Billionaire investor Peter Thiel predicts bleak future for innovation

I doubt regulation plays more than a marginal role here.

The truth is that capitalism is not good at creating new technologies, only at increasing adoption of technologies that have already been developed.

Innovation on big problems is hard by definition. It takes decades and there is a very high risk of failure. The original ideas may not work out, an alternative technology may be developed which ends up dominating the market or increasingly the way may be blocked by patents.

Why would an investor support such an undertaking, especially when very good returns can be obtained in well established areas like social networking (at least if you spread around your investments) and finance ?

The only exceptions to this general picture are those very rare companies with practical monopoly power which have been able to fund developments of this nature. Examples are Google and pre-deregulation AT&T. But such behemoths represent only a small fraction of the total economy and though some monopolies might be good for technology development it seems unlikely that increasing their role in the economy would be of general benefit. The result is that the vast majority of new technologies over the past 60 years have been spearheaded by government research (semiconductors, the internet, etc.). Even self-driving cars were made possible by government driven efforts.

Overall I think society vastly underfunds research and development compared to what would be optimal for mid to long-term enhancement of human well-being and this is primarily due to a broken socio-economic system.

So we get the same spiel about how regulatory pressure is killing innovation, which is basically what all these types of guys have been saying for a while.

I'll try to ask this question without being inflammatory, but has there been a lot of case study or research about the effect of regulation on startups? I can think of the Uber thing, but apart from that I can't really think of things where regulation was the only thing that stood between a startup and success (survivor bias I know).

His example is , of course, alternative energy. He says that regulation prevents investment, but isn't it more the fact that connecting something to the grid is complicated, building something that could create any amount of power is expensive, and that the problem is more or less fundamentally hard the issue? I mean doesn't Tesla show that when you throw enough money at the problem, you're still able to tackle the infrastructure problem?