Innovator's Dilemma - Where Innovators' Focus Is Shifting

With all the hype and excitement surrounding the Facebook IPO, the publisher of Forbes (Rich Karlgaard) had an interesting opinion piece in the May 17th, 2012 WSJ entitled:

The Future Is More Than Facebook

Social media is already passé in Silicon Valley. America's innovation engine is now focused on transportation, energy and manufacturing.

http://online.wsj.com/article/SB10001424052702304371504577406142515388550.html?mod=wsj_share_tweet_bot

Here are just a few of Mr. Karlgaard's thoughts and observations:

* America's innovation engine, Silicon Valley, is again overheating. Evidence: Last month Facebook swapped $1 billion in pre-IPO shares and some cash for Instagram, a two-year-old start-up with 11 employees and no revenue.

* A week later, another Silicon Valley start-up called Splunk, slyly allied with the decades' two hottest buzz generators—cloud computing and big data—went public at a $1.5 billion value on just $121 million in sales this year. Yet shareholders swooned for Splunk and bid up its $17 IPO share price to $37 in the first two days of trading.

* Can it (American innovation) go mainstream and transform the really big things: transportation, energy, electricity, food production, water delivery, health care and education?

* If it (American innovation) can't do that—or if it is thwarted by high taxes and complex regulation—then welcome to the new normal of 2% annual growth. Our future will become sadly familiar. Just follow Spain, France and Great Britain down history's sinkhole of lost status and influence.

* There's a growing interest among bright minds to apply "exponential technologies" to solve problems much larger than whom to friend on Facebook. Transportation is one of those big deals. Would you rather own a car, an iPad or a Facebook membership? Thought so. By 2050 the planet will have nine billion inhabitants and three billion cars. This will create huge demand for fuel and road access.

* Silicon Valley's biggest new thing, therefore, is not Instagram or Splunk but Google's robot-driven car ... a technology with a rate of progress over the last 4 years that is normal in the algorithmic world, but it is new in the physical world.

* Rising labor rates in China, along with rising oil/transportation costs will be a windfall for "Made in the USA" as the global economic playing field enters a period of ebbing.

These and other concepts and trends shared do convey magnificent opportunity for innovators everywhere and anywhere, however, as Rich also points out, taxation and regulation policies do have significant impact on the pace of innovation.