Monopoly allows innovation to flourish

What the author is really trying to say is government funding of advanced technologies leads to innovations. He bases his arguments on the monopolies that existed at the time but correlation =/= causation. Everyone of the examples he sites had a huge amount of input from government funding. Bell Labs wasn't going to create UNIX on its own. ARPA funded Bell Labs developed UNIX. DOD invested money to get planes built, rockets built, and men on the moon. And once we beat the CCCP to the moon all that funding was dialed down.

He might as well be saying the lack of a competing super power is why innovation has stagnated. When I was in university there were a lot of ex aerospace engineers taking university lecturer positions (not even professorships, just teaching statics and mechanics). In fact there was a joke, which was irrelevant until the recent economic crisis, about the only job aerospace majors could get came with fries.

The stranglehold Microsoft had on the browser market brought new innovation at all. It was 3-4 years of IE sux (6). And now that Firefox has gone through 3 major visions it finally lit the fire under Microsoft's ass. The same thing for the iPhone. Windows Mobile...asleep at the wheel, Blackberry OS...asleep at the wheel, Symbian...still trying to get their act together. All of a sudden one maker makes a usable smartphone now everyone has a real browser, multitouch, and honest to goodness intelligently designed UIs.

This article is a bag of FAIL.

There's so much wrong with this article. The original data is some random journalist's list of big innovations. And even if innovation was greater during times of high defense spending, it wasn't greater because of monopolies. A lot of the novel technology of the cold war was developed by little companies.

Pure research definitely leads to innovation. But I don't think there's any significant correlation between holding a monopoly and running a top-tier lab.

It has happened, sure. But at least as often, it hasn't. And a monopoly certainly isn't required to build a great research lab.

I consider the graph of "Time Distribution of 100 recent major inventions" as evidence of a decrease in the rate of innovation highly questionable and subjective. To see an innovation as major will clearly take time since it will need to be exploited. It follows that it is unlikely that anything recent would be considered a major. Even as late as the early 90's I doubt that e-mail would have been considered a major innovation and that was 20 years after it was developed.

During the 80's through current day innovation drought just off the top of my head I come up with the following: Scanning Tunneling Microscope followed by the Atomic Force Microscope, Super String Theory, RNA Interference, Carbon Nanotubes, iPhone (a convergence of many technologies in chip development and manufacturing, power storage, display technology and software), Statistical Natural Language Processing, Acceleration of Universe expansion, ....

The flip side of a major innovation is an entire category that was previously undiscovered or unutilized. Therefore, there are a finite number of breakthroughs that are possible, and how many there are is determined by two things: The nature of the universe, and how we characterize breakthroughs.

If you characterize "innovation" very broadly, then you get few innovations that are even possible. Example: Would "augmented reality" be an "innovation", or simply an application of existing vision algorithms, 3D graphics hardware, and small computers? It's arguable either way, and I'm not making a claim either way. My point is that if you do say "That's not an innovation, it's an incremental improvement on the computer innovation", then you get a smaller set of possible innovations to draw from. Apply that standard across the entire set and you can shrink it to the point that there are only a handful even left (human-level AI, brain upload, space colonies, and maybe 10 or 20 more).

On the other hand, if you broaden the definition of "innovation", you get more. Is a "web search engine" a valuable innovation? It's "just" an application of a computer, but it's a big and important one. That "computer" innovation is a particularly big source of this problem; there are many innovation-class things that are "just" an application of a computer.

I don't think we've gotten that much less innovative. We're just taking some time to come to grips with the ones we've already got, and research on others is proceeding. I think this is an artifact of the way innovations get less and less flashy over time; "cure for cancer" have been very innovative, but there isn't just one, and individually they don't look like much. But they are, nevertheless, proceeding, and at an increasing pace as we bring more and more biology under our control.

I agree with most here that a monopoly isn't required by any means, but there is the issue of critical mass. I believe there's a nonlinear relationship between the size of the lab and the significance of its output. The sheer size (in dollars and brainpower) of Bell Labs and DoD-derived research were major drivers in their successes.

We're veering dangerously close to the broken window fallacy here...