Nobel Prize Winner Paul Romer Found Government Boosting Innovation

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New York University professor Paul Romer was a winner of the 2018 Nobel Memorial Prize in Economics. Photo credit: Spencer Platt/Getty Images By Aaron Pressman and Adam Lashinsky 8:27 AM EDT
An apostle and scholar of innovation, Paul Romer, shares this year’s Nobel Prize for economics. It’s an exciting moment for Silicon Valley, whose doers should stop for a moment to reflect on the theories Romer advanced that explain their success.
Researchers long had a hunch that innovation led to growth. Romer documented, quantified, and confirmed the assumption. But he did more. He showed that government policies have a salubrious effect on innovation. In other words, the right laws and regulations are the lubricant for turning great ideas into economy-sustaining growth. As The Economist explained this week: “In Mr. Romer’s models of growth, the market generates new ideas. But the pace at which they are generated, and the way in which they are translated into growth, depend on other factors—such as state support for research and development or intellectual-property protections.”
Technologists who hit the mythical “product-market fit” and subsequently get stinking rich genuinely believe they got there all by themselves. It’s as if they’re able to explain their good fortune according to some pure laws of capitalism that don’t exist. Paul Romer’s research is an antidote to such thinking. And a welcome one.
Analyst Brent Thill of Jefferies put out a note to clients Tuesday reiterating a previous assertion that Alphabet’s self-driving car unit, Waymo, is like a “long-dated call option” valued at between $75 billion and $125 billion. (A call option is a bet that a security will increase in value in the future; long dated means that future is further out rather than sooner.)
Thill spun a whimsical but powerful scenario of how self-driving cars could be a part of Google/Alphabet’s money-making future: “One could wake up to an alarm from the new Google Home Hub device ( announced today for $149), ask Google Assistant to request a Waymo ride to an important client meeting, prepare during rush hour while using G Suite on the new Pixel Slate, catch up on a show afterwards via YouTube TV, while personalized displays suggest the ideal venue for a celebratory deal dinner. One could subscribe to a handful of Google services or upgrade to a larger bundle–all enhanced by AI.”
If all else fails, Google has at least one enthusiastic customer-in-waiting.
Adam Lashinsky @adamlashinsky [email protected] NEWSWORTHY
The show must go on . As Adam mentioned and as expected, Google on Tuesday unveiled a Chrome OS tablet dubbed the Pixel Slate (starting at $600 without a keyboard or stylus), two new Pixel phones (with better cameras and higher prices), and a smart-assistant-fueled connected screen device called the Home Hub (without a camera built in, to protect privacy). Also as expected, Google parent Alphabet formally appealed the $5 billion anti-competition fine levied by the European Union.
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Meet the new boss, same as the old boss . In the daily update of how SoftBank CEO Masayoshi Son is spending other people’s money, the Wall Street Journal reports that Son’s Vision Fund is considering buying a controlling stake in WeWork for $15 billion to $20 billion. The fund bought 20% of the office space startup last year.
As the world turns. In another, fresher long running soap opera, the story of the story of Bloomberg’s Chinese hacking story continues to evolve. Bloomberg, which stands behind the original story that Chinese spies put a surveillance chip in servers used by Apple and Amazon , came out with a new one-sourced story that an unnamed U.S. telecom company was also penetrated by a similar method. All four major U.S. telecoms, and some others, too, denied they were involved. And one of the few named sources for the initial story, cybersecurity expert Joe Fitzpatrick, cast doubt on the original narrative as well.
Virtual unbuilding . How lame is the Apple TV for doing anything besides watching video programs? So lame that Microsoft is discontinuing its pre-teen gaming powerhouse app, Minecraft, for the platform. Or as Business Insider put it in their headline: Microsoft axes Minecr...