Rebuilding the Engine of Progress
Accelerating industrial progress in the 21st century requires rethinking the current techno economic paradigms we regard as axioms.
The origins of industrial progress
I have spent the past several years studying the origins of American industrial progress, and one question in particular has always stuck out to me: why did the physical world experience such rapid progress from 1870 through 1970, only to then experience relative stagnation from 1970 through the present day? Was this simply a case of exponential growth tapering off, or is there something deeper at play here?
Note: To those who doubt this supposition, Eric Weinstein’s observation that “if you remove the screens, your room in 2025 could just as well be a room from 1970” clearly and powerfully illustrates this point.
Reasons for this Great Stagnation (coined by Tyler Cowen) abound in articles and books, and I need not rehash them all here. However, to succinctly summarize the most common arguments, they roughly fall into one of the three following categories:
Moral and spiritual decay
Corollary #1: A lack of imagination and courage
Corollary #2: A retreat towards easier, higher-margin, value extracting activities, typified by the shift from physics to finance
Excessive regulation
No more low-hanging fruit for scientific and industrial breakthroughs other than in the world of bits
The Henry Adam’s curve, from “Where is my Flying Car” by J. Storrs-Hall, provides a stark visualization of the drop-off in energy abundance since 1970. Energy is fundamentally the rate limiting factor of civilization.
While there is truth in each of the above arguments, I think they are accurate but not complete. My own answer is that invention is necessary, but not sufficient, for innovation in the physical world. Instead, the only way we can break through the plateau of progress is to have innovations in commercialization strategies — including business models, fundraising approaches, and approaches to distribution — to match the innovations happening in research labs directly.
This is difficult because it implies that non-technical business types, long mocked by Silicon Valley for being essentially parasites, might actually be useful compliments to the technical scientists and engineers in this next era of innovation.
To be more precise, observe that with the great software giants such as Microsoft and Meta, the founders were often extremely technical programmers. While this model has worked fabulously well for software firms, valuing technologists strictly over operators has been less obviously effective outside the world of bits.
Gates and Zuckerberg are two of the classic engineer-businessman archetypes that have defined the past several decades of the philosophy of entrepreneurship
As a historical contrast, consider industrial giants of old such as Standard Oil or Carnegie Steel (later U.S. Steel). In both cases, the founders were not scientists or engineers, but businessmen. Before starting Standard Oil, Rockefeller owned a small commodities business, and observed the opportunity in oil second hand as the volume of oil trading increased dramatically. Sam Andrews was the chemist and inventor who actually pioneered the original Standard refining processes; but he knew he could not bring his process to market alone, and thus partnered with Rockefeller.
Without exhausting the point, Carnegie had a similar background — he was an executive at the Pennsylvania Railroad and a savvy investor to boot before building his steel empire. He was interested in technology and was right to spot the future of steelmaking at a Bessemer mill on a trip to England; but he was first and foremost a master salesman and financier, not a technologist.
Rockefeller (top) and Carnegie (bottom) were the paradigmatic founder figures of the Industrial Revolution, but they contrast sharply with the founder archetypes we consider today
An astute student of history will chime in to remind us here that Edison was an inventor-entrepreneur, and thus disproves my argument. To whit, I will leave two comments:
Edison was largely a poor businessman; the reorganization of General Electric under J.P. Morgan, the consequent removal of Edison, and its subsequent huge success illustrates this point.
There are always exceptions to any rule! But these exceptions do not detract from the main thrust of the argument above; which is to say that operators have been just as important, if not more important, in building prior industrial giants.
Although you cannot pattern match historical trends to future predictions, it nevertheless appears to be true that building large industrial concerns requires at least as much innovation in finance, operations, and distribution as is required on the core technology alone. Therefore, complementarity and partnerships between businesspeople and scientists will matter far more for success in the future than it necessarily has in the software-dominated near past.
Relaunching our industrial future
Thomas Alva Edison in his laboratory
Why should we care so much about thinking through the socioeconomic bottlenecks to building industrial giants and accelerating progress?
The short answer is that, in the age of AI, there will be a vast displacement of jobs as AI automates an endless array of tasks. If we do not both rebuild old industries and also create completely new ones to accelerate job creation, the social ramifications of massive unemployment will be beyond any social unrest previously experienced in history. This is the single most important task of our generation.
At Bits to Atoms, we believe that industrial startups today will be the foundation for this future economic transformation. Therefore, our organization has two basic goals:
Support deep tech startups
Help create new deep tech startups
To this end, we have one very simple question we constantly ask ourselves: how can we systematically connect the scientists and engineers inventing the future with the entrepreneurs capable of commercializing these inventions?
There are many attempts at this today, but our approach involves three steps:
Create media highlighting industrial verticals and the technologies and research which could unlock new techno economic opportunities
Cultivate a community of individuals eager to engage with this media, and willing to turn understanding into action
Systematically leverage this community and shared understanding to catalyze the creation of a new wave of industrial startups
The structure of things to come
Thus, if media is the catalyst for community, the question arises naturally: what form will this media take?
Without being overly structured, we want to keep some degree of consistency week over week to enable readers to have certain expectations. To this end, each week we will choose one industry to focus on; and within this week, we will produce one article per day. The topics per industry will include:
The history of the industry
Present-day market dynamics
State of the art technology, it’s current adoption, and how this technology could disrupt techno economic assumptions
Promising frontier research, and how this research will further disrupt techno economic assumptions
Startup companies that are leveraging the innovations outlined above to push the frontier of progress forward
In addition to these weekly articles, we will optionally include one to two supplementary articles per week. These will cover interesting topics such as:
The foundations of industrial finance
The politics of site selection
Operations theory and statistical quality control
And many more!
Interested in partaking in this journey?
We realize the scope of research, media production, and community building we are proposing is massive in scope. However, we have no intention of doing this alone! If you would like to work together with us as we create media, offer constructive feedback, or generally join in our growing community, we would love to hear from you.
Please feel free to reach out directly at john@bitstoatoms.com, and I will follow up with you ASAP!
And as always, thank you for reading! Until next time: Ad Astra Per Aspera; and Ad Majorem Dei Gloriam.