Has the ideas machine broken down?

[I]t may come as a surprise that some in Silicon Valley think the place is stagnant, and that the rate of innovation has been slackening for decades. Peter Thiel, a founder of PayPal, an internet payment company, and the first outside investor in Facebook, a social network, says that innovation in America is “somewhere between dire straits and dead” [..] Mr Cowen is more willing to imagine big technological gains ahead, but he thinks there are no more low-hanging fruit. Turning terabytes of genomic knowledge into medical benefit is a lot harder than discovering and mass producing antibiotics.

Pfff..

This is a bunch of hot gas. Example: speed-up gains on a single microprocessor stopped some time ago right? Plucked that low-hangin fruit and we are done (well actually reaching the current speed levels was no peach, but we’ll leave that aside for the moment). Soo are we stagnating now I guess, in terms of how fast, how much we can process data.

Not so. The moment one avenue closes, another opens. If .. that sounded too New Age, here’s another one: necessity is the mother of invention. All of a sudden running things in parallel became necessary, and  running algorithms on seperate “cores” on these so-called “multicore” processors or seperate machines came into focus for a lot of engineers and researchers. And innovate they did. Interestingly it was discovered that some analysis algorithms were so easy to run in parallel that they are now classed as “embarrassingly parallel” algorithms. This is the academese way of saying “obnoxiously simple (and mind you, it was invented just the right time, when computing power reached to a certain level)”

There are so many other things happening on different fronts that I dont even know where to start. Cowen and people like him do not know where to look, or they keep looking at the same tired old places.

• Perhaps the most radical answer to the problem of the 1970s slowdown is that it was due to globalisation. In a somewhat whimsical 1987 paper, Paul Romer, then at the University of Rochester, sketched the possibility that, with more workers available in developing countries, cutting labour costs in rich ones became less important. Investment in productivity was thus sidelined. The idea was heretical among macroeconomists, as it dispensed with much of the careful theoretical machinery then being used to analyse growth. Some economists are considering how Mr Romer’s heresy might apply today. Daron Acemoglu, Gino Gancia, and Fabrizio Zilibotti of MIT, CREi (an economics-research centre in Barcelona) and the University of Zurich, have built a model to study this.

Oh this is hillarious

• Pattern-recognition software is increasingly good at performing the tasks of entry-level lawyers, scanning thousands of legal documents for relevant passages.  Algorithms are used to write basic newspaper articles on sporting outcomes and  financial reports. In time, they may move to analysis. Manual tasks are also  vulnerable. In Japan, where labour to care for an ageing population is scarce, innovation in robotics is proceeding by leaps and bounds. The rising cost of looking after people across the rich world will only encourage further development. Such productivity advances should generate enormous welfare gains. Yet the adjustment period could be difficult.

In the end, the main risk to advanced economies may not be that the pace of innovation is too slow, but that institutions have become too rigid to accommodate truly revolutionary changes—which could be a lot more likely than flying cars.

EXACTLY