The Truth About Investors’ Money and the Startup Scene

Over the years I have had many an occasion to remark the terrible job the media generally does keeping the public apprised of developments in science and technology. One failing I have had particular occasion to remark has been their tendency to treat technologies as much further along in development than they really are (to the point of, in terms of NASA’s system of evaluation, treating technologies on Level 1 as if they were all the way up on Level 9). Their superficiality on this level interacts with superficiality on others, not least the fact that following up stories, and putting together "the big picture," has never been a priority for the media, subjecting the news reader, listener and viewer to a hard rain of disconnecting details that can be so overwhelming as to leave them knowing less the more they tried to follow along (studies have literally documented this). Thus some technology story tells us something big is around the corner. We never hear about it again, in part because it never actually happens, another story telling us about something else that never happens. People forget the second part--the nothing happened part--and remember the dramatic announcement, the hype sticking, forming the general mood of expectation that endures even in a context which may be one of technological stasis.

Going along with this has been the coverage of the R & D side of things itself. We are always hearing about "startups," while the media hangs on every act, every pronouncement, of the "tech billionaires." All of that gives the impression that there is thus no end of money pouring into the research and development bringing "new things to life." Yet anyone who studies the actual flow of money through the arteries of the global economy knows full well that the picture is very different, with a new report from McKinsey & Co. showing that for the last two decades the game has mostly been speculative, and mostly centered on buying and selling that old commodity, real estate, in the hope of extracting profits from price changes, not grand new technological endeavors.

The pattern of investment (a reminder of the enormous media bias where financial news is concerned, ever selling the narrative of finance, globalization and the rest turbo-charging "INNOVATION!") would seem to correspond to the fact that, in actuality, the past two decades have not been terribly dynamic technologically, with obvious reflections in the slowness of the energy transition, in spite of the enormous potentials consistently revealed in the advances that have happened; and how, even in that scene supposed to epitomize the progress of our era, information technology, disappointment has been so commonplace. (Consider how many of its promises fizzle out, especially at the practical level. Artificial intelligence beating Go champions is all very well--but the AI that can take over your morning drive is a more significant test of practical efficacy, and we all know how that has been going.) However, we are still left with the question--is this because we live in an era where the technological possibilities are simply not all that promising (as Robert Gordon, for example, gives us cause to think), or because the potentials are there but, in this investment climate, not the incentives?

That question I put to you, reader.