I can't resist pointing to another Michael Malone post. Malone's post "Missing the Meat" seems to be channeling those eminent economists Elwood and Jake Blues:
"Have you ever heard of a wish sandwich? A wish sandwich is the kind of a sandwich where you have two slices of bread and you, hee hee hee, wish you had some meat" (from Rubber Biscuit)
Malone's post from 10 days or so ago speaks to the concern that the engine for future job growth, i.e. new company formation, may not be running even though it seems like the economy is starting to recover. If Malone is correct, this is a big problem.
The crucial center of the tech world – new and fast-moving companies – the meat in the technology sandwich – is gone. Under the press of an economic slowdown, government regulations that have handcuffed entrepreneurs and venture capitalists – and perhaps most of all, an Administration that increasingly seems actively hostile to entrepreneurship and small business – high tech is hollowing out.
It all still looks good – the new cars in Silicon Valley traffic, the announcements of exciting new inventions – but there is no there there. It is a comforting illusion, one that has us believing that good times are just around the corner, that the next Apples and Googles are waiting in the wings to help restore the country to economic leadership and prosperity, and that Silicon Valley will once more become the generator of millions of new jobs across the land.
But it isn’t true. Over the last couple months, I’ve seen some spectacular new start-up companies, some with finished products on the market. All of them are starving from lack of capital –and their business plans, which would have attracted tens of millions of dollars two years ago, earning only shrugs and apologies from straitened venture capitalists and banks. My guess is that several hundred new start-ups in Silicon Valley have already been lost, with no sign anywhere on the horizon.
If, as has been the case in the past, Silicon Valley and the tech industry are the leading indicators of the country’s economic health, this is going to be a truly ‘jobless recovery’, one that rewards the few at the expense of the many in ways we haven’t seen for decades, that consolidates power in Big Business at the expense of the little people, and which delays the adoption of important, life-saving, new inventions for years.