People love to focus on horse races: NYC vs Silcon Valley, Facebook vs Twitter, IPO markets vs private exchanges, the valuation of some startup vs some other startup. Like a lot of people in the tech industry, I’ve gotten inquiries recently on the meaning of Facebook’s “private” IPO with Goldman Sachs, whether VC valuations are indicative of a bubble, whether such-and-such startup is overvalued, and so on.
These questions are all footnotes that will be forgotten in a few years. The Internet has gone through fits and starts – in particular the dot com crash of 2000 disillusioned many – but every year we see it transform industries that previously sauntered along blissfully denying its existence. Already transformed: music, news, advertising. Being transformed: finance, commerce, TV & movies, real estate, politics & government. Soon to be transformed (among many others): healthcare, education, energy.
The modern economy runs primarily on information, and the Internet is by orders of magnitude the greatest information mechanism ever invented. In a few years, we’ll look back in amazement that in 2011 we still used brokers to help us find houses, that doctors kept records scribbled on notepads, that government information was carefully spoon-fed to a compliant press corps, and that scarcity of information and tools was a primary inhibitor to education.
Thus far the US has led Internet innovation. There are things the US can do to keep this lead, including: 1) exporting the entrepreneurial ethos of Silicon Valley to the rest of the country (including places like my home city, New York), 2) allowing talented people to go where their skills are most needed (e.g. by changing US immigration policies), 3) convincing the upcoming generation to innovate in sectors that have a direct impact on the quality of peoples’ lives (Internet, healthcare, energy, education) instead of wasting time on sectors that were historically prestigious (e.g. finance and law) but add little to negative economic and societal value.
Predicting the future of the Internet is easy: anything it hasn’t yet dramatically transformed, it will. People, companies, investors and even countries can’t stop this transformation. The only choice you have is whether you join the side of innovation and progress or you don’t.