Imagine landing at JFK airport today in a time machine from 1970. As you step out into 2024, what would surprise you most?
Probably, the pocket supercomputers everyone carries around.
Your mind would be blown that you can video call someone half a world away with crystal clarity, for free. And access more knowledge on demand than contained in the world’s greatest libraries.
Then you look up from the six-inch screen. Your awe melts into… disappointment.
The same old planes lumber down runways. The same traffic-clogged highways lead into Manhattan. The same century-old subway system rattles underneath.
Welcome to the innovation famine.
Or rather, welcome to its end.
My friend Matt Ridley, the godfather of Rational Optimism and our honorary founder, wrote: It is commonplace today to say that innovation is speeding up, but like much conventional wisdom, it is wrong. With the exception of the digital industry, the West is experiencing an innovation famine.
Rational Optimist honoree Peter Thiel agrees, saying: “We wanted flying cars, but all we got was 140 characters?” (a reference to Twitter).
In some ways, physical innovation hasn’t just stalled. It’s gone backward:
It takes longer to build a house than it did 50 years ago.
We’ve closed more nuclear power plants than we’ve opened this century.
That Baltimore bridge that collapsed in March will take twice as long to rebuild as it took to build.
What’s wrong with us? Did we get worse at building stuff? What happened to the progress my grandparents saw, from the Wright Brothers’ first test flight to footprints on the moon, all in one lifetime?
The innovation famine has blighted your life in ways you might not realize. If wages had kept growing at their “pre-famine” pace, the average American would earn over $100,000 today. Energy could be billed like your Netflix subscription—a small, fixed monthly fee because it's too cheap to meter. Affordable supersonic travel would exist.
But the deepest wound isn't in our wallets. It's our spirit. When a country stops growing, building, and innovating, people lose faith in the future. Politics devolve into fighting over a pie that’s not growing. Sound familiar?
The root cause of the innovation famine can be debated. I lay most of the blame on the energy slowdown.
Before the 1970s, America pumped out bigger, faster, more powerful machines.
Cheap energy was the key ingredient behind American muscle cars, jet engines, spaceships, and new power-hungry appliances.
Then, in 1973, energy use per person started shrinking… and it’s been in decline ever since:
Source: Our World in Data
Some of this is due to huge gains in energy efficiency. That’s great. But it also represents innovations that never happened. Without cheap, abundant energy, we can’t transform the physical world like our grandparents did when they went from horses to jets, from candlelight to electrified cities.
Instead, we retreated into the digital world, where innovation requires much less energy.
Great news: the innovation famine is over.
My friend Tyler Cowen literally wrote the book on America's innovation slowdown.
His 2011 work The Great Stagnation put hard numbers to why planes stopped getting faster, wages grew slower, and major inventions became rarer.
At a recent gathering in California, Tyler told me The Great Stagnation is over. He believes future historians will point to the invention of artificial intelligence and ChatGPT as the turning point.
It is like America suddenly remembered how to build big things again. The dam broke.
Innovation is now FLOODING back into the physical world.
I recently took a self-driving Waymo in San Francisco. Just me and a steering wheel turning itself. It felt like I’d arrived in the future.
Neuralink’s brain chips allow paralyzed people to work by controlling computers with their minds.
Doctors are designing cancer-killing shots using mRNA technology.
Startups are building nuclear reactors small enough to fit in your garage but powerful enough to fuel a city (more on this below).
High-tech skyships, the size of the Empire State Building, will revolutionize how we move stuff across the globe (more on this in a future issue).
Even flying cars, the eternal symbol of "the future," recently won FAA approval.
These innovations of the past two to three years eclipse everything from the past two to three decades. It’s not even close.
Welcome to the innovation feast. There's been a huge shift in what ambitious people want to build. No longer are the brightest minds designing ways to get you to click more ads. Now, they're building supersonic jets and mini nuclear reactors, and planning missions to Mars!
There’s a lot more to the innovation feast than cool new gadgets. More innovation = more prosperity for all. It means more money in your wallet. It means beating cancer without losing your hair. It means no more red-eye flights. Electricity bills that cost less than a cup of coffee.
For 50 years, we innovated digitally while our cities crumbled. Now, we’re at the start of what could be the greatest burst of innovation in human history. Our near future is better than you can possibly imagine.
Here's how to help shape what comes next:
1: Join a startup crafting the future, or encourage your kids to.
Stop doom-scrolling and start doing. There's never been a better time to be a builder. Nothing kills despair like helping to shape the world around you.
2: Invest in breakthrough technologies.
Fund the future you want to see. Support the innovators achieving the unlikely. The Rational Optimist Society will help you track both public and private companies pushing boundaries.
3: Spread rational optimism.
Ronald Reagan said, “All great change in America begins at the dinner table. So, tomorrow night in the kitchen I hope the talking begins.”
Rational Optimism is contagious. Tell your spouse, your kids. Your neighbors don’t know about the innovation feast yet. Tell them! Sharing stories of progress matters more than you know.
Being a Rational Optimist isn't about ignoring problems or endlessly citing progress charts. It's about recognizing how far we've come while rolling up our sleeves to push further.
The innovation feast is just beginning.
Forward this issue to your friends. Remind them: You are what you read.
Nuclear’s new friends
I’ve been investing in nuclear energy for six years… and I’ve never experienced a more exciting week.
I toured Aalo Atomics’ new Small Modular Reactor (SMR) factory in Austin, Texas (details below). It was also the week America’s most valuable companies went “all in” on nuclear.
Google inked a deal with Kairos, a nuclear startup building SMRs. Amazon announced it will invest $500 million into another startup, X-Energy, to build a fleet of SMRs to power its data centers. Meta also revealed its intentions to build nuclear-powered AI warehouses.
This comes hot on the heels of Microsoft’s deal to revive Three Mile Island’s nuclear plant.
Why now? To feed the demand for artificial intelligence. Data centers devour electricity like never before. A single rack of AI servers gulps down 20 times more power than standard computing equipment. Nuclear is the best (and cleanest and safest) way for Amazon, Google, and Microsoft to keep the lights on.
A big problem for nuclear has been cautious customers unwilling to sign long-term agreements.
Great news: Nuclear has new friends. And they just so happen to be the largest, most successful companies on earth. Big Tech’s backing will accelerate the nuclear renaissance by at least five years.
Julia DeWahl, founder of nuclear startup Antares, told me tech companies are offering triple the going rate for guaranteed nuclear power. That's how desperately they need always-on, carbon-free energy.
For 50 years, we all pretended nuclear was unsafe and dirty. Nuclear energy's long winter is ending. Can you see the energy-abundant future taking shape?
Two guys visit a nuclear SMR factory
Austin-based Aalo Atomics is building portable reactors small enough to fit inside a NYC apartment.
Its reactors will be made of Lego-like parts—made in a factory and then easily assembled on site. Aalo’s goal: Be able to get a new reactor firing in just 60 days. It currently takes about 14 years to build and fire up an old-school reactor—talk about acceleration!
CEO Matt Loszak showed me and fellow ROS founder Dan around the gleaming factory floor. Aalo is creating a conveyor belt for mini reactors. SMRs will roll off the production line and be shipped out the door. Here are some pictures…
Aalo is commercializing a proven design from Idaho National Laboratory, one that's already cleared regulatory hurdles. Each reactor rolling off its line will power 10,000 homes with clean, reliable energy. Within a few years, it plans to ship two reactors per week.
Remember, old-school nuclear plants are like custom-built mansions—unique, expensive, and slow to construct. Aalo's goal is to drive down costs by making hundreds of the same reactor.
Matt was also optimistic about the dramatic shift in regulatory attitudes. The Nuclear Regulatory Commission’s (NRC) new SMR czar is actively working to quickly approve safe designs, rather than defaulting to “no.”
Even Holtec, a company specializing in knocking down old plants, is now pivoting to building new ones.
Meet Paul
An 82-year-old man named Paul had aggressive blood cancer. After six rounds of long and unpleasant chemotherapy failed, things looked bleak. Doctors had tried all the usual cancer killers, but none worked.
Enter Exscientia, a UK startup using AI to play matchmaker between patients and treatments. They took a tiny piece of Paul's tumor and exposed it to a buffet of drugs. The AI analyzed the results and recommended a drug Paul’s doctors skipped over.
Two years later, Paul isn't just alive; he’s cancer-free. The AI-chosen drug obliterated every last cancer cell!
Drugmakers have toyed with AI for decades. But this new breed of AI systems, like ChatGPT, is a game changer. They can connect dots from medical journals, clinical trial data, and personal genetic information that human doctors never see.
Instead of scientists spending years hunched over lab benches filling vials one by one, AI can simulate millions of potential drugs in days. It then predicts which ones are most likely to work, tossing out duds before a single test tube is filled.
Welcome to the age of artificial chemists, where the drug discovery process is faster and far more efficient.
Biotech company Genentech recently slashed the time it takes to screen new drugs from “years” to just nine months.
AI drug discovery startup Insilico Medicine identified a new drug target fit for human trials for just $2.7 million. That’s 1/1,000 the usual price tag to get a new drug approved and on pharmacy shelves.
Today's cancer treatments involve brutal surgeries and months of sickening chemotherapy. Paul's story offers a glimpse of a gentler future. One where AI drugs take out cancer while leaving our bodies unscathed.
Hey, can you help shape The Rational Optimist Society?
What would you like to read about in the Rational Optimist Diary? What would you like to see more of? Less of? Ideas? Send me a note at stephen@rationaloptimistsociety.com.
You don’t have to wait until the end of the week for good news. Follow us on X and check out our podcast for regular updates.
Writer: Stephen McBride: https://x.com/DisruptionHedge
Editor: Dan Steinhart: https://x.com/dan_steinhart
Rational Optimist Society: https://x.com/RationalOptSoc