How Techno-creativity Will Save Us
by Bret Swanson 12.12.08
As a new president contemplates his agenda amidst a
deep recession and global financial crisis, he should
remember his best friend: innovation. The
combination of technology and entrepreneurial
creativity drives all real long-term growth. But today
market volatility pushes our panic buttons, and short-
term hysterics unlock the vaults of the Keynesian
kingdom. In these uncertain times, we forget just how
far and how fast the world moves. And how many
crises innovation transcends.
Think back, for example, to the last Democratic
transition, when Bill Clinton ascended to the Oval
Office in 1992. It was only 16 years ago, but it
nevertheless offers a gauge for the pace of change.
The Soviet Union had just collapsed, Apple
Computer was in the doldrums versus the Windows
juggernaut, and that other unstoppable force, Miley
Cyrus (aka "Hannah Montana"), had just been born.
The Internet was but a blip to most Americans, as
were real coffee and wine. There was no "genome,"
and there were no digital cameras. The "Facebook" I
received as I arrived for my freshman year of college
that autumn was printed on paper and played no part
in the presidential campaign.
Today, an average consumer can buy a terabyte hard
drive (1 million megabytes), on which she might
store her family photos, videos and other digital
documents for as little as $109.99. In 1992, a terabyte
drive, if such a thing had existed, would have cost $5
million. The chief digital storage medium at the time
was the 3.5-inch floppy disk, which held 1.4
megabytes. When digital photos came along and
consumers found the huge square disk could only
hold one photo, it was instantly obsolete.
In mid-2008, the four-gigabyte (or 4,096 megabytes)
flash memory chip in an iPod Nano cost $25. Late in
2008, four-gigabyte flash cards and USB drives are
selling for $14.99. But back in 1992, four gigabytes
of flash memory would have cost $500,000. This
means a hypothetical iPod Nano circa 1992 would
have set back the teenage Nirvana or Boyz II Men
fan around $3 million.
Apart from research scientists and a few early
adopters of Compuserve and AOL, the Internet
essentially didn't exist in 1992. Monthly Internet
traffic was four terabytes. All the data traversing the
global net in 1992 totaled 48 terabytes. Today,
YouTube alone streams 48 terabytes of data every 21
seconds.
The first integrated circuit, half an inch wide, with two
transistors, demonstrated by Texas Instruments on
September 12, 1958. (Image courtesy of Texas
Instruments.)
Biology is also on the innovation curve and is likely
to accelerate. When the Human Genome Project
began in the early 1990s, sequencing one DNA base
pair cost about $10. Craig Venter famously began his
own competing genome search in 1998 and
completed the project simultaneously, at around one-
tenth the cost. Today sequencing one base pair costs a
tenth of a cent, and by 2024 – just 16 short years
from today's presidential transition – we'll sequence
an entire human genome (yours, if you'd like) for
$100.
In 1992 a tiny percentage of Chinese citizens had
ever made a phone call, but today there are twice as
many mobile-phone subscribers in China as there are
people in the U.S. The entirety of U.S.-China trade in
1992 was $33 billion. This year it will approach $400
billion. Trade with India in 1992 was just $5.7
billion, but is now $35 billion. All world output in
1992 was $20.4 trillion, about the size of today's
output from U.S., Japan and Germany. Imagine the
rest of the world didn't exist. That was 1992.
Now imagine how similar innovation going forward
will utterly transform all our industries, from
medicine and mining to agriculture, energy and
education. Or further imagine an accelerated pace of
innovation. It's possible.
But innovation is by definition unexpected. We can't
force it or compel it. Certainly not from Washington.
The dramatic centralization of money, power,
information and influence now under way seriously
threatens the entrepreneurial revelations and
technological revolutions that drive long-term
growth. If we quasi-nationalize the energy, finance,
auto and health care markets, and possibly bar
dynamic new business models on the Internet, as with
possible network neutrality regulation, we will close
off many of the most promising paths to needed
efficiencies and, more important, new wealth.
If Washington had planned our future in 1992, we
wouldn't be here. Technology and ingenuity can
overcome many government mistakes and bloat. But
at some point, our short-term fixes and obsessions
with certainty will block the entrepreneurial acts so
essential to long-term security. In many ways, they
already have.
When things look bleak, look back. You will see how
bright tomorrow can be.
Bret Swanson is a senior fellow and director of the
Center for Global Innovation at The Progress &
F r e e d o m F o u n d a t i o n ( w w w. p f f . o r g / c g i /
publications.html).