Salient to Investors:
Fareed Zakaria writes:
- New studies suggest that American innovation is in trouble and that the glittering examples of Facebook et al are deceptive. We are eating the seed corn and not laying the groundwork for the next great tech revolutions.
- Silicon Valley’s roots are deeply tied to government support – most of the legendary start-ups that fueled the computer revolution got off the ground largely because the military and NASA. GPS powers the information revolution and was originally developed for the military.
- Federal funding for basic research and technology as a percentage of GDP is at the lowest level in four decades, while real start-up cultures are emerging in Sweden, Israel, India and China, which is on track to surpass the US in R&D spending.
Robert Litan writes:
- The rate of start-up formation in the US has dropped from almost 15% of all US companies in 1978 to 8% in 2011, while business deaths have exceeded business births for the first time in three decades.
- Tech is now dominated by older companies. The proportion of US companies at least 16 years old rose to 34% in 2011 from 23% in 1992. Historically, older firms are more risk-averse, rigid and incrementally innovative than younger firms.
- The US should let in more talented immigrants – who are disproportionately more likely to start new firms – reduce regulations for starting a company, increase the ease of rasing money over the Internet, and maintain near-universal health care to allow people to risk leaving established companies.
Peter Thiel at Founders Fund says we do not live in innovative times – we have Twitter instead of flying cars.
Ajay Piramal says one of the reasons the US is so successful is that it constantly criticizes itself.
Read the full article at http://www.washingtonpost.com/opinions/fareed-zakaria-the-need-to-renew-american-innovation/2015/01/01/b0f0d864-913b-11e4-a900-9960214d4cd7_story.html