Moderator’s Introduction:
The Economist published a cover story questioning if innovation is accelerating or decelerating. Despite significant investments in R&D, skepticism remains due to the lack of groundbreaking inventions comparable to the lavatory.

Peter Thiel’s Opening Remarks:
Thiel and Andreessen agree on the positive impact of technology but acknowledge the growing hostility towards it in popular culture. He suggests that technology has not delivered on its promises and is often used for trivial purposes, leading to stagnation and a lack of change. Thiel highlights the lack of progress in areas outside of computers, such as energy, biotechnology, clean tech, and transportation. Even within the computer industry, he sees signs of deceleration in terms of employment, market capitalization, and innovation. Thiel warns of the risk of a “computer rust belt” as major tech companies struggle to innovate and maintain their profits.

Peter Thiel’s Perspective:
Thiel believes we should be striving for more advanced technologies and innovations like AI, quantum computing, space technologies, and biotech. He criticizes our risk-averse culture and incrementalist approach, arguing that we have settled for less than our potential. Thiel emphasizes the need to be bolder and take risks to achieve transformative progress.

Marc Andreessen’s Perspective:
Andreessen agrees that we can do better, but he is more optimistic about the current situation. He acknowledges the slogan of Thiel’s venture capital firm, “We wanted flying cars. Instead, we got 140 characters,” and addresses both sides of the argument. Andreessen discusses the realization of various science fiction innovations, such as satellite communication, the Palm communicator, and laser surgery. He questions the practicality of flying cars, citing concerns about efficiency, safety, and infrastructure.

Transportation Innovations:
Andreessen argues that transportation has not stalled out but is undergoing significant changes. He highlights the impact of information technology in reducing the need for physical transportation, citing examples like video conferencing and global communication. Andreessen emphasizes the importance of innovations like Twitter, instant global public messaging for free, which has revolutionized communication and has implications for business, news, politics, and cultural discovery.

Communication Technology:
Andreessen asserts the central role of information technology, particularly communication technology, in the advancement of civilization. He emphasizes that communication is the basis of civilization and that decreasing communication costs create a platform for potential innovations in various industries. Andreessen believes communication will catalyze innovations by enabling innovators to collaborate and share expertise more fluidly.

Perspective on Progress:
Andreessen acknowledges that progress may not always be apparent in the short term. He encourages a long-term perspective, emphasizing that advancements in technology and innovation often take time to materialize and have a significant impact.

Historical Underestimation of Innovations:
Marc Andreessen argues that major innovations throughout history were initially perceived as unimportant or even ridiculed.

Examples of Underestimated Innovations:
Thomas Edison’s early work on the telephone was primarily focused on facilitating communication between telegraph operators. The Internet was widely mocked in the 1990s, with many doubting its potential as a consumer medium. The car was initially viewed as a trivial toy for the wealthy.

Red Flag Laws:
In the late 1800s, laws in the U.K. and U.S. required cars to have three people operating them, one of whom would walk ahead carrying a red flag.

Pennsylvania’s Horseless Carriage Law:
A law passed in Pennsylvania in 1896 required motorists to stop, disassemble, and hide their vehicles upon encountering horses or cattle.

Measuring Technological Acceleration:
Peter Thiel emphasizes the difficulty in accurately measuring technological progress in real-time. He suggests using metrics like the number of people working in the computer industry, market capitalizations, and common sense.

Transportation and Technological Stagnation:
Thiel points to the decline in transportation efficiency, such as airport security and traffic congestion, as examples of technological deceleration.

Energy and Economic Growth:
Thiel highlights the strong correlation between energy input and GDP growth. He argues that the lack of innovation in energy, particularly in the face of resource depletion, has contributed to economic stagnation.

Flying Cars and Energy Constraints:
Thiel suggests that the lack of flying cars is primarily due to energy constraints, as they would consume excessive amounts of oil.

Technology’s Impact on Economy and Society:
Peter Thiel questions the impact of technology on the economy, particularly Twitter’s success as a company, and its ability to improve living standards. Thiel argues that the tech industry’s size and success may not be enough to save the US economy or Western civilization.

Energy Innovation and Subsidies:
Marc Andreessen asserts that there has been significant technical innovation in energy, but it has stalled due to government intervention and subsidies for oil and gas. Andreessen believes that the massive subsidies for fossil fuels discourage entrepreneurs from developing clean tech alternatives. He suggests that the imbalance in subsidies hinders the progress of clean tech and prevents it from reaching cost-competitiveness with oil and gas.

Transportation Advancements:
Andreessen highlights three key areas of advancement in transportation: vehicles, optimization, and replacements. He mentions the progress made in electric cars, self-driving cars, and optimization technologies such as Waze, which aims to improve traffic flow and reduce the need for new infrastructure. Andreessen also discusses the rise of collaborative consumption services like Sidecar, Lyft, and Uber, which enable car sharing and reduce the number of cars on the road. Additionally, he emphasizes the growing importance of telepresence and video conferencing as substitutes for travel.

Government’s Role in Innovation:
Andreessen argues that the lack of innovation in energy is largely due to government intervention and subsidies for oil and gas. He believes that removing these subsidies would stimulate innovation and allow clean tech alternatives to compete effectively.

Technology as a Solution:
Andreessen expresses optimism about technology’s ability to address societal challenges, such as transportation issues and the need for innovation in energy. He believes that technological advancements in transportation, including electric cars, self-driving cars, and optimization technologies, have the potential to improve efficiency and reduce the need for new infrastructure. Andreessen also sees telepresence as a viable alternative to travel, offering a high-quality experience that can reduce the need for physical travel.

Regulation and Innovation:
Peter Thiel points out that the world of stuff has been heavily regulated, while the world of bits (technology and software) has not. This has led to a decline in engineering as a field, with many areas of engineering becoming unfavorable career choices. Computer science and financial engineering have been exceptions to this trend, but Thiel believes financial engineering may not remain favorable going forward.

Deceleration of Progress:
Thiel believes that the tremendous deceleration in technological progress can be attributed to the over-regulation of the real world. Even with advancements in computer technology, it is difficult for innovations to break out of the virtual world and have a real-world impact due to heavy regulations.

Challenges of Self-Driving Cars:
Thiel raises questions about the liability and legal implications of self-driving cars in a risk-averse society. He highlights the potential challenges in determining liability in case of accidents involving self-driving cars.

Time Lag in Technological Benefits:
Thiel mentions Mark Zuckerberg’s point about the time lag between technological advancements and their impact on workers’ pay and living standards. He uses the example of the Industrial Revolution, where the gains in wages and living standards took almost a century to be reflected in British workers’ pay packets.

The Lag Theory:
There’s a theory suggesting a lag between technological advancements and their impact on wages, resulting in a delayed increase in pay packets and wages.

Technological Displacement of Labor:
Another theory posits that advancements in technology are replacing human labor, causing job displacement and potentially exacerbating income inequality.

Stagnant Wages in the US:
Mean wages in the US have seen a significant rise from 1933 to 1973, followed by a much smaller increase from 1973 to 2013. Median wages have remained flat during this period, leading to a widening income gap.

Lack of Technological Wealth:
Peter Thiel argues that there’s a lack of wealth generated from technological advancements to redistribute for equality. He emphasizes that confiscating all the money from US billionaires would only cover the government deficit for a year.

The Inequality Narrative:
Thiel highlights a media bias towards celebrating technology entrepreneurs while neglecting the substantial wealth accumulated by individuals in natural resource industries, which often result from a lack of innovation.

Government Monopolies and Innovation:
Marc Andreessen criticizes government monopolies in the energy sector, arguing that they hinder innovation and discourage entrepreneurs from pursuing new technologies.

Calls for Diversification in Energy:
Andreessen suggests a different approach to energy, including wireless energy transmission, long-haul transmission, and compressed air energy storage.

Slowdown in Innovation:
Thiel emphasizes the need to understand the slowdown in innovation and its potential causes, such as government interference or a lack of disruptive technologies.

Measuring Innovation:
Thiel suggests using economic data, company capitalizations, and macroeconomic indicators to measure innovation rather than relying solely on patent statistics.

The Illusion of a Cornucopian Future:
Thiel warns against over-optimism about the future, leading to unsustainable expectations and financial bubbles. He highlights the US’s negative savings rate and the succession of bubbles in the tech, housing, finance, and potentially government sectors.

Data Points of Progress:
Marc Andreessen highlights that the number of scientists and engineers has grown significantly, from 2.1 million in 2000 to 3.7 million in 2008. He also notes that per capita GDP has consistently followed Moore’s Law’s exponential growth, showing a long-term trend of technological advancement.

Signs of Deceleration:
Peter Thiel points to the deceleration in life expectancy increases, suggesting potential underlying problems. He also expresses skepticism about the number of scientists and the accuracy of scientific publications, questioning their contribution to innovation.

Cultural Indicators:
Andreessen emphasizes the need to monitor innovation in imagination, considering factors like the decline in scientific papers and patents as potential indicators of a slowdown. Thiel suggests looking at Hollywood science fiction movies as a cultural indicator, believing that a shift towards positive portrayals of technology would signal renewed optimism.

Emerging Markets and Innovation:
The moderator raises the possibility of innovation emerging from developing countries, where constraints like banking systems may not exist, leading to the adoption of new technologies. This raises questions about whether emerging markets could become hubs of technological acceleration, potentially challenging the notion of a decelerating technological civilization.

Overall Sentiment:
Andreessen and Thiel exhibit differing views on the current state of technological progress, with Andreessen expressing optimism based on numerical data and Thiel expressing skepticism due to broader economic and cultural factors. The discussion highlights the need for diverse perspectives and indicators to accurately assess the pace of technological acceleration and its impact on society.

Venture Capital Approach:
Globalization of venture capital approach has had mixed success. Business models often involve globalization arbitrage, focusing on localized versions of existing technologies. Peter Thiel prefers investing in first and best technologies, emphasizing innovation centered in Silicon Valley.

Innovation in Other Countries:
Developed countries like Israel, Scandinavia, and Germany have potential for innovation due to cultural constraints in those countries. Japan’s history of copying and catching up to the US without overtaking raises questions about the potential for other countries to surpass the US in innovation.

Accelerating Progress and Cultural Stagnation:
Accelerating technological progress is rare and has only happened once in history. Most cultures and societies have historically been stagnant, highlighting the importance of maintaining an accelerating technological civilization.

Decline of Public Companies in the US:
The number of public companies in the US has decreased significantly from 8,800 in 1997 to 4,100 today due to sustained attacks and regulatory pressures.

International Regulatory Competition:
Countries can differentiate themselves through regulatory structures to attract innovation. South Korea, Japan, Israel, and the UK have liberalized regulations in areas like embryonic stem cell research, drug development, commercial drone flights, and online gambling.

Opportunities for Deregulation and Innovation:
Deregulation can create openings for businesses to innovate. Peter Thiel sees potential for deregulation in the space and life sciences industries, particularly in the US. The question remains whether the FDA’s stranglehold on the global drug market can be loosened, which would open up new avenues for innovation.