My short article on persistent innovation just came out in Tech Review, and they are messing with my head….
This is from a pre-print of the March/April 2010 issue.
Sculpted prose for the limited space in print.
Here is the crude original:
Innovation is critical to economic growth, progress, and the fate of the planet, yet it seems so random.
If we step back though, and look across the eons, a pattern emerges. The future belongs to the new, the entrepreneur, the new entrant, but this only feels coherent and comfortable in retrospect. Who is the great leader of 2020? Nobody we could name with confidence today. What great new idea will change the world? Certainly not anything generally considered to be a good idea today; that’s proof it’s not disruptive enough to the status quo.
So while innovation may appear inscrutable at the atomic level, patterns emerge in the aggregate nonetheless. And companies and countries can embrace policies that promote innovation with emergent predictability. Leaders can embrace a process of innovation more than they can hope to dictate innovation.
A critical pattern, spanning centuries, is that the pace of innovation is accelerating, and it is exogenous to the economy. At DFJ, we see that in the diversity and quality of the entrepreneurial ideas that we see each year across our global offices. Scientists do not slow their thinking during recessions. And frankly, the startup ideas seem better in down markets.
For a good mental model of the pace of innovation, consider Moore’s Law in the abstract – the annual doubling of compute power or data storage. As Ray Kurzweil has plotted, the smooth pace of exponential progress spans from 1890 to 2010, across countless innovations, technology substrates, and human dramas — with most contributors completely unaware that they were fitting to a curve.
Moore’s Law is a primary driver of disruptive innovation – such as the iPod usurping the Sony Walkman franchise – and it drives not only IT and communications, but also now genomics, medical imaging and the life sciences in general. As Moore’s Law crosses critical thresholds, a formerly lab science of trial and error experimentation becomes a simulation science and the pace of progress accelerates dramatically, creating opportunities for new entrants in new industries. And so the industries impacted by the latest wave of tech entrepreneurs are more diverse, and an order of magnitude larger — from automobiles and rockets to energy and chemicals.
And now globalization expands the geography of entrepreneurship, the network effects in innovative ideas, and the end markets for their products. The transactional friction has been restructured by the Internet.
Technology’s non-linear pace of progress has been the primary juggernaut of perpetual market disruption, spawning wave after wave of opportunities for new companies. And without disruption, entrepreneurs (and thus VCs) would not exist.
In past recessions, we have had false Oracles who predicted that innovation is dead because they did not see any in enterprise software. Mature industries are predictable and stable, and stasis precludes new entrants. You have to follow the disruption. I’m guessing many of the TR50 will lead the way.
To see the frontiers of the unknown and the cutting edge of innovation, you have to scan the horizon, and look to interdisciplinary spanners, as a good idea that jumps across the sciences, or across industries is like a virus jumping across species or continents – the potential for disruption is greater with differential immunity.
In a sea of similar sounding startups, are there foundational innovations underway? More than I could possible relate. A couple to ponder:
2010 will be the year of the first scalable quantum computer, and if it follows Rose’s Law of annually doubling qubits for the next decade (as it has for the past seven years), it will handily outperform all computers on the planet… combined.
2010 will be the year of the first synthetic life form, with 100% of its DNA built up in the lab from beakers of chemicals, heralding an era of intelligent design in biology, where one writes the code of life as if it were a computer program, and the software creates its own hardware. “Industrial Biotech 2.0” compounds off Moore’s Law, creating billions of novel microbes per day.
We haven’t seen anything yet.
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