American Innovation Lies on Weak Foundation?
nytimes.com
nytimes.com
I don't know how it used to be 20, 30 or 50 years ago, but if you have sat in a graduate science/technology/engineering course classroom in any US university in the last few years and surveyed the demographic profile of your fellow classmates you might notice something.
The percentage of students of Asian ethnicity will probably outnumber all other groups combined. I admit this is only anecdotal.
A fairly large percentage of those students (who are not already US citizens) will try to find work here and contribute to the US economy if they can. However due to the increasingly difficult immigration climate many of them will return home and become the spearhead of innovation for their home countries.
I don't know if that is the same in the US undergraduate programs.
In net, you have two factors here, 1. Fewer US based students are going into graduate STEM programs. 2. More US educated foreign STEM graduate students are being trained to contribute to your future competitors.
I wonder what that does that to the long term prospects for home grown innovation in the US.
Just citing one study [1] below. I am sure there are even more counter studies.
[1] http://www.brookings.edu/research/interactives/2014/geograph...
The main thing holding Canada back is a similar increasing focus on "commercializable" research at the expense of basic science. Long-term commitment to excellence in basic science is what opens up new fields. Preferentially funding research with the latest buzz-words tends to make a country a follower of trends.
Because if you're a US citizen, getting a PhD for the money is a racket. Just take your BS in CS over to Silicon Valley and start making bank working on Tinder for Dogs. Want to make six figures and have a shot at a billion dollars? The surest way to NOT do that is to go to grad school.
If you're NOT a US citizen, getting a graduate degree is a great way to get into the US, do work that gets you noticed by big companies or labs, and then get a job at those companies or labs once you graduate. Many of those jobs will be in the US, and having a PhD will make your visa application smoother (so I hear) because you have an advanced degree.
Foreign students have more to gain, so more apply. That's not hard.
p.s. for the US overall, in 2013[1] 47% of the students enrolled in math & CS were permanent residents, so it seems unlikely that your statement "The percentage of students of Asian ethnicity will probably outnumber all other groups combined" is true.
[1] http://cgsnet.org/ckfinder/userfiles/files/GED_report_2013.p...
https://www.insidehighered.com/news/2013/07/12/new-report-sh...
In absolute numbers, there was a decline in U.S. nationals earning science & engineering doctorates from 1995 through 2002, but the trend is upwards again since 2002.
Chart: http://www.nsf.gov/statistics/sed/2013/digest/theme1.cfm#cit...
I hear this all the time, and it's absurd. The high P/Es of innumerable companies (like Amazon) are compelling evidence that investors are well aware of the long game companies play and they approve of it.
The charge that companies are eating their seed corn to satisfy wall street assumes that investors are monumentally stupid. Share prices are based on the collective best estimate of the future value of a company. Any hint that the company has sacrificed the long term for the short term will tank the stock value.
The sorts of people who invest in Amazon are, anyway.
Still, it's true. Growth companies think long term. But the moment a company (or other organisation) gets into trouble it starts thinking short term. When you've got to lay off 20% of your workforce, you pick the ones whose absence won't be felt for many years.
But really, the reason that companies don't invest in pure science is not that the value is too far in the future but that the value is too diffuse to capture.
If you are better than other investors at knowing which companies are secretly eating their seed corn, you can make a fortune shorting their stocks.
CEO compensation is often tied to short term stock values. But those short term stock values ARE a reflection of the long term prospects of those values, not last quarter's profit. I've seen a lot of share prices tank when a blowout profit was announced, because along with it investors got hints that there were big problems looming.
I think so. A lot of the research at Xerox PARC and Bell Labs failed to generate much profit for their parent companies, although it was of great benefit to society, so why should companies continue to operate that way? It's a market failure. The federal government probably needs to pick up the slack and fund more basic research.
I'd argue we are seeing the same mechanisms at work in the private tech investing space, and that once companies start to go under, those who have not exited from their investments are likely to get burned big time.
It's the PE of companies like Facebook and Twitter, who derive their earnings from questionable business models (notoriously hard to measure ROI on advertising, millions of fake/spam accounts, possibility of disruption ala Myspace) that I would be concerned about.
Often attributed to Keynes, though may have originated with Shilling (or been in common use).
Imagine saying "Stock X is great, but the market can undervalue X longer than I can stay solvent"?
It's a chaotic system with an upward bias. Cyclical implies temporal predictability, and good luck with that :-)
Sure, I can say with 99.9% certainty that the economy will contract within the next 100 years. Shorten the time frame and my confidence level will drop accordingly. I'd probably have a 0.1% probability of guessing within 30 days of when the business cycle will reverse.
Hillary's plan to make it more costly for people to switch investments will make the economy less productive.
> If Clinton really wants to deal with short-termism, she’d be better off targeting the way executive compensation works, instead of the way capital gains are taxed. Ultimately, the solution to short-termism isn’t on Wall Street. It’s in the executive suite.
So my GGP's post is correct. Executives break companies by manipulating the financial short-term.
Saying "Amazon and Netflix and Tesla prove that the market is long-terminal" is silly. These companies are founder-run and there is a large part of the market (Hello Yahoo and HP) where revolving door CEOs just pillage the company to goose the short term numbers and cash out their stock options)
"a 2014 study of companies that cut R. & D. spending in order to meet short-term earnings goals found that their stocks underperformed after earnings had been announced—hardly what you’d expect if the market cared only about the short term."
meaning the market is not being fooled, and therefore executive compensation based on market value is not driving short term thinking.
Sigh..people who use this example don't understand engineering. The Voyager doesn't need much power to do its job. An iPhone needs a lot of power to surf the web and play videos. An iphone also has more computing power than a Casio watch that you can buy a Walmart, because the watch doesn't need much power to merely display the time. It also has more computing power than a traffic light.
As for R&D, another possibility is that universities and small companies may be compensating for R&D stagnation in bigger companies. Many bigger companies acquire small innovative firms instead of doing the research all themselves.
> Rather than invest in their own science, big companies may now more easily buy innovative start-ups and develop their most promising discoveries into profitable technology.
> And yet this ecosystem is vulnerable, reliant on a dwindling pot of public money that underwrites most university-based research.
> “The buy-up strategy would be fine if we had confidence that the university system and start-ups were picking up the slack,” Professor Arora told me. “But we still don’t understand how this division of innovative labor would work.”
> It might work. But it looks risky to put all our trust in that approach. It’s time for a different paradigm — more on that in a future column — to finance the innovation that will power America’s future.
Apple is fixing this problem right now.
Yet, most startups started on shoestrings. Then they got investment from VC firms. These sources of innovation don't come from NSF or Microsoft Research.
And American innovation comes from far more than money. The culture of American innovation is a huge factor, which isn't declining at all.
Secondarily, as public money from governments and money from large corporations dry up, innovation and risks are taken on by other parties. The article completely avoids crowdsourcing such as Kickstarter campaigns, an example of innovation being Oculus and their Rift.
As the cost of innovating decreases, innovation decentralization increases.
> In 2011, Luckey got a dream job working as a technician at the Mixed Reality Lab (MxR) at the University of Southern California's Institute for Creative Technologies (ICT). There, he had a chance to cross deep into VR territory. On Sept. 25, he posted the following on MTBS3D. [These excerpts are condensed and lightly edited.]
He described the experience in a 1500-word narrative titled "Truly immersive (AKA "Holy crap this is real") VR simulation."
via: http://www.popularmechanics.com/technology/gadgets/a12956/pa...
Besides, I was saying that other means have become available as the cost of innovating has been cut, sometimes by orders ot magnitude. Kickstarter, specifically, has replaced a lot of traditional public or large corporation outlets for funding.
That's not to say that startups are unimportant, just that I don't think anyone would argue it makes sense to replace all research labs with startups. Startups are focused on making money, whereas research is focused with progress in human knowledge.
The desire to cut science funding does not come from rational deliberation. So the path to greater investment in science is not through rational debate. The only real path, and it is a long one, is to bring people on board through proper science education.
Those days are long gone...
What about commodity clusters (i.e. all cloud computing), MapReduce/Hadoop, Spark, or the deep learning renaissance? Yes, I am super biased, but I think Google and Facebook have done as much to advance technology as their predecessors.
But apart from that they have a point. Raw numbers matter, and even though R&D might have a fuzzy boundary with ordinary business, I think that R&D expenditure is a useful signal.
Mirror, if you can't get past the paywall: https://www.notehub.org/2015/8/20/beyond-the-internet-innova...
Am I missing something here? Is the lack of funding rickety? That all of it is moving into the "D" rather than the "R"? Is there a distinction, or are we just "feeling" like laggards without a good key metric to represent it?
Okay, Intel is now at, what, 14, 10, 7 nm?
Intel can put how many thousand cores in a single processor?
There was the Human Genome Project and Craig Venter.
The US did TCP/IP, IP and BGP routers, and the Internet.
James Simons did a lot, he won't talk about, but that resulted in a lot of money.
Can look at what is going on in fusion at Princeton, Argonne, Fermi, and LLNL.
Can see what L. Breiman did in classification and regression trees and, then, random forests.
Of course the USAF did GPS, which is accurate to one inch, and now farm tractors can plow very accurately due to GPS.
The US has done well with carbon fiber materials.
But, IMHO, relatively well informed, is that the US has powerful, valuable innovation coming like drips of a leaky faucet when it should be raging like a massive, wild river.
Why the difference? The people managing the money don't have even as much as a weak little hollow hint of a tiny clue about how to do innovative projects successfully. As soon as they see something beyond what they knew in middle school, they roll their eyes, throw up their arms, scream about blue sky, intellectual fun, games, and self-abuse, etc. That's grotesque incompetence.
The main exception is the innovation for US national security. A second exception is medical innovation, especially funded by the NIH and the research hospitals.
Silicon Valley? It has history majors with LLBs and/or MBAs who are 99 44/100% non technical looking for routine software for yet another social, mobile, sharing, membership, consumer thingy, throwing their line into their backyard above ground pool hoping to hook another Facebook.
We're talking totally clueless. Hopeless. Their ability to identify, formulate, evaluate, and pursue powerful, valuable technical innovation? Zip, zilch, or zero. Their technical competence? Even worse. Did I mention hopeless?
Instead, just got to have people running projects and allocating funds who actually understand how to innovate. E.g., need an Andrew Viterbi, Gordon Moore, Craig Venter, James Simons.
For Bill Gates, Mark Zuckerberg, go back to Harvard, complete a good education, and then try to allocate some funds effectively. Page/Brin -- back to Stanford, guys.
I've seen a lot in innovation, and what I've seen in the decision makers in Silicon Valley is the lowest, lower than I would ever have suspected could exist. And their ROI? Actually, on average, poor.
Blunt fact: Could hold a convention in a commercial airplane wash room of all the Silicon Valley venture partners and CEOs qualified for a problem sponsor position at NSF. Sorry 'bout that.
We're talking business development people? Marketing guys? Hold on while I go for a big swig of the pink stuff, Pepto Bismol. Darn, too late -- upchucked, on the sheared 100% wool carpet. Those people believe that the crucial core of the innovation they are looking for is some C++ code on Linux done by self-taught hackers.
At least when the US DoE and NSF fund fusion research, they don't look for really big breakthroughs from 10 year old naughty boys out back playing with matches.
In the past there has been innovation, also, when there was money enough involved and people ready to do something: E.g., clocks. Why? Well, in 1800 a wooden ship good for open ocean sailing was big time expensive. But on a successful voyage, such a ship could make a lot of money. But, the ship needed to know its longitude -- latitude was much easier. For longitude, ..., right, need a really accurate clock. Newton knew that, too. So, at whatever effort, ships got some quite accurate clocks. Else the ships too often ended up on the rocks.
Innovation can be done; it has been done; here in the US now we should have a raging, wild river of innovation; instead, we have a drip, drip.
Net, the people running and funding the projects are technically incompetent. E.g., they just didn't study the right stuff, long enough, hard enough in school, and, gotta tell you, now, away from graduate school, no way will they reinvent that material.
Intel (you seem impressed with them) are right in the heart.
Cisco, same.
Google seems to be unimpressive to you, but they are producing some pretty solid (and new) technology at a pretty high rate.
There are plenty of mediocre folks here as well, but there are also plenty of sharp ones.
(My background, btw, was DoE and NSF funded research. I came to work on California startups when things got much more interesting technically in the private sector)
Mine was US national security, computing, applied math, and associated research around DC. When I saw commercial technology, I upchucked. As Betty Davis said, "What a dump."
> much more interesting technically in the private sector
Hope so. But I don't have much hope, as I explained, due to the backgrounds of the VC partners and CEOs. In blunt terms, around DC, I could always get a competent technical review of my technical work; in the commercial world, I've never been able to.
Another explanation for the sick-o climate of innovation in the US commercial sector is that the decision makers, i.e., VC partners and CEOs, picked some "high payoff" projects, tried them, saw the projects fail, and gave up. So, Silicon Valley has adopted some rules: Regard anything beyond middle school level material as blue sky, academic game playing, nonsense and give up.
Of course the problem was that the VC partners and CEOs didn't give competent technical evaluations of the technical parts of the projects, and that because they were incompetent technically, and, thus, they picked poor projects. Simple as that. Again, those decision makers just did not know how to evaluate technical projects; plenty of people in the US do know how do such evaluations well.
So, now the norm is, don't evaluate technical projects. Just don't do it. Instead, evaluate projects much like an accountant would, that is, based on assets. The main difference is that accountants count in dollars, and the Silicon Valley decision makers are also willing to count data from ComScore, Google Analytics, etc. about traction. The crucial, core technical internals, if any, they don't care and don't look.
Intel? I picked them because their work at 14- nm and their path down from 1 micron has been so easy to notice. Maybe much of the credit goes to their vendors for, say, UV sources, optics, photosensitive materials, positioning systems, etc.
I used to be impressed with Cisco, but now I wonder.
Google? For their search engine, they have written some quite nice code. I don't see much serious innovation, e.g., like a drag-free satellite, the P&W engines for the SR-71, the Bertsekas polynomial algorithm for an important assignment problem, what I mentioned that Breiman did, but a lot of really nice code.
For their self-driving cars: My guess is that mostly they are in effect using electronic tracks and that people will give up when the rates of accidents and/or traffic jams are too high. Then the hope will be to change the roads to make Google's efforts with self-driving cars practical, and my view is that the roads won't change and self-driving cars will go the way of turbine engine cars. At times, driving as it is done now by humans takes some actual intelligence, and I don't believe that anyone knows how to program that.
To me the self-driving cars look like mostly a publicity stunt, a head fake with a lot less to it than meets the eye.
For Silicon Valley's innovation, I would ask: What is new, correct, significant, useful, powerful, and valuable and well beyond a bright, self-educated high school student and, hopefully, well beyond essentially any efforts outside the US.
With that, an example was the SR-71, especially its engines. Why? The Soviets also had the MIG 25 that could go that high and fast but only for a few minutes before its ordinary turbojet engines overheated. Meanwhile the SR-71 kept going along, 80,000+ feet, Mach 3+, for another 1500 miles or so, no problem, never got shot down. Why? The turbojet engines converted to ram jet engines starting near Mach 2 or so and, thus, didn't overheat. I'm not sure the USSR ever figured that out. Nice.
In the commercial world, we get innovation drip, drip instead of wild, raging rivers like we should.
Actually take away what came from high quality work for US national security, and there would be not much left of the computer industry or Silicon Valley. No such thing is true for medical innovation.
Yes, US national security and progress in medicine (the guys in Congress who vote for the NIH budgets are old and want better medical care!) are the main reasons NSF and NIH research grants fund ballpark 60% of the budgets of Stanford, Harvard, Princeton, Johns Hopkins, Cal Tech, etc. Okay. Fine. Terrific.
But for the rest, there is still too much dependence on US national security. US national security is a great goal, but the commercial world also needs to take the results of the research and create wild, raging rivers of powerful, valuable innovation instead of the present drip, drip.
As it is, Silicon Valley is doing next to nothing that a determined effort in England, France, Germany, Italy, Poland, Russia, China, South Korea, etc. can't do. Bummer. Really big bummer. Big time bummer. Threat to the US economy bummer. Might put US workers in direct competition with the 17 cent an hour workers in China. Did I mention bummer?
So, how to get ahead? Really, there's only one way -- great, leading edge exploitations of great, original research. Sorry 'bout that. To do that, need the decision makers able to judge the research efforts, the research results, and promising exploitations and make the possibilities real. For that, the usual MBAs, LLBs, business devs, marketers, self-taught C++ coders, UI designers, unicorn CEOs, need not apply.
Or did we notice that Microsoft, China, and Russia were all able, apparently quite routinely, to duplicate Google search? So, where's the unique, world-class leadership, which the US very much needs? We don't have it and are becoming just one more of the pack of 10 or so countries that can do nearly anything the US does. Bummer. We need to get going. For that, we need project decision makers who know what the heck they are doing in innovation.
I feel like I'm trying to explain the importance of medical research and innovation to a country doctor in 1850, the importance of a drag-free satellite to an auto mechanic in 1910, the importance of quantum mechanics to a radio engineer in 1930, etc.