Comment: The corona virus disenchants Silicon Valley

Silicon Valley icon Marc Andreessen recently cleared his anger at US failure in the coronavirus pandemic. In a post on his investment firm's website, he diagnosed "a failure to act, and especially our inability to manufacture things". He asks why the United States doesn't have vaccines and medicines, not even masks and ventilators. "We could have these things, but we chose not to have them – in particular, we chose not to have the mechanisms, the factories and the systems to make these things. We chose not to manufacture."

This entry is from the Technology Review issue 6/2020. The booklet will be available from May 14, 2020 in stores and directly from the heise shop.
Highlights from the booklet:

You forget for a moment that this is from the same man who famously explained in 2011 "why software eats the world". But Andreessen is not entirely wrong. The coronavirus pandemic has revealed much of what has broken and crumbled in America's politics and society. The inability to manufacture the drugs and devices that are urgently needed, such as personal protective equipment and essential supplies, is a deadly example.

Comment: The corona virus disenchants the valley

David Rotman is the editor of the US edition of the MIT Technology Review.

Silicon Valley and big tech in general have reacted lame to the crisis. Sure, they provided Zoom to us so that the lucky ones can keep working, and Netflix to keep us sane. Amazon is a savior nowadays for those who avoid business. iPads are in high demand, and the Instacart delivery service helps feed many people who are currently quarantining themselves. The pandemic has also revealed the limits and impotence of the world's richest companies (and, as we have been told, the most innovative place in the world) in the face of the public health crisis.

Big tech doesn't build anything. It will probably not give us vaccines or diagnostic tests. We don't even seem to know how to make a cotton swab. Those who hope the US could turn their dominant technology industry into an innovation dynamo against the pandemic will be disappointed.

This is not a new complaint. A decade ago, in the wake of the financial crisis we once called "the" great recession, Andrew Grove, formerly an Intel CEO, wrote an article in "Bloomberg Business Week". He lamented the loss of American manufacturing capacity. Those who argued that we should "let tired old companies involved in raw material production die" were wrong: scaling and mass producing products means building factories and hiring thousands of workers.

But Grove wasn't just worried about the lost jobs that were lost due to the production of iPhones and microchips abroad. He wrote: "Losing the ability to scale will ultimately affect our ability to innovate."

The pandemic has made this smoldering problem clear: the US is no longer very good at developing new ideas and technologies that are relevant to our most basic needs. They are great at developing shiny, mostly software-controlled clunkers that make our lives more enjoyable in many ways. But the US is far less good at reinventing healthcare, rethinking education, making food production and distribution more efficient, and generally aligning our technical expertise to the major economic sectors.

Economists like to measure technological innovation as productivity growth. In the past two decades, these numbers have been bleak for the United States. Even when Silicon Valley and high-tech industries were booming, productivity growth slowed.

The past decade has been particularly disappointing, says John Van Reenen, an economist at the Massachusetts Institute of Technology. He argues that innovation is the only way for an advanced country like the United States to grow in the long term. There is much debate about the reasons for sluggish productivity growth. However, according to Van Reenen, there is ample evidence that a lack of both enterprise-funded and government-funded research and development is a major factor.

His analysis is particularly relevant because as the US begins to recover from the Covid 19 pandemic and businesses start up, we will be desperately looking for ways to create high-wage jobs and boost economic growth. Even before the pandemic, Van Reenen "proposed a massive pool of R&D resources to be invested in areas where market failures are greatest, such as climate change." Many are already renewing their calls for a green stimulus and larger investments in urgently needed infrastructure.

So the pandemic could be the wake-up call the country needs to start solving these problems.

This comment comes from the current June issue 6/2020 of Technology Reviewthat can be conveniently ordered online, but is also available in stores.


. (tagsToTranslate) Big Tech (t) Coronavirus (t) Innovation (t) Pandemic (t) Silicon Valley (t) USA