MuniWireless

Judy Estrin, former Chief Technology Officer of Cisco and an entrepreneur who started several tech companies, gives a video interview on why the US is losing its edge in tech and many other fields. Estrin has just published a book entitled “Closing the Innovation Gap” where she focuses not just on tech companies, but also on climate change and dependence on oil. She says: Our short-sightedness has led to major challenges — dependence on oil, climate change, health care, and national security — that threaten our economy and quality of life. Each challenge also brings opportunities — if we give innovation the attention it deserves.

She says that what seems to us today to be cool and innovative, is nothing more than incremental innovation. The root of the problem: our obsession with quick fixes and the quick buck, the pump-and-dump mentality among leaders, entrepreneurs and venture capital firms. She reserves special scorn for Silicon Valley and its love for “flip meat”, companies that do nothing truly special or innovative, but exist solely to flip at huge sums of money to large companies. A few excerpts from the video:

“Companies are being led for the short-term . . .”

“Venture capitalists have become risk averse . . . how do we go back to a time when entrepreneurs and VCs took more risks?”

“The attitude towards failure in the Valley has shifted. It used to be that if you had tried to start a company and it had failed, you would be looked upon by the VCs more favorably than someone who had never tried. Today that’s not necessarily true. Today someone who was a low-level employee with Google but who had been affiliated with success will be given more points than someone who had started a company and failed.”

On the lack of funding for basic research: “We are reaping the benefits of what we planted and we are not planting for the future and we won’t see it till it’s too late. We are not planting the seeds for 10, 20 30 years from now.”

On what Silicon Valley calls innovation: “The [tech] bubble innovation was around business models, there was not as much innovation going on. People had just become more risk averse in the Valley and shorter term focused.”

The reason I am posting this on Muniwireless is that the issues that Estrin raises in her book are the same ones we’ve been reporting time and time again on this site: the lack of long-term investment in high-speed fiber optic infrastructure; the extreme dependence on the “free market” , i.e. on companies with very short term horizons like AT&T and Qwest for infrastructure, which demands long-term investment and openness; the failure among municipal governments to think of wireless not just as a service for accessing the Web and downloading music clips, but as infrastructure itself for carrying all kinds of services (from public safety to traffic management, smart utility meters and road telemetry, and many more); the allergic reaction to all kinds of public investment (i.e. using taxpayer money) for the creation of a public good.

Indeed, many of the municipal wireless broadband projects failed because the politicians who purported to lead the way only wanted a quick PR blast (appearing to be a Mayor for the Future). They did not have a long-term vision at all, so they backed schemes that in the end, had the substance of a marshmallow.

I post this video to make you think not just about how the US is falling behind in technological innovation. This is not about being sick and tired of seeing yet another Web 2.0 service (all those tiresome travel sites called Tripsay, Tripwolf, Tripit which are nothing more than Tripadvisor wannabes), but rather to reflect on how things have declined dramatically in the US and improved in other countries: US airlines are flying ancient airplanes and providing very poor service (charging now for sandwiches in business class and blankets), the airports are old, decrepit and uncivilized with security personnel yelling at the passengers all the time, the service in cafes and restaurants in many cities is abysmal (Starbucks gives you only paper cups even if you are drinking coffee on the premises, no porcelain cups and saucers for you), the road and bridge infrastructure is crumbling, the government bungled the Katrina “rescue” three years ago and will probably bungle again, and so on.

What’s the common thread here: short-term thinking and dependence on quick stupid fixes.

I say this because I just returned from Peru (trek to Macchu Picchu followed by visit to Lake Titicaca). I was amazed at the new airplanes of TACA, the Salvadoran airline which I flew from San Francisco to San Salvador to Lima. LAN, the Chilean airline I flew from Lima to Cusco, also has new airplanes. No ancient MD-80s for them! The TACA and LAN flight attendants were professional and helpful (yes, even helping passengers put bags into the luggage hold above the seats), the airports at San Salvador, Lima, and Cusco were clean, new and civilized, and the San Salvador airport had free Wi-Fi; airport security personnel at all these airports were very polite — no yelling at passengers to take off their shoes, take off their belts. The experience made me ask: so which airlines and airports feel like Third World operations?

There was Internet access everywhere we went, except at Macchu Picchu where they have cellular connectivity. The food was great, service wonderful. My take: although Peru is not as rich as the US and many people still live in poverty, they are seriously upgrading their infrastructure in cities and villages, upgrading service and quality, investing in education (a lot of the small kids even in little villages could speak some English). Countries like Peru are closing the gap very quickly, by this I mean that it’s not that much of a stretch anymore to say, hmmm, maybe I could live there. Apply this to cities like Bangkok, Buenos Aires, Rio de Janeiro. They used to be much worse, but not anymore.

There’s a lot of opportunity in countries like Peru for American companies. But guess what, I asked a cab driver in Lima which car brands are hot sellers in Peru and he said: Toyota and Honda. I am almost certain it’s the same in other Latin American countries. The US auto makers have just handed an entire continent in their backyard to the Japanese because they’re still making huge ugly gas guzzlers that no one wants. The Japanese have invested over the long-term in fuel efficient cars and now, they’re cleaning up in Latin America. Maybe the Koreans will be a major force, too because Peru is about to sign a free trade agreement with South Korea. Here comes Hyundai.

Back here in San Francisco, I just learned that Kingfisher, the Indian airline will be offering flights to Bangalore and soon to other Indian cities. Emirates has already launched a similar service from SFO. All these “Third World” airlines have new planes, great service. United Airlines, which uses San Francisco as a hub, will suffer death by a thousand cuts. Here and there, people will choose to fly with foreign airlines not only because the planes are new, but because the service is great. They do not nickle-and-dime their passengers to death by fees for blankets and sandwiches. The flight attendants on foreign airlines do not yell at passengers inside the cabin (as I was appalled to witness on a UA flight from San Francisco to Osaka: United Airlines personnel screaming at Japanese passengers to do this and that, in English, of course, which very few could understand. I am sure you all know that standards of service in Japan do not include screaming at customers). What will happen? The same thing that happened to US auto makers. People flying to other countries will increasingly avoid US carriers, leading to the latter’s death spiral. Their airplanes are old and therefore less fuel efficient than those that foreign airlines use because, surprise, they have not been investing in new planes; the service is dreadful, passengers avoid flying with them . . . end of story.

You have to ask why and how a lot of things got much worse in the US. I think Judy Estrin points out where we’ve gone wrong and what can be done to fix it.

Related posts:

1. Delta Airlines to offer Wi-Fi on all domestic flights
2. Reading Transport to deliver free Wi-Fi on buses
3. Update: Wireless Silicon Valley gets seven RFP responses