More Startup Hubs Could Stop Trumpism
Over the past several decades technology and globalization has dramatically altered the lifelong expectations of most people in Western societies. In the hands of a skillful communicator like Donald Trump the painful symptoms of complex economic change can be compressed into a single vector and used as ammunition to fuel the political ambitions of a demagogue.
demagogue: a political leader who seeks support by appealing to popular desires and prejudices rather than by using rational argument.
Not that long ago in America people were able to get a decent job with a high school education and be comfortable throughout life. Then, within a single generation, these jobs vanished. It made more sense for a person in a developing country to do the same job for a lower wage. At the same time immigrants from South America began flooding across the American boarder to fill demand for baseline unskilled jobs.
A large segment of Americans who’ve felt the pain of job loss, stagnant wages, and an uncertain future have blamed it directly on what they see in front of them — immigrants and other nations “stealing” from them. From that perspective, the fight for equality among minorities is interpreted as an attempt to elevate themselves above the established middle class. This is a skewed view of the world which I disagree with, but you can see how it’s led to growing pockets of mistrust which can be taken advantage of and amplified by demagogues like Trump, Putin, and Farage.
On top of that, upward mobility has ground to a halt. Technology nerds don’t feel that because we’re working in a sector where beating back aggressive job recruiters is a daily occurrence. For those who are doing well, we have to understand that, for most people, what we do has never an option for many people, and never will be. (Unless you keep reading this.)
If you’re a technologist, most Trump supporters don’t even know what value you add exactly. They don’t know why you’re so happy with the where our country is going. To them, they have no future, and no way to feel valuable again, and they don’t know why it’s happening. That makes you look like a smug elitist out to rig elections.
There are indications by historians that we may be entering a period of mass destruction and there is nothing we can do about it. That’s pretty dark. In fact, it terrified me to the core. But, after spending a significant time thinking about it, there are a few things we should stop wasting our time on, and a few things we should be putting a lot more effort into. If we do this, we can probably stop another Trump or Brexit from happening again in the future.
The Economic Inequality Fallacy
Paul Graham wrote a great piece on economic inequality in which he reminded us that the most common mistake we make is to treat it as a single problem as if the rich are taking from the poor, end of story. There are cases where this is happening, and we should stop it, but by and large, the rich are getting rich by creating value — creating something from nothing.
We might be able to budge the needle a little bit by raising taxes on the wealthy. It would probably serve us well if our society felt that our taxation was at least fair.
I recently attended an investor luncheon where an economist spoke for a few minutes to address the elephant in the room at the end of a talk about economic forecasts. He expressed little faith in using the tax code to improve economic equality. But, he did say that government spending on infrastructure could help out a great deal, with the side note that most people would never be able to get “thinking” jobs, so we needed to introduce more “non-thinking” jobs into our economy.
Making the assumption that a huge swath of our population will never be capable of entering “thinking” fields where upward mobility is possible is a dangerously complacent position in my opinion. We can do better than that, but we need to stop framing the problem as a fight against economic inequality. We need to focus instead on attacking poverty and the lack of upward mobility. Economic inequality will get better as a side effect.
The Education Fallacy
One line you’ll hear a lot is that we need to educate and train our workers for the jobs of tomorrow. It’s true, we do, but that’s just playing around in the margins. Better training and education will help, for sure but, for the most part, our general population is never exposed to the jobs with the best upward mobility. Most people don’t know anyone who has a great career. Even worse, if they do, they’re probably known as the liberal yuppie who lives in that city and makes all the smug comments about the “simpletons” back home.
So, yeah, we need great mechanics, plumbers, and customer service agents. We even need more skilled technicians to work in factories and hospitals. But, we also need more programmers, nano engineers, marketing professionals, and entrepreneurs. And it’s these jobs that I’m afraid our students aren’t ready to learn about, mostly because they aren’t even aware of the options.
Even worse, these upwardly mobile options require moving to a place where most people feel out of place at best and logistically impossible to move to at worst. Education can’t fix that.
The “Basic Income” Fallacy
It’s also been said that the only way out of a disastrous outcome where a populist political movement destroys a generation is to provide a government subsidized basic income. To a nerd, this makes complete sense.
But, think how emotionally disconnected this “solution” is. Nerds react to problems with reasonable solutions, but nerdy solutions compound the social issues because as nerds we’re insensitive to the emotional reality of everyone who’s been left out of our ecosystem. Not everything is a math or computer science problem.
A person’s attitude and actions are inexorably tied to their self worth. If we take away a basic sense of worth by providing a government subsidy, we’re only feeding into the social and political turmoil we’re trying to solve. I really don’t see how this could possibly work.
We Need to Create Tech Hubs Outside of New York and Silicon Valley
As a technology entrepreneur I’m biased, but I think we could attack most of these problems head on with entrepreneurship and technology before we end up in another trough of human history. We should be creating entrepreneurial startup hubs focused on technology.
Technology companies grow fast, and as they grow they leverage technological advances to bring value back into the community that spawned them. Success inspires others in the community to give it a shot. Those who have had success help others achieve it. Small investment groups begin to form and more businesses are spawned. All the while the restaurants, mechanics, Realtors, plumbers, car dealers, and hospitals do better too.
On top of that, local populations are exposed to the real possibility of joining an industry where upward mobility is more common than not. Young people are more aware of their options, because they likely know somebody who is doing it. Maybe even a parent.
This takes time and work. It’s no silver bullet but, it’s attacking the problem of poverty and upward mobility head on. We have concrete steps we can take to accept technology adoption and globalization as a net positive instead of using it as a political flash point.
The Government Can’t Help
When government bureaucrats step in they mess it all up. I don’t know why, but they just don’t get it. Probably because they have to answer to a confused and angry constituency.
Anyway, the government usually wants to do things like provide grants for startups who promise to stay in a certain place and hire a certain number of people. In New York State we have something called Startup New York. The TV ads made it look awesome, but when our business applied, we learned the deal breaking details. There was no way we could promise to stay near a State University of New York campus and hire X number of people over Y years. We certainly intend to stay in New York, and we hope we’ll grow and hire lots of people, but we can’t promise that. To come up short of our promises would have meant our funding would have been taken away. Starting a startup is risky enough already without adding silly distractions like that.
Another thing bureaucrats will do is build corporate parks and try to lease them out cheaply to convince technology companies to move in. Early stage growth companies hate corporate parks. Hate them. We want to be downtown, where we can travel by foot, meet in the coffee shops, go to the local establishments for lunch, and grab a beer after work in the pub across the street. Anything else is a deal breaker.
We need to be thinking more like France during the renaissance. Small towns, cafes, and most of all, authenticity. Government really stinks at being authentic.
Colleges and Universities Need To Level Up
When I say that higher education needs to step up their game, I don’t necessarily mean that they need to change their course offerings to focus on technology. I mean they need to provide a vessel through which local entrepreneurs and technologists can relate their stories to the student population. Young adults have so much talent and promise, yet are expected to become productive members of society after only experiencing a sliver of what the world has to offer. And too often that sliver is rooted in the economies of the past.
Stanford University is perhaps the most powerful driving force behind Silicon Valley. Bright young people come there, get exposed to technology, entrepreneurs, thinkers, and dreamers. The passion is contagious, passed down from one generation to the next.
When I was at Ithaca College I got exposed to the TV, radio, and film industries in a very inspiring and effective way. The school was obviously optimized for that. But, when I wanted to apply that experience to technology there was a vacuum. I had taken some computer science courses and it was enough to convince me to do my capstone senior project in digital media — what we were calling “multimedia” at the time. Given that I was a film student at a film school with a reputation to keep, I found nothing but rebuke at the idea of making my crowning achievement a digital work. The rejection was stunning, actually.
I did it anyway. And now, 15 years later, that project has formed the baseline thesis for Odd Networks. If I had gone to Stanford I’m 100% convinced that process would have been accelerated by 15 years.
The role higher education needs to play in a healthy tech economy is to attract and incubate formidable nerds. Paul Graham made a great point that a tech startup hub needs to attract the best nerds to have any chance of being a tech startup hub. One of the best ways to attract nerds is to have a quality university which exposes smart people to a path forward where they can achieve greatness.
But, even communities without a large college or university usually have community schools. And, perhaps here, in the small trade school environment, it could be most critical that students have the opportunity to be exposed to the possibilities available to them.
Go Forth and Startup Hub
I’m sure there is a lot more we could do to build startup hubs in our communities but, for now, there are a couple of big impact things we can push forward. We need to stop talking about economic inequality and start talking more about how we’re going to fight poverty and the lack of upward mobility. We need to pick a small town where we think we can grow our technology businesses and put down roots. We need to support each other in these communities, and draw investment to our entrepreneurs.
We need to go to our high schools, colleges, and universities and tell them what we’re up to. Seek out the small community schools. We should never see a parent go in front of a news camera and tell us they are worried about their children’s future.
So, Silicon Valley, go back to your hometown and start something. Life in the Valley isn’t that great anyway. New Yorkers, come on up to Saratoga Springs and join us at Odd Networks, MadGlory, Apprenda, CommerceHub, Agora Games, and Vicarious Visions. It’s a nice place to live ;-)
