Billionaire investor predicts bleak future for innovation

Billionaire entrepreneur Peter Thiel said in a Monday talk that technological progress has been insufficient in recent decades.
Billionaire entrepreneur Peter Thiel said in a Monday talk that technological progress has been insufficient in recent decades. Photo by Philipp Arndt.

Billionaire investor, philanthropist and entrepreneur Peter Thiel said Monday afternoon that the future of innovation is bleak.

At the talk, which drew a crowd of roughly 80 students and members of the New Haven community, Thiel emphasized how technological progress has diminished in recent decades, adding that the pattern might extend into the future. Thiel, a venture capitalist who founded PayPal in 1998 and became the first outside investor in Facebook in 2004, said that though computer technology has witnessed a “relentless” growth in recent years, other sectors have not seen significant progress in innovation.

“We are no longer living in a technologically accelerating world,” he said. “There is an incredible sense of deceleration.”

Varying regulatory policies have caused a disparity between the growth in technological industries and that in other areas of production, Thiel said. The development of energy alternatives is heavily regulated, he said, so few viable technologies have been produced, but inventions of new software and computer hardware have been highly unregulated, he added.

While recent decades have been characterized by insufficient progress, Thiel said he does not think “deceleration is something natural” and “there are many areas where technological innovation is possible.”

Thiel said the United States needs technological progress to maintain a democracy. Progress is necessary for effective compromise, which is a foundation of democracy, so both parties can be satisfied, he added.

“It’s a very open question of whether you could have the democratic process in a world without growth,” he said. “You can’t craft compromise where everyone comes out ahead.”

Thiel said he thinks not enough focus has been placed on the growth of the developed world because the developing world often attracts the most attention. But the vast majority of technological innovation comes from Western Europe, the United States, Japan and several other highly advanced nations, he said.

Roughly 80 percent of Americans believe the next generation will be less well-off than the current generation, Thiel said, adding that he himself has a pessimistic outlook on the future.

“In this technologically decelerating world, there are some very big problems,” he said.

Several audience members interviewed said they enjoyed hearing about the problems currently facing economic growth in the developed world.

Yousef AbuGharbieh LAW ’15 SOM ’15 said the talk prompted him to consider the causes of a lack of innovation.

Marcus Eagan, a member of the New Haven community, said Thiel helped him understand the obstacles that confront businesses in today’s society.

Thiel founded a hedge fund called Clarium Capital in 2002.

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