If you want people to build, do what the Chinese do (who learned it from the Japanese). Give smart people lots of money and get out of the way. China told it's thousands of regional banks to lend towards productive purposes. This was called "Window Guidance".
The best thing you can do is give smart people a lot of money and get the fuck out of the way. There are three ways to do this; Bank lending, government spending, and private equity.
The problem in the west is that the majority of lending goes into asset purchases (buying existing wealth) instead of new production. One reason is that very few large banks make most of the loans. Government spending on high technology and research has also been declining over 30 years.
The reason people build today in Silicon Valley is private equity is funding projects (giving smart people money and getting out of the way). The problem with Silicon Valley is that private equity is a drop in the bucket compared to the capacity of bank lending or even government spending. In fact most of the tech, including the fact that Silicon Valley exists in the first place, was because of federal government spending. (fyi Google started as a government grant, google maps, waymo)
Lets look at the USA. There are 15k Banks in the US but the majority of lending happens in the top 3. The US can just instruct it's thousands of local banks to lend for projects instead of real-estate/asset purchases and suddenly you will have a lot of people with money to build things.
Alan Kay who was at Xerox Parc, which is estimated to have produced trillions in wealth cost only 100 million dollars, says that Parc worked because smart people were given money and management stayed out of the way. That they invested in people.
In fact, the vast majority of high technology was funded this way. Government gave labs lots of money and they created computers, the internet, rockets, GPS, AI, etc etc etc.
So a combination of government spending + bank lending can kickstart building.
Lots of smart people out there can't build because of the lack of funds. Give these people money! Let them build! Don't make them do a dog and pony show in front of VCs about WHAT they are going to build. Just invest in people and stay out of the way.
> The problem in the west is that the majority of lending goes into asset purchases (buying existing wealth) instead of new production.
I'm not sure I agree with this. A lot of lending is for mortgages, and a lot of those go into new construction, not purchases of existing buildings. In my area, there is a ton of vacant office space that has been built over the past decade or so because of the availability of cheap loans for new construction. The problem is that it was new construction that was not needed--hence the buildings are still sitting vacant years after completion.
In other words, I think the problem is not that lending is being done for asset purchases instead of new production, but that lending is being done for the wrong new production--producing things that nobody wants instead of things people do want. That misallocates resources and creates shortages of things that are actually wanted. Imagine if all the resources that went into building those vacant office buildings had gone into making PPE for disease protection instead.
The best thing you can do is give smart people a lot of money and get the fuck out of the way. There are three ways to do this; Bank lending, government spending, and private equity.
The problem in the west is that the majority of lending goes into asset purchases (buying existing wealth) instead of new production. One reason is that very few large banks make most of the loans. Government spending on high technology and research has also been declining over 30 years.
The reason people build today in Silicon Valley is private equity is funding projects (giving smart people money and getting out of the way). The problem with Silicon Valley is that private equity is a drop in the bucket compared to the capacity of bank lending or even government spending. In fact most of the tech, including the fact that Silicon Valley exists in the first place, was because of federal government spending. (fyi Google started as a government grant, google maps, waymo)
Lets look at the USA. There are 15k Banks in the US but the majority of lending happens in the top 3. The US can just instruct it's thousands of local banks to lend for projects instead of real-estate/asset purchases and suddenly you will have a lot of people with money to build things.
Alan Kay who was at Xerox Parc, which is estimated to have produced trillions in wealth cost only 100 million dollars, says that Parc worked because smart people were given money and management stayed out of the way. That they invested in people.
In fact, the vast majority of high technology was funded this way. Government gave labs lots of money and they created computers, the internet, rockets, GPS, AI, etc etc etc.
So a combination of government spending + bank lending can kickstart building.
Lots of smart people out there can't build because of the lack of funds. Give these people money! Let them build! Don't make them do a dog and pony show in front of VCs about WHAT they are going to build. Just invest in people and stay out of the way.