CelebrityTouch: Oct 10, 2010

Sunday, October 10, 2010

A story bigger than Facebook - Washington Post

Much like a Facebook profile, "The Social Network" is made more appealing through some artful lies, well-chosen omissions and careful shading.

Co-founder Eduardo Saverin's ejection from the company, for instance, is turned from a story of inattentive financial management into a senseless betrayal of a friend. And though the movie portrays Facebook founder Mark Zuckerberg as a pining loner, he has actually dated the same girl since 2003.

But it's not the details of Zuckerberg's life that mislead so much as the decision to focus on Zuckerberg at all. The movie recasts a story of inevitable technological change as the saga of a socially inept genius, two or three of his most important relationships and the social pressures of Harvard University. That makes for a better film, of course. But it misses the richer drama behind transformative innovations like Facebook, and it's part and parcel of the way we misunderstand, and thus impede, innovation.

"The idea of the lone genius who has the eureka moment where they suddenly get a great idea that changes the world is not just the exception," says Steven Johnson, author of " Where Good Ideas Come From: The Natural History of Innovation ," "but almost nonexistent."

And that's because innovation isn't really about individuals.

I was not born physically or mentally superior to my grandparents. But I would have been much likelier to invent Facebook than they were. The natural capabilities of human beings don't change much from year to year, but their environments do, and so do the technology and store of knowledge they can access. Better sanitation lets people live in cities, where they can learn from one another. Transportation and communication advances allow ideas to mingle across distances that, a thousand years ago, they would never have traversed. The development of the Internet makes the coding of social networks possible.

When these advances happen, they happen to many people simultaneously, so many people tend to see the next step forward at the same time. In 2003, we were all social network geniuses, at least compared with everyone in 1993.

Consider CU Community, a Facebook competitor started at Columbia University. Adam Goldberg, its creator, programmed his social network over the summer in 2003. It was more advanced than Facebook, with options for pictures and integrated blogging software, though it did lack the elegant minimalism of Zuckerberg's design. (Disclosure: Washington Post Co. Chairman Donald E. Graham is on Facebook's board, and The Post markets itself on Facebook.)

This phenomenon is age-old: It's called "simultaneous invention." Technology - and the conversation about what can be done with it - advances to the point that the next step is obvious to multiple people at once, and so they all push forward. In the end, one squeezes the others out by landing the patent, or the market share, and becomes synonymous with the invention. That's what happened with Alexander Graham Bell, who in all likelihood invented the telephone after Elisha Gray - and both of them came after Antonio Meucci, who couldn't afford the fee to keep his patent current.

Today, Zuckerberg is many times as rich as Goldberg. He won. Zuckerberg's dominance can be attributed partly to the clean interface of his site, partly to the cachet of the Harvard name and partly to luck. But the difference between Mark Zuckerberg and Adam Goldberg was very small, while the difference between what Mark Zuckerberg could do and what the smartest college kid in 1999 could do was huge. It was the commons supporting them both that really mattered.

Human beings are more comfortable thinking in terms of people than in terms of technology. And a movie about a socially inept genius is certainly more interesting than a film about conferences where programmers present advances in social network software. But the focus on people leads us to overinvest in the rewards for individual innovation and underinvest in the intellectual commons that make those innovations possible. We're investing, in other words, in the difference between Zuckerberg and Goldberg rather than the advances that brought them into competition.

Consider the current debates in Congress. Republicans are fighting to add $700 billion to the deficit to extend the Bush tax cuts for income above $250,000. It is hard to imagine the innovations that happen at a 35 percent tax rate for your two-hundred-thousand-and-fifty-first dollar, but not at 39 percent. We're also helping creators and their heirs hold legal monopolies on innovations for much longer, extending individual copyrights to the life of the author plus 70 years, for instance. Would we lose so many great ideas if the monopoly lasted only until 15 years after the inventor's death?

At the same time, the recession has broken the back of state budgets. California is gutting its flagship system of universities. Salaries are dropping, and research money is drying up. And California is not alone. According to the Center on Budget and Policy Priorities, 43 states have cut funding for higher education, while 33 others - plus the District of Columbia - have hacked away at K-12. And Congress seems to have given up on the energy and climate bill that could've kick-started our green energy industry - even as China has committed almost a trillion dollars in green energy funding over the next decade.

And let's not kid ourselves into thinking that public investments don't matter. Direct public investment was crucial for developing a national railroad system, planes and semiconductors. It was behind the Internet and the Global Positioning System. It was behind the educated populace that developed those innovations.

Nor should we be overly sanguine about the private sector's interest in innovation. The average company spends 2.6 percent of its budget on research and development, and a National Science Foundation survey found that only 9 percent of companies reported a product innovation between 2006 and 2008. "You can't be an innovative economy if only 9 percent of your companies are innovating," economist Michael Mandel wrote.

People have many incentives to innovate. They love what they're doing. They're competing with others. They want to make money. They want, as Zuckerberg does in the film, to "make something cool." And they should be richly rewarded for their successes.

But there really isn't a replacement for public investment, and good rules. You need a good education system. You need intellectual-property rules that ensure space for new ideas and uses. You need a tax code that encourages research and development spending. You need, in other words, to furnish people with an environment in which innovation can take place.

We need to think harder about whether we want to spend our limited dollars on the vision of innovation in the Facebook movie or the reality of innovation behind Facebook.