It Will Take More Than Antitrust Enforcement To Light Innovation’s Fire

What are the key technology policy issues that will face the next U.S. President and Congress? How about fixing a crumbling innovation system and saving democracy?

That was the gist of a discussion among four technology and policy experts convened over Zoom by the Computer History Museum earlier this week.

U.S. innovation isn’t on a path heading in the right direction, the panelists warned, and big changes are needed.

Considering the U.S.’s ability to create and deploy innovative technology, Mariana Mazzucato, a professor in the economics of innovation and public value at University College, London, said that the U.S. government has moved away from the “glorious decades,” when the public and private sectors worked together on ambitious, mission oriented projects that spanned broad areas including basic research, applied research, and procurement policy. Now, she says, the federal government only sees its role as “fixing market failures.”

“China is learning the lessons of what worked in the U.S. at the same time that the U.S. is unlearning the lessons,” Mazzucato said, pointing to China’s commitment to investing in greening its economy. This, she said, is the kind of “patient, long-term finance” that companies need—and that the U.S. doesn’t have right now. “The Death Valley phase [of a startup] can last 15 years,” she said, “while VCs want five year exits. China has that long term finance.”

Judy Estrin, CEO of JLabs and former CTO of Cisco, concurred. “Our tax policy has been backwards. R&D tax credits don’t incentivize research, they incentivize short term development,” she said. And look at “long term capital gains—a year is not long term.”

What should that ambitious, mission-oriented project be? Anne-Marie Slaughter, CEO of the think tank New America, said: “We could see a national mission to radically decrease health inequities. The space race triggered the science age, Covid and the problems it spotlights” could bring on “the health age.”

Pushing towards a green economy could be another option, though, Slaughter said, the two aren’t unrelated. “Much of what we could do to create a green economy would help health.”

Estrin warned the group that technology by itself isn’t the answer, and called for bringing in experts from social sciences and the humanities. “We shouldn’t go after these moonshots by saying we are just going to throw technology at them, in the same way that you don’t solve a pandemic with just technology; public health is driving it, not just science. As we look at these moonshots, we need to have tech at the table but not dominating the table. [Tech] contributed to the problem, so as we contribute to the solution, let’s broaden the table.”

Antitrust in the Spotlight

Tech industry regulation and, in particular, antitrust law was in the spotlight the day of the Computer History Museum event, with the U.S. House of Representative’s antitrust subcommittee this month just releasing the majority report from its 16-month-long investigation into competition in digital markets. The report concluded that the tech behemoths—Amazon, Apple, Facebook, and Google—are behaving in anticompetitive ways, to the detriment of innovation.   The panelists considered whether updating antitrust law—and enforcing it to stop anticompetitive behavior—would spark innovation.  

“Antitrust is a serious issue, but it’s not a silver bullet,” said U.S. Representative Ro Khanna (D-Calif.). “There are issues in terms of mergers, in platforms tying their own services, and in wanting platforms to have portability of data and interoperability with other platforms. There is a way of having thoughtful antitrust regulation that will preserve economies of scale, that won’t break up companies without a rationale, but will increase competition and the possibilities for new entrants. But people who think that if we have better antitrust enforcement we will have a better innovation economy…it’s just one part” of what needs to happen.

Slaughter expressed doubts about just how important those economies of scale really are. “Platform companies say ‘You can’t break us up because we have to be this big to compete with Huawei and Alibaba, and we need a lot of data’” to develop artificial intelligence, she said.

“That may not be true even on its face—AI might not need that much data. But even if it is true, are we not willing to regulate our own industry just because Chinese companies will be bigger?”

Perhaps more urgent than dealing with antitrust issues for the U.S. government is for the U.S. to figure out exactly what it wants the Internet to be. Said Slaughter: “China has the authoritarian Internet, Europe has the highly regulated democratic Internet,” but the U.S. has “the Wild West or nothing. We need to think about what are a person’s digital rights, and how can you use technology consistent with non-authoritarian uses. We need a vision of an open internet that is rights-regarding.”

Education, Immigration, and Healthcare Policies All Impact Innovation

Lighting a fire under innovation in the U.S. will take a lot more than setting a goal, fixing the incentives for investment, cracking down on anticompetitive behavior, and sorting out digital rights.

“It’s broader than that,” Slaughter said. The U.S. “needs to invest in education, to have a workable immigration situation, invest in equity, and to have [universal] health insurance.”

On education, she said, “We have the talent we need, but we are not educating the talent adequately. We are educating a small segment, but there is a mass of talent we need to be educating.”

The need to fix our immigration system, she indicated, is obvious. “It’s not just Silicon Valley and importing India’s best engineers, it is the ability to have a whole clash of cultures and ways of thinking. We’ve always innovated with many of our immigrant citizens leading the way.”

 “The equity piece,” she said, goes back to talent. “Unless we are using all of our talent, we aren’t going to lead globally.”

The issue of healthcare, she suggested, is connected to the ability of innovators to take risks. “The work on risk-taking shows that you need at least minimal security. Our innovators are people who, if they fall on their faces, will only fall so far; they won’t end up on the street without health insurance. One of the best things Obama did for Silicon Valley was to extend kids to age 26 on their parents’ health insurance. [Now] they have four years after graduating college to take risks,” even to try starting companies.

Innovating Without Breaking Democracy

Of course, fixing innovation isn’t much good if that innovation breaks democracy. Technology needs to be good for society, not bad, the panelists warned. And getting that to happen will take a significant shift in how Silicon Valley does business. Explained Estrin:

“Given our dependence on digital technology, we have to stop thinking about just encouraging technology, but think about how we change power dynamic. How technology is wielded today is unbalanced. They—the industry, the platforms—have too much power. We need to figure out how to achieve a better balance between technology and humanity. This isn’t easy, but until we do this, we will be playing catchup.

“In addition to mitigating the devastating impacts of today’s platforms on democracy and public health we have to think about new technologies, about what governs our life in virtual worlds, about whose values are driving our future.”

Estrin went on to talk about an inherent danger in today’s tech culture.

“There is a worship of dominance and disruption that is incentivizing problematic behaviors,” She said. “Look at the common mantras: ‘Scale fast/fail fast’ creates a winner take all environment. ‘Move fast and break things’ [implies that] disruption is good without regard for the consequences. Some things can’t be fixed later—like democracy. ‘Make everything frictionless’ [is another, but] the right type of friction is critical to a functioning society.”

She admitted that changing the culture to one that considers disruption thoughtfully, that steps back and considers the possible harm a technology could do to the world or society, won’t be easy.

“It is hard to find technologists who are free of the tech utopian mindset,” Estrin said.  As engineers, “we are trained to think about the good.” But, she said, we “need a counter perspective while still understanding details of the technology…. We need to think about how [we can] augment organizations that exist or create new organizations that can provide this understanding, that can educate individuals, that are not just going to take us down the same path.”

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