
America has become too anti-innovation - Graham24
https://www.theguardian.com/technology/2017/may/11/tech-innovation-silicon-valley-juicero
======
jonstokes
Hate on this guy all you want, but there's a lot right with this article. I
covered this same set of issues at Ars way back in the day:

[https://arstechnica.com/uncategorized/2006/07/7340/](https://arstechnica.com/uncategorized/2006/07/7340/)

[https://arstechnica.com/security/2008/03/paying-for-
secrets-...](https://arstechnica.com/security/2008/03/paying-for-secrets-
national-security-vs-tech-innovation/)

What passes for "innovation" nowadays, especially in the world of software
startups that HN tends to venerate, is typically nothing of the sort. It's
actually just gambling.

[https://collectiveidea.com/blog/archives/2015/09/24/the-
righ...](https://collectiveidea.com/blog/archives/2015/09/24/the-right-way-to-
think-about-whatsapps-massive-engineering-team)

To do real innovation of the kind that got us where we are, today, you need to
fund lots and lots of basic research on multi-decade time horizons. (Here's a
rule-of-thumb test: if you and about 20 hotshot engineers could clone the
product in a year, then it's not innovation, at least not in any worthwhile
sense of the term that the generation that gave us the Internet and the
transistor would recognize.)

The stock market's quarterly focus, which incentivizes base hits and
accounting tricks and punishes real risk-taking, makes the public sector a
terrible place to do this kind of long-term, blue-sky work.

Anyway, this is one of those sad, stupid stories like electronic voting -- a
few people who are paying close attention write about it for a decade and bang
the drum, and nobody really listens, and then when it's way too late people
start to wake up to the problem.

If you hated this article and came here to bash it, you'll have plenty more
opportunities to trash this same argument, because it's one that way more
people will be making as this freak-show drags on. That's because it's
basically right.

~~~
Eridrus
Why does the argument that "the government should spend more on basic R&D"
need to be packaged with "no-one outside of academica ever does anything
innovative"?

Most people in tech wholeheartedly agree with the former and disagree with the
latter.

~~~
jonstokes
Not what I said. I realize that it's asking a lot to click through to the
underlying links (said without irony, since I rarely do that myself anymore
:), but I'm talking just as much about the massive network of labs that was
funded by tax dollars in the cold war, only a portion of which were in
universities.

------
apatters
Even though I'm a small government, pro-markets kind of guy, one point this
article touched on which I find quite interesting is that so much of the good
stuff on the Internet (TCP/IP, the WWW, NCSA Mosaic, the Linux kernel, the IRC
protocol, etc.) was basically publicly funded--if not directly then it was
usually a guy at a university somewhere.

Whereas the bad stuff (AOL, Internet Explorer, spam, the scammy digital ads
industry, Orwellian Google, Orwellian Facebook, mandatory DRM) has generally
come from the private sector. (And VC, dear Hacker News, bears its share of
responsibility.)

My only takeaway from this, and it is admittedly milquetoast, is we should
take a little more of that public money we spend on war and instead spend it
on general science and technology research.

~~~
vtange
It's funny you end your comment with that remark on war...

The Internet you mentioned at the top of your comment saw its roots as a DARPA
project called "ARPANET". That's right, it was a Department of Defense
project.

During the Cold War and the Space Race, the military was heavily tied with
"general science and technology research". Aerospace, materials, you name it,
if it had some sort of military application it was looked into.

So yeah, war sucks and the military might waste money in some projects but
it's unwise the look at military and science in black-and-white, this-or-the-
other terms.

~~~
burkaman
DARPA just funds research. There's no reason that has to be done through the
military, that's just the way it is right now. If DARPA had the same funds but
was part of the department of transportation or something, we still would have
gotten the internet.

We still need defense research, but the fact that a lot of our advancements
have come through the military doesn't mean that's the only way it can happen.

~~~
whiskers08xmt
Wasn't ARPANET started as a project where individual communication nodes could
fail, and the message could still arrive? Military technology generally needs
to be reliable, which makes it a good fit for civilian use as well. Of course,
there are plenty of aspects of military technology that isn't as necessary in
civilian life.

~~~
burkaman
It was originally an internal tool for ARPA researchers to collaborate. It had
very little to do with the military, and ARPA scientists were not the only
ones working on something like this. It absolutely would have happened
somewhere else around the same time if the defense department wasn't
interested.

------
grecy
I would broaden the statement and say "America has become anti-change, and
it's suicide".

For decades Americans were convinced they were the best country in the world,
with the best Democracy, working conditions, quality of life, health care,
education, infrastructure, etc. etc. Probably, most of it was true.

Unfortunately, for the last 10-20 years America has fallen behind the world
leaders in these key areas, but the chant of "We are the best" still rings
loudly.

By continuing to think they are the best, Americas have stopped trying to
improve, and attempting to improve anything is now seen as "Anti-American".

A country that does not try to improve itself does not have a bright future,
and nobody should stop improving even if they are number one (that applies to
a lot more than just countries)

~~~
fivestar
Ours is a nation of rent-seekers. It is largely due to the Boomer demographic
shift where so many people are headed for or are in retirement.

~~~
grecy
> _so many people are headed for or are in retirement._

I believe that to be true of most OECD countries, though that doesn't make
improving things unpatriotic in those countries...

------
jp555
"monopoly profits and tax evasion have enabled Apple to amass a cash pile of a
quarter of a trillion dollars."

Since when is ~15% market share a monopoly? Apple was the largest corporate
tax payer in America last year (when were they convicted of tax evasion???).

Maybe offering remarkable products is more why they have $250B?

~~~
Fricken
In Q3 2016, following the Note 7 recall as well as losses for LG and HTC,
Apple took 103.6% of the smartphone industry profits, in spite of having only
13.6% marketshare. I have no idea if monopoly is the right word, but it's
kinda fucked up any way you look at it.

[https://www.macrumors.com/2016/11/04/apple-smartphone-
profit...](https://www.macrumors.com/2016/11/04/apple-smartphone-
profit-q3-samsung-recall/)

~~~
Filligree
103%? Are you sure that's what you meant to say?

~~~
RugnirViking
Not that poster, but yes, the information is correct, because in total, all
their competitors made a loss

------
abhv
As another example of the author's premise, Snap spent 800m in R&D in order to
make their app more addictive to 18-34.

I cannot see how their investments lead to higher societal productivity and
thus more societal wealth. It seems more like a wealth transfer (of
advertising dollars), and overall, a way to make society less productive (by
wasting its time).

~~~
skynode
The social responsibility of business is to increase profits - Milton Friedman
[0]

Let every entity play its role. For private enterprise, their selfish pursuit
of profits under a regulatory atmosphere actually helps society improve on so
many levels as a net effect.

That said, issues like this cannot be rigorously analyzed while ignoring the
different contexts, changes in costs/benefits and the different periods in the
historical development of the country. Thinking these background issues have
remained constant will invariably lead to fallacies.

Finally, we may need to think about these matters differently; it's 2017,
there are many ways of being innovative without restricting it to your
national boundaries or geography. One could easily be accused of _tunneling_
if she thinks that all American exploits of science and technology must happen
within the boundaries of United States in this century to qualify as an
improvement of American society.

The stage is bigger and the system has become orders of magnitude more
complex.

[0]
[http://www.colorado.edu/studentgroups/libertarians/issues/fr...](http://www.colorado.edu/studentgroups/libertarians/issues/friedman-
soc-resp-business.html)

------
cjf4
This article had one interesting idea: the role of government funding in
innovation. But rather than explore and flesh it out, it settled for a series
of overgeneralized and unsubstantiated polemics against capitalism, akin to a
sophomore political science student who's just finished the manifesto for the
first time.

~~~
criddell
Isn't military spending a type of government funding of innovation?

~~~
fivestar
It is, but I am ethically bound to not work on any project that has military
funding. In general, engineers and software developers need to make better
ethical choices.

~~~
criddell
How much flexibility do you give yourself?

For example, if a project uses a GPS receiver or GPS data, is that ok?

------
WalterBright
> the invention of the internet, [...] – were the result of sustained and
> substantial government investment

Hardly. Anyone who has been in the industry for more than 30 years knows that
anyone with 2 or more computers immediately desired to hook them together. All
kinds of networks were developed, eventually all merging into the internet.
BIX, Prodigy, MCImail, FidoNet, Compuserve, Novell, just to name a few off the
top of my head, not to mention innumerable others people invented.

The article is completely one sided, failing to mention such innovations as
Ethernet, Xerography and, of course, the transistor itself. If a product
consists of innovations A B C D and the government did C, it presumes that C
would never otherwise have come about. It's classic selection bias.

~~~
visvavasu
Truth

------
apeace
> ...the economy that produced Juicero is the same one that’s creating opioid
> addicts in Ohio... These phenomena might seem worlds apart, but they’re
> intimately connected.

I don't think so.

I'm from Cape Cod, Massachusetts, a place that has had such a sudden and
dramatic onset of opioid use it was the subject of an HBO documentary[0]. I
know many people who have been affected by it.

Cape Cod was never going to get tech jobs. It's a beach town fueled by
tourism. Sure, we got a few hundred Uber driving jobs from the tech boom over
the last decade, but not much else.

While the author makes some good points about funding scientific research, tax
cuts, and so on, I think there are many other important factors that outweigh
the performance of the tech industry or "innovation".

[0] [http://www.hbo.com/documentaries/heroin-cape-cod-
usa](http://www.hbo.com/documentaries/heroin-cape-cod-usa)

~~~
mikebelanger
I thought the same thing about that quote. What's fueling the opioid epidemic
is a combination of cheap, easy-to-prescribe drugs, doctors who are unwilling
to treat chronic pain cases with more diverse methods, and depression. Of
course, there's the precipitating factors too: auto-accidents, sedentary
lifestyles which make the body more vulnerable to chronic pain, and economic
stagnation.

------
davidf18
The government funded a tremendous amount of innovation while there was a Cold
War with the Soviet Union.

When the Soviets launched a satellite before the US, that launched "The Space
Race" where the government put an enormous amount of money into NASA,
semiconductor development (for satellites originally?), science education.

Also with the Cold War there was a tremendous amount of weapons development
including nuclear weapons and ICBM systems. Supercomputers were needed for
nuclear simulations and code breaking etc.

The Internet is an outgrowth of military (DARPA) funding.

Once the Berlin Wall fell in 1991, there was no longer the political push to
fund science.

Israel is an example of a tremendous amount of innovation for a country about
the size and population of New Jersey (8 million). They are surrounded by
enemies and have been since even before the creation of the state.

They have many military advances for such a tiny country. 3 different
antimissile systems (Iron Dome -- short range, David's Sling - Medium, Arrow
long range) sometimes co-developed with American firms.

Israel was the beginning of the Drone industry and today is #2 after the US.
Also #2 after US for cybersecurity. Your Intel processors are designed there
and some are fabricated there (the 22nm node plant has been upgraded to 10
nm). Apple has a design group there that designs much of the ARM processors
for the iPhone.

Besides military, Israel has since biblical days water shortages. They
innovated so that up to 1/3 of their water needs can be satisfied by very
large desalinization plants.

Unless the US wakes up about issues with China, we may not be investing as we
should. Imagine if the US had the same motivation as Israel for development.
For me, someone who is familiar both with Israeli and US innovation (per
capita), it is very frustrating to see the government spend so very little on
science compared with The Cold War/Space Race, especially today with advances
in computing, biology, ....

------
BEEdwards
>Contrary to popular belief, entrepreneurs typically make terrible innovators.
Left to its own devices, the private sector is far more likely to impede
technological progress than to advance it. That’s because real innovation is
very expensive to produce: it involves pouring extravagant sums of money into
research projects that may fail, or at the very least may never yield a
commercially viable product. In other words, it requires a lot of risk –
something that, mythmaking aside, capitalist firms have little appetite for.

My key takeaway from the article.

When you research things, it's not like Sid Meier’s Civilization, you don't
get a tech tree.

You might spend years looking and find nothing or you might make the internet.

Corporations won't invest that way, it would kill them.

~~~
mcphage
> Corporations won't invest that way, it would kill them.

It probably wouldn't, but their stockholders would.

~~~
WalterBright
Stockholders have massively rewarded AMZN for inventing and investing heavily
in cloud computing.

Me, I'd be buying lots of shares in SpaceX if it were publicly traded. I had
to settle for buying TSLA shares (up about 50% from where I bought it).

~~~
mcphage
> Stockholders have massively rewarded AMZN for inventing and investing
> heavily in cloud computing.

Yes, but AMZN is pretty unique in that regard. I don't know why, but AMZN
shareholders have put up with things that I don't see any other shareholders
putting up with. And it's gone well for them, so I'm definitely not saying
it's a bad decision for their shareholders, just that... it's not the norm.

~~~
WalterBright
Lots of companies have high P/E ratios, meaning the investors believe in the
future of the company rather than next quarter.

~~~
mcphage
The average P/E ratio right now of the S&P 500 is around 25, which,
historically, is on the high side: [http://www.macrotrends.net/2577/sp-500-pe-
ratio-price-to-ear...](http://www.macrotrends.net/2577/sp-500-pe-ratio-price-
to-earnings-chart)

Amazon's P/E ratio right now is 178, which historically, is quite low for
them:
[https://ycharts.com/companies/AMZN/pe_ratio](https://ycharts.com/companies/AMZN/pe_ratio),
since it often is in the 500-1000 range.

So I don't think the P/E ratio is good evidence that stockholders value long-
term planning, since the best example of a company whose stockholders _do_
value long-term planning has a P/E ratio is 7x higher—and has been above 50x
higher—than the S&P 500 average.

~~~
WalterBright
> I don't think the P/E ratio is good evidence that stockholders value long-
> term planning

I'm afraid that makes no sense to me. A high P/E is the quintessential play
for the long term future rather than next quarter's profits.

~~~
mcphage
> I'm afraid that makes no sense to me.

Ah, because I wasn't very clear.

> A high P/E is the quintessential play for the long term future rather than
> next quarter's profits.

I agree there. But the question then is, what is a high P/E? We can look at
Amazon, who is known for playing for the long term future, and we see their
P/E ratio is currently ~180, but usually in the 500-1000 range. So that'll
give us a good idea what "high P/E" looks like.

And then if we compare it to the S&P 500 average, which is about 25, but
usually in the 15-20 range, is that high enough to qualify as evidence that
their shareholders are playing for the long term future? And I'd say, no: it's
evidence that they are not. If 200, 500, 1,000 are "high P/E", then 15, 20, 25
are low.

Looking at specific companies, you would get a different picture, but it seems
like, as a whole, stockholders of the S&P 500 at least are not investing in
the long-term future.

~~~
WalterBright
I would think that a company that grew large enough to be in the S&P 500 would
not sacrifice it all for the next quarterly results. Hence, I'd expect a
larger P/E for the S&P 500 than for the market as a whole.

~~~
mcphage
Then I'm having trouble understanding what you mean when you say:

> > The stock market's quarterly focus

> This idea constantly resurfaces. It's easily shown to be incorrect. If it
> was true,

> 1\. companies would have low P/E ratios

But it looks like companies _do_ have low P/E ratios—the S&P 500's P/E ratios
are considerably lower than Amazon (which is company where the stack market
_does_ have a longer term outlook), and (as you say), the market as a whole
you'd expect to be lower than that even. So when you say:

> Lots of companies have high P/E ratios, meaning the investors believe in the
> future of the company rather than next quarter.

What companies do you mean by that? Among big companies (that can afford
significant long-term R&D spending, which is what began our thread of this
conversation) what do you think counts as a high P/E ratio?

~~~
WalterBright
You want to believe that companies are slaves to short term results, that they
eat their seed corn to do so, be my guest. I'll continue to invest using a buy
and hold for decades strategy, which has served me very well.

------
mrfusion
Yep you can see it right here on hacker news.

Check out the top comment on any innovative idea. It's always some esoteric
environmental concern or reasons it can't be done.

~~~
Spivak
Because the announcement posts for these 'innovative' ideas are basically wish
lists that rely on fixing some currently unsolved problem, have no plan for
funding or deployment, require society to reorganize itself, or would require
everyone to take a quality of life hit.

------
tmaly
This really comes back to economics if you think about it.

The ZIRP ( zero interest rate policy ) has caused a miss-allocation of
capital. There are large pensions and funds that are jumping into investing in
startups where in the past it has only been primarily VC firms.

All of these companies are looking for yield because they have to provide a
certain return to their clients.

Investing in companies like Juicero is just the natural consequence of this.

------
notadoc
I find this is an interesting premise and at least I know I'm not the only one
that sees some of the "ideas" out there and remains baffled why they exist at
all.

There are so many big issues and tough problems that could be greatly improved
or resolved by innovation, yet very few seem to be tackled or addressed.
Perhaps because they are hard?

------
appleflaxen
it's easy to agree with this analysis, scoff at the economy and its
participants, and move on.

But the reality is that the economy and the participants are reacting in sane
ways to an insane regulatory environment. That sounds silly, because
regulation has never been more unpopular, but it's stealth regulation in the
form of patents, copyrights, and other "intellectual property" laws working
hand in hand with licensing and scope-of-practice restrictions that incumbants
use to stifle newcomers. Combine that with fallow enforcement of antitrust
laws, and it is a disaster.

We need to make the legal system more supportive of competition in all forms,
and we should elect politicians who will make that happen.

The catch-22 is the efficacy of lobbying money in preventing this change:
incumbants have captured the legislature, and it will be very very difficult
to fix.

------
garyfirestorm
'That’s because real innovation is very expensive to produce: it involves
pouring extravagant sums of money into research projects that may fail, or at
the very least may never yield a commercially viable product.' This is a very
inaccurate statement.

------
WalterBright
I challenge the author to drive a car built in 1930, 1960, 1990, and today,
and say car companies do not innovate and that any improvements came from the
government.

------
thr0waway1239
America is the most anti-innovation country except for all those other
countries that have failed at innovation time and time again...

------
FullMtlAlcoholc
This is a terrible article that nonetheless brings up an important point.
Silicon Valley doesn't do itself any favors by abusing the term innovation by
applying it to companies that sell juicer machines. The original iPhone with
the app store was an innovation. It changed the world. Each new model is not.

It's time for a new word. Does evovative work?

~~~
TimJYoung
How about just "iterative" ? Capitalism is particularly good at iteration and
driving something basic into something more appealing to actual customers.

------
thatwebdude
America has become too ______________. (fill-in-the-blank)

------
tanilama
This is an example of an article that doesn't have substance with recycling
ideas of old stories - Guardian just gets close to its quality suicide.

------
golergka
I feel that this article tells much more about Guardian than America.

------
muninn_
Are you serious? This quote is all you need to see:

> Left to its own devices, the private sector is far more likely to impede
> technological progress than to advance it. That’s because real innovation is
> very expensive to produce: it involves pouring extravagant sums of money
> into research projects that may fail, or at the very least may never yield a
> commercially viable product. In other words, it requires a lot of risk –
> something that, mythmaking aside, capitalist firms have little appetite for

Meanwhile, America keeps on innovating despite being capitalist imperialist
scum!!! What a terrible, blatantly biased article. I'm a big fan of public
sector research and funding, but let's be real here. The person who wrote this
article should go back to school.

~~~
lawless123
Spot the Juicero owner..

~~~
muninn_
Never heard of it until I heard everybody else making fun of it. But yeah
America can't innovate. Everything is doomed. Hide under your pillow. Google
can't create a self-driving car! SpaceX can't land reusable rockets! America
can't innovate guys!!!

~~~
lawless123
SpaceX benefits from some very patient Nasa contracts.

~~~
mistermann
Patient contracts?

~~~
lawless123
I mean they have contracts with Nasa and that Nasa have been very patient with
SpaceX fulfilling their obligations.

------
sharemywin
I think there's others problems.

Nobody wants to be the guy that climbs the corporate latter anymore.

And what happened to respect for a guy/gal that puts in a hard days work for a
good days pay.

Entrepreneurs make poor employees, too. Always chasing the next thing.

~~~
sharemywin
People keep down voting and up voting his like crazy. Just would be nice to
know if you disagree with the statements or that the statements are problems.
Or that I'm submitting an opinion at all.

~~~
nihonde
Are you asking for a critique? It's a facile analysis that borders on
meaninglessly vague and unsupportable, and is riddled with spelling errors.

~~~
sharemywin
Some articles to back up my point on corporate ladder:

Redefining Success: The Corporate Ladder No Longer Matters

[http://www.huffingtonpost.com/elizabeth-
rider/success_b_4952...](http://www.huffingtonpost.com/elizabeth-
rider/success_b_4952361.html)

Opting Out of Climbing the Career Ladder
[http://kontrary.com/2013/06/17/opting-climbing-career-
ladder...](http://kontrary.com/2013/06/17/opting-climbing-career-ladder/)

------
MichaelBurge
> On the contrary: it’s yet another example of how profoundly anti-innovation
> America has become.

You can ignore any article that uses popular recent news to indicate a trend.

* Point out a recent popular item to ride on its success

* Class-baiting against the capitalists: They don't innovate, and they dodge taxes.

* Frame it as something Trump is working against

It looks like there's an argument like "The government should raise taxes on
incompetent capitalists and fund basic research, since the money would
otherwise go to juice machines", but I'm skeptical he's actually making an
argument: It's more likely he's just telling people what they want to hear so
they share his article.

If he was making a serious argument, he would've at least ran it by an
economist or two so the reader would have something to follow up on.

~~~
jamesrcole
I don't see any in-principle problem with using a recent example to illustrate
a trend, as long as they back it up with other examples, statistics, research
or whatever.

