If you're looking for innovation by American companies to save us, don't hold your breath. Sure there are innovators and companies started by them. The problem is that they are not instantly profitable, whereas some piece-of-crap social networking company can make you a billionaire overnight.
Internet-based companies leverage yesterday's research. Everyone knows that biotech and genomics will drive the next wave of "creative destruction"; but all the smart money wants someone else to take the early stage risks. Bold venture capitalists my ass. Read this obscure article from the high-tech business sector and weep:
Considering a Career in Biotech? How About Trying Computer Science Instead
If you don't want to read the whole article, here's the nub of it:
Big Pharma’s R&D engines are in such a state of crisis that some are publicly wondering whether pharma should quit doing R&D altogether. Smaller, supposedly more innovative biotech companies are starved for cash and running lean, relying on cheap outsourced labor every chance they get. Academic biology departments are feeling pressure from state and federal budget cuts. For those who stay in academia, good luck ever progressing beyond the starvation wages offered by the typical postdoctoral fellowship...
All of the young engineers get job offers, because their skills lead directly into product development that industry relies on, O’Donnell says. As for those studying the kinds of riskier, more exploratory fields that are the bedrock of modern biotech—things like molecular biology and genomics—students “have to work much harder” to find a job, O’Donnell says...
It’s a really sad state of affairs that there’s such little demand for young biotech talent. Many of these students, who have their hearts set on unraveling the mysteries of how genes and cells work to create the wonders of life, need to adjust their expectations. It’s not realistic for many to think they can go on to get academic faculty gigs, or even traditional bench research jobs in pharma or biotech, O’Donnell says. Many biology PhDs need to transfer their skills into office jobs in pharma—like business development, law, patents, marketing, and communications, he says...
The pharma and biotech industry is providing much less support for basic research today, which provides the foundation for all those quick and elegant engineering solutions we hope to reap tomorrow. Without supporting basic research today and providing gainful career paths for the young people who can tackle these problems, it could take us a very long time to see the fruits of genomic-based personalized medicine.
This article is beyond sad. It is a death sentence for America's competitiveness in the next generation of innovation. It is the Wall St. counterpart to the fundamentalist denigration of science and logic in our culture. In the name of "profitability" or "efficiency", they will strangle newborn science (i.e., basic research) in its crib. The same forces are busy trashing the science expenditures in the Federal budget. This anti-science double whammy will take us back to the Dark Ages.
Imagine where America would be today if all the materials scientists who created and perfected silicon lithography, semi-conductor lasers, charge-coupled devices, kevlar, and jet engines 40 years ago had been told to go into "law, patents, marketing, and communications" or you will wind up flipping burgers. There would be no Intel, no Apple, no Oracle. Britain would have succeeded in commercializing jet aircraft instead of Boeing. Europe would have built the Internet.
The business disciplines touted by the Judas Goat guidance counselors are all derivative from and dependent upon actual innovation - the creation of new technologies. But Wall St. today is all about "extracting value" and not at all about "creating wealth". Supporting basic biological science is creating value. Funding a quick cornering of a market by some social networking startup is extracting value from the wealth created by the slow and patient perfection of the Internet infrastructure (by the government) over a period of thirty years. You don't need to be Warren Buffet to see where Wall St. is going to invest.
We already know that over 99% of the activity on Wall St. is in trading shares and assets (or, more recently, leveraged derivatives of shares) that were created in the past. Some tiny percentage of stock purchased is from Initial Public Offerings (IPOs) - money actually given to a company. Even with those statistics, Wall St. had the chutzpah to claim that this tiny percentage was critical to the whole job creation engine and justified the rampant corruption of the financial industry. Now they can't even claim that.
Even the NYT called out Wall St. on its IPO activity (or lack thereof) in February:
What the market is not doing so well is its core public function: allocating capital efficiently. Apple, for instance, is hugely profitable and sits on an enormous pile of cash; it is thus very unlikely to use its highly rated stock to pay for any acquisitions. It hasn’t used the stock market to raise money since 1981, and there’s a good bet it never will again.
Meanwhile, the companies in which people most want to invest, technology stars like Facebook and Twitter, are managing to avoid the public markets entirely by raising hundreds of millions or even billions of dollars privately. You and I can’t buy into these companies; only very select institutions and well-connected individuals can. And companies prefer it that way...
When the stock does trade, the deals can be negotiated quietly, in private markets, rather than fall victim to short-term speculation from the high-frequency traders who populate public markets. And companies love how private markets allow them to avoid much of the regulatory burden of being public...
...the stock market as a whole increasingly fails to reflect the vibrancy and heterogeneity of the broader economy. To invest in younger, smaller companies, you increasingly need to be a member of the ultra-rich elite.
At risk, then, is the shareholder democracy that America forged,
This story is, for me, the final indictment of all the lies about how Wall St. takes risks with patient capital. So, not only is Wall St. not investing in biotech; its not investing at all. The private markets of the plutocrats are taking over that function, leaving Wall St. to the HFT crooks and speculators and the "dumb money" of the public.
Bottom line:
The plutocrats are bleeding us dry. They don't care about anyone's future but their own. They don't care about keeping innovation going. Now they are in the process of privatizing/ monopolizing IPOs, again, for the gain of the top 1%. And only immediately profitable "innovations" will be funded.
America isn't a democracy anymore. America is dinner for the super rich and the global corporations. It is merely a cow that is less skinny than the rest of the cows in the world; but at the rate they are devouring it, that won't last much longer.
How can anyone with scientific training or a science-based job stay silent about the naked demolition of intellectual America? The callous and cynical neglect of the very innovators that our financial and corporate overlords lionize is just one more load of horrible karma for the coming collapse into corporate neo-Feudalism.
Afterword:
The young biotechies I talk to say the article in the intro is pretty accurate. You can't get hired in today's job market without experience; and if you just came out of school, you have no experience. So pharma and biotech workforces are bifurcating. They are not hiring enough young folks. They are firing people in the 40-55 age range because they cost too much. The suits at the top are doing just fine, thank you. The whole business is kept afloat by people in the 30-45 age range, who somehow got experience and are willing to work like dogs. But, at the rate they are screwing young talent, soon no one will go into the field. In 20 years, when the grads to whom they should have given jobs and experience aren't there, biotech will move elsewhere and the corporate money will follow. America will be discarded like an old clunker car.
Just FYI, the same thing happened to chemists in America over the last decade. We have off-shored a huge amount of chemistry to China, where pay is lower, pollution regulations are laxer, and there are more job applicants for every decent job than here.
So, scratch chemistry and biology. Tell me exactly where this country intends to innovate?