Would you rather be Thomas Newcomen and help invent the steam engine or Andrew Carnegie and use that technology to build a railroad empire? Would you rather be Tim Berners-Lee and be credited with inventing the world wide web (and receive a $1.65 million prize 15 years later) or Mark Zuckerberg and deploy that technology to create a $75 billion social media company?
Phrased for the general case, would you rather be an inventor or a deployer of a revolutionary new technology? If you had to pick, you’d probably choose deployer.The nature of technological revolutions
Chris Dixon wrote a great post
about how technological revolutions come in two phases; installation and deployment. Typically, the installation phases happens during a financial bubble when excess resources are poured into a promising new technology. An inevitable financial collapse ensues, followed by a sustained period of growth fueled by the deployment of the new technology.
America’s unusual success has largely been fueled by major technological revolutions that have lead to large increases in productivity that unfolded over time. Innovations in manufacturing, transportation, engineering, and energy are examples of giant leaps in technology that resulted in real growth of productivity and quality of life.
Technological revolutions increase our national output and well-being in a way incremental improvements in labor and organization efficiency simply cannot. If you are America and want to maximize your success, it is essential to figure out how to create as many of these revolutions as possible. So how do you do that?
If America were an individual, it would probably invest time and resources into "installation" technologies – some promising places to start might be artificial intelligence, robotics, nuclear power, or materials science. America would know that many of these investments would never reach the deployment phase, but it would be worth it in the long run because those few successful revolutions would be so incredibly valuable.
America, unfortunately, is not an individual, and the inventors who dedicate their lives to making progress in installation types of technologies often don’t enjoy the benefits they seem to deserve. Most installation technologies never reach deployment phase, and even when they do, the inventors rarely reap the same benefits as the deployers.Dynamic inconsistency
In Homer's The Odyssey
, Circe warns Odysseus that when he sails past the sirens, their beautiful singing will draw him in and result in his death. The singing will be so beautiful, in fact, that once he hears it he will still decide to go towards the music even know though he knows it will lead to his certain demise. Knowing that his preferences will change, he orders his men to put wax in their ears and tie him down so that he will be able to hear the music but unable to steer the boat towards it.
This is one of the earliest written examples of dynamic inconsistency, the phenomenon in which an individual's preferences are inconsistent over time. We are all too familiar with this in our everyday lives – we wake up in the morning determined to work out and eat healthy food, and cave in late at night to a delicious piece of chocolate cake. What you want right now is often different from what you want most.
When you are an individual, if you know that your preference will change over time, you can make decisions that force yourself to do the things you most want. Throw the cake out of your apartment so you can’t eat it late at night. Get ahead on your work on Sunday evening so Monday is better. Pay for a full online course to encourage yourself to see it through.
When you are a community, however, it is much harder to do this because individuals are driven by their own well-being, rather than by the well-being of the community.Inventors and deployers
There are two main reasons it’s bad to be an inventor. First, much of the work done never results in a tangible product or service; instead, it’s akin to incremental advances in academic knowledge, which are important in the aggregate but typically yield little benefit for the individual researchers. Second, the period between the installment and deployment phases can take a *really* long time. As John Maynard Keynes said, in the long run we are all dead. Most people don’t want to wait around for decades to watch their inventions be gainfully deployed.
Individuals are much better off participating in the deployment phase than the installation phase because of the rapid and sustainable growth, and because many installation phases will hit a dead-end and never make it to deployment. The deployment phase is much less risky and, frankly, easier. This causes people to flock to deployment phases (think about the current deployment rush in tech) rather than installation phases (consider the nascent industry of computer chips and microprocessors).
America the individual gets long-term benefits when one person invents a brilliant new technology that another person gainfully deploys many years later. Unfortunately, humans' incentives are typically limited to themselves and those closest to them, so the inventor isn't always be so eager to pour his life into a risky research endeavor that may never pay off.Incentivizing technological revolutions
Because the time periods are so long and third party externalities are so relevant, I believe we need to actively encourage work on promising installation technologies. Quantum leaps in robotics, cheap energy, transportation or AI will result in the long-term sustainable growth that has lead to America’s greatness, but how do we get the smartest people to leave their jobs at SnapChat or Goldman Sachs to work on those problems?
We know that we will be best off in the long run if we invest time and resources into installation technologies, but because America is not an individual we have to create structures to incentivize the behavior we want.
Some of these incentives are already in place. There are academic prizes and government grants, and even in the private sector, Zuckerberg, Milner and Brin teamed up to offer a $3 million reward
for breakthroughs in medical research. The 20 under 20 Thiel Fellowship is at least tangentially related.
Still, it’s not enough; we could and should be doing much more. Private initiatives are good but there will probably need to be significant government involvement to correct the natural disparity in incentives for being an inventor over a deployer.
Until we make it more appealing to focus on inventing for emerging installation phases, people will continue the (relatively) easy and rewarding work of deploying the current revolutions. There are undoubtedly some private forces at work, and inventors can get great joy and satisfaction from their work, and often money too. But until we figure out how to make it as appealing to work on invention as deployment, we are leaving an indeterminate amount of innovation and growth on the table.