America’s digital economy is booming media question: Only a few got rich

The Technology Industry has not changed the physical world as is often the case, and what is now gained is a consumer convenience revolution rather than a third industrial revolution, the Atlantic Monthly wrote. In addition, the entire technology industry is taking talent away from other innovation-benefiting industries. People should use their intelligence back into reality, not just in the virtual world. Here’s the translation:

America's digital economy is booming Media question: Only a few are rich

Looking back, how on earth do we tell the story of the 20-year-old digital age? We can focus, like journalists, on the debasement of connected lives. To be sure, as Facebook, Twitter and YouTube continue to engulf the entire online world, they have upended traditional media, allowing forces to speak out and widening the political divide across American society. Although smartphone technology has brought promise and practicality, it has also been proven to be an anesthetic.

But what if we don’t focus on the misdeeds of big tech companies and more on the guilt of negligence, such as failure, bankruptcy, and failure to deliver on promises? There have been several sensational examples in the past year: WeWork, an office space-sharing start-up that has announced that it will overhaul the workplace, is suddenly on the brink of bankruptcy just as it goes public. Uber, the ride-hailing service, was once seen as a powerful force that would revolutionise urban transport, but the company’s value has also fallen sharply since going public. From January to October, the two companies lost a total of $10 billion.

While these companies may seem like an example, their plight sends a message to investors and all of us that big tech companies, while always looking for new ways to monetize advertising sales and cloud services, cannot reshape the physical world.

For decades, we’ve relied on Silicon Valley to show people the future of America’s efforts. Optimism comes not only from Bay Area missionaries, but also from the U.S. government. In a speech at Moscow State University in 1988, US President Ronald Reagan said: “In the new economic age, human inventions are increasingly free from the constraints of material resources. “In the 1980s and 1990s, Democrats like Al Gore formed a new generation of liberals who believed that computer technology would bring opportunities on the same scale as Roosevelt’s New Deal. The Internet age is known as the third industrial revolution, is to stimulate individual creativity and promote employment of a powerful force.

But the promises were not delivered as expected. Instead, the advent of the digital age coincides with a recession in the vitality of the U.S. economy. Innovation in the technology industry has made a few rich, but it has not created enough middle-class jobs, offset the decline of America’s manufacturing base, and addressed pressing problems such as deteriorating social infrastructure, climate change, low growth and rising economic inequality. Technology companies such as Lyft and DoorDash, which operate in the physical world, do provide more convenience to the public, but it’s hard to represent the kind of shift that Reagan and Gore mentioned. These failures may be more serious than the negative effects of the Internet, but they are the root cause of the boredom and radicalism of our time.

Decades later, when historians look back at the early 21st century, they may see the smartest group of people in the world’s richest country pouring their talents, time and capital into digital technology, a small part of the human effort of this era. Their efforts have given us easy access to media, information, consumer goods and drivers, but the software has barely changed the real world. They promised that we would go through the industrial revolution again, but all we got was a consumer convenience revolution.

America's digital economy is booming Media question: Only a few are rich

The first industrial revolution freed humanity from centuries of slow economic growth. Human society’s productivity and income soared in the early 19th century, first in England and then throughout Europe. While the shift was brutal for many, the fruits were shared: real wages of the working class doubled in the first half of the 19th century, and life expectancy increased sharply in the second half of the 19th century.

In the computer age, economic development is evolving in the opposite direction. If the productivity of American society as a whole continues to grow as it did when Harry Truman was elected president to Richard Nixon’s resignation, the U.S. economy could grow by about 60 percent in 2013. If these incomes were split equally, the average middle-class family would earn about $30,000 a year. In contrast, the pace of economic growth in the United States slowed by 80% between 1973 and 2013.

Defenders of the tech age claim that traditional macroeconomic tools are unlikely to capture the power of smartphones. This compact device is not only a phone, but also a portal for cameras, game consoles, and access to the web. They told economists that everything was getting better, except our ability to measure how much it was getting better.

However, regardless of these figures, the development of the digital age has always been in step with the decline in economic growth rates. When Chad Syverson, an economist at the University of Chicago Business School, looked at the “inadequate” growth, he found that falling productivity had reduced US GDP by $2.7 trillion since 2004. Americans may like their smartphones, but all these free apps are worth trillions of dollars.

If you look up from your smartphone, it’s hard to see real progress. The material world of the whole city – whether the lights in front of us, the speed of cars on the road, the roar of overhead planes, or the subways passing through the city – are the product of human inventions from the late 19th to the early 20th centuries. Progress in the physical world seems to be over, and much of the innovation has shifted to the invisible realm of numbers.

Technology advocates argue that all code in the digital world increases human creativity by allowing individuals to deal with problems, communicate with each other, or trade with each other in a way that has never been easier. It feels like it’s true. Who can deny these facts? After all, it’s easier than ever to record music, promote video games, or publish papers. But by most indicators, personal innovation is declining. In 2015, Americans are far less likely to start a business than they were in the 1980s. According to economist Tyler Cowen, the spread of broadband technology has led to a decline in entrepreneurial activity in almost all cities and industries.

One explanation for the decline in innovation can be traced directly to Silicon Valley. The biggest winners in the tech industry have actually built a monopoly in their respective fields, such as Microsoft in office software, Facebook in social media, and Google in search advertising. Instead of promoting innovation, these tech giants are growing, scaring away entrepreneurs on the way. The term “death zone” for venture capitalists describes the terrible shadows cast by tech giants. The power of the tech giants has exacerbated regional inequality, with wealth often concentrated in the few large urban areas where they have offices. According to statistics, 80% of venture capital investment goes to California, New York and Massachusetts. It was thought that Internet tools could destroy traditional business empires, free up untapped creativity and spread wealth. Instead, these tech giants have become as ruthless and uncompetitive as the companies they once tried to replace.

For decades, the tech world has been touting the impending leap to get rid of its tedious macroeconomic impact. In the case of self-driving cars, the tech world says it will replace defective human drivers with a large number of camera and computer-controlled vehicles, saving lives and creating a whole new manufacturing industry. As recently as April, Elon Musk, Tesla’s chief executive, predicted that 1m “self-driving taxis” would be on the road by 2020, and his optimism was echoed by automakers and technology companies. Yet the progress of self-driving cars has been slow. It’s not easy to replicate human vision and behavior that evolved over thousands of years through computer coding, but that’s the near-miracle that Silicon Valley has been promising.

America's digital economy is booming Media question: Only a few are rich

Ironically, the most striking consumer technology innovation of the past decade has not been self-driving cars, but about hiring people to drive them. We are seeing more and more companies that allow consumers to summon products and services via smartphones, such as DoorDash in takeaways, TaskRabbit in outsourcing, and Uber and Lyft in the car-calling service. In this so-called platform economy, it is often workers who provide goods and services, and their part-time status eliminates the need for the platform to provide all benefits, including health insurance. This cheap service makes life easier for Yapis. But instead of improving public transport or enriching workers, the companies have increased traffic congestion, depleted public transport resources and exacerbated inequality in cities. Is this the progress the digital age has brought to the real world?

If I tell you now that everything about slowing growth and diminishing human creativity is true, can you say it’s not Silicon Valley’s fault?

Patrick Collison, co-founder and chief executive of Stripe, a fintech company, said: “I think the slowdown is much more disappointing than most people expect from the digital age. “But this slowdown predates the advent of the Internet, and on the whole I still see the digital revolution as a bright spot in the overall picture of the past 50 years. It is almost certain that the current state of social development and the capacity for innovative societies will require significant changes. But if we don’t get enough gold, we should blame the goose that lays the egg, not the egg. ”

Mr. Creeson is right that all negative economic indicators should not be blamed on big technology companies. Many of these negative indicators are the result of poor governance, difficulty in increasing productivity in sectors such as energy and residential construction, and other factors. The digital revolution has in many ways improved the overall economic slowdown; the geographical mobility of American society is indeed declining, but the Internet has made telecommuting more feasible. Air travel is not much faster today than it was 30 years ago, but comparison sites make tickets cheaper, and air Wi-Fi services make long-haul flights more efficient.

But it’s also wrong to say that Silicon Valley has nothing to do with it. Today, the tech industry is as a giant over the entire U.S. economy. The number of people majoring in computer science more than doubled between 2013 and 2017, according to the Institute for Computational Research. According to PitchBook, the software industry has strong control over U.S. venture capital, with more than 3,700 deals in 2018, and the pharmaceutical and biotech industry ranks second with 720 deals. From the perspective of research and development, the supremacy of technology is unprecedented. In a paper reviewing the history of Innovation in the United States through patent applications, economists Mikko Packalen and Jay Bhattacharya found that previous inventions led to patent applications in chemistry, electronics, Explosive growth has occurred in a number of areas, including pharmaceuticals and mechanical engineering. By contrast, U.S. patent applications have focused on computers and communications technology since 2000. If we are to concentrate so many resources in one area, it would be better to produce more benefits.

Perhaps it is time to rethink whether it is time to place such a big bet on Silicon Valley and whether America can move from the rusty present to the bright future. Too many Americans are chasing issues that don’t matter at all. The internet has been hailed as a powerful force and a means to get out of control, but Silicon Valley’s most lucrative business model is to track and control user behavior: Facebook and Google make nearly 90 per cent of their revenue by selling ads. Many big problems have not been solved, but the advertising monopoly of big tech companies has generated a huge market capitalisation of about $1.5 trillion.

“The internet age is far from meeting expectations, ” says Eli Durado, an economist and aerospace entrepreneur. “I’m also concerned that this could take more talent away from other innovation-benefit industries. All those who develop applications and software as service companies may make a real difference to human society if they are involved in real-world challenges, especially in energy, housing, health, and transportation. ”

Mr Durado does not believe that we have exhausted our thinking, but that our former ambitions have been confined to a few reliably profitable areas. We specialize in advertising technology and virtual services such as the cloud, and are used to being immediately available. He argued that Silicon Valley could invest more in biotechnology, which could change preventive health care and disease detection, and building automation, which could lower the price of housing and transportation. With the help of government, science and technology can also play a greater role in addressing climate change, the greatest challenge in human history. Carbon capture systems can remove excess carbon dioxide from the atmosphere, slow global warming and create thousands of jobs. In 2019, the U.S. Department of Energy announced more than $150 million in federal funding for research and development of carbon capture technology. That’s not a small amount, but consider that the Apollo moon landing program alone consumes more than 2% of federal spending, equivalent to nearly $100 billion today.

It is a fantasy that Silicon Valley can solve all the problems of American society, artificially created by technocrats who attract capital in California and want to shift responsibility away from Washington. Silicon Valley can certainly play a vital role in meeting the challenges of the new century, but it cannot act alone. Change and progress in society require not only the involvement of local, state, and federal governments, but also the participation of Americans who believe that code can achieve economic prosperity.

Over the past two decades, we have pooled our valuable wealth and talent into the virtual world of software and digital optimization. Imagine what the American’s ingenuity would achieve and what its future would be if it came back to reality.