Fareed Zakaria: American innovation is in trouble – The Washington Post 01-01-15

Salient to Investors:

Fareed Zakaria writes:

  • New studies suggest that American innovation is in trouble and that the glittering examples of Facebook et al are deceptive. We are eating the seed corn and not laying the groundwork for the next great tech revolutions.
  • Silicon Valley’s roots are deeply tied to government support – most of the legendary start-ups that fueled the computer revolution got off the ground largely because the military and NASA. GPS powers the information revolution and was originally developed for the military.
  • Federal funding for basic research and technology as a percentage of GDP is at the lowest level in four decades, while real start-up cultures are emerging in Sweden, Israel, India and China, which is on track to surpass the US in R&D spending.

Robert Litan writes:

  • The rate of start-up formation in the US has dropped from almost 15% of all US companies in 1978 to 8% in 2011, while business deaths have exceeded business births for the first time in three decades.
  • Tech is now dominated by older companies. The proportion of US companies at least 16 years old rose to 34% in 2011 from 23% in 1992. Historically, older firms are more risk-averse, rigid and incrementally innovative than younger firms.
  • The US should let in more talented immigrants – who are disproportionately more likely to start new firms – reduce regulations for starting a company, increase the ease of rasing money over the Internet, and maintain near-universal health care to allow people to risk leaving established companies.

Peter Thiel at Founders Fund says we do not live in innovative times – we have Twitter instead of flying cars.

Ajay Piramal says one of the reasons the US is so successful is that it constantly criticizes itself.

Read the full article at http://www.washingtonpost.com/opinions/fareed-zakaria-the-need-to-renew-american-innovation/2015/01/01/b0f0d864-913b-11e4-a900-9960214d4cd7_story.html

Fareed Zakaria GPS – CNN 11-30-14

Salient to Investors:

Fareed Zakaria said:

  • All through history, humans have advanced when they have been able to work together. Matt Ridley said human progress took off when human beings began exchanging things, ideas, skills, goods, services.
  •  Teamwork is the most crucial skill and yet education is mostly about solo performances.
  • If you want to innovate, think crazily, work with others, think big, be creative, and keep up with your math.

Walter Isaacson said:

  • Steve Jobs said creating a product is hard but creating a team, a company, is even harder.
  • Creativity is a team sport, a collaborative effort. You need a visionary and somebody who can everyday execute because vision without execution is just hallucination.
  • America has become a much more partisan society. The increased tension between government, corporations, and universities is diminishing the spirit that helped create the digital revolution.

Travis Kalanick of Uber said:

  • The most successful in Silicon Valley are the ones who do not accept failure ever – but are empathetic to reality.
  • Innovation is really about creative problem solving.
  • It’s so easy to talk about failure when you’re not failing. Those who talk of failure and how it is easy to do in Silicon Valley are people who have succeeded – but they were once scared out of their minds of failing.
  • It is very hard to be successful with something that the world hasn’t seen before.
  • America s dominance in technology will continue.
  • Beijing is a very young, vibrant Silicon Valley.

Peter Thiel said:

  • Most of what we call innovation is not innovation
  • Though we have had enormous innovation in the world of computers, we have had much less innovation in the world of atoms and energy and food technology, biotech, medicine, space travel, supersonic airplanes.
  • The companies that succeed in building breakthroughs are those that create the best bulk of all value.
  • Failure is very overrated. 20,000 people a year move to Los Angeles to become movie stars, but only 20 make it.

Linda Rottenberg at Endeavor said:

  • The two fastest growing groups in America that are starting businesses are women and baby boomers over 55. Yet only 6-8 percent of venture-backed businesses are started by women.
  • Entrepreneurs are a fancy word for doers, and are people who view the world differently and allow themselves to be contrarian.
  • Entrepreneurship is about a series of mini innovations and executing well.
  • You are the person that is holding you back.
  • The most successful entrepreneurs are those that believe being called crazy is a compliment and that if you are not called crazy you are not thinking big enough.

Vinod Khosla at Khosla Ventures said:

  • 80 percent of what doctors do will be done by computers in 20 years. There are 15,000 diseases, 15,000 devices, drugs, therapies, prescriptions so a doctor who graduated 25 or more years ago simply cannot remember what he learned. No cardiologist has read even 100 of the last 5,000 articles published last year on cardiac disease.
  • 20 years from now, there will be very few areas, maybe none, where human judgment is better than machine judgment.
  • The jobs eliminated will be those that people think of as work and drudgery
  • Within 50 years we will see an era of abundance and extremely high productivity – producing enough goods and services for all.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

at http://edition.cnn.com/TRANSCRIPTS/1411/30/fzgps.01.html