Judy Estrin, former CTO of Cisco, is releasing a book called “closing the innovation gap” in which she suggests that overall innovation and funding for innovation is in serious trouble. Now at first read you might think that Ms. Estrin is crazy right? I mean there are many new companies that emerge and get funding every day in Silicon Valley. Good point. However, have you ever payed attention to these new companies that get funded? Most, if not all of them, are designed to create short term wealth by trying to get sold off to lager companies.
Ms. Estrin states, “In some ways, we have the problem that it looks like innovation is flourishing, but too much of it is short-term, incremental innovation.” I couldn’t agree more, I think companies need to start thinking of long term technology solutions and business models. Companies like Seesmic, SocialThing, Twitter, Summize, etc. are all in the game to get acquired by larger companies. Where is the next Apple, Microsoft, IBM, or Google. Where is the next groundbreaking technology company that is going to make an impact nationally or globally?
The NYtimes did an excellent piece on Ms. Estrin and her new book. This quote from the article sums it all up.
“Ms. Estrin acknowledged that innovative ideas still appear all over Silicon Valley. But, she said, the technologies at the root of new products like Apple’s iPod or the Facebook social networking service were actually developed several decades ago. If entrepreneurs do not continue to develop groundbreaking technology, she said, the valley would be in dire straits in another decade. She compared the situation to a tree that appears to be growing well, but whose roots are rotting underground.”
It’s interesting to note that Ms. Estrin does discuss this lack of innovation on a national level. Although Silicon Valley may be doing better then other parts of the country in terms of innovation and financing, overall she does not think that the U.S. is doing that great.
I have not read the book yet but from what I hear, Ms. Estrin traces the lack of innovation to what we teach our kids in school. There is not enough of a push towards the sciences, engineering, and mathematics departments and thus we are seeing less progress in these fields. I agree, in fact my dad (who works for Raytheon) received a notice not too long ago saying that the engineering industry as whole is seeing less and less qualified and interested individuals. The letter urged employees to encourage children to pursue the sciences.
Ms. Estrin’s comment about VC’s needing to take more risks also rings true. The same companies that are seeking to make a quick buck by getting acquired are being funded by the VC’s that are also looking to make a quick buck. It appears that VC’s want to put money into the companies that can sell for the most money and not into companies that can develop new groundbreaking technologies. Of course, I am probably not the best person to speak on the issue of what VC’s are or aren’t putting their money in, but I can address what I observe.
What do you think about Ms. Estrin’s comments and observations? Are we in innovationt trouble?
Thanks for reading