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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

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-national-security-vs-tech-innovation/ https://arstechnica.com/security/2008/03/paying-for-secrets-... 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-right-way-to-think-about-whatsapps-massive-engineering-team https://collectiveidea.com/blog/archives/2015/09/24/the-righ... 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.

wwkeyboard 9y ago
> if you and about 20 hotshot engineers could clone the product in a year, then it's not innovation I think this statement runs against the argument these OP is trying to make. It's the massive number of failures that occur on the way to finding the innovation that important but don't show up when duplicating the end product. It's not hard to make a lightbulb if you have a good vacuum pump and know what filament to use, but trying thousands of different metals while inventing new vacuum techniques is expensive and hard. (I appreciate your core argument, I just think this particular statement runs against it)
- deleted 9y ago
  [deleted]
- jonstokes 9y ago
  I don't think it does, though. "Innovation" isn't solely a function of the number of failed attempts, despite the fact that this particular way of looking at it has become trendy of late. Take a look at that last link, and specifically at how I unpack the lightbulb analogy that you used above and that's so popular with the "fast failure" set: https://collectiveidea.com/blog/archives/2015/09/24/the-right-way-to-think-about-whatsapps-massive-engineering-team https://collectiveidea.com/blog/archives/2015/09/24/the-righ... "Yeah, I know, I’m a jerk, because a startup is the hardest and most punishing thing you can do, and it’s considered rude to suggest that anyone’s success at it is largely attributable to luck and not “innovation”. And I’m sure you’re also thinking of Thomas Edison, and how he famously tried 1,000 different filaments before inventing the light bulb and then boom, innovation! Isn’t Airbnb just like that? No, it isn’t, because that story is bunk. As Thomas Parke Hughes describes in his magisterial Networks of Power: Electrification in Western Society, 1880-1930, Edison and his team at Menlo Park built an entire, low-cost electrical distribution network, of which the light bulb was one of a number of critical new components. It wasn’t like the electrical grid was just sitting there with empty sockets, waiting for Edison to diddle his way through the solution space until he stumbled into just the right filament so that he could staff up and scale; he had to invent, finance, manufacture, and deploy the entire grid in order to take on the entrenched gaslight industry."
  - petra 9y ago
    I'm not disputing your thesis about the need for basic research and long term investment ( and definitely alot of what's on HN is hype), but could it be that in today's world, deep innovation can be done in a more distributed manner and small research groups are much more powerful , especially since we already have a lot of the needed infrastructure ?
Eridrus 9y ago
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.
- ska 9y ago
  You don't need to be in academia, but you do need to create a working environment that shares some of the same features. Very few companies do this well; most don't do it at all. Which isn't to say it's impossible to innovate in industry - but typically it is actively made much more difficult. It's undoubtedly true that "innovation" is a term that is much abused in industry, weakened to the point it is mostly meaningless.
- jonstokes 9y ago
  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.
- fivestar 9y ago
  I was in academia for years. I didn't see all that much innovation coming out of there, either. Too much politics and rent-seeking (gotta get that next grant) and you have to publish, and there's committees and conferences. And then whenever we did invent something cool, the university patent office wouldn't take it and do anything with it! I should have 2-3 patents now and instead I have none. Not that I'm a fan of patents, anyways, but it was the late 90s and my adviser and I were breaking new ground at the time.
pacala 9y ago
A lot of people can clone a TCP/IP alike stack + a router by themselves in less than a year. Assuming one only needs to clone the product function, "route packets over a network", not all the concrete implementation details. The daunting part is being compatible with all the written sometimes unwritten, corner cases of the actual TCP/IP spec. By the proposed measure, the Internet is not innovation.
- paulddraper 9y ago
  "Things that speak IP" is the definition of the internet. So...I don't get your argument.
hsuresh 9y ago
I have a different theory. You need access to users/customers of problems you're trying to solve. I guess the first couple of rounds of tech boom happened in the valley because of the access to chip makers, early internet adopters etc. What this probably means is just that valley doesn't matter anymore to every industry/market. Probably also explains why we're starting to see more international startups at YC.
wslh 9y ago
I think the paradigm shift is that companies like Google are doing research (e.g. security and algorithms) at a quality level that only existed in academia. IBM has a long history on basic research but they are not capable to move those inventions to the real world except in press releases.
WalterBright 9y ago
> 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 2. companies that "eat their seed corn" to sacrifice the long term for short term gain would see their stocks dump after quarterly results come it. This is not happening. 3. you could get rich by shorting those short term companies, making money off of the fools that bid up share prices for short term profits. This is not happening. 4. A successful stock investment strategy is buy and hold, hold, hold, hold. 5. AMZN
- AnthonyMouse 9y ago
  All that is assuming investors don't know what's happening. Stock price only changes in response to quarterly results if the quarterly results are different from expectations. The real problem is that if you have a company which is losing money for several years, their leadership will generally be fired, even if they're losing $100M/year for an annual 5% chance of making $20B.
  - WalterBright 9y ago
    AMZN is famous for losing money for a decade, yet having constantly escalating stock valuations. I don't think investors are fools. The alleged short term focus of investors and companies requires them to be fools (as a group). Also, the continued growth for decades of corporations simply doesn't fit with being short term focused. Boeing.
    - jonstokes 9y ago
      Heh, you've picked the one counter-example that I was going to toss in there, but didn't. Amazon built its cloud business during the lean times after the dotcom bust, when there wasn't a ton of money chasing risk in the tech sector. So they were able to focus on the long-term and on building an entirely new kind of business. They could do it because they had the resources thanks to their core business and, more importantly, they could retain the engineering talent in a world where rockstars couldn't just quit and raise VC megabucks to pursue "Uber for Cats" or some adtech play. So it has turned out that AMZN is an anomaly, judged by its P/E ratio as you point out, in that investors will let it bleed for a long time and still value it highly. There are a few companies like that, that can afford to fail and that the market will have patience on a fairly long time horizon. In those places you can get a little taste of what it was like to work at a government-funded blue-sky research lab with no pressure to productize in a commercial timeframe.
flexie 9y ago
AT&T was founded in the 1870s. But it wasn't until 1925 the research activities had gotten so massive that they spun it out in Bell Labs. Apple and Microsoft are around 40 years old, but Amazon and Google are much younger companies and Facebook is not even a teenager yet (although it's no longer run by one). Give these companies a few more years to build equally impressive research wings :-)
- aaron-lebo 9y ago
  So we should be anticipating the breakup of those monopolies somewhere around 2076? We could keep subsidizing these companies by giving up our privacy while they build up said research wings, or we could just spend it on research wings that are already decades old (you know, the unis that made those companies possible). You're right, they do produce useful stuff, but it's a really inefficient way of doing it.
  - WalterBright 9y ago
    If free enterprise does not produce innovation, or is inefficient at it, then unfree economies should be fountains of innovation. I haven't noticed any such coming from such economies.
    - frgtpsswrdlame 9y ago
      The argument isn't black and white. We're a "free economy" but we still control and regulate certain things in the market. The argument is that this is a specific instance where our "free economy" is failing and so we should use government to address that. It bears no comparison to "unfree economies."
    - deleted 9y ago
      [deleted]
- fivestar 9y ago
  I just don't think that's going to happen. Bell Labs was never profitable, was it? Look at Xerox PARC--all the stuff they invented there that Xerox never profited from, although many others did. It's just not in company DNA anymore. They would rather buy out startups.

wwkeyboard 9y ago

> if you and about 20 hotshot engineers could clone the product in a year, then it's not innovation I think this statement runs against the argument these OP is trying to make. It's the massive number of failures that occur on the way to finding the innovation that important but don't show up when duplicating the end product. It's not hard to make a lightbulb if you have a good vacuum pump and know what filament to use, but trying thousands of different metals while inventing new vacuum techniques is expensive and hard. (I appreciate your core argument, I just think this particular statement runs against it)

deleted 9y ago
[deleted]
jonstokes 9y ago
I don't think it does, though. "Innovation" isn't solely a function of the number of failed attempts, despite the fact that this particular way of looking at it has become trendy of late. Take a look at that last link, and specifically at how I unpack the lightbulb analogy that you used above and that's so popular with the "fast failure" set: https://collectiveidea.com/blog/archives/2015/09/24/the-right-way-to-think-about-whatsapps-massive-engineering-team https://collectiveidea.com/blog/archives/2015/09/24/the-righ... "Yeah, I know, I’m a jerk, because a startup is the hardest and most punishing thing you can do, and it’s considered rude to suggest that anyone’s success at it is largely attributable to luck and not “innovation”. And I’m sure you’re also thinking of Thomas Edison, and how he famously tried 1,000 different filaments before inventing the light bulb and then boom, innovation! Isn’t Airbnb just like that? No, it isn’t, because that story is bunk. As Thomas Parke Hughes describes in his magisterial Networks of Power: Electrification in Western Society, 1880-1930, Edison and his team at Menlo Park built an entire, low-cost electrical distribution network, of which the light bulb was one of a number of critical new components. It wasn’t like the electrical grid was just sitting there with empty sockets, waiting for Edison to diddle his way through the solution space until he stumbled into just the right filament so that he could staff up and scale; he had to invent, finance, manufacture, and deploy the entire grid in order to take on the entrenched gaslight industry."
- petra 9y ago
  I'm not disputing your thesis about the need for basic research and long term investment ( and definitely alot of what's on HN is hype), but could it be that in today's world, deep innovation can be done in a more distributed manner and small research groups are much more powerful , especially since we already have a lot of the needed infrastructure ?

Eridrus 9y ago

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.

ska 9y ago
You don't need to be in academia, but you do need to create a working environment that shares some of the same features. Very few companies do this well; most don't do it at all. Which isn't to say it's impossible to innovate in industry - but typically it is actively made much more difficult. It's undoubtedly true that "innovation" is a term that is much abused in industry, weakened to the point it is mostly meaningless.
jonstokes 9y ago
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.
fivestar 9y ago
I was in academia for years. I didn't see all that much innovation coming out of there, either. Too much politics and rent-seeking (gotta get that next grant) and you have to publish, and there's committees and conferences. And then whenever we did invent something cool, the university patent office wouldn't take it and do anything with it! I should have 2-3 patents now and instead I have none. Not that I'm a fan of patents, anyways, but it was the late 90s and my adviser and I were breaking new ground at the time.

pacala 9y ago

A lot of people can clone a TCP/IP alike stack + a router by themselves in less than a year. Assuming one only needs to clone the product function, "route packets over a network", not all the concrete implementation details. The daunting part is being compatible with all the written sometimes unwritten, corner cases of the actual TCP/IP spec. By the proposed measure, the Internet is not innovation.

paulddraper 9y ago
"Things that speak IP" is the definition of the internet. So...I don't get your argument.

hsuresh 9y ago

I have a different theory. You need access to users/customers of problems you're trying to solve. I guess the first couple of rounds of tech boom happened in the valley because of the access to chip makers, early internet adopters etc. What this probably means is just that valley doesn't matter anymore to every industry/market. Probably also explains why we're starting to see more international startups at YC.

wslh 9y ago

I think the paradigm shift is that companies like Google are doing research (e.g. security and algorithms) at a quality level that only existed in academia. IBM has a long history on basic research but they are not capable to move those inventions to the real world except in press releases.

WalterBright 9y ago

> 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 2. companies that "eat their seed corn" to sacrifice the long term for short term gain would see their stocks dump after quarterly results come it. This is not happening. 3. you could get rich by shorting those short term companies, making money off of the fools that bid up share prices for short term profits. This is not happening. 4. A successful stock investment strategy is buy and hold, hold, hold, hold. 5. AMZN

AnthonyMouse 9y ago
All that is assuming investors don't know what's happening. Stock price only changes in response to quarterly results if the quarterly results are different from expectations. The real problem is that if you have a company which is losing money for several years, their leadership will generally be fired, even if they're losing $100M/year for an annual 5% chance of making $20B.
- WalterBright 9y ago
  AMZN is famous for losing money for a decade, yet having constantly escalating stock valuations. I don't think investors are fools. The alleged short term focus of investors and companies requires them to be fools (as a group). Also, the continued growth for decades of corporations simply doesn't fit with being short term focused. Boeing.
  - jonstokes 9y ago
    Heh, you've picked the one counter-example that I was going to toss in there, but didn't. Amazon built its cloud business during the lean times after the dotcom bust, when there wasn't a ton of money chasing risk in the tech sector. So they were able to focus on the long-term and on building an entirely new kind of business. They could do it because they had the resources thanks to their core business and, more importantly, they could retain the engineering talent in a world where rockstars couldn't just quit and raise VC megabucks to pursue "Uber for Cats" or some adtech play. So it has turned out that AMZN is an anomaly, judged by its P/E ratio as you point out, in that investors will let it bleed for a long time and still value it highly. There are a few companies like that, that can afford to fail and that the market will have patience on a fairly long time horizon. In those places you can get a little taste of what it was like to work at a government-funded blue-sky research lab with no pressure to productize in a commercial timeframe.

flexie 9y ago

AT&T was founded in the 1870s. But it wasn't until 1925 the research activities had gotten so massive that they spun it out in Bell Labs. Apple and Microsoft are around 40 years old, but Amazon and Google are much younger companies and Facebook is not even a teenager yet (although it's no longer run by one). Give these companies a few more years to build equally impressive research wings :-)

aaron-lebo 9y ago
So we should be anticipating the breakup of those monopolies somewhere around 2076? We could keep subsidizing these companies by giving up our privacy while they build up said research wings, or we could just spend it on research wings that are already decades old (you know, the unis that made those companies possible). You're right, they do produce useful stuff, but it's a really inefficient way of doing it.
- WalterBright 9y ago
  If free enterprise does not produce innovation, or is inefficient at it, then unfree economies should be fountains of innovation. I haven't noticed any such coming from such economies.
  - frgtpsswrdlame 9y ago
    The argument isn't black and white. We're a "free economy" but we still control and regulate certain things in the market. The argument is that this is a specific instance where our "free economy" is failing and so we should use government to address that. It bears no comparison to "unfree economies."
  - deleted 9y ago
    [deleted]
fivestar 9y ago
I just don't think that's going to happen. Bell Labs was never profitable, was it? Look at Xerox PARC--all the stuff they invented there that Xerox never profited from, although many others did. It's just not in company DNA anymore. They would rather buy out startups.