To Dream, To Build

It’s been nearly a quarter of a century since the 90s, a decade looked back on with almost universal fondness. Most attribute that fondness to the lack of mobile phones. It sounds plausible, but what I do know is that in the intervening 25 years, we have seen remarkable progress. 

The primary progress driver has been in the world of information: we now have access to more information than ever before. Only 30 years ago, the idea that you could have the sum total of human knowledge available in your hand and be able to access most of it for free was science fiction.

The last 25 years have also seen enormous progress and change in the world of financial engineering. The once staid world of investment banking became crazy, exorbitant, and extravagant. Innovations such as derivatives and cryptocurrency have created an ever burdening finance sector. The financial services sector is now around 20 - 25% of the world economy.

However, it’s noticeable what hasn’t been invented in the last 25 years. 

Although the average human lifespan has increased, there is still an array of illnesses and diseases for which there is no cure. We lost supersonic commercial travel in 2003 and we haven’t resurrected it since. The tallest skyscraper in 1998 was the Willis Tower in Chicago, at a height of 442m; the current tallest skyscraper in the world is the Burj Khalifa at 828m tall - we haven’t broken the famed 1km boundary. 

In the 1980s and 1990s, common predictions were that we’d have humanoid robots walking amongst us by now - we haven’t. The most famous humanoid robot is Asimo, revealed by Honda all the way back in 2000. Maglev, once the future of transport, has never succeeded, and we only have five maglev trains in operation today, all in East Asia (China has three, South Korea has one and Japan has one). Indeed, rail travel hasn’t changed that much in the last twenty years, and high speed rail is still disastrously sparse in the world. In 2005, the world’s fastest production road car, the Bugatti Veyron, achieved 253.81mph. Since then, only an additional 24mph has been added to that by the Koenigsegg Agera RS.

The 20th century was full of fantastical ideas for intercontinental and transoceanic road and rail links, such as the Korea-Japan Friendship tunnel, the Strait of Gibraltar crossing and the Bering Strait crossing. We assumed that by 2024 these would be a reality. A small number of these happened, such as the Channel Tunnel, which connected the UK with France and beyond.

The 1960s, the height of the space race was filled with dreams of regular, commercial trips to space. These never materialised.

So why didn’t these inventions and innovations happen? I’ll offer a few theories. 

The first is that governments increasingly lack the economic long term view to commit to and fund industrial projects and advanced speculative research, and they severely lack the capability to deliver projects on time and on budget. In the last ten years, high deficits and increasing government debt mean that funding for capital projects is harder than ever. It’s no surprise that big private sector success stories like Amazon and SpaceX operate on long term time horizons. As Jeff Bezos said: "If everything you do needs to work on a 3-year time horizon, then you're competing against a lot of people. But if you're willing to invest on a 7-year time horizon, you're now competing against a fraction of those people..." The simple fact is that industrial projects such as railways, road networks and broadband networks pay dividends to a country, an economy and people for decades and centuries. They are always worth the investment, and the fallacy of cost benefit analysis does not recognise this. The private sector is increasingly taking the role of government. It is tech companies who build and own submarine cables. The largest of companies are now more important than all but ten of the world’s nation states.

Secondly, capital is deployed where it generates the highest returns, and in the 21st century this has been software, an industry with staggeringly high profit margins. It’s also an industry with less uncertainty in returns. Venture capital is a force for good, but with a few notable exceptions, much of Silicon Valley has focused on software and not industry. In many ways, it’s a crying shame that so much of the world’s best talent has spent so much of the last twenty years figuring out how to make more money from online adverts. Private equity and venture capital have historically large cash on hand, ready to deploy. But not enough are funding the next big industrial projects.

Finally, there has been a force against building new infrastructure, especially since the Global Financial Crisis. The Empire State Building was built in a year, now it takes a year just to prepare planning documents. There was a time, not that long ago, when massive investment into physical infrastructure was seen as a good thing: in the United States, the government funded the Interstate Highway System; in Japan, government loans helped fund the Shinkansen; in the 2000s China funded the building of roads, known as the expressway network. It now stands at over 110,000 miles and connects vast swathes of China. Megaprojects are not only cool, they’re necessary. But in the UK, we celebrate taking ten years to build a new staircase at a suburban train station.

The peak of industrial and physical innovation, certainly in the West, may have been in the mid-20th century. Since then, innovation has occurred in the world of bits and software. Of course, that’s not to say that massive achievements haven’t occurred. Bill Gates dreamt of a paperless office, which has been achieved. The world's data, though still mainly unstructured, does exist in databases. Something like 400 million terabytes of data are created each day. This data is used to optimise supply chains, make financial transactions, communicate with each other and run transport networks. The 2024 Crowdstrike incident illuminates just how much innovation the digital world has experienced.

Back in the 1960s, futurists dreamed of highways in the sky, underwater cities, world travel in two hours, cities that used skywalks hundreds of metres in the air, trains that could travel at 500 mph, drones in the sky delivering products, driverless cars, abundant nuclear energy and regular space travel. It’s over a decade since Peter Thiel said “We wanted flying cars, instead we got 140 characters.” The statement then, as now, illustrates where we have seen innovation and where we haven’t.

Reading my previous paragraph is a bit depressing, so let’s balance that out with some positivity.

We have the ability to package bits of information and in near real time, communicate with anyone else in the world. We have the world’s information stored, sorted and processed in databases. We are able to order a product and get it delivered the very next day. We can make international transactions which are processed in seconds (except America, don’t ask). We have global supply chains and international flights. We have high resolution mapping for most of the world’s land mass. We have the ability to explore the world’s oceans. The world has never been safer. Fewer people die from natural disasters such as earthquakes and volcanoes because we have monitoring, data analytics, warning systems and earthquake-resistant buildings. We have artificial intelligence capabilities like never before: computer vision, image recognition, voice recognition, voice and video generation, and we have it available at our fingertips to consumers all across the world. 

We’ve never lived in a time of less war. It’s not coincidental that the most peaceful of times is the same time as the most international trade. Countries that trade generally don’t fight. We have a fabulous mixture of startups and multinational conglomerates pushing us further. We have people taking safe bets (yet another HR SaaS system) and modern industrial tycoons taking highly risky bets (SpaceX). 

So I’ll continue to dream of the highways in the sky, consumer space travel, driverless cars and intercontinental connections. Because if we don’t dream, we won’t build. And if we don’t build, it won’t happen.