There's a difference between trickle-down technology and trickle-down economics, and this article seems to be confusing the two. It's also conflating "industrial" technological developments with "personal" technological developments, as well as the /purchase/ of luxury items versus the /creation/ of luxury items. Oh, and it's also completely omitted the role of government in technological developments.
Overall, if it was a piece of GCSE homework, I'd give it a C-. Anyhow, to justify my marking...
Trickle-down technology: yep, yesterday's high-end/luxury feature is today's mid-tier value-add and tomorrow's low-end commodity, whether it's something like car air-conditioning or a quad-core mobile phone with a HD-resolution screen. Though to counterpoint this, it's worth noting that companies often withhold technology trickle-down to avoid cannibilising the high-end market. This also means that the high-end market has higher profit margins: same equipment, different configuration, higher price. Microsoft and Adobe are key examples of this in the software world; AMD and Intel offer similar examples when it comes to CPU frequency/clock-speed locking.
And whichever way you cut it, TDT is absolutely nothing to do with rich hobbyist tinkers, except for the fact that they're part of the initial "rich" group who can afford to buy thi
ngs before they're commoditised.
The other point is that the industries mentioned in the article (cars, rockets, IT, etc) have pretty much all developed out of government investment - which in turn has been mostly driven by war - WW1, WW2, the cold war, etc. In fact, the technological underpinnings which have allowed Branson and others (e.g. John Carmack) to try and progress space travel can be traced directly back to when the German government took a bunch of amateurs tinkering with rockets and threw lots of money at them; when WW2 ended, the same people ended up working for the USA and USSR governments.
Trickle-down economics. In the simplest form, the idea is that giving tax breaks to the rich will improve the overall economy. However, there's a few flaws in this, the biggest of which is the assumption that the rich will go out and spend the extra money. Given that the rich (pretty much by definition) already have everything money can buy, they're far more likely to invest the money in abstracted, minimal-tax financial schemes - and these schemes are likely to be offshore and hence deliver little or no benefit to the local economy.
Similarly, if the rich do spend more money, it's likely to be on "luxury" brands and services and as highlighted above, a significant percentage of the cost for these items is likely to be for the "brand" rather than the resources needed to produce it. To use Apple as an example (as it's cited in the article), a 64GB iPod Touch currently costs £250 at PC World whereas a 32GB iPod touch is £180. That's an extra £70 for just 32GB of flash memory, which can be currently had elsewhere for £10 - £15 so (to grossly simplify things), Apple is getting £60 of additional profit from the "luxury" model. And that profit's going straight back to Apple at the high end of the economy; the low end of the economy isn't seeing a single penny of it.
Industrial technologies vs "personal" technologies. In brief, a personal technology is one where the technology can be mass-produced, it offers a significant improvement over "muscle power" and the ongoing cost of use is low enough for an individual to fund it. Bicycles, cars, computers, mobile phones: each one in turn offered a quantum leap forward in terms of travelling times, carrying capacity, processing capacity and communication capabilities - and the ongoing costs for each are relatively low, thanks in no small part to the fact that (to a greater or lesser degree) they're built on infrastructure derived (again!) in no small part from government investment.
Industrial developments however, carry too high a cost for most individuals to afford them or are simply impractical for the majority of individual uses, so tend to be used for mass-transit. And guess what: these are (again!!) usually funded or at least partially subsidised by the government - aviation fuel and train infrastructure being two good examples.
In fact, to keep with the aviation example: it costs around £7,000 to get certified on a light plance. Then, there's also the cost of maintaining the plane and buying the fuel, not to mention storage. Even hiring a plane is expensive; the cheapest I found at a glance online was £350 an hour; conversely, a low-end hatchback car can be hired for 3 days for just £40 - or effectively around £0.55 per hour!
It's therefore unsurprising that a lot of pilots get their certification through a stint in the military... which is funded (again!!!) by the government.
It's not unreasonable to expect that even when "commoditised", space-flight will prove to have a similar cost ratio when compared to aviation. Whichever way you cut it, climbing out of a gravity well requires a lot of energy, puts an incredible strain on components during flight and requires a lot more technology (e.g. vacuum seals, etc). And as for the cost of getting certification, there's probably going to be at least one extra zero tacked onto that £7,000!
So, to summarise: Branson's investment is a good thing: he's not wasting his cash on "luxury" items and there's likely to be trickle-down technology. But space-flight will never be a commodity technology, nor will it ever be something that the average individual can personally own, and the trickle-down effect is likely to take years - if not decades - to manifest. And the vast majority of the money which comes out of developing space tourism will be going straight back into the high end of the economy. And it's all only possible thanks to that bogeyman of Republicans and Conservatives: big government. And any further significant developments (e.g. space elevators) will almost certainly have to be backed by big government, in much the same way as the Chunnel and other similar infrastructure projects have been.
To offer a final counterpoint to the article: if you want to boost the economy, then a better approach would be to increase spending power at the bottom end, where it's much more likely to be spent on physical and/or low-margin goods and services which need (relatively speaking) much higher levels of resource to produce - and in far higher volumes, to boot. For instance, if you give a multi-millionaire an extra £250,000, he might go out and buy a single high-end car. Give ten non-millionaires £25,000 apiece, and they'll go out and buy ten mid-level cars. And aside from the ten-fold increase in resources needed to produce those ten cars, where a luxury car is likely to involve significant levels of imported resources (ranging from engines up to the assembly of the entire car), a much higher percentage of the resources for a mid-range car will have been drawn from the local economy - as will the resources needed to maintain those ten cars (e.g. garages, mechanics, etc).
To offer a final counterpoint to the article: if you want to boost the economy, then a better approach would be to increase spending power at the bottom end, where it's much more likely to be spent on physical and/or low-margin goods and services which need (relatively speaking) much higher levels of resource to produce - and in far higher volumes, to boot. For instance, if you give a multi-millionaire an extra £250,000, he might go out and buy a single high-end car. Give ten non-millionaires £25,000 apiece, and they'll go out and buy ten mid-level cars. And aside from the ten-fold increase in resources needed to produce those ten cars, where a luxury car is likely to involve significant levels of imported resources (ranging from engines up to the assembly of the entire car), a much higher percentage of the resources for a mid-range car will have been drawn from the local economy - as will the resources needed to maintain those ten cars (e.g. garages, mechanics, etc).
In fact, there's evidence to suggest that giving people a guaranteed basic income actually has a major benefit to the economy as a whole; not only does it simplify administration and thereby /reduce/ government, but it also has significant social benefits: crime drops, child nutrition and school attendence improves, people save more and produce more startups. In fact, that's pretty much the key premise behind the article - but instead of a small handful of Bransons and a small number of indirect long-term economic benefits, we get major direct ongoing economic benefits, hundreds - if not thousands - of entrepeneurs *and* Branson will still be free to tinker with spaceships - in fact, he may even have more cash to do so, if tax revenues rise to the point where government can cut taxes.
Admittedly, the above is simplified and there's plenty of other factors to take into account. But hey... tis the end of the day.
Biting the hand that feeds IT
