To revive the economy after the pandemic, we need hard science, not software

Ten years ago, PayPal founder Peter Thiel condensed the growing sense of disenchantment with latest technologies into just nine words. “We wanted flying cars,” he wrote, “instead we got 140 characters.”

The incontrovertible fact that ten years later these words are still valid shows how far latest technologies have fallen wanting expectations. To fuel growth in a post-pandemic world, we should keep in mind that in the past, real economic progress was driven by science, not flashy consumer gadgets.

For years, hopes for increased productivity have been pinned on “The fourth industrial revolution” (4IR), resembling artificial intelligence (AI), Internet of Things (IoT) and 3D printing.

However, unlike previous industrial revolutions, recent advances in digital technology have not resulted in the expected productivity gains. Increased work efficiency there has been stagnation since the Nineteen Seventies. In the UK this is mainly at the end slowest pace in 200 years.

Productivity stagnation has not gone unnoticed. By banging the drum The fourth industrial revolution since 2016, the World Economic Forum has now modified its narrative to “Great reset“. This shift undoubtedly reflects the new economic reality brought on by the pandemic, but it is also a tacit admission of it 4IR achieved dramatically low results on guarantees of productivity and prosperity.

Why? First, dominant corporations with 4IR technologies make their dissemination tougher by exploiting their technological advantage to an even greater extent consolidate your dominance and restrict competition.

This is because software technology, which has high fixed costs but low marginal costs, enables larger corporations to develop higher quality products and services than their smaller rivals. It goes away smaller corporations they face high obstacles and low advantages when considering the adoption of 4IR technologies. Many select to easily proceed their business without them.

This signifies that 4IR technologies are not spreading fast enough. The gap between “technology has and has not” in the corporate world is expanding. Recent test they also found that the gap was widening between rich and poor countries. When few companies have access to 3D printers, robotsor cutting-edge artificial intelligence, fewer entities can leverage such technologies to the point where productivity increases across the board.

It was general-purpose technologies – resembling steam engines and electric dynamos – that drove change previous industrial revolutions. Currently, stays unclear whether 4IR technologies can do the same.

For example, artificial intelligence had little value against the pandemic, without contributing constructively to solving the biggest problem of a generation. 4IR technology is stuck in what research firm Gartner calls “trough of disappointment” – the state of disappointment we feel when technologies cannot meet expectations.

Shifting investments

This “technological problem” has been well documented. New digital technologies often prove effective diminishing returns over time, especially when “low hanging fruit” have been snatched away, leaving only more ambitious, expensive and dangerous projects up for grabs.

To avoid technological problems, we must invest in science that gives general-purpose technologies and technologies that ensure real scientific progress. To achieve this, we will need latest research and investment strategies once the pandemic subsides.

For example, the overwhelming majority of digital technology investments are currently led by enterprise capitalists earn quick profits in start-ups that may scale quickly. As a result, technologies that require more time to develop but are probably to steer to latest breakthroughs are likely to suffer from a lack of resources.

This investment trend may leave key industries and technologies without the resources they need to grow and innovate. For example, enterprise capital (VC) financing for medical instrument technologies – essential for the continued fight against pandemics – decreased by over 50% between 2003 and 2017. Elsewhere, the VC market for technologies to combat climate change is in crisis.

Given that markets are allocating insufficient funds to technologies that can assist address our grand global challenges, controversial arguments are now being presented mission-oriented innovation policy, which might mean that the “entrepreneurial state” would lead the push for key technologies.

Back to the lab

Many doubt this “creationist” view of innovation, which holds that the state can lead innovation, and as an alternative argues that innovation is a bottom-up process. Whether innovation is creationist or bottom-up, we need to rethink our institutional framework for doing science and start with the role of universities.

According to a growing chorus of commentatorsfundamental physics that provided virtually all of the technologies that underpinned earlier industrial revolutions stagnation for years. This stagnation is now accompanied by growth anti-science movements that reject scientific knowledge on the subject climate change, vaccine safety, and even the shape of the earth. At the same time, academic freedom is at risk.

University learning has also been burdened with unhelpful administration incentiveschecking boxes and “focusing on incremental studies rather than more ambitious projects that are likely to fail but may lead to more exciting breakthroughs.” Overcoming these obstacles ought to be a top priority when developing post-pandemic research and innovation policy.

How we reset

The Fourth Industrial Revolution never actually took off – largely because human errors in distribution, investment, and research limited the spread of its technologies and skewed investment in technologies with less important economic impact.

The Great Reset, like the Fourth Industrial Revolution, reads like a Hollywood script. To move beyond headline-grabbing science fiction and flashy gadgets, we need a true “back to basics” revolution – the sort of science and risk-taking that has historically delivered economic prosperity. First, it is going to require more university-based entrepreneurial research projects, which can fail but might also create latest opportunities.