Happy new year to everyone, whenever your year starts.
First off, I send my respects to Clayton Christensen’s family and friends. The business community lost one of a small number of synthetic systems thinkers last week, and the world lost a gracious, kind human being.
I’m writing this month to explore the idea that the info tech run may be winding down. That is, we may look back at the late 1940s (invention of the transistor, Alan Turing, Claude Shannon) until the mid-2010s as an era extending from room-size computers through the smartphone and large-scale digital platforms that migrated “the Internet” into the utilities of modern life, most of them privately owned. Look at Silicon Valley: unicorn valuations are retreating after the Uber IPO and WeWork disaster, and it’s an open question how many meal-delivery startups the world really needs. Nobody talks about “the next Apple” because hardware is too hard, and “Uber for X” hasn’t really panned out as a blueprint for startups. The big (FAANG plus Microsoft) get bigger, to the point where many people are asking “how big is too big,” and nobody has broken through in well over a decade: Netflix, the 2nd youngest company on the list, is almost 20 years old, while Facebook is already 15.
Where can tech go from here? The smartphone is being steadily but incrementally improved, Apple makes a whole lot of money on earbuds, Amazon's cloud business is very much a utility, and the privacy issues around AI-powered ad targeting have become non-trivial. (A startup has screen-scraped billions of public photos into a single massive facial recognition database and Facebook didn't stop them.) The last really interesting app was probably Uber, or maybe Tinder or TikTok, none of them known as a privacy champion. If info tech has solved the obvious problems, and the industry is “mature,” what’s next?
If we look back, 1910-1970 was a time of sustained innovation in personal ground transportation. The Volkswagen Beetle was a lineal descendant of Henry Ford‘s assembly line, as was the Toyota production system. Dwight Eisenhower got the idea for the interstate highway system from Germany’s autobahns. Since 1970, however, while cars have gained in theoretical top speed, commute times are longer. Car sales are slowing, in part because fewer people use cars to express their identity. (For a snarky look at how some people still do this see here.) Given the generally grim state of the industry and of global urbanization, it's hard to see the car as the core of a technology rebirth.
The same might be said of medicine. The 20th century saw mass immunization, the rise of antibiotics, and improved nutrition, all of which helped extend longevity at the global level. Now, U.S. lifespan growth is slowing and at times reversing: available nutrition has instead fueled obesity and overuse of antibiotics (including in the food supply) may render the whole class of drags useless in the not too distant future. Opioids contribute to "deaths from despair." Big pharma, meanwhile, has little to show for billions of dollars of investment except arbitrary price hikes on off-patent and other essential drugs. The money made from those high prices doesn't go primarily to R&D, as the industry implies, but to lobbying and marketing. The face of the industry is neither a Jonas (polio vaccine) Salk nor even Kenneth (aerobic exercise) Cooper: it’s Martin Shkreli and Purdue Pharma's Sackler billionaires.
What about plastics, the industry of the future as of the 1968 classic The Graduate? The oceans (where the primary source of plastic waste is not straws or even bottles but . . . fishing nets) are but one concern; other watersheds, air quality, food safety (I won't claim expertise but neither BPA nor teflon looks like a long-term winner in the human food chain right now), and landfill issues have the industry scrambling.
Aviation went from Kitty Hawk to the moon (via the SR-71 and Boeing 747) in one human lifetime, but since 1970, what can we say about the field except “bankrupt discount airlines”? Very light jets never got to scale, in part because of scheduling issues, and we now see that Boeing lost its engineering soul: it looks to be closer to a bank, in its culture and incentives, than to Kelly Johnson’s Skunk Works.
If tech, automotive, pharma/chemicals, and aviation are no longer the hothouse of innovation, what might be next? One possibility might be mayors. That is, for all the talk about gridlock at the nation-state, lots of new, clever ideas are emerging at the municipal level. Whether it’s the places that James and Deborah Fallows report on in their book Our Towns, or South Bend, IN, or Paris, cities are the locus of lots of good thinking and experimentation.
South Bend’s Pete Buttigieg is part of something called the Mayors Innovation Project, run out of the University of Wisconsin – Madison since the 1990s. (He's currently too busy with his primary campaign to attend the meetings right now, but remains involved.) Mike Bloomberg is another former mayor who is convinced his hands-on problem-solving skills will translate to the next level. Cities scholar Richard Florida has been tracking and inspiring urban innovation for years, most recently via his CityLab website (now owned by . . . Bloomberg Media.) Anne Hidalgo, the first woman to be mayor of Paris, has made clean air a high priority and is pushing hard on bicycle mobility, including for the disabled.
What tech analyst Horace Dediu (he’s an expert on Apple) calls “micromobility” encompasses scooters, e-bikes, bicycles, and the like. Given scooter-company failures all over the world, it’s unclear that the problem of moving people safely and cleanly through cities will be achieved by the private sector. (Elon Musk is, I‘m convinced, on the wrong track with both his tunneling and his battery initiatives; equities markets disagree.) As The Economist pointed out last week, fixing housing involves everything from tax policy to mass transit to demographics. (Paris is also dramatically extending the Metro.)
Housing, employment, and transport are inextricably intertwined, and such systems challenges are beyond the scope of any private enterprise, no matter how well funded. Urbanization will only accelerate, so the people-moving problem will gain in urgency. Here’s $5 that says the 2020s will be known more for progress on urban mobility than any technological field (this includes 5G). That focus on public welfare also implies investors won’t see the kinds of returns the FAANGs and Microsoft have delivered. Given the extreme concentration of wealth we are witnessing, perhaps a return to thinking about general welfare is a fair and reasonable corrective.
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