Peter Thiel is a grump, but a special kind of grump. He is a dystopian utopian (if such a person can exist). The investor who wrote the first check for Facebook both believes in the power of technology to transform our lives, and is perennially disappointed by it.
A lengthy profile in the November 28, 2011 edition of the New Yorker (summary here) states: “his main lament is that America—the country that invented the modern assembly line, the skyscraper, the airplane, and the personal computer—has lost its belief in the future.”
It is an argument he’s made before. Last September, at Disrupt SF he made the case that innovation is dead across most of the economy (you can watch the video of the session below). He is co-authoring a book on the subject with Max Levchin and Gary Kasparov, called The Blueprint.
But what about something like the iPhone? ”I don’t consider this to be a technological breakthrough,” he tells the New Yorker. Technology simply isn’t creating enough jobs or moving the needle in areas like transportation, health, or energy.
From the article, here is his assessment on the impact of the Internet, Apple, and Twitter:
“The Internet—I think it’s a net plus, but not a big one,” he said. “Apple is an innovative company, but I think it’s mostly a design innovator.” Twitter has a lot of users, but it doesn’t employ that many Americans: “Five hundred people will have job security for the next decade, but how much value does it create for the entire economy ? It may not be enough to dramatically improve living standards in the U.S. over the next decade or two decades.”
Thiel is a natural contrarian who is never satisfied with the status quo, which is a good thing in a venture capitalist and startup mentor. But I think he dismisses the global impact of technologies like the iPhone and social networks a bit too easily.
Having a fully functioning computer in your pocket opens up entirely new experiences—and markets. Was it predictable? Yes. But that doesn’t make it any less transformative. Social media, combined with mobile technologies, are powering protests and revolutions around the world and changing the way people consume information.
But will these technologies improve living standards? The fact that the companies creating the technologies are capital efficient shouldn’t be a mark against them. What about the economic value created by the people who use the technologies. Putting a computer in the hands of business people away from the office, or a farmer in the field could yield significant improvements in productivity. It all depends on what kind of value you place on staying connected.