Immediatism Stifles Significant Innovation

Our view of work and success today is measured in immediate returns. We watch the stock market daily. Companies must produce quarterly profits or investors bolt. We assess the success of politicians by how they did in a four-year term, not by the long-term impact of their decisions. A new report published in the MIT Technology Review (January/February 2016) makes it clear that the demand for immediate profits is suppressing important advances that could provide large-scale benefits to society. The report questions whether "the mechanisms for funding innovation today can nourish a broad range of technologies: not just car-sharing services like Uber, but valuable technologies for making energy cleaner, reducing poverty, and improving health care."

Writer Nanette Byrnes states that $21.5 billion (42 percent of all venture capital investment money in 2014) went toward new software development. Only $6 billion went to biotechnology and only $2.4 billion was used for industrial and energy companies.

The reason for the disparity is that the latter two categories often require long-term commitment before investors see a return. Software is far easier to develop and deploy than a promising new medication, or than products that require large factories and infrastructure. Given the choice, investors usually want the easy route to quick profits.

The problem, however, is that software innovation often addresses smaller societal needs. Sometimes is seeks to satisfy frivolous desires. It's one thing to design a cellphone so that another row of apps will fit on the screen and another to cure Alzheimer's, purify water, or improve the electrical grid.

"Capital intensive industries are particularly ill-suited to today's methods of funding," writes Byrnes. ". . . certain innovations are still struggling: potential breakthroughs in energy production and medicine, among others, that take too much money and time to develop."

Underlying the demand for immediate financial returns is a deficiency in our worldview and culture. And that can take a long time to fix.