8/14/2019 How Techno-Creativity Will Save Us - 12.12.08 - by Bret Swanson

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by Bret Swanson 12.12.08

As a new president contemplates his agenda amidst adeep recession and global financial crisis, he should

remember his best friend: innovation. Thecombination of technology and entrepreneurialcreativity drives all real long-term growth. But todaymarket volatility pushes our panic buttons, and short-term hysterics unlock the vaults of the Keynesiankingdom. In these uncertain times, we forget just howfar and how fast the world moves. And how manycrises innovation transcends.

Think back, for example, to the last Democratictransition, when Bill Clinton ascended to the OvalOffice in 1992. It was only 16 years ago, but itnevertheless offers a gauge for the pace of change.

The Soviet Union had just collapsed, AppleComputer was in the doldrums versus the Windows juggernaut, and that other unstoppable force, MileyCyrus (aka "Hannah Montana"), had just been born.The Internet was but a blip to most Americans, aswere real coffee and wine. There was no "genome,"and there were no digital cameras. The "Facebook" Ireceived as I arrived for my freshman year of collegethat autumn was printed on paper and played no partin the presidential campaign.

Today, an average consumer can buy a terabyte harddrive (1 million megabytes), on which she mightstore her family photos, videos and other digitaldocuments for as little as $109.99. In 1992, a terabytedrive, if such a thing had existed, would have cost $5million. The chief digital storage medium at the timewas the 3.5-inch floppy disk, which held 1.4megabytes. When digital photos came along andconsumers found the huge square disk could onlyhold one photo, it was instantly obsolete.

In mid-2008, the four-gigabyte (or 4,096 megabytes)flash memory chip in an iPod Nano cost $25. Late in2008, four-gigabyte flash cards and USB drives are

selling for $14.99. But back in 1992, four gigabytesof flash memory would have cost $500,000. This

means a hypothetical iPod Nano circa 1992 wouldhave set back the teenage Nirvana or Boyz II Menfan around $3 million.

Apart from research scientists and a few earlyadopters of Compuserve and AOL, the Internetessentially didn't exist in 1992. Monthly Internettraffic was four terabytes. All the data traversing theglobal net in 1992 totaled 48 terabytes. Today,YouTube alone streams 48 terabytes of data every 21seconds.

The first integrated circuit, half an inch wide, with two

transistors, demonstrated by Texas Instruments onSeptember 12, 1958. (Image courtesy of Texas

Instruments.)

Biology is also on the innovation curve and is likelyto accelerate. When the Human Genome Projectbegan in the early 1990s, sequencing one DNA basepair cost about $10. Craig Venter famously began hisown competing genome search in 1998 andcompleted the project simultaneously, at around one-tenth the cost. Today sequencing one base pair costs atenth of a cent, and by 2024 just 16 short yearsfrom today's presidential transition we'll sequencean entire human genome (yours, if you'd like) for$100.

In 1992 a tiny percentage of Chinese citizens had

ever made a phone call, but today there are twice asmany mobile-phone subscribers in China as there arepeople in the U.S. The entirety of U.S.-China trade in1992 was $33 billion. This year it will approach $400 billion. Trade with India in 1992 was just $5.7 billion, but is now $35 billion. All world output in1992 was $20.4 trillion, about the size of today'soutput from U.S., Japan and Germany. Imagine therest of the world didn't exist. That was 1992.

Now imagine how similar innovation going forwardwill utterly transform all our industries, frommedicine and mining to agriculture, energy andeducation. Or further imagine an accelerated pace ofinnovation. It's possible.

But innovation is by definition unexpected. We can't

force it or compel it. Certainly not from Washington.The dramatic centralization of money, power,information and influence now under way seriouslythreatens the entrepreneurial revelations andtechnological revolutions that drive long-termgrowth. If we quasi-nationalize the energy, finance,auto and health care markets, and possibly bardynamic new business models on the Internet, as with possible network neutrality regulation, we will closeoff many of the most promising paths to neededefficiencies and, more important, new wealth.

If Washington had planned our future in 1992, we

wouldn't be here. Technology and ingenuity canovercome many government mistakes and bloat. Butat some point, our short-term fixes and obsessionswith certainty will block the entrepreneurial acts soessential to long-term security. In many ways, theyalready have.

When things look bleak, look back. You will see howbright tomorrow can be.

Bret Swanson is a senior fellow and director of theCenter for Global Innovation at The Progress &

Fr e e dom Founda t ion ( w w w . p f f . o r g / c g i / publications.html

).

How Techno-creativity Will Save Us

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