Doing capitalism in the innovation economy
"The innovation economy begins with discovery and culminates in speculation. Over some 250 years, economic growth has been driven by successive processes of trial and error: upstream exercises in research and invention and downstream experiments in exploiting the new economic space opened by innovation. Drawing on his professional experiences, William H. Janeway provides an accessible pathway for readers to appreciate the dynamics of the innovation economy. He combines personal reflections from a career spanning forty years in venture capital, with the development of an original theory of the role of asset bubbles in financing technological innovation and of the role of the state in playing an enabling role in the innovation process. Today, with the state frozen as an economic actor and access to the public equity markets only open to a minority, the innovation economy is stalled; learning the lessons from this book will contribute to its renewal"
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What Hacker News says
- There's also a very good book by Bill Janeway (of Wargburg Pincus notoriety) on the same subject called 'Doing Capitalism in the Innovation Economy: Reconfiguring the Three-Player Game between Markets, Speculators and the State'.
He argues the same point about the states roll in RnD (also explicitly calls out DARPA) and also their role in booms and busts.
- Check out the book Doing Capitalism In The Innovation Economy for a defense of the government encouraging exactly this sort of thing. I reviewed it on Amazon here: https://www.amazon.com/review/R2SCHS5SXNDF30.
Point being, we want exactly this sort of thing, but it's foolish to expect the market to make this sort of investment very often.
- My oft-recommended book Doing Capitalism in the Innovation Economy [1] hammers on this idea of that financing of speculative vs. mundane ventures are fundamentally different games. The author argues that speculative finance is a good thing, as long as it's not just speculating on finance itself. In fact, it's so useful that the government should encourage it. He cites the long-term advancements produced by incredible amounts of public money injected into the defense industry, the space industry, the National Institutes of Health, the NSF, and so forth. But, he argues that such speculation needs to be cordoned off from the mundane economy, so that when bubbles burst, they don't take down the systems everyday people rely on.
[1] http://www.amazon.com/Doing-Capitalism-Innovation-Economy-Sp...
- > Apple was a product of that system, not a cause of it. Companies like Apple do not happen in a pure deregulated neoliberal market paradise because markets don't have the kind of strategic intelligence that can fund projects like Whirlwind, TX-0, and the original Arpanet - all of which are essential steps on the road to making an Apple or a Google.
The book Doing Capitalism in the Innovation Economy [1] really hammers in this point. I highly recommend it to people who have an interest in this. I wrote a review that captures a lot of my reflections on the book itself and the subject matter [2].
[1] http://www.amazon.com/Doing-Capitalism-Innovation-Economy-Sp...
[2] http://www.amazon.com/review/R2SCHS5SXNDF30/ref=cm_cr_dp_tit...
- Interestingly, this reminds me a lot of the view espoused by Bill Janeway in Doing Capitalism in the Innovation Economy [1], which, among many other things, studies the history of business cycles. It's a great book.
[1] http://www.amazon.com/Doing-Capitalism-Innovation-Economy-Sp...
- The fantastic book Doing Capitalism in the Innovation Economy [1] digs a lot into the roles of the market, the government, and the financial industry in the western economy. It's a challenging read, but a fantastic book if you can make it through.
[1] http://www.amazon.com/Doing-Capitalism-Innovation-Economy-Sp...
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