Mandel foresees a collapse of innovation and growth when venture capital outlays slow down in a bear market. The effects of VC, however, play out not over months but over decades. The growth of the '90s was largely an effect of the venture innovations of the 1980s. The huge surge of venture investments of the late 1990s and early 2000s with outlays more than doubling in the first three quarters of 2000 compared to 1999 will yield a steady flow of innovations reaching the market over the rest of the decade. These innovations in turn will manifest themselves in new wireless and broadband Internet access, petabits per second of backbone bandwidth, millions of lambdas of new cheap connectivity, exabyte tides of new Web traffic.
Demand is relevant to economic growth only as a symbol of real productive contributions.
George Gilder is a contributing editor at Forbes ASAP and editor of the monthly Gilder Technology Report for which Bret Swanson is an analyst. Fill in this form for your free trial issue. U.S. indexes are real-time. Forbes 40 Index powered by Telemet . News may include latest headlines from Reuters.