{"id":257,"date":"2017-07-12T16:49:02","date_gmt":"2017-07-12T22:49:02","guid":{"rendered":"http:\/\/redmonk.com\/rstephens\/?p=257"},"modified":"2017-07-12T16:49:02","modified_gmt":"2017-07-12T22:49:02","slug":"cycles-of-innovation","status":"publish","type":"post","link":"https:\/\/redmonk.com\/rstephens\/2017\/07\/12\/cycles-of-innovation\/","title":{"rendered":"Cycles of Innovation and Technological Progress"},"content":{"rendered":"

Like many others, I have been captivated (and occasionally caught flat-footed) by some of the emergent national and international trends of 2016 and 2017. While a plethora of economic and political theories account for the underlying causes of the events of the past year, I’ve been curious about how changes in technology in particular are perceived to play a role.<\/p>\n

Is there a common narrative around how thinkers inside and outside the industry are approaching this question?<\/p>\n

While I don’t profess to have any answers, I did want to share a summary of some of the positions I’ve encountered as they have helped frame my thinking on the topic of technological innovation.<\/p>\n

How significant is the current pace of innovation?<\/h2>\n

Interestingly, for what seems like it should be the baseline question for the discussion, there is not a clear consensus on the whether technological innovation is stagnating or accelerating.<\/p>\n

A conversation between Dan Primack and Marc Andreessen<\/a> noted the following dichotomy. On one hand we have a deep skepticism about the value of current innovations. Arguments against the state of our progress abound: tech is a bubble<\/a>, the innovations are trivial, and “entrepreneurs are trying to fix things that aren\u2019t broken<\/a>.” This viewpoint is perhaps best epitomized by Peter Thiel’s<\/a>, “we wanted flying cars, instead we got 140 characters.”<\/p>\n

At the same time, Andreessen notes there are corresponding arguments that tech is overwhelmingly impacting the world, from claims that tech is swaying election outcomes<\/a> to fears that tech is fundamentally changing jobs and the economy<\/a>.<\/p>\n

Which is it? How can a trend be simultaneously dismissed as frivolous while also being feared for its disruptive impact on all of society?<\/p>\n

Can you quantify the rate of innovation?<\/h2>\n

If there are anecdotes on either side of the argument, are there any clear quantitative indicators? There are many attempts at creating proxy measurements for innovation, but again there is no clear consensus on either measurement or interpretation. One approach is looking at R&D spending, though I’ve previously explored the ways this is a flawed measure for innovation<\/a>. Counting the number of patents filed as a gauge for innovation<\/a> proves to be similarly problematic.<\/p>\n

From an academic perspective, this question often takes the form of exploring productivity growth. The U.S. rate of productivity growth declined by 0.2% in 2016<\/a>. This is part of a decades-long trend that has shown declines of productivity from around 3% in the post-war era to around 1% today.<\/p>\n

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