Comment by abalone | Hacker News Reader

Comment by abalone | Hacker News Reader

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Folks. There's no crisis of innovation. This would be a lot clearer if people understood how Silicon Valley has always worked:

1. Government pays for really big long-term high-risk core technology development. Things like microprocessors, the internet, voice analysis, lasers, space rockets, highways, etc.

2. These are mostly done under the rubric of defense spending. (This is important.)

3. Private sector steps in to commercialize the projects that bear fruit.

Hyperloop falls under category #1. Those projects take billions invested over decades with very uncertain prospects. Usually supported by military procurement. Yes, even highways were built ostensibly for the military. And Siri on your iPhone? Funded by the CIA.

That kind of Really Big Fundamental innovation is funded by the government. It's never been VCs. They focus on the "last mile".

Space X is a good example of that: bringing a foundation of core tech developed by NASA to market, adding commercial-oriented innovation on the scale of a few years and a couple hundred million from the private sector. But even at this stage, there's still many more hundreds of millions in government procurement (prepaid launch contracts).

The reason Hyperloops don't get funded is that the government doesn't have a military application (or pretext) for it.

Now we could go on to ask why Silicon Valley's megabucks foundation is military spending and not, say, direct government investment in sustainable public services. But then we get to some uncomfortable issues, like how the public might feel more entitled to the fruits of those investments. Whereas if core science and tech is seen as a kind of "military surplus", free or cheap for the taking, then the VC private sector gets to keep the profits from commercialization.

The idea that "military development advances technology" is very popular but not entirely accurate. The micro-processor, for example, was invented while working on a handheld calculator project, and advanced through the consumer market.

Sometimes military development advances technologies in ways that might not have happened otherwise but it's hard to compare to the way development would have gone otherwise. Take the development of aircraft from their invention through WWII. Unquestionably there was a rapid pace of development during, and due to, WWI and WWII. But there was also a rapid pace of development outside of the wars. The design of the iconic WWII fighters the Supermarine Spitfire and P51 Mustang owe much to the advancement of high performance aviation spurred by the entirely civilian Schneider Trophy competitions through the 1920s and '30s, for example.

"In the United States, the development of the computer was underpinned by massive government investment in the technology for military applications during WWII and then the Cold War. The latter superpower confrontation made it possible for local manufacturers to transform their machines into commercially viable products. It was the same story in Europe, where adoption of computers began largely through proactive steps taken by national governments to stimulate development and deployment of the technology."

http://en.wikipedia.org/wiki/History_of_computing_hardware

You're arguing there's an interplay between the public and private sector. That's true. But you would be hard-pressed to find an example of a major core tech that developed independently of significant government investment -- particularly in the highest-risk, most capital-intensive stuff. And that's why Hyperloop doesn't get funded.

> You're arguing there's an interplay between the public and private sector. That's true. But you would be hard-pressed to find an example of a major core tech that developed independently of significant government investment

I'm not sure about the history, but perhaps the internal combustion engine?

More generally, the line of reasoning in this thread assumes "this is how things have happened" to imply "this is the _only_ way things can happen". It is entirely conceivable that the private sector would, in the absense of government funding, step up and perform/fund fundamental research. But, in the current fiscal climate where there is still, generally speaking, copious government funding available (e.g., to the military), why would a private group spend money to do that when they can let someone else (the government) take the risk (with someone else's money).

Indeed. There were 3 of the largest wars in history during the 20th century (WWI, WWII, and the Cold War). That's going to necessarily skew the statistics on development of technology in recent history.

However, the increasingly large-scale integrated circuits that led to microprocessors were largely defense driven: missiles, etc.

Not "largely" but rather "initially". IC development was probably accelerated by missile development, but it's difficult to say by exactly how much.

Here's a quick overview of the history of ICs. It gives many strong examples of how DARPA propelled their development and decisively rescued the U.S. industry from Japanese competition -- definitely a large role. There's really not a lot of controversy about the massive role that DARPA and other agencies play in American high tech.

http://www.longviewinstitute.org/projects/marketfundamentali...

Hold on, so you're arguing that DARPA "rescuing US industry from Japanese competition" is proof that the technology absolutely required government investment to advance it?

Need I really demonstrate the fault in that logic?

I don't know if it affects this case, but I know that the Japanese government was doing a lot to prop up their companies, so it's possible that "Japanese competition" isn't entirely private sector.

You just shifted the goalpost ("absolutely required"). The logically fallacy is yours. I merely claimed a "massive role," which is accurate.

But there is a crisis of innovation. The hyperloop is not a good example of it, because all the reasons abalone mentions.

Two examples:

1.Talk to people in the medical device community. There are plenty of good ideas , but they are hard to build and it's hard to raise money.[2]

2.Robotics: VC investments totaled in only $190 million in 2012[1] for a technology that is quite highly developed.

[1]http://www.hizook.com/blog/2013/06/10/venture-capital-vc-fun...

[2]This is partly due to the difficulty of writing software in this highly regulated environment. Seems like some pre approved platform should help here.

Medical world is troubled with legislation issues not innovation issues.

The robotics world is getting there but it's hardware so it takes longer and is more risky and with less room for pivots.

Even with the tight regulation(some of it surely needed and not just bureaucracy ), given more funding you'll see more profitable innovation.

But sure, legislation could help immensely.

I think the root cause of the problem is that innovative projects/companies don't have marketing/sales skills. There are a lot of innovation in the world and in US in particular but it's difficult to plug into the business world.

As a co-founder of an 'Instagram' business, I completely agree with everything in this article. In fact, it's one of the best things I've read in a long, long time. There is absolutely a crisis in innovation.

Unfortunately, this is the way the ecosystem is at the minute and we can only hope that when the bubble bursts the people that have made exits from these types of startups can invest or found & fund real innovation themselves.

Thank you. Explanations from people like Mariana Mazzucato are getting increasingly hard to ignore, with reviews in places like The Economist and FT. (http://www.ted.com/talks/mariana_mazzucato_government_invest...)

Previously, it was common knowledge among the left, like Chomsky. (http://books.google.com/books?id=3VtILDSrZ7wC&pg=PA173&lpg=P...) Economic ideology is the religion of the age, where people are unable to see clear answers.

> Government pays for really big long-term high-risk core technology development

No, taxpayers do. Without consent. Government takes money from taxpayers and pays for those long-term things regardless of whether they agree with those things or not. Democracy and elections isn't consent - may I remind you that congress approval rating is now below 10%.

> No, taxpayers do.

Well, given the degree to which spending exceed tax revenue, marginal changes in government expenses are actually paid for by bond purchasers, not taxpayers.

"Ride Hyperloop, the terrorist-safe speed train"

It will also make you skinnier :)

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