Since the 2008 financial crisis, the world economy has been in the doldrums, and every time we think we’re out of the storm, we find that we are still at sea, struggling to stay afloat. Europe appears on the verge of disastrous devolution, and the world economy as a whole is roughly at the same levels as 2000. Will we ever feel confident that we are returning to sustainable growth?
I think the answer lies in technology investing. I think we just have to ask, Have we been investing in technology? But in order to answer that, we have to know what “technology” is.
Ask a random stranger “What is technology?” and you’ll likely hear something about “computers” or “the Internet.” Most people assume that investing in anything having to do with computers or the Internet is automatically “technology investing.”
This can’t be right, of course. The term “technology” has been around since the 1600s, before anything like today’s computers existed. I suppose a compass was considered technology back then, and when the sextant was invented it was “high-tech.” More recently, though still generations ago, the technologies of railroad transformed the world economy from the mid-1800s, and automobiles shortly afterwards extended that transformation further into our economy and culture. Broadcast radio and then television and movies became important technologies as mass media came into our lives from the early-to-mid 20th century. The cycles got shorter and faster with computers in the ’70s and ’80s, and the Internet from the ’90s.
When we say “technology” today we no longer think of trains or cars or even radio or TV. All of those things still have technology in them, but none of them represents what we mean by “technology.” So it only makes sense that someday soon “technology” will bring no reflexive association with computers or the Internet. So what then will it mean when we say “technology”?
My nutshell roadmap of technology from the compass to the Internet stopped in the 1990s. The right investments in seafaring, shipping, autos, broadcast networks, computers and Internet resulted in personal fortunes and worldwide economic growth. I think in any of those eras, you could ask “Are we investing in technology?” and the answer would be a clear yes, and you would have been able to point clearly to the technology. But ask yourself today, “Over the last decade, have we been investing in technology?” and I’m not comfortable with the answer.
“Technology investors” have made personal fortunes and huge companies have been birthed since 2002, but what is the technology? Should social media and games be considered technology? Should mobile phones and tablet computers? If so (or if not), why (not)? What is the definition? What is the test? What is technology?
Here is the simplest definition of technology:
Technology promises a better life.
This begs a question with almost every word. Why a promise? Better by what standard? Whose life? Before trying to clarify, let me propose a test:
Technology delivers what you need while breaking the boundaries of the Speed/Quality/Price triangle.
When technology works, you get what you need at a higher quality, lower price and faster than you could have gotten it before. At introduction, “high-tech” may not include all three right away, but it’s apparent even early on that the speed, quality and price will inevitably improve. This is why technology is a promise – early iterations may give you what you want with clear improvement in only one of the three aspects, but even early on there is an explicit assumption that the other two will follow. It’s also inherently assumed that although only an exclusive few might access and benefit from the early technology, someday everyone will. The definition of “better” is just that “quality” is delivered, in whatever definition of quality that is being used at the time, but that the quality comes faster and cheaper. So: Technology promises a better life.
How well does this definition and test fit the waves of important technology advances of the past? If say, the prime years of your life were from 1930 to 1970, did television give you what you needed, better and faster and cheaper? At a time when we went from worldwide depression, then broad scale war, then peace and increasing interdependency and complexity and societal change – yes, I’d say that the ability to viscerally and quickly deliver news, entertainment and culture gave life what we needed. How about the personal computer, the Internet, and search engines? I think positive answers are similarly easy to construct, and negative answers are mostly dyspeptic dystopianism.
Now how about social media? Well, everyone needs friends. Everyone needs a way to connect with friends, close and distant. Everyone needs to be a part of a community. But are social networking companies truly satisfying these needs? Is that even what they are trying to give us? Do your multiple social networks, hundreds or thousands of “friends” you have on them, their messages and status updates and pictures and quotes of the day – are these giving you what you need? Is this a promise of a better life for you?
I have no problem if your answer is “yes” to these questions. But I can’t answer yes, and I fear that most people wouldn’t answer yes, and this makes me uncomfortable because when I return to the question, Have we been investing in technology over the past decade? – I also cannot answer yes. And that means I cannot see how we will emerge from this worldwide economic slump.
I’m sure there is active investment in technology that really does promise a better life, but that’s not the mainstream of what’s called technology investing today. When autos and radios and TV and computers and the Internet were coming up, there was plenty of investment fervor around these industries. Today, the fervor is around companies that promise all sorts of interesting things, but I wouldn’t call most of these things a promise of a better life. They may be great companies, they are certainly filled with great people, they definitely have smart investors – but they are not making technology. And if we fail to invest in technology – real technology – then the economy will not return to robust health, and life will not get better.