Ok, so this is a really shitty article about a potentially interesting take. technologyreview.com/2020/06/17/100
None of these arguments are new to VCs, nor are they particularly well presented. Let's see if we can redo it, but better. A thread.
Conversation
Opening: "Many VCs think they fund the greatest source of innovation in the economy. It is true that they are sitting on a lot of dry powder."
(Insert quote from Charley Ellis, and talk about how low interest rates have pushed the yield curve out).
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Lede: "BUT this view, while superficially correct, is flawed."
(Insert short history of the Internet, and how it was funded by the government. Point out even Google comes from DARPA qz.com/1145669/google)
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General point: "many domains of innovation are like this: an initial period of thankless investment, usually in fundamental research in a variety of technologies, where only the government can afford to sink in huge amounts of money for no apparent return."
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"This is then followed by a tipping point where commercialisation is possible. THEN venture capital steps in, and witness an explosion of innovation."
(Insert segment about Carlota Perez's theory of technological deployment, and interview a few VCs who believe the theory)
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"Sometimes, even when governments mess up, there can be an explosion of commercial innovation. Of course, this relies on the fundamental research and tech innovations being in place."
(Insert story about solar panels becoming cheap, which was a result of a Chinese gov gaffe).
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(Full story here: npr.org/2019/08/14/751)
Point: even when government intervention is sloppy, incentive shaping can often drive innovation.
(Insert story about explosion in materials science as indirect result from Apollo program).
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END: "Marc Andreesen says its time to build, but history tells us this isn't accurate. Perhaps the better exhortation is: it's time to research. Because government-funded research has always led to an explosion of building further down the line."
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None of these ideas are new. Even the arguments are decades old at this point. The MIT Tech Review piece at the top of this thread is a disjointed string of historical anecdotes, quotes, and stories. What a missed opportunity to bring good old arguments to a wider audience.
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I would be remiss if I didn't link to at least one academic who has been tooting this horn: Mariana Mazzucato has been shouting this from the rooftops for years. academic.oup.com/oxrep/article/
She has an upcoming book amazon.com/Mission-Econom on exactly this set of ideas.
