Nicely done Irving--an elegant story telling, despite the absence of mentioning the pioneer of complexity with our friends at SFI:) One of the reasons we are located in NM--have engaged with many up the hill since conceived my classic CAS in our lab in mid 90s--then in N AZ, but it's better being on the ground as I can participate regularly with visiting scientists from all over the world. I am constantly attempting to remind those who will listen that we need to be a bit careful about allowing the magical mystery tour to deflect away from the rigor and discipline of objectivity, as bias is ever present in the CAS we call humans.

A long complicated topic, starting with the obvious that the Academy is by definition biased so reform efforts need to be taken up by others. I've worked with the system for about 30 years now with several hats. While I agree with the conclusions, typically it's very soft on accountability and heavy on more funding. A couple of quick points: It is the failure of the basic research system that has substantially led to the decline of the American dream. If it had been more efficient and less corrupted with more accountability, less activism and more science--with more economic diversity, the structural foundation of the economy would have been stronger. Unfortunately now that the U.S. economy has been so weakened it is a much greater challenge to invest in federal research. For example, the national debt is more than 10x of the level cited in earlier times, which is frankly due less to partisanship (don't deny that is among our greatest challenges, but it's primarily a symptom of this, not the cause) than he culture of academia and lack of accountability throughout the federal system, including regulators, which is very closely aligned with academic institutions they fund. I know many and am often invited to attend four and five star hotel conferences, but of course since I pay my own way I stay down the street in budget lodging. The biggest problems I see with the research system include extreme bias towards the academy itself rather than merit-based research (they fund themselves as part of the guild's unspoken rules), the state funded universities export most of the IP and IC to leading companies--much of which doesn't benefit the state citizens at all, a great many are gaining enormous wealth from this broken system--including some very highly paid administrators as well as start fundable researchers, majority of investment isn't an investment at all but rather a political statement supporting ideology, and of course the bureaucracy cited has become ludicrous. An example, I recently met with two of the leading researchers with institutions that are among top funded by fed R&D in their disciplines. They started their institutions roughly two and three decades ago, one of which said when he started he spent 10% of his time on administration and 90% on research. Today it has almost reversed- 15% to 85%. The other was so frustrated by the system the individual just wanted to discuss immediate plans for retirement. Here in NM we have an extreme example, but it's also among the most pure cases to study. Despite ever increased basic R&D from primarily federal government sources--ranging now above $5 bn per year and representing most of the highly paid persons living in NM, and a mandate by the institutions and most of the agencies funding to grow NM tech businesses, the state has never enjoyed a single major business success from the vast federal investment in these institutions. Yes there have been many small successes for researchers, institutions, and investors, but like most of the flyover states they are acquired by the G500 or are forced to relocate from funding in major markets that have regional mandates as part of the partnership agreements in VC firms. The result is we have what has been described by one leading researcher as one of the most polar society's and economies in the world, with federally funded institutions at the top of the hierarchy and those they are charged with serving at the bottom. Our friends at the Academy are not the appropriate source to be reporting on this as they are obviously extremely conflicted emotionally, financially, and in every other sense. The system needs to be completely re-invented, but given the power of this lobby in D.C. with corrupted political system I fear it's unlikely at best. This is why we self-funded Kyield btw. It would almost certainly not have survived and matured in any other model.

Well done Irving. KR, MM

Good work John. I am embarrassed for Harvard and to some degree academia, thinking this debate will serve as a nice marker for future historians attempting to understand tipping points. I only hope they prove to be positive trends.

Irving, you touched on this as I recall when we talked, regarding importance of services--or transforming traditional services. I have never liked the cloud, but usually do like descriptions that appeal to the masses, even if necessary for most to grasp on to something they are familiar with. The primary benefit is one of control, or lack thereof, over the physical. By using distributed computing in pay for use model, lock-in is reduced whether for a particular vendor or even internal from a protections IT department or investment in data centers. Secondarily are plug and play standards managed by a third part who (to presumably a lessor degree) has fewer conflicts than internal departmental silos and conflicts or a vendor owned data center with proprietary standards. The plug and play components, or in our case modular system design based on independent standards, above described by Zysman as abstractable and composable, has been an outcome many of us have been working on for decades. The question will be to what extent independent standards survive and evolve, compared to extension of lock-in to the cloud, new or hybrid forms. In the enterprise we see two trends that are encouraging--industry data standards finally maturing and increasingly adopted and enforced by regulated industries, and tech stacks with infrastructure that provide easy plug and play platforms with very healthy investment generally pointing towards healthy competition. The really challenging part I think is what we've been working to overcome--successfully, which is how to provide a platform that is continuously adaptive, scalable to highest levels in near real time, benefit from low cost commoditized computing stacks, while also providing differentiation and a competitive advantage. This was no trivial task.

Cure is worse than the disease, that is.

Many of us had hoped this was the case with the commercialization of the Internet, and was essentially true for a couple of years until institutions woke up to both the threat and opportunity, and flooded the environment with the largest subsidy in history. We've been in a series of historic bubbles, busts, crises and reactions ever since. The needs to keep RE valuations high in key metros like SF, NY, EU etc… governments are tied to taxes and transactions costs. I think it's important to drill down into the topic in business and investment to the granular level, and when we do we find that economies of scale and barriers to entry still exist in many sectors--I like to use railroads as one example that is unlikely to be seriously disrupted as that industry enjoys barriers of physics, scale, capital and legislation. However, it is true that many industries and sub industries are quite likely to be disrupted. Spencer Ante posted a nice brief piece on LinkedIn today that I think captures it well in enterprise IT "trillion dollars up for grabs". Generally speaking I think all of this is fine, natural, and necessary. The problems arise when we distort markets to dangerous levels with protectionism, legislation, or policy to include massive subsidies hiding behind venture capital, stock markets, subprime mortgages or FRB policies. As I first witnessed up close and personal cleaning up the S&L crisis for private owners one property and business at a time, with the RTC the cure was indeed worse than the cure for the honest actors while rewarding bad actors. The moral hazard it created literally planted the seeds for the much larger crisis to come, which has now caused very dangerous moral hazard. These lessons have been learned, we need not repeat, nor increasingly can we collectively afford to do so. Back to topic at hand--one problem is funding models--unlike earlier brick and mortar models in franchising, institutional VC doesn't typically invest in small scale anything, including large scale that serves small scale, nor do most of their LPs want them to (back to RE and tax problem above relative to policy). While some of our great challenges are still technical, the most costly I see still are in organizational, monetary, and capital. - MM

Elegant writing -as usual, Irving. Well of course it's about probability. Statements like those from Gordon, which I had noticed with interest, are in my experience typically a form of warning or activism--a judgement call I have myself made a time or two, like warning of the dot com and housing bubbles among others. The warning is valid I think in one respect, which is levels of adoption--innovation is constantly at risk due to entrenched interests. While somewhat improved from a few years ago in the enterprise, for example, when innovation was declared dead by many, there is a direct correlation between market share and levels of innovation--no question about it even if the rare exception exists. Also very important is understanding that many types of market regulation and influence exist well beyond state actors. Similarly, polarization and wealth gap reflect to a large degree the lack of market function, which requires a diversified economy to remain relatively healthy. Clearly in many industries and markets--to some extent interconnected between industries and government, we do not currently enjoy healthy market activity, and that does impact innovation. A slight impact today with innovation infrastructure can radically shape the future 50 years out. Probabilities should take on more confidence in forecasting trajectories along similar trend lines. For example, I see the wealth gap as a good forecasting tool, and causal, rather than the outcome many economists claim. And perhaps importantly, my forecasts have been considerably better than the super majority of economists on economics precisely because I have not been indoctrinated. Something I keep in mind as I design AI systems with human interaction. We do have reason to be concerned with the future. The world is not governing well, either from a self-adaptive complexity perspective, from a classic top down approach, democratic, social, environmental, economic.... Tech and innovation trends would have a much higher probability of realization if we had could have slightly more confidence that the human race won't self-destruct - based on evidence. Governance matters. Systems matter. Integrity in the financial system and political system matters. Fiscal sustainability matters. As it is now futurists on innovation must run at least two scenarios in the longer term…. Tough times for optimists.

Eventually that's a serious math problem!

Good points Vinnie -- it's always interesting when governments brag about the number of start-ups. While it tells you something, that something usually isn't relative to the message they are attempting--it's usually very few that matter in tech. I think the narrow focus of HANA is an important point we don't hear often--obviously why the start-up ecosystem. So apparently the effort is to replace the SI ecosystem with an apps ecosystem, which takes us back to your initial point about pricing. I'm not an app developer for other ecosystems, but with interoperable data standards becoming the norm in key industries--which I am on top of, and the API world having already exploded, guess it boils down to whether the SAP ecosystem can deliver the goods for developers and customers in the new model. It will be interesting to see what you and other observers say about that moving forward. KR, MM

Greetings Irving. Bitcoin is dangerous from a security perspective - has gone further faster than I thought it would, but obviously any global currency will be subject to security and regulation. However, I think your comments on taking decades and seeking consensus on disruptive technology is dangerous. In fact I know it is. AT&T said almost the precise thing to Vint Cerf about the Internet, MS with Google - the list is long just in my own circles and history. Disruptive technology doesn't wait for consensus or ask permission of incumbents. While it's true that it may take a decade or two to become dominant, by that time it's too late for others to catch up, and the velocity in which big bang disruptions are occurring is increasing--roughly half the time it took a decade ago in digital environment from initial investment to become market leaders. They are rare. No denying they exist, or that a strong global demand exists for alts to banking. That said, I don't personally see future innovation in currency rising in Bitcoin fashion at all. Rather I agree with you that a conversion will take place. But that shouldn't necessarily rest easy with banks. .02- mm