We now exist an interesting interstitial moment, one defined by big corporations producing much of the innovation and some of the world’s richest companies – Apple, Amazon, Uber, Facebook – trying to solve big hairy problems. These are the problems that startups would have once solved but because they are so expensive – I’m talking about commercial VR, self-driving trucks, gene editing, and the like – there are no startups capitalized to tackle them.
This means two things. First, it means the frothy startup mania that defined this past decade – and was largely chronicled on this site – is going to slow for a while. I would equate this moment to the big PC race of the late 1980s – big corporations fought each other to end up on your desktop. Small companies could pull off upsets – Compaq and Microsoft leading the charge – but most of the heavy lifting was done by IBM, TI, and the other massive corporations.
It also means that big companies will be tackling big problems with big money and it’s time for those selfsame companies to start doing these things in places outside of SF, London, and New York. It’s time for big tech to give back.
Richard Florida, who I interviewed here, took a look at where innovation landed in the last decade and he is not optimistic. He writes:
For all of their many problems, our cities are our greatest economic drivers. Their continued revival is critical to the country’s ability to innovate and compete, create jobs and raise incomes and living standards. For all the nostalgia about the seamy old days of Times Square, we should not look forward to going back to the urban economic and social dysfunction of the 1970s and ’80s. Stopping or reversing the urban revival would not just be bad for cities. It would be a disaster for all of us.
His words should resonate in Europe as well where innovation appears in tiny pockets and only in the richest countries. Greece, Macedonia, the Balkans, and Central Europe is as tech-starved as the American Midwest. Luckily the EU is improving these central cities at an alarming rate and, if nationalist politicians fades with the next election cycle, there will still be hope. However, what hope is there for Morgantown, West Virginia? For Pueblo, Colorado? For Salt Lake City? Unless big corporations find new homes for their programmers in the heartland while avoiding false hope they will be left behind.
In the past corporations settled in smaller cities because it made financial sense. Now, however, I think it should also make humanitarian sense. “The future is already here — it’s just not very evenly distributed,” wrote William Gibson. This is the moment for that distribution.
What happens when we don’t? The starkest reminder of why this is needed appears here, in another New York Times piece. In this article, we meet two janitors separated by 35 years and an entire continent. One, Gail Evans, worked as a janitor in Rochester, New York at Kodak. Marta Ramos works at Apple in Cupertino.
The $16.60 per hour Ms. Ramos earns as a janitor at Apple works out to about the same in inflation-adjusted terms as what Ms. Evans earned 35 years ago. But that’s where the similarities end.
Ms. Evans was a full-time employee of Kodak. She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March. When the facility she cleaned was shut down, the company found another job for her: cutting film.
Ms. Ramos is an employee of a contractor that Apple uses to keep its facilities clean. She hasn’t taken a vacation in years, because she can’t afford the lost wages. Going back to school is similarly out of reach. There are certainly no bonuses, nor even a remote possibility of being transferred to some other role at Apple.
In short, the companies with the most promise for solving the big problems – AI, VR, self-driving vehicles – are avoiding the economical and societal issues associated with these inventions. Countless smaller companies and people have added levels to the towers upon which Apple, Amazon, and Google now build. But the stairs are walled off and there is little hope for those left behind.
Ultimately the future of innovation is the future of human endeavor and to ensure innovation we must reduce inequality. Small cities around the world could house centers of creation connected to the mother ship – in Apple’s case, quite literally – giving all employees a living wage and improving conditions for nearly everyone in the city. In a world where meetings can be held with VR goggles or holograms, why can’t part of Google’s workforce help revitalize Wheeling by settling there? Why can’t Amazon offer more than another warehouse?
Ideas like Steve Case’s Rise Of The Rest are noble but not quite there yet. At this point the rest cannot rise until the foundation of a new century are completed. The Internet could not take off until home computers were ubiquitous. Programming frameworks couldn’t flourish until the web was prevalent. Media streaming didn’t make sense until the network could manage it. All of these innovations came about because corporations, not startups, pushed things forward. Don’t worry: we will see a renaissance of sorts in the start up world once the biggest problems are solved. Until then it is incumbent upon the best of the best to look away from the coasts and the high prices and expensive real estate and start to spread innovation like sunlight from sea to sea.