For centuries, military innovation has driven forward technological advances. One of the most famous, the Apollo project is famous for the number of spin-off technologies it created. I realize that the Apollo project was billed as a government/scientific endeavor, but President Kennedy didn’t see it that way:
“…I’m not that interested in space.”
When this transcript was released in August 2001, the press and public focused in particular on one comment by President Kennedy: “Now, this may not change anything about that schedule but at least we ought to be clear, otherwise we shouldn’t be spending this kind of money because I’m not that interested in space” (emphasis added).
Only a minute earlier, Kennedy had said, “And the second point is the fact that the Soviet Union has made this a test of the system. So that’s why we’re doing it.”
Today, the most rapid area of technological advancement is coming form the private sector and it is feeding into the defense sector.
This fall, the Chinese National University of Defense Technology announced that it had created the world’s fastest supercomputer, Tianhe-1A, which clocks in at 2.5 petaflops (or 2,500 trillion operations) per second. This is the shape of the world to come—but not in the way you might think.
Powering the Tianhe-1A are some three million processing cores from Nvidia, the Silicon Valley company that has sold hundreds of millions of graphics chips for videogames. That’s right—every time someone fires up a videogame like Call of Duty or World of Warcraft, the state of the art in technology advances. Hug a geek today.
What a switch. For centuries, the military has driven technology forward, fostering new waves of industrialization and corporate use. James Watt’s steam engine was perfected with the help of a cannon-boring tool. Computers were created during World War II to calculate artillery firing and to break codes. The military bought half of all semiconductors until the late 1960s. Even the first global-positioning systems (GPS) were funded by Congress, not for navigation but as a nuclear detonation detection system. Add microwave ovens from radar, Blu-ray discs from lasers, or Velcro and Tang from NASA, and there’s no doubt how much government acquisition programs have shaped our lives.
BTW, the Velcro and Tang spin-off from NASA are myths.
The reason for the more rapid advance of technology in the private sector is efficiency:
So why has the military been displaced? For one, capital formation. Governments had the unique capacity to raise (read: tax) the enormous capital needed to fund state-of-the-art projects. But a fully functioning stock market can raise billions for productive commercial applications, bypassing the military connection. Hate Wall Street all you want, but it’s now better than wars at driving progress.
Second, displacing the military is about high sales volume. Often that means lower costs. The $300 Roomba automatic vacuum, which the company iRobot says it has sold to five million customers, helps drive down the cost of the Army’s robotic bomb removers. Volume is especially good at spurring the creation of new applications. Hardware is nothing without software and apps. Caffeine-fueled coders won’t even think about writing apps unless there are millions, if not tens of millions, of potential customers.
Lastly, our economy will grow and create new wealth if we let the markets innovate.
The economy is not going to create wealth just because we print dollars, build fast trains, put up windmills, or even assemble military supercomputers. (For the record, Google has the largest and fastest supercomputer, spread over dozens of data centers.) Even China will someday learn that wealth only comes from productivity. That’s found in a different place every cycle—and the stock market will find it first and fund its expansion. So where is it now? It’s staring us in the face and amusing us to a better life.
