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Did ‘Renewables Mania’ Cause The Tech Slide?

Catherine Rampell did a marvelous job in Tuesday’s New York Times of pulling the cover off one of the most overlooked impediments to economic recovery: stagnation in the tech sector.

Silicon Valley and other American tech centers simply aren’t coming up with the marvels they produced in the late 1990s and early 2000s.  Perhaps the Internet Revolution has run its course. But are there other factors involved?

Rampell points to several:

1) American students no longer excel at math, science, and other disciplines that lead to technological innovation.

2) Highly skilled computer jobs have proved very easy to export to countries where education levels are higher.

3) These foreign-tech centers have not only developed their own highly skilled labor forces but have become innovation centers as well, moving ahead of the U.S.

“There’s been this assumption that there’s a global hierarchy of work, that all the high-end service work, knowledge work, R&D work would stay in [the] U.S., and that all the lower-end work would be transferred to emerging markets,” Hal Salzman, a public policy professor at Rutgers and a senior faculty fellow at Heldrich Center for Workforce Development, tells Rampell. “That hierarchy has been upset, to say the least.”

The result is that thousands of highly skilled American tech workers now find themselvesunemployed, their skills becoming obsolete as the locus of innovation shifts abroad.

It’s not a pretty picture. But there’s one question Rampell doesn’t ask, that may explain part of this decline: Has Silicon Valley’s infatuation with alternative energy played a role in this drift away from cutting-edge innovation?

Since around 2005 — two years before Al Gore joined the board of directors at Kleiner Perkins — more and more of Silicon Valley’s venture capital firms have been shifting their bets to the “energy space,” mostly with small companies experimenting with wind and solar energy. Vinod Koshla, former CEO and Chairman of Sun Microsystems, has become an international superstar by founding Koshla Ventures, which has placed significant bets on solar. Most of these bets have not panned out — which is why Silicon Valley, which once shunned Washington, has become one of the biggest petitioners for more energy subsidies.

What no one ever noticed when this shift began is that the chances for significant returns in renewable energy were severely limited. The incredible advances in computer technology have evolved according to Moore’s Law, the principle first enunciated by Gordon Moore in 1965 that the number of transistors that could be fit into an integrated circuit was doubling every two years. This incredible pace continues today and has been the cornerstone of advances in high tech.  For instance, the iPhone has 100 times the processing power of the largest portable computer of the 1980s.

But there is no such “Moore’s Law” for renewable energy. The limits of potential improvements are fixed by nature and they are not impressive. The best efficiency improvements we can hope for with wind and solar energy are in the range of 25 to 50 percent. In the beginning there was talk of Silicon Valley “discovering” a new “Moore’s Law of solar energy,” but that has now faded.

What remains is the sluggish, workmanlike task of putting up more and more solar collectors across thousands of rooftops and hundreds of miles of desert, mountaintops, and farmland — all this to produce energy that will remain unreliable and scar the American landscape.

Yet Moore’s Law-type potential lies in the tremendous density of nuclear power. Uranium has 2 million times the energy density of fossil fuels and 20 to 50 million times the density of wind and solar power. The rest of the world is discovering this and is rapidly converting to nuclear power, with more than 60 reactors now under construction in 15 different countries. We are not one of them. The implication for our economy over the next few decades is staggering.

The one exception in the tech sector has been Bill Gates, who has invested in the “traveling wave reactor,” a cutting-edge nuclear design that consumes its own waste in the process of generating electricity. The rest of the high-tech world has followed the crowd down the “road to renewables.” Silicon Valley’s role as the technological leader of the world may have run its course. But things could have lasted longer if prominent CEOs and venture capitalists had stuck with what they once did best: following the dictates of the market in developing breakthrough technologies.

– William Tucker is editor-at-large at Nuclear Townhall (, from which this is adapted.

National Review Online, 9 September 2010