Andreessen and Thiel debate whether we're still innovating

By Sarah Lacy , written on May 2, 2013

From The News Desk

Marc Andreessen and Peter Thiel will pretty much debate anyone, anytime, anywhere about most anything. They're both frighteningly good at it. It's not fun to be on the other side of the barrage of obscure facts and rhetorical tricks both can easily employ.

So, The Milken Institute decided to sick them on one another. At an event earlier this week, the two debated whether innovation has stalled, with Thiel taking the pro and Andreessen taking the con position.

This issue is obviously a major one for the startup world, and one we've debated quite a bit as well. I'm typically more aligned with Andreessen's view of the world. Yes, we could be doing more. But let's not underestimate the impact of things like Twitter and smartphones on the world. As Andreessen says in this video, "The whole basis of civilization is communication." It's the catalyst for multi-cultural understanding and, ultimately, innovation itself. Massive advances in globally available free communication aren't exactly trivial.

One of the more interesting bits of the debate centered around transportation -- an area that Thiel argues has gotten worse in some respects, while Andreessen pointed to developments like Tesla, self-driving cars, and telepresence as significant advancements in technology.

Of course, no one could argue those advancements are commonplace or widely available, and both had the same culprit to blame: Government regulation. Thiel, a well-known libertarian, said that the world of real stuff was highly regulated, where the world of bits was not -- hence all the progress and job creation in computers. But he argued the growth of the computer industry wasn't enough to save the economy. Andreessen and Thiel both suggested other countries' best opportunities to steal the innovation spotlight was in competing with the US on regulations, whether it is around stem cells, drug research, clean tech, or even online gambling. Thiel even noted that his firm was closely watching for a time when the FDA would lose its "stranglehold" on the global market, making drug development easier and more affordable.

A frustration with the government was one of the only points of agreement between the two throughout the debate. That, and the fact that the number of patents issued was in no way a barometer for innovation, given the widespread abuse of the patent system.

The video is also worth watching for Thiel's dig on Apple too: He says the company is "shockingly" close to entering the high tech "rust belt" since the pace of innovation at the company has so greatly slowed. He quipped that tweaks as minor as moving the headphone jack on the newest iPhone shouldn't be cause for screaming "Halelujah! It's a miracle!" (Take that, fanboys.)

No matter which side you agree with, part of the fun in watching the two debate is that they clearly do it often enough in private that they anticipate each other's coming arguments and answer them before the other speaks.

At the end the moderator asked each of them what data points could convince them to change their minds. Thiel had a creative one. He said when Hollywood stopped vilifying technology. He argued most movies that center around technology depict it as a threat to be scared of, rather than something to embrace. "Do people even like technology anymore?" he mused.

[Both Andreessen and Thiel are investors in PandoDaily.]