Business

05.30.13

Never Mind Inequality: Silicon Valley Enriches All of Our Lives

Of course innovators serve themselves a relatively big part of the economic pie, but their innovations benefit us all.

In the near future, most Americans will have their own private robotic chauffeur. Self-driving cars will save roughly 32,000 lives lost every year to auto fatalities, reduce dependence on foreign oil, and free up valuable leisure time otherwise spent cursing in stalled traffic. Like steamboat captains and horse-drawn carriage drivers, innovation will wipe out cabbies, and concentrate income in a smaller workforce of higher-skilled workers.

The inevitable march of technological efficiency means making the trappings of luxur—personal assistants, cutting-edge medicine, and world-class education—less reliant on brute human force (i.e., jobs).

The inevitable gap between the innovative elite and (unfortunately) disposable blue-collar workers has once again been thrown into the spotlight by The New Yorker’s George Packer, who brands wealthy Silicon Valley technologists as antigovernment utopians who prioritize an army of yuppie immigrant app designers over San Francisco’s shrinking middle class.

His thoroughly researched feature, though, curiously lacks solutions. Perhaps this is because the business of innovation is wealth creation, not economic equality. Some people have the smarts to grow the economic pie more than others and will end up serving themselves a relatively big slice. We should judge innovators not on whether they fatten our wallets, but whether their products enrich our lives.

Packer chides Silicon Valley founders for their refusal to deal with the disturbing coexistence of unprecedented technological advancement and skyrocketing economic inequality. Many economists agree that, to some extent, technology itself is the culprit, slashing jobs as it increases productivity.

Packer's fixation with financial parity seems to blind him to the fact that, in many respects, life has gotten better without the extra money. Cancer survival rates have doubled, recreational spending has nearly tripled since 1970 (from $850 to $2,500 per person), and women are free to spend more time on their careers, partly due to house-chore gadgets.

"These innovations changed the lives of women," University of Montreal Professor Emanuela Cardia wrote in a 2009 study of women's liberation from domestic work. Pew recently found that mothers are now the breadwinners in 40 percent of households with children.

This isn't to say the economy is all roses and sunshine: black unemployment is nearly double white unemployment (7.5 percent vs. 13.2 percent), more than one in five homeowners are underwater, and the average college grad now carries a heavy $35,200 in debt.

But at least a few very important parts of life have improved over the last half-century because technologists have delivered on exactly the things we expect innovation to do.

Packer is right about sky-high rents in the Bay Area; speaking as a 30-year-old San Franciscan still living with three roommate engineers, I care far more about one of my relatives surviving cancer than I do about having a front lawn.

While Packer and his fellow Silicon Valley critics stop short of arguing that travel agents should have been rescued from Travelocity.com, industry unions have a very simple solution to technology’s threat to equality: protect workers at the cost of innovation.

“The tech industry is, frankly, being greedy,” said AFL-CIO legislative representative Andrea Zuniga DiBitetto about a new proposal in a comprehensive immigration reform bill to expedite the hiring of foreign workers. Any long-term potential benefits from immigrant workers, unions argue, don’t outweigh the obligation to give Americans shotgun at the hiring desk.

But, technologists are right to worry that the cost of protectionism is too high: almost half (43.9 percent) of all Silicon Valley startups had at least one foreign-born founder, including Google, Paypal, AT&T, and Sun Microsystems—the literal foundation of the Internet.

Equality is a lazy measure of social welfare

All throughout the country, unions are pounding tech companies with regulation: taxi unions oppose smart-phone ridesharing apps, hotel unions have threatened apartment owners who rent out their rooms, and college faculty unions are fighting low-cost online courses.

At least unions are honest: the best (and perhaps only) way to fight inequality is to stall progress.

But slowing technology will rob us of a more educated and innovative society. For instance, White House Science Fair Awardee, 17-year-old Brittany Wenger, designed a low-cost way to radically increase early cancer detection. Wenger told me that she taught herself advanced computer programming with the help of web tutorials—resources she never would have had at even the best high schools.

Not only did Wenger became educated through a technology that will likely replace thousands of professors, her invention represents a trend in semi-automatic diagnosis tools that could replace even more many physician assistants.

From the accidental discovery of penicillin to a teenager’s surprisingly accurate cancer-fighting software, brilliance comes in unlikely places. Guaranteed, short-term protectionism is a compassionate temptation that will rob us of long-term, society-altering breakthroughs.

Over the long run, technology creates jobs we never even knew existed. The nonprofit Samasource farms out manual data-entry work to refugees in the bleakest war-torn areas on earth. Car-ride sharing service, Lyft, is giving steady income to San Francisco’s unemployed college grads. And Google’s new WiFi-network in sub-Saharan Africa will bring opportunity to the poorest of the poor.

Technologists, however, must face the reality that their innovations create financial inequality. Building the technical infrastructure for entire industries or automating jobs inevitably benefits the designers in far greater proportion.

But, in many respects, equality is a lazy measure of social welfare. If certain political interest groups stall innovation, we may be all equally worse off. Instead, judge Silicon Valley by the free time, wellness, and educational value it creates for all of us. By those measures, the Internet economy is a welcome part of society.