
American Innovation Lies on Weak Foundation? - valhalla
http://www.nytimes.com/2015/05/20/business/economy/american-innovation-rests-on-weak-foundation.html
======
gjkood
What about the people angle (as in People, Process, Technology)?

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...](http://www.brookings.edu/research/interactives/2014/geography-
of-foreign-students#/M10420)

~~~
munin
> Fewer US based students are going into graduate STEM programs

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...](http://cgsnet.org/ckfinder/userfiles/files/GED_report_2013.pdf)

~~~
gohrt
You can find many ethnic-Asians in all of these groups: US Citizens, permanent
residents, and student-visa holders

~~~
GauntletWizard
But that's not where the growth is. In many engineering fields, the majority
of degrees are going to foreign nationals.

[https://www.insidehighered.com/news/2013/07/12/new-report-
sh...](https://www.insidehighered.com/news/2013/07/12/new-report-shows-
dependence-us-graduate-programs-foreign-students)

~~~
gjkood
Those are staggering statistics. All the more reason to streamline the
immigration process to make sure they become valuable contributors to US
growth.

------
WalterBright
> Corporate executives, their compensation tied overwhelmingly to short-term
> gains in the market value of their companies, may be responding accordingly.

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.

~~~
roymurdock
This is simply not true. The stock market is notoriously short sighted. Many
investors are playing a game of musical chairs/the bigger fool because they
know the economy works in a cyclical fashion with alternating booms and busts.
So during boom times (now) investors will continue to push money into the
market, pumping up PE ratios, with each investor thinking he/she is smart
enough to exit before the next bust. If anything, the markets are even more
short-sighted today due to the increase in popularity of arbitrage-seeking
algorithmic and high-frequency trading, which is the anthesis of value
investing.

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.

~~~
WalterBright
Which companies do you believe are eating their seed corn, and are you
shorting their stock?

~~~
Frqy3
“The market can stay irrational longer than you can stay solvent.”

Often attributed to Keynes, though may have originated with Shilling (or been
in common use).

~~~
JesperRavn
It's just not right. Given the existence of options, shorting is no more bound
by liquidity than being long on a stock.

Imagine saying "Stock X is great, but the market can undervalue X longer than
I can stay solvent"?

~~~
tbrownaw
The control against companies staying undervalued for too long is
acquisitions. Plus of course, it's possible to buy stocks and hold them long-
term without worrying about margin calls forcing you out.

------
paulpauper
The iPhone in your pocket has more computing power than the Voyager spacecraft
that left the solar system two years ago

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.

~~~
GFK_of_xmaspast
Voyager needed computational chops to do things like error correction and
starfinding and etc, I suspect that NASA stuffed as much cpu in there as they
could get away with, considering the whole 'radiation' thing.

~~~
sandworm101
Or they went with as little as they needed. When it comes to radiation, the
older/bigger circuit paths on silicon are more robust. I'd bet they used the
least-powerful cpu they felt would do the job.

------
toomim
This whole article is assuming that innovation comes from money, and
specifically from the money labeled "R&D" in the budgets of nations and
companies.

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.

~~~
rifung
I don't think startups can really be considered innovative in the way that the
article is talking about. Certainly startups can have very creative products,
but in the end they almost always apply existing technology, whereas the
article is more concerned with actually advancing science, engineering, or the
arts.

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.

~~~
noobermin
Specifically, I think rifung is referring to the very high cost of fundamental
research that startups don't have to incur, especially given the slow return
on such investments.

------
sandworm101
Funding for pure science is a function of american politics. The problem isn't
in budgets or even politicians. The people with the money/power have lost
respect for science. Some feel that scientists have an agenda, others that
they are simply untrustworthy, and a large percentage see science as a
challenge to belief systems. Those views are the real root.

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.

------
hyperion2010
Bayh-Dole Act of 1980 is the single worst thing to happen to the American
university system.

------
JesperRavn
_American corporate labs are the stuff of legend. Researchers dream of the
halcyon days of Bell Labs and its eight Nobel Prize winners, who brought us
the transistor and Unix. Others reminisce about Xerox PARC, which came up with
the graphical user interface that propelled the personal computer into just
about every home and office.

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.

------
anjc
This article seems to be ignoring a new dynamic, in my eyes, which is that of
"outsourcing" innovation to third level institutions, and the facilitation of
commercial innovation by third level institutes, for industry. It has the
effect of shifting innovation from being a fixed costed cost-centre, to being
a variable cost with more potential for profit. As we can see from Uber's
announcement that they want to buy university robotics departments, innovation
can be reincorporated if it has a potential return. It's definitely a change
in the innovation landscape.

------
w1ntermute
Here's an article on a related topic, _Beyond the Internet, Innovation
Struggles_ : [http://www.wsj.com/articles/beyond-the-internet-
innovation-s...](http://www.wsj.com/articles/beyond-the-internet-innovation-
struggles-1439401576)

Mirror, if you can't get past the paywall:
[https://www.notehub.org/2015/8/20/beyond-the-internet-
innova...](https://www.notehub.org/2015/8/20/beyond-the-internet-innovation-
struggles)

------
sailfast
This article has me extremely confused. They keep talking about a dearth of
R&D spending relative to the rest of the world and then present a graph that
says we are basically keeping up and have been at about the same level
compared to most countries since 1995.

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?

------
ebt
What's with the ? in the HN title.

------
rdlecler1
It would be awesome if HACKERnews could see a NYT article and link to the
Google search redirect. I hope that's not too much of a technical challenge
given the name...

------
graycat
US innovation?

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.

~~~
ted_dunning
Hmmm... you don't seem quite up to date on Silicon Valley. You seem to forget
the older achievements as well.

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)

~~~
graycat
> My background, btw, was DoE and NSF funded research.

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.

