Two weeks before the start of our perpetual lockdown, The New York Times columnist and Substack writer Ross Douthat released “The Decadent Society,” a survey of America’s general apathy toward building a more dynamic future. While the book itself isn’t particularly surprising in its critique, the timing of its release was important: it was among the last public critiques of American stagnation before the world changed forever in March 2020. In the Before Times, Douthat noted four indicators of malaise in the Western world, some of which were magnified during the pandemic: institutional failure and loss of civic trust; economic and technological stagnation; declining birth rates and sterility; and mimetic, derivative culture. By April, many seemed hopeful that some of these trends might reverse — if anything could pull America out of its decades-long march toward decline, perhaps it was a global pandemic.
Almost two years later, it’s clear that the stagnationists were right about some aspects of American decline and very wrong on the ones most within our control. Institutional failure is the most glaring and far-gone aspect of American stagnation: look no further than the U.S.’s shoddy exit from Afghanistan and the associated $2 trillion of spend, and it’s clear that the military, the governmental institution with the highest degree of trust — before the Afghanistan withdrawal, 69 percent of Americans had a “quite a lot of confidence” in the U.S. military — has been damaged. Other institutions like public schools and the medical establishment have lost so much trust during the pandemic years that they could go the way of mainstream newspapers, plateauing into a distrustful malaise where only a fraction of the country cares about what they have to say at all.
But the major error of the stagnationists — claiming technological stagnation as a factor in American decline — revealed a countertrend that’s easy to miss if you’re not immersed in technology. Though the Manhattan Project and the Moon Landing happened when America was arguably at her most dynamic, the technology sector is the only sector of the American economy that has maintained its vibrancy, dynamism, and growth through innovation over the last 25 years. The top six companies by market capitalization in the U.S. are now technology companies, two of which were founded in the 2000s. In 1996, none of the top six companies were technology companies. Indeed, tech has been propping up all other sectors including the institutions that have lost all civic and public trust. In 2020, this fact became so obvious that there isn’t much of a counter argument: From the Moderna vaccine to the uninterrupted service of Amazon Prime, Zoom and Netflix, the scientific and operational excellence of consequential technology companies made up for the shortfall of our flailing governmental institutions.
The prevailing trend of the 2020s is not that we’re destined for decline. It’s that the technology sector is augmenting and improving the functions of institutions that we used to trust, especially those in the realm of government. Indeed, I believe the only way to reverse the course of stagnation and kickstart nationwide renewal post-Covid is through technologists building companies that support the national interest. I call this American dynamism: it’s the recognition that seemingly insurmountable problems in our society — from national security and public safety to housing and education — demand solutions that aren’t simply incremental changes that perpetuate the status quo. These problems demand solutions from builders — and it’s never been more vital that startups tackle these serious American problems.
The problem with American government
It’s not surprising that the last remaining holdout from the software revolution is government, and that due to regulatory capture, special interests, and perverse structural incentives, the last sectors of the American economy to be transformed by technology will be those that the government deems most important to its power. But if software can stave off stagnation in all other industries — industries that have similar problems attracting the talent needed for 21st century innovation — why can’t software fix government? In some ways, it’s already happening.
In 2018, I wrote in the Washington Post that startups have begun usurping the responsibilities of governments at breathtaking pace. Whether it was Uber and Lyft supplementing much of public transport in major cities or Palantir assisting in the important work of the U.S. intelligence community, it is becoming clear that government cannot meet the needs of its citizens without the tech sector’s aid.
While some Senators will lament this fact, the private sector is taking on important missions of government because it has the specialized talent and means to do so. In aerospace, the private sector has outpaced government agencies in milestones once reserved for nation states: yes, billionaires are going to space, but that’s because of the extraordinary private sector investment leading to the declining cost of a rocket launch that propelled the industry and science forward at a time when government ignored its potential. Now, a glut of venture-backed aerospace companies are all innovating on the economics of launch, constellations, connectivity, and travel.
And it’s not only capital investment where the private sector is helping government. When politicians panicked at the supply chain crisis at the Port of Long Beach in November 2021, the man to get on a boat and figure out immediate solutions was not an elected official but Ryan Petersen, founder and CEO of Flexport. Ryan arguably understands supply chain and freight forwarding better than anyone on the planet, and by tweeting his remedies for the crisis, citizens better understood why the things they needed were sitting off the coast of California. Flexport isn’t often viewed as a government company, but at a time when government lacks critical tools and voices to understand complex national problems, founders like Ryan are doing important civic work and pushing solutions forward.
These examples prove that dynamism in America is not being spurred by policy in Washington — it’s being driven by a growing group of technologists that are solving problems of immense national importance. And as technology becomes less of a “sector” and more of a means of acceleration that touches every industry and aspect of society, we’ll see more solutions for American problems coming from engineers, technologists, and startup founders. Washington and Silicon Valley are going to have to become friends.
Some critics of the tech industry believe that software only touches the digital world and that we’re wasting valuable talent ignoring the physical. But these critics are missing this current movement to the physical sector and the interplay between hardware and software: some of the most disruptive companies are remaking the physical world with software at their core. And these companies are often entrenched in the work and mission of government, such as in aerospace (Blue Origin, SpaceX), intelligence (Palantir), and defense (Anduril, Shield, Skydio). These categories feature fast followers powered by software that depend on selling to government. In public safety, Citizen, Flock Safety, and Mark43 are innovative competitors to the legacy incumbents, which have benefitted from traditional government contracting models that don’t prioritize innovation. And in transportation, companies such as Applied Intuition and Samsara are taking on the OEMs and Honeywells of the world by putting software and cheap sensors inside the industrial sector to improve safety and efficiency simultaneously. Though these sectors may seem disparate, the most striking element of these businesses is that they’re so regulated that the government is either a customer or competitor — and at times both.
Why build for America now?
It’s now easier to solve critical national problems through startups. For one, many of these companies and their respective problems require large capital investment, and venture capitalists are better at taking on risk and allocating capital than agencies in Washington. Venture capital is also better at monitoring outcomes: it turns out that professional investors, even in a bull market, care more about value creation than bureaucrats who are not measured by or compensated for their success. The best comparison is that in the last two decades, roughly $1 trillion has gone to venture-backed companies in the U.S., while $6 trillion went to the War on Terror and failed nation-building in Afghanistan. The outcomes are different due to incentives, not investment. In the last two decades, venture capital has matured from a niche asset class to a global industry. And finally, it’s clear investors are actively looking for opportunity in government sectors: the global capital glut is a boon for capital-intensive companies with venture-scale return profiles. The hard things to build now have real private capital bases to sustain them — and enough examples of success that investors are excited to back these sectors.
Second, the U.S. government has had a growing talent problem since the 1970s. This is not an unknown problem: the government began studying its talent shortage and decline in public service ethos thirty years ago, calling it “a quiet crisis.“ Financialization and a cultural shift away from collective responsibility have led to a decimation of the bureaucracy and a permanent, aging governing class. A country without a vibrant public service culture cannot thrive, especially when competing with countries with effectively mandatory public service in the technology sector, such as China. Many of the young people who would have stayed in public service or adjacent worlds — such as think tanks, academia, or nonprofits — are moving to startups instead to solve thorny problems of government on time horizons that would be impossible for bureaucrats to fathom. Fortunately, more and more founders are interested in building companies that genuinely solve important missions for their communities, with or without the support of government.
Third, the customer is changing — albeit reluctantly — because it knows it must innovate. Those who work in government are now sensing the tech acceleration in their lives as consumers and have yet to see real change in the types of technology they use at work. Ask a procurement officer how frustrating it is to use 20-year-old software in their work life, and it’s clear that government recognizes the software revolution must transform its work too. The Department of Defense (DOD) realized this shift in the early 2010s: without links to the technology epicenter of the world, can the DOD actually compete with adversaries? This realization may have started with defense, but all departments are downstream national security. The government has to embrace software to continue functioning, and procurement shifts and cultural shifts are already improving the speed of new acquisitions.
American dynamism and founders
When discussing how technology can solve America’s biggest problems, I’ve seen a language problem that leads many well-meaning people to ineffectual results. Many mission-driven founders are eager to innovate in govtech, i.e. companies that sell to government to make the bureaucratic operations slightly more efficient. They’re also eager to innovate in “ESG”, or “Environment, Social and Governance,” a term defined for and by bureaucrats, not builders. Dynamism is neither govtech nor ESG. I don’t believe those categories will solve the biggest problems most Americans face.
It would be simple to say that American dynamism is just the inverse of decadence: a reversal of economic stagnation, mimetic culture, and the collective casual dismissal of our future prospects as a nation. And maybe that simple definition is a good start. We believe technology is the font of this reversal, and the only immediate way to kickstart American renewal is through startups building for critical problems. But most importantly, dynamism requires optimism and a belief in growth and opportunity. A Pew Research Forum poll recently asked Americans the famous political question: will your children be better off than you will? Sixty eight percent of Americans said no, putting the U.S. as the sixth-most pessimistic country in the survey. I don’t believe our outlook has to be this way. Technology is a solution, not the perpetuator of this crisis of faith.
American dynamism is for builders. It is the belief that the values upon which the country was founded are real and worth defending. Dynamism is also a feeling: the feeling of growth, movement, momentum, and opportunity that makes America the country people want to be from, to immigrate to, and to build a life, career or company in. I believe strongly in this ongoing and historic American experiment and the values that unite us. And I look forward to championing the founders who believe that America’s best days are just ahead.