Thursday, May 17, 2012

The Bright Future of America



The debate about whether America will own the global economy in the 21st century or else become a dude ranch for rich Chinese and Brazilians hinges on whether innovation can break out of the box….

America can do better than that, and it will. In fact, the seeds are being planted now. In Silicon Valley, investing in social-media companies is already passé. Last year, as private investors were bidding up Facebook's valuation to $100 billion, the veteran Silicon Valley investor Roger McNamee said "the next 500 social-media companies will lose money." He's broadly right. The time to make big returns in Facebook and in social media has passed.

There's a growing interest among bright minds to apply "exponential technologies" (the phrase used by Ray Kurzweil and Peter Diamandis, founders of Singularity University) to solve problems much larger than whom to friend on Facebook. Transportation is one of those big deals. Would you rather own a car, an iPad or a Facebook membership? Thought so. By 2050 the planet will have nine billion inhabitants and three billion cars. This will create huge demand for fuel and road access.

Silicon Valley's biggest new thing, therefore, is not Instagram or Splunk but Google's robot-driven car. The Google car is only four years old. In 2008, it could barely get around pylons in a parking lot. Last year it got down San Francisco's snaky Lombard Street with no human driver and today it races over mountain passes with only R2-D2's second cousin behind the wheel. This rate of progress is normal in the algorithmic world, but it is new in the physical world.

Manufacturing? America will own the mid-21st century. Geopolitical instability and rising oil prices will wreck the late 20th-century rationale for outsourcing. Chinese labor costs are rising 20% a year while robotic costs are dropping by 30% a year. Do the math. "Made in the USA" is set to have a major comeback….

Energy? America's natural-gas and shale oil boom will bridge us to 2030 or so when solar energy and algae-based fuels will be closer to market parity and begin to make a real contribution. As long as I'm on the topic of the natural-gas boom, what key technology made this happy surprise possible? High-tech horizontal drilling. Who knew? We were all too busy fiddling with our iPhone apps to see it coming.

2 comments:

  1. That positive outlook will be true as long as Social Security and Medicare don't swallow us alive.

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  2. I don't want to minimize the debt problem we are facing. But I'm not sure we'll be "swallowed alive". It will be uncomfortable, to be sure, but the growth opportunities outlined in the article will mitigate that discomfort.

    Before I posted this article, I emailed it to my kids. My sons are in the 16-24 range, and it's good to see that there will be viable career opportunities for them, other than the health care field.

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