Science and technology have been the largest drivers of economic growth for more than 100 years. But this contribution seems to be declining. Growth in labor productivity has slowed, corporate revenue growth per research dollar has fallen, the value of Nobel Prize–winning research has declined, and the number of researchers needed to develop new molecular entities (e.g., drugs) and same percentage improvements in crop yields and numbers of transistors on a microprocessor chip (commonly known as Moore’s Law) has risen. More recently, the percentage of profitable start-ups at the time of their initial public stock offering has dropped to record lows, not seen since the dot-com bubble and start-ups such as Uber, Lyft and WeWork have accumulated losses much larger than ever seen by start-ups, including Amazon.
Although the reasons for these changes are complex and unclear, one thing is certain: excessive hype about new technologies makes it harder for scientists, engineers and policy makers to objectively analyze and understand these changes, or to make good decisions about new technologies.
One driver of hype is the professional incentives of venture capitalists, entrepreneurs, consultants and universities. Venture capitalists have convinced decision makers that venture capitalist funding and start-ups are the new measures of their success. Professional and business service consultants hype technology for both incumbents and start-ups to make potential clients believe that new technologies make existing strategies, business models and worker skills obsolete every few years.
Universities are themselves a major source of hype. Their public relations offices often exaggerate the results of research papers, commonly implying that commercialization is close at hand, even though the researchers know it will take many years if not decades. Science and engineering courses often imply an easy path to commercialization, while misleading and inaccurate forecasts from Technology Review and Scientific American make it easier for business schools and entrepreneurship programs to claim that opportunities are everywhere and that incumbent firms are regularly being disrupted. With a growth in entrepreneurship programs from about 16 in 1970 to more than 2,000 in 2014, many young people now believe that being an entrepreneur is the cool thing to be, regardless of whether they have a good idea.
Hype from these types of experts is exacerbated by the growth of social media, the falling cost of website creation, blogging, posting of slides and videos and the growing number of technology news, investor and consulting websites. Narrowly focused news sites that serve every type of technology also continue to proliferate and spread their articles and reports on LinkedIn, Facebook and Twitter. These trends are magnified by the rise of online sponsored content and native advertising, both with the look and feel of news written by independent journalists even though they aren’t. The amount spent on these new forms of advertising now exceeds that spent on banner advertising.
What can be done about rising hype? Although scientists and engineers can have little impact on the media, those at universities can promote better measures of success and more accuracy in their announcements, courses and curricula. Measuring university programs by amounts of venture capital funding attracted or numbers of start-ups created makes it easy for programs to game the system.
Better accuracy requires acknowledging the long development times, explaining the reasons for them, and illuminating the process by which new technologies became economically feasible, going beyond simplistic distinctions between basic and applied research. The reality is that few technologies experience the types of improvements necessary for commercialization and excessive hype distracts decision makers from the challenges of achieving the necessary pre-commercialization improvements.
Students should also be learning about the economics and business of real science-based technologies, not just the internet commerce, mobile apps and algorithms that are emphasized by business schools. From superconductors to fusion, bioelectronics, solar cells, gene editing and quantum computing, there are technologies with the potential to change the world, but doing so requires university researchers and companies to overcome cost and performance challenges.
Illuminating these challenges requires a discussion of cost and performance variables, the trade-offs between them and the rates of change. Not only can such illumination help policy makers and managers make better decisions, illuminating the challenges makes it easier for students, managers and policy makers to avoid the hype that currently permeates many discussions of science and technology in the media and elsewhere.