The Battle for Innovation

How long does innovation take? Depends. Facebook started in 2004. By 2011 it was a multibillion dollar company. Apple ($AAPL) was built in a garage in 1980. It went through many peaks and valleys, but didn’t really hit its stride until the iPod in 2000. Back then you could still buy Apple stock for under $40. Microsoft ($MSFT) was king (and was started at roughly the same time). Innovation can take time, or it can spread like a wildfire and take an instant.

Along time ago in a land faraway, I was a business student at the University of Illinois, I lived with a bunch of engineering majors. Engineering majors aren’t a social bunch. There is a lot of math and a lot of routine in their lives! But sometimes when you talked about the future you learned a lot of the things that people were working on.

Talk to a biomedical engineering student and you would hear about lab experiments on cancer. Talk to a computer engineering student, and you’d hear about PLATO, artificial intelligence and faster processing.

My roommates were Mechanical and Industrial guys. But one idea they talked about was in the material science lab. They ran into some people that were working with ceramic to make electrical wire. The ceramic would replace copper. Theoretically it was lighter, and more conductive. This would make a speedier path for electricity, and you would also use less energy getting energy from place to place.

That day has finally arrived 30 years later.

For the first time, researchers have made carbon-nanotube electrical cables that can carry as much current as copper wires. These nanotube cables could help carry more renewable power farther in the electrical grid, provide lightweight wiring for more-fuel-efficient vehicles and planes, and make connections in low-power computer chips. Researchers at Rice University have now demonstrated carbon-nanotube cables in a practical system and are designing a manufacturing line for commercial production.

Making lightweight, efficient carbon nanotube wiring as conductive as copper has been a goal of nanotechnologists since the 1980s. Individual carbon nanotubes—hollow nanoscale tubes of pure carbon—are mechanically strong and an order of magnitude more conductive than copper. But unless carbon nanotubes are put together just so, larger structures made from them don’t have the superlative properties of the individual tubes.

If they can mass produce this stuff, it’s huge, and will change the world. Entire electric grids will eventually to be redesigned and retrofitted. Electrical components will change. Solar power will be more efficient.

I was thinking the other day about energy usage. When I was growing up, we had television. You walked in a room, you turned your TV on and it worked. It used energy of course. But when you were done watching you turned your TV off and you walked away. No energy was being used.

Today, we have satellites and cable boxes with hard drives that use energy even when we are gone. Appliances are the same way. These kinds of things raise our standard of living. But they use a lot more energy than our old lifestyle of 30 years ago.

Changing the way energy is delivered, and the way all these appliances are wired will change how much electricity we have to generate to power our way of life.

“The goal is to make an engineered product,” says Rice’s Barrera. “We believe what we’ve been able to do is scalable to continuous production methods.” The group has mapped out how this would be done on a manufacturing line and is currently exploring commercialization with various companies, though they have not disclosed any deals.

Though the cables are now good enough to begin thinking seriously about commercial applications, Ajayan wants to make them even better. Ajayan notes that, so far, they’ve only tested the double-walled cables’ ability to carry alternating current. Electricity is transmitted over long distances in the form of alternating current. A separate goal, Ajayan says, is to make the cables even more conductive than copper. One way to do this is to make workable cables from single-walled carbon nanotubes, which are inherently more conductive, but have been difficult to spin into fibers.

Another thing to bear in mind. The first generation of something isn’t the best generation of something. They will continually innovate to make it better. Once perfected and an industry standard, every item that incorporates copper wire to move electricity will be re-engineered to take advantage of the new technology.

All this creates jobs. But you have to be educated enough to engage in the innovation.

Sometimes you get benefits where you least expect it. No doubt, we need to change the supply curve for energy by exploration, building new nuclear, using coal and all the rest. But, we also can change the quantities demanded by using innovation to change the products we presently use.

There is hope and change. But it doesn’t emanate from Washington DC, ever, no matter which party is in charge. Change comes from empowering entrepreneurs. Hope everyone understands that.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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