Tomorrow I will be attending an “Innovation Summit” hosted by the Darden School of Business.  I just finished reading Peter Thiel’s “The End of the Future” in the National Review.  Thiel’s argument is that underlying our economic difficulties is a more profound problem: a dramatic slow-down in innovation. His examples include the fact that we now find ourselves with travel slowing down not speeding up (Concord decommissioned and no successor in sight) and the apparent lack of progress on treating cancer (Thiel’s piece was published just before Steve Jobs’ death which provided a poignant reminder of just that).

Thiel’s diagnosis appears to be that we have lost the will to progress (there is a distinctly Nietzschean bent to Thiel’s writing) when the “hippies” took over in the 1960s.  I don’t share the deep vein of pessimism that runs through all of this.  Without a doubt our current institutions are failing us by focusing on protecting the status quo and being mired in incrementalism.  That’s true for government, universities, large corporations.  But we are beginning to see new networks emerge on the edge that are the likely sources of future innovation.  

As just one example, there is a lively and growing culture of makers.  Interestingly, many makers are both technologically sophisticated and environmentally conscious.  They are possibly the vanguard in a redirection of the thrust of innovation from purely “faster” as a metric to “sustainable."  This is not a rejection of technology (as we did see in the 60s) but rather an appropriation of technology for a different set of goals.  If that attitude becomes more widespread – as I believe it will – that will become the new social consensus.  Once it does we will unlock an amazing new innovation arc.

If you want a terrific historical perspective on this , please go and look at Carlota Perez’s presentation on ”The direction of innovation after the financial collapse“ (PDF).  Perez lays out the previous cycles of "installation” versus “deployment” for various technologies including canals and railroads.  Her perspective suggests that the financial crisis we are finding ourselves in now, may wind up being the catalyst for a transition (which would be much preferable over the previous big transition, which was World War II).  Perez’s optimistic view provides the perfect antidote to Thiel’s.