Tech Bubble or Golden Age?
July 27, 2016
Since the recovery from the dot-com crash, doomsday prophets have consistently warned of a bubble in the private technology company ecosystem. This may sound like a valid concern to Silicon Valley-outsiders confronted with a spectacle of far-fetched startup ideas, wild blow-ups, and the transfer of large sums of money into the hands of audacious twenty-somethings. But we are not in a tech bubble. Iterative, trial and error experimentation is the mechanism by which firms drive the evolution of the market economy; it is the natural adaptation of industry to new technological paradigms. Moreover the amount of money involved in this vital discovery process is a tiny fraction of total economic output. Like any industrial revolution, the present era is one of rapid flux of the economy in response to new technological possibilities. Economic historians looking back on the present period will characterize it as the early innings of Golden Age of the information technology revolution.
