“The man who acquires the ability to take full possession of his own mind may take possession of anything else to which he is justly entitled.” –Andrew Carnegie
MEDIA
The Entrepreneurial State? – Silicon Valley Examined 9
On the Silicon Valley Explored podcast, Robert Hendershott and Don Watkins discuss Mariana Mazzucato’s concept of “the entrepreneurial state” and how Ingenuism grapples with the question of the government’s role in promoting progress.
INSIGHT
Progress through the lens of Ingenuism
Robert Hendershott and Don Watkins
Over the past five months we’ve covered a lot of territory, delving into everything from COVID-19 to failure to Bitcoin to the challenges of measuring progress. So it’s worth stepping back and looking at how the Ingenuist framework helps us understand the forces that drive progress—and the forces that hold it back.
The core of Ingenuism’s new theory of innovation is that progress depends on ingenuity and ingenuity comes from people generating and applying new insights—practical ideas—while being connected. Intuitively, this is pretty simple: progress depends on new ideas (otherwise you are just doing the same thing) and the impact of these new ideas is magnified when they spread.
But what we mean by these key concepts—progress, connection, creating insights—and what Ingenuism implies about how to support progress both warrant a closer look.
The meaning of progress
By progress we mean accomplishing a broad range of goals that make the world a better place. This includes but isn’t limited to material progress. People, ourselves included, often default to concrete measures of progress like economic activity or life expectancy. This is fine as long as we don’t forget that we are interested in the broader concept of human well-being.
Progress by our definition is a created phenomenon. In the broadest terms: increasing connection and/or accelerating insight generation leads to more progress. By contrast, decreasing connection and/or inhibiting insight generation leads to less progress (or even regress).
The value of connection
Connection is multi-faceted and has a multi-dimensional impact on progress.
Connection means being able to observe and join the creation of new ideas and knowledge. Individuals can be connected. (Think Facebook, Reddit, or Twitter.) Groups and organizations can create connection internally. (Think of company meetings or Slack channels.) Groups and organizations can be connected to each other. (Think trade organizations or industry journals.)
Connection happens at different levels. Language connects us. Transportation networks connect us. Writing and books increase connection and libraries increase it further. Communication technologies speed up connection and today, with the world wide web and Google to navigate and translate, we are massively more connected than ever before. Knowledge, new technologies, and business models spread rapidly across the globe, creating new opportunities for billions.
Connection not only magnifies the impact of insights (as more people become aware of them); it also enables collaboration. Money, commerce, and the division of labor unleashes complex forms of cooperation that yield new insights and new technologies that enable greater connection that, in turn, supports even better technology.
Exploration leads to insights
As important as connection is, at the core of progress are new insights. Connection empowers and magnifies insights, but new insights fundamentally come from human ingenuity. Human beings have a unique combination of curiosity and ambition that can lead new insights to arise when people engage with challenges or interesting questions.
Take the case of Bell Labs. Bell Labs was set up to do pioneering research and development for the telephone company AT&T. One of its leaders, Mervin Kelly, labeled it “an institute of creative technology.”
Bell Labs created a culture of exploration—and as a result pioneered some of the most important technological breakthroughs of the last century. In the mid-1940s, for example, Bell Labs set out to produce a smaller, more efficient replacement for the vacuum tube. They started out experimenting with an unusual class of materials called semiconductors—silicon in particular.
Semiconductors had properties that suggested they might possibly be able to replace vacuum tubes. But there were enormous challenges that needed to be overcome. One example: the purity problem. According to Jon Gertner, author of The Idea Factory: Bell Labs and the Great Age of American Innovation:
[A]n almost vanishingly small impurity mixed into silicon, having a net effect of perhaps one rogue atom of boron or phosphorus inserted among five or ten million atoms of a pure semiconductor like silicon, was what could determine whether, and how well, the semiconductor could conduct a current.
That was just one of the many frustrating roadblocks that would take years of thought and experimentation to conquer. But by 1947 John Bardeen and Walter Brattain managed to build a physical point-contact transistor. This was a historic achievement—it proved in principle that transistors could work as intended. But their design was primitive and had limited practical application. The final breakthrough came in 1950, when William Shockley developed a dramatically different approach, the junction transistor, which proved to be the foundation for both the communication and information technology revolutions to come.
Gertner captures the essence of the journey to the transistor when he writes:
We usually imagine that invention occurs in a flash, with a eureka moment that leads a lone inventor toward a startling epiphany. In truth, large leaps forward in technology rarely have a precise point of origin. At the start, forces that precede an invention merely begin to align, often imperceptibly, as a group of people and ideas converge, until over the course of months or years (or decades) they gain clarity and momentum and the help of additional ideas and actors. Luck seems to matter, and so does timing, for it tends to be the case that the right answers, the right people, the right place—perhaps all three—require a serendipitous encounter with the right problem. And then—sometimes—a leap. Only in retrospect do such leaps look obvious.
The Bell Labs story highlights how insights emerge from exploration. When we’re free to try new approaches, take risks, fail and try again, we’re able to reap fresh insights and evolve new and better ways of doing things.
Environment matters
The Bell Labs story highlights something else about innovation: environment matters. Bell Labs scientists, stretching across fields, were encouraged to collaborate (their office was designed to enhance serendipitous collaboration), were encouraged to pursue speculative but potentially game-changing products, and were given the time and space to pursue leads that might not pay off for years (if ever). You cannot understand why innovation happens (and why it sometimes doesn’t) if you don’t understand the environmental conditions that encourage or discourage ingenuity.
One condition that clearly fosters ingenuity is a freedom to explore, experiment, and learn. But other elements of the environment may be as, or more, critical to nurturing new insights. Part of our initiative is to explore what these might be and how they can be cultivated.
For example, does government support of science help or hinder progress? What about patents and copyrights? What about the precautionary principle? Is the corporate form itself outmoded for some industries?
Ingenuism’s analysis of environment can help us rethink every aspect of how people interact, collaborate, and build a better future.
Understanding progress promotes progress
We need to identify what conditions foster the progress ingenuity makes possible if we want to make the most of the 21st century’s unprecedented connection. And we need to identify what conditions hold back progress to avoid missing out on all of those benefits: just imagine a world where mRNA technology had taken even a few more years to develop.
Even more fundamentally, we want humanity to draw a line in the sand regarding ingenuity and its benefits. The core tenets of Ingenuism are connection, exploration, and a supportive environment. People may differ over what represents progress or what constitutes a supportive environment. What everyone who values human well-being should agree on is that we will not sacrifice connection and exploration; we will not impede people from applying their ingenuity to make the world a better place.
QUICK TAKES
If you never want to see your cat again
Tesla has announced that it plans to build a 5’8” humanoid robot, with a prototype scheduled to be arrive sometime in 2022.
While Musk didn’t go into many details about the overall capabilities of the Tesla Bot and exactly what tasks it will be able to do, he hinted that the ultimate goal is for the robot to eventually be able to replace most “dangerous, repetitive, and boring tasks.”
Can’t wait for the coal industry to start using Tesla miners.
Designer genes
Scientific America has a great rundown of how designer DNA is transforming medicine. After telling the story of how gene therapy has eliminated one young man’s sickle cell disease symptoms, the article notes:
The next-generation technology, gene editing, is another level altogether. Gene editing enables scientists to precisely target abnormal genes of many organisms (bacteria, plants, animals), snip the DNA, then remove, replace or add new DNA at the incision site. “Imagine you have a car with a flat tire,” says Fyodor Urnov, a gene editing expert at the University of California, Berkeley, and the Innovative Genomics Institute. “Gene therapy is taking a fifth wheel and putting it somewhere on the car and hoping it runs. Gene editing is repairing the flat.”
Much of this has been made possible by CRISPR. And maybe the most exciting news is that CRISPR may soon be getting an upgrade.
And scientists are already working on next-gen CRISPR technology that’s more precise. “Base editors," which correct single-letter DNA mutations without cutting the DNA double helix, have been shown recently to treat sickle cell disease in mice. And then there are “prime editors” which can replace even larger DNA snafus.
And just think. It was only 150 years ago or so that doctors stopped bleeding patients.
If you can type, you can code
“This is jaw-dropping. It starts slow but watch the whole thing. I don’t think I would have been more amazed had I witnessed the first flight of the Wright Brothers.”
That’s what economist Alex Tabarrok said about this video of new tool that allows you to program using everyday language. Let me second his comments.
Well, that’s not good
A survey of 104 researchers found that nearly 20% report being pressured to change or suppress their findings.
In the survey, trial investigators were asked if they had encountered various forms of suppression, ranging from requests to change research methods or alter a study’s conclusions through to appeals to delay publication or not release results at all (see ‘How trial findings were suppressed’).
McCrabb and her co-authors found that respondents were more likely to report pressure from government department funders seeking to influence research outcomes than from industry or charity funders, or public research funding agencies.
One implication of this finding is that we should be wary of centralized funding of research. You will always have cases where the people holding the purse strings will want to suppress results they don’t like. The least you can do is make sure a lot of different people are holding the purse strings.
Real genius
I recently watched the Val Kilmer documentary, Val. Heartbreakingly, Kilmer lost use of his voice due to throat cancer. But shortly after the documentary premiered, Kilmer dropped this video, where he uses deep fake technology to “speak” in his own voice.
My only regret is that he didn’t say, “I’m your huckleberry.”
RECOMMENDATIONS
José Luis Ricón Fernández de la Puente on “The Entrepreneurial State”
As Robert and I discuss in this week’s podcast, Mariana Mazzucato has argued in favor of what she calls “the entrepreneurial state.”
Her claim is that many of the transformative innovations we enjoy, from the pharmaceutical breakthroughs to the iPhone, were largely government creations. If we want to enjoy more progress, we must rethink the conventional view that the private sector is more innovative than the public sector and instead promote “public/private partnerships.”
In a fascinating series of essays, José Luis Ricón Fernández de la Puente analyzes Mazzucato’s claims, revealing unanswered questions, flawed logic, and—most valuably—a distortion of the historical record that run throughout her book.
Take her central example of the iPhone. Mazzucato writes:
The iPhone is a good example. This chart shows how every technology that makes it so smart, traces its funding back to a mission-oriented public agency in the US government which likes to pretend it believes in the free market when actually it has been one of the most interventionist in history
José delves deep into the historic record and shows that “State interventions in science that were conducive to the iPhone were neither crucial, nor entrepreneurial, not as numerous as Mazzucato tries to show.”
He goes on to point out a deeper issue with Mazzucato’s analysis. You cannot equate the value of iPhone purely with the basic technologies it uses.
What makes the iPhone the iPhone, a product that managed to put Apple in the position it is, is design, its iOS operating system, a correct technological integration, and a careful quality assurance process. All these factors are essentially internal to Apple itself. Without these things we would have a smartphone that wouldn't be an iPhone. That is what it gave Apple its comparative advantage, the base of its huge revenues.
That’s just a taste. What emerges from the series of essays is something far more valuable than a critique of one author. It’s a well-researched analysis of how many of today’s most important innovations emerged—one that goes far beyond empty headlines like “the government created the Internet.”
It’s a great starting point for anyone looking to develop a robust theory of innovation.
Until next time,
Don Watkins
P.S. Want to support our efforts? Forward this email to a friend and encourage them to sign up at ingenuism.com.
"[A]n almost vanishingly small impurity mixed into silicon, having a net effect of perhaps one rogue atom of boron or phosphorus inserted among five or ten million atoms of a pure semiconductor like silicon, was what could determine whether, and how well, the semiconductor could conduct a current.
"That was just one of the many frustrating roadblocks that would take years of thought and experimentation to conquer."
Understand that boron and phosphorus (or arsenic) are not roadblocks, they are actually required if you want to convert silicon into transistors. Without them, and their ability in minuscule amounts to change the properties of silicon, silicon would not be at the heart of our integrated circuits.
Yes, cleanliness is required to make integrated circuits with high yields, where the majority--now more than 97% in a five year old process--of the parts on a wafer are functional. But cleanliness was known to be important before the first integrated circuit was made, and it is just one of many factors that have to be controlled to create working integrated circuits.
What about all of the unknown factors that came up between the theoretical work that made transistors possible and their successful implementation in silicon? Finding and fixing unknown roadblocks to making integrated circuits requires more ingenuity than solving the problems of cleanliness. We keep hearing about the coming end of Moore's Law precisely because a lot of ingenuity is required to continue making integrated circuits with ever greater density and ever lower power requirements.