narrow my down right a little a little bit more so I'd actually like to dive straight into energy and transportation yeah we can spend the entire session defending information technology I think people will draw whatever conclusions said yeah there but let's dive into energy and transportation so let's start with energy so my assertion is we have tremendous innovation in energy and installed out by government intervention so we have had action last ten years massive technical innovation across almost every dimension of emerging energy technologies solar the price of solar has dropped like a rock we and geothermal biofuels fuel cells energy storage energy transmission on and on and on I think the my view the rail my analysis of energy is the problem with oil and gas it's not that it's too expensive instead it's too cheap we live in a world that has had unbelievably large subsidies for oil and gas for many decades direct subsidies to fossil fuels per year running about five hundred billion dollars worldwide right now indirect subsidies are much larger including most of the United States foreign policy in the Middle East X Israel most of United States foreign policy the three trillion dollars of wars in the last ten years and the only reason X Israel for us to be there and to worry about these countries is because of oil and so if I'm an entrepreneur I'm an entrepreneur and clean tech and I'm working on getting my two hundred million dollars in government subsidies to try to get my technology to be cost competitive against oil and gas and I look at the trillions of dollars and subsidies of the of the existing technology I mean it's basically a hopeless proposition the technology has however continued to advance generally what's happening a clean tech is that the clean tech alternatives get to within about 2x of the price performance that they would need to be at in order to start replacing oil and gas and then they stall out because of the subsidy imbalance and people say I didn't but those new technologies have not yet had the opportunity to come down the price performance curve the technology has come down as they get cheaper as they expand into volume because they don't make it to volume solar actually being the exception solar has now gotten two volumes so the prices coming down very fast and so these things stall out people say a hot didn't work aha the subsidies don't work and they ignore the subsidies on the other side of the ledger they ignore ignore the massive work of government supporting oil and gas so my assertion is we can have massive energy innovation maybe this makes me the pessimist actually we can have massive energy innovation in our economy anytime we want what we have to do is stop subsidizing oil and gas now whether that will happen in our lifetimes I don't have a slightest idea I do know it is a hundred percent a political problem it's not a technology problem let me jump yeah you'll me jump real quick to transportation so here are the three fundamental areas of advances in transportation that I'm that I'm that I'm paying a lot of attention to so one is vehicles themselves and will probably argue a lot about this but electric cars have made significant advances in the last ten years including Tesla which is an investment of Peter's absolute phenomenal company again at very very very low unit volumes right and so they have not had the chance yet to come down to price performance curves we don't know how good the economics are gonna get when they start selling at the same rate that conventional cars are which mate by the way it never happened if we're on the gas keeps getting subsidized which is why these concepts are so connected that's one two self-driving cars are very close Google basically has them working Mercedes actually almost has them working Mercedes their new top-of-the-line sedan coming up this summer they had almost they had a very large amount of self-driving technology and if they yanked it last minute cuz they didn't think that it was even think laws at the state level are ready to handle self-driving cars but they're actually very very close so we'll talk more about that to is optimization and I think this is important there are new technologies actually interestingly generally smartphone based around optimizing traffic and so the app that you might actually use today is called waves spelled waz e and it's a mapping app that gives you real-time traffic peer-to-peer networking your traffic it's like almost like BitTorrent of traffic or Napster of traffic where people driving around in the road are uploading all their traffic data including all the location data off their smartphone and pooling it so that you know what's happening with traffic and routes right now and you see if you use Waze you can find yourself rebalancing your route in real-time against all the other drivers in ways which are starting to be in some areas of the country large enough percentage of drivers who are starting have an impact on traffic flows we have the opportunity to have everybody in the country using systems like this and then optimize traffic loads across all the roads and bridges there's actually a whole academic field called societal networking Stanford is very strong in this which is around the incentives to do exactly this and there's a I think there's a lot of reasons for optimism there the point of that is if we get that right it really reduces the requirement to build new roads and bridges right because we can balance the traffic we can balance the time we've never had the technology to be able to do that before because we've never had wireless communication and computers in all the cars and now we do cars themselves are being optimized we have the rise of the collaborative consumption movement and we have these services like sidecar and lyft and uber that basically make it possible to share cars so we can reduce the need for cars we can reduce the number of cars in the road and then finally replacements I indicated right anybody who traveled to this conference and had a bad travel experience anybody who stays home used to watch this conference a video later on they have a fantastic travel experience they don't need to leave their living room the substitution offense of transportation I think are going to be a very big deal in the years to come high-quality telepresence is only now becoming a reality and we are very close of you who have seen like high-end Cisco TelePresence systems it's like being in the same room with people and that stuff is going to commoditize very quickly very interested Peter mark picks up two the two common themes that I often hear when when when I'm reporting on innovation yeah one is that well it's all the government's fault so your energy question yeah there hasn't been innovation but marks point well yeah because the government's in the way number one the second argument is yet text coming to the rescue don't worry it might look bad but within about three or four or five years there's technology coming in you know you've got Ray Kurzweil you've got George Gilder saying you know sooner or later bioinformatics every it's going to solve the pizza teal concerns he doesn't need to be worried because I t's coming to the rescue that's Mark's point on transportation what do you make of both well there's certainly number of these people been saying these things for a while so there's some question at what point at what point does one become a little bit more skeptical of what what people what people have said I would say um I'm actually very sympathetic to Mark's point that there's a big government regulatory problem and we live in a world where the world of stuff has been regulated and the world bit's has not been regulated and and so if you were an engineer when I went to Stanford in the mid-80s engineering was a terrible feel to go into almost all areas of engineering were bad Chemical Engineering by a biochemical engineering Electrical Engineering doesn't say nothing of nuclear engineering mechanical engineering Industrial Engineering aero-astro engineering terrible terrible career decisions I'm leaving punishing engineers in this country for 40 years people are not allowed to build things you know and you can see with things like you know the Empire State Building was built in 15 months in 1931-32 it's taken 12 years and Counting to rebuild the World Trade Center Golden Gate Bridge in my backyard was built in three and a half years in the 30s it's taking seven years to build an access road that's costing more than the original bridge and real dollars so um so we we have it's been a bad decision become an engineer computer science and financial engineering have been the two exceptions to this I think financial engineering not so much going forward so it's sort of been reduced to this one very narrow area and everything else has been outlawed but that's you know that's a perfectly reasonable explanation of why there's been tremendous deceleration right and the question becomes is our computers alone enough to save us and and it's very hard for them to break out of this virtual world when the real world remains massively regulated and and you know I think it's very interesting question what will happen with the self-driving cars you know well will you be able to have them who's liable will be cut with a company doing the computer code be liable if the car crashes and all these sorts of questions will be tremendous hang-ups in a super risk-averse society what about marks other point which is very interesting he made it right at the end so we sort of lost it but this point about time lag you know if you look back I mean the Industrial Revolution there are the gains from that in wages and living standards it was almost like a century before they started showing up in British workers pay packets you've got you know a sort of classic lag about five to fifteen years before communications technologies and IT technologies tend to show through in pay packets and wages so that's one possibility mark might be right you know that there's just this lag and we're not seeing it and there's a second possibility which is the you know the argument that's put forward by Erik Brynjolfsson who says well actually what you're seeing is massive advances in technology and actually what they're doing is displacing labor so laborers robots are coming out next year I won't be chairing this there'll be a robot here c-3po with my accents and it'll be terrible but nevertheless you know we are as the New York Times and The Economist are all doomed to die I thought I bring that but nevertheless maybe there's two things going on here one there's a lag and two actually what we're seeing is this displacement of labor with with technology or maybe there's not that much technology happening so that's the third possibility now I think the lag the question is how long is the lag at this point we're going on 40 years from wages have been you know mean wages have been stagnant not median it's not an income inequality issue so on mean wages went up 350 percent in the u.s. after inflation from 1933 to 1973 went up 22% from 73 to 2013 median wages were flat so that's become more unequal but even even if you had redistributed everything it's gone up only 22% right and that I think all no on the second point in fact there is no robot sitting there I will at least I think now I think the robots that they're and and and you know it's that is a distributional question so it's it's true that if if computers replace labor it might lead to more unequal Society I'm not sure that's true but but then you you presumably create enough more wealth that you could figure out some ways to redistribute it but but the problem is there is actually not that much wealth around to redistribute it if you confiscated all the money from every billionaire in the United States you'd basically pay off the government deficit from one year right and so it's it's not that there's been technologies led to this incredibly unequal wealth if you look at if you look at who's looking at this the other day the Forbes list 92 people who are worth 10 billion or more on the Forbes list from 2012 where do they make money 11 of them made it in technology all 11 were in computers and that's the narrative that you like to tell but there were 25 and we've heard of all of them ok you've heard of all the names it's it's Bill Gates it's Larry Ellison Jeff Bezos on and on Mark Zuckerberg there are 25 people who made it in mining natural resources which are basically cases of technological failure because commodities are inelastic goods and people make a fortune when there's a famine if you're a farmer because people pay way more for food if there's a little bit there's not enough and so 25 people in the last 40 years have made their fortunes because of a lack of innovation eleven people have made them because of innovation and we never talk about those 25 people I could go down the list who would not have heard about half of them in this audience and so there's this incredible media skew where we're celebrating the technology people and then we can have a secondary debate how do we take their money and give it to other people and and we never talk about the the the incredible trend towards um towards inequality driven by a shortage of innovation which is what you see and the fortunes that are made in oil natural gas things of that sort in the last uh 40 years and just to mark on energy you know you say government gets in the way me when I look at the the electrical grid so that's not talked about generating the extra see but distributing at me if I were Edison I came up today I probably don't say well it looks pretty familiar to me I mean the last 50 years have been virtually no change and if you look at the the sort of R&D spend of energy companies we managing grids it's like naught point 1 7 percent of sales you know you look at a pharmaceutical company way higher so is there just not a fundamental problem in terms of the grid itself as opposed to all the stuff that's going into it well when you get government sponsored monopolies that's what you get I mean that's that is the consequence I mean an energy innovation itself they're astonishing things happening there's there are people working on wireless energy transmission in the house to be able to just have everything in the house powered wirelessly so no more wires they're people working on long-haul energy transmission I've actually been significant advances in nuclear power right France gets 80 percent of their electricity from nuclear you know if you there's there's advances Peter actually has an investment in a company very very bright entrepreneur in Berkeley doing energy storage in an air and light fast air which is incredibly interesting if you put all these together right you can start to imagine a different layout you can start to imagine you know put 50 new state-of-the-art nuclear plants in you know have put countries up for bid look who wants the nukes right and then run long haul transmission into all the other countries and then do wireless transmission in the house like there are completely different ways to do this but when you have entrenched government monopolies in these areas and this is probably Peter the main area of overlap between Peter I mean when you have entrenched government protection and government monopolies government subsidies it certainly is a big antipodean and then at some point people will stop innovating at some point you know like the clean tech thing has gone on for a decade but at some point people will give up and and I do think but I think there's a question why there's been a slowdown that's important yeah but the question I think maybe it's the government's fault but because I go back to the fundamental thing is we've had a slowdown in all these areas we've not the innovations have not been allowed to see the light of day but there's you know there's statistics out there from it was a Brookings study earlier this year that said you know American patents they're an all-time high patent filings happen we've got an all-time high - you can get but if you look back in cycles then they went back to 1790 when American patents have been at a cyclical high innovation has tended to be at a high - you know you subsequently see that innovation come through in the real economy so I agree with you there's a certain amount of patter of lawyer driven so feel sorry to all the lawyers in the audience but nevertheless you know that perhaps there are some really some things going on that mark says that we're just not really picking up on but they're embedded in those patterns there well it's look it goes back to this this measurement question it it strikes me that patents are not the best way to measure it I prefer to look at wages macroeconomic data capitalizations of companies I mean the markets do discount the future to some extent so if you look at companies tech company started 2000 and 2013 you sum all the market caps compared with tech company start in the 1990s some of those market caps four times as much 1980s close to the 90s 70s close to the 80s so you look at it you'd see a very big drop-off in the last 13 years hmm I don't know all these measures are imperfect I'm not saying that's the Holy Grail but but I think there are sort of a number of these different ways you can you can triangulate I I do think I do think one can make both mistakes you can make the mistake of being too critical of things that are incipient and not giving them a chance to sort of breathe and develop but you can also make the chant mistake of being too gullible and if you think that you have this cornucopia infusion will take care of itself you end up with the country like the US where you have a savings rate of minus 6% if you include government deficit spending people think the future will take care of itself you end up with one bubble after another where people have been promised that the future will be fantastic we've had a quarter century of one bubble after another in this country tech Housing Finance I think now probably government bubble and and they keep blowing up because you know you end up with a credit crisis when the president does not live up to the fantastic expectations the past had about the future and so there is something very off with our calibration this is a date one one one anecdotal data point from 1967 on his book fantastic written called the American challenge by JJ Zevon Schreiber who was how the u.s. lived in an accelerating technological civilization and what would this look like and he predicted a lot of the computers innovation automation and by the year 2000 because the US was accelerating it would mean that it would leave the rest of the world behind and therefore people have to compete less with other countries and therefore the average American worker in the year 2000 would be working seven hours a day four days a week with 13 weeks a year of paid vacation time and even though we'd like to dismiss him because he's French we do have to you have to acknowledge that from 1850 to 1970 work hours steadily went down and that's what happens in an accelerating simulation people have to work less hard and we're not talking about the creative people or the CEOs who love their jobs we're talking about the average people who actually would like to have a work-life balance you Aust an interesting question Arianna I want to ask both of you that question and start with math what evidence would you need to convince you that your position is wrong yeah there's there's three too that are in numbers and one that is an intangible so on the numbers side it's also actually the same answer the question of how do I measure innovation so at the macro level I think there's an input metric and I'll put my face both of which irrelevant the input metric number of scientists and engineers in the world I mean sort of the raw material of innovation are the people who innovate I think probably in the long run that's a good proxy I'll come back to the what might be the problem of that at the end but that is probably good proxy all of the things being equal the facts they're actually quite astonishing 2.1 million natural science and engineering degrees granted in the year 2000 worldwide grew from 2.1 to 3.7 million by 2008 you know an enormous take off of science and math and engineering education in the developing world the number of researchers increase from 3.9 million in 1995 worldwide to 5.7 million in 2007 so huge increase the number of researchers so I so answered the question of what would convince me wrong if those numbers start to fall in a dramatic way that would for sure have a big impact on my thinking on the output side median mean wages I they intermix inequality as a factor I would prefer to look at per capita GDP just look at the straight number per capita GDP and then if we want to work backwards into the inequality issue we can do that which is a very interesting issue but per capita GDP over the Israel no over the long sweep of time per capita GDP actually follows a Moore's law is exponential if you look at US per capita GDP it's almost exactly the same curve you see on advances in semiconductor technology it's a straight exponential curve over a very long period of time 150 years since 1871 per capita GDP and in this country has gone from three hundred dollars to forty five thousand dollars in current dollars the other interesting thing about looking at this curve is you see these crises like the Great Depression and you see you know the the dot-com bust and they're these tiny little squiggles on what otherwise is this is this unbelievable curve and so if we saw a sustained drop in per capita GDP I mean that would put me into a complete panic the final thing that I would look at is is is the imagination component if we fundamentally lose our imagination right the the obvious critique of a number of engineers and scientists in the world is well what are they all going to work on and what if there aren't enough new ideas what if they can't come up with enough new ideas and we fundamentally stall out when it comes to imagination and creativity that would how would you measure that people concerned the problem with that one is this it's an intangible yeah you can maybe measure it you know some loose metric might be the number of scientific papers or something like that but it's it's it's a loose one patents by the way I think at this point had become an anti indicator Peter I think might even agree with this bats becoming the patent system actually it's interesting patent system all the people in our world believe that the patent system is fundamentally broken like fundamentally broken in that it has become you can almost prank the patent you can basically at this point if you wanted to you could file fake patents and get them granted all day long I mean the the patent examiner said basically as far as we can tell if completely lost the ability to actually differentiate between an innovation and just another copycat feature and so there are they're these patent you know machines these companies that are generating tens of thousands of patents a year and not innovating even a little bit and it's completely broken in fact that itself might be an indicator that innovation is alive and well it's because innovation has now moved to the point where the patent examiner's can't keep up with the state of the art they have literally no idea of what the state of their it is so patents I would definitely not use great Peter same question for you what would it take to change your mind fundamentally about this well I I would I would still focus on the broader economic data I would focus on I would focus on certain specific areas of innovation they think are very important so so one that I think has decelerated some but still held up is increases in life expectancy they've decelerated but they're still going up some and so that's what I would look at very carefully if that started going up again it you know two and a half three years per decade as it had from 1842 to 1970 that would be a very very good indicator if that decelerates further it suggests the problems are you know the problems are even even even deeper so I think there's certain specific measures that I think are really critical I certainly think on there is a cultural component of this that's very important I don't know if I like the numbers of people in science I think we have about a hundred times as many scientists as we had in the 1920s as far as I can tell there was more innovation the 20s and there is today so that's that leads me to think that's it's actually not that good an indicator and I think you know it's about 50% of the articles that are published in science and nature magazines turn out to be inaccurate and incorrect and so there is sort of a lot of the scientists are sort of not not quite honest or being pushed in ways they're somewhat problematic and we should be a little bit more skeptical that whole enterprise at this point but I would I would say um yeah I would say if you know I think I do think it's it is this uh this question of imagination that's very important I come back to to an indicator that I think is an interesting cultural one that's sort of in Los Angeles is if if Hollywood started producing science fiction movies in which technology was a good thing that would that's up really important you know and know a bit of Ian and the you know the only ones I can think of in this are the Star Trek retread movies which are still like a flashback to the 60s everything else it's technologies bad it's going to kill you it's going to destroy you so if people here stopped hating technology and started using their imagination to produce some good science fiction movies that would that would be a very good sign well let's hope we can make it so good the final thought in win reads we talked a lot about America and develop what emerging markets huge number of people out there who don't even have benefits yet of some of the the fundamental innovations that came through from you know sanitation electricity etc etc so people say well it's all catch up out there you know there's no innovative yeah the innovation is gonna come from the developing world but maybe just maybe there's this huge sort of innovation coming from the ground up sort of low cost you know the Nano car mobile payments in Africa really taking off because there's no you know banking system there to hold it back maybe some of those constraints that Mark was talking about that we have here could in emerging markets not be there and maybe we will see in Brazil in China India other places huge sort of blotting maybe it's there already are you optimistic is that reasons that we should actually go away from here thinking we are actually still in a accelerating technological civilization or are you pessimistic about that well our venture funds offices are we have only one office in Silicon Valley and we're gonna keep it that way for the foreseeable future there's definitely been the sort of globalization of venture capital approach when people have tried to set up offices and many other countries in the emerging markets on the efforts have had met with very mixed success and the business models have generally involved sort of a globalization arbitrage where it's the Groupon of China or the Singh of India or something like this and I tend to think we like to invest in the first and best technologies I tend to think that often the something of somewhere is the nothing of nowhere and therefore that the place where the real innovative companies are happening it seems to have gotten even more centered on Silicon Valley it's possible that once these countries catch up in 10 15 20 years there will be innovation but I think they are still far behind and and the the place I would look outside the US is other developed countries where there's room for innovation I would look at Israel I'd look at Scandinavia ROM you know maybe Canada maybe maybe Germany there are other constraints and innovation other cultural constraints in those countries but I'd look at the developed world the the big place where people said things were gonna get copied and overtaken was Japan and Japan copied phenomenally it caught up to the US and the 80s and then it never overtook and it's a very open question whether it's gonna happen in these other places and a culture of accelerating progress is rare it's only happened once in the history of the world most cultures most societies were basically stagnant and so it's a very important thing for us not to lose the sort of accelerating technological civilization that we've had that I think is at great risk thank you not on this one so I pulled the number so number of public companies in the United States went from eighty eight hundred in 1997 to 4100 today right so there's been a sustained attack on public companies in the US that has predictably cut the numbers on the other hand the number of countries in the world went from in 1990 164 to in 2012 somewhere between 190 to 206 depending who you ask and there are various debates about that and then there's a southern new movement The Economist Paul Romer has this effort to do so-called charter cities to basically create more Hong Kong's to Singapore's which could take the number of countries up a lot reason I bring this up is because I think there's an opportunity for innovation internationally that go right back to the regulation topic which is regulatory competition so various countries choosing to specialize where they want to have innovation it what kind of innovation they want have in their economy by the regulatory regimes South Korea embryonic stem cell research Japan has liberalized drug development big surge or drug R&D Israel has commercial drone flights which we which are not allowed in the US the UK online gambling is allowed which means prediction markets work which I can't in the u.s. because they're illegal and so there's actually an opportunity for countries I think to differentiate through their regulatory structures and have new kinds of centers of innovation as a result and actually I grew agree this is just a this is one place where I think you agree we can you know we we've been looking at a lot of these heavily regulated industries to invest in and the question is always is there an opening for deregulation so space there was some deregulation in the US was an opening for SpaceX to get started as a business here in Southern California and I think on the life sciences in biotech the question is is there some tipping point where the FDA loses its stranglehold on the global drug market and and that's that's the one I'm I'd be most interested on that right ladies and gentlemen we've sort of run out of time so I'm not gonna let each but it doesn't have two minutes because I think they've given us plenty of food for thought there please would you thank my panelists terrific [Applause] [Music]
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Channel: Milken Institute
Views: 140,944
Rating: 4.8836179 out of 5
Keywords: 4076
Id: VtZbWnIALeE
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Length: 57min 11sec (3431 seconds)
Published: Mon May 20 2013
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