Guideposts: Israel's Effective Innovation Drives Defense Dome

You are receiving this email because you signed up to receive our free e-letter Gilder's Guideposts, or you purchased a product or service from its publisher, Eagle Financial Publications. [Gilder Guideposts] [Technology Report]( [Tech Report PRO]( [Moonshots]( [Private Reserve]( Guideposts: Israel's Effective Innovation Drives Defense Dome by George Gilder and Richard Vigilante 06/05/2024 SPONSORED CONTENT [The NEXT Trillion Dollar Company?]( It just signed a deal to get its tech in Apple's iPhone until 2040! Online commenters are debating if this brand-new company will be the 7th trillion dollar stock. [Details on the controversy here.]( When Israel’s Iron Dome, David’s Sling, and Arrow Three strategic defense systems intercepted hundreds of drones, and some 350 rockets and ballistic missiles from Iran and its allies on April 13, I thought of Ronald Reagan and Peter Drucker. In the mid 1980s, I was invited to the White House by Colin Powell, then Reagan’s National Security Advisor, to counsel the President on how new chip technologies would affect his plans for missile defense. He listened attentively and questioned me trenchantly for close to an hour. I gave him a sample dynamic random access memory chip, a DRAM, from Micron Technology in Boise, Idaho, the first chip he had ever seen. At the time, Reagan’s many critics said his “Strategic Defense Initiative” (SDI) would be rendered futile by the need for complex centralized software controls that would inevitably be flawed by bugs and glitches in the code. I contended that microchips would enable a distributed system of missile defense with nearly all the control circuitry to be held in the anti-missile projectiles themselves. I said that missile defense based on microchips was a new paradigm that would change the global strategic calculus. I probably cited Peter Drucker, whose insights had helped shape my supply side views. “New technological paradigms cannot prevail unless they are at least 10 times superior to the incumbent system,” Drucker said. I termed this principle "Drucker’s Law" after the great titan of business theory and critic of established economics, who passed away in 2005, while his philosophies of business were becoming ever more dominant in our new epoch. Famous for his focus on effectiveness rather than efficiency, Drucker explained: “Efficiency is doing things right. Effectiveness is doing the right things.” [Millionaires Will Be Minted OVERNIGHT]( Legendary tech futurist who predicted the rise of Amazon, Netflix, and Apple YEARS in advance now says: “The biggest, most profitable technological advances in the future will ALL stem from this single breakthrough. Millionaires will be minted overnight.” [He’s revealing EVERYTHING here.]( Efficiency goals incrementally improve existing technologies. For example, making ever larger and more powerful giant computers, or ever more capacious aircraft carriers, or ever more cost- effective nuclear warheads. Effectiveness goals would ultimately put supercomputers in your pocket and an “Iron Dome” over Israel. Put in other terms, as I constantly quoted Drucker in my speeches: “Don’t solve problems.” When you solve problems, you feed your failures, starve your strengths, and achieve costly mediocrity. Instead, “pursue opportunities.” When you pursue opportunities, you can so transform your environment that the previous problems become irrelevant. Reagan’s instincts were all in the spirit of Drucker. At the time, I was stressing the difference between qualitative and quantitative arms races. Qualitative arms races focus on new technologies and favor entrepreneurial capitalists who seek effectiveness rather than mere efficiency. Qualitative arms races can be pursued without steadily swelling defense budgets and ever larger armies that impose growing burdens on their societies. Quantitative arms races are zero sum games. They tend to exhaust their societies and climax in war. Reagan’s critics all feared technological competition and wanted to restrict it with nuclear test ban treaties and limits on advanced missiles. Popular in the universities were proposals for a mutual agreement to forgo missile defense altogether and depend on mutual assured destruction (MAD). The counsel of Reagan’s critics would have made Israel impossible. Surrounded by Arab states with hugely greater total populations, Israel could prevail only through qualitative superiority. It would lose any quantitative arms race. Israel survives only because of the genius of its people and its world-leading qualitative assets in science and technology. [Don't let the market burn you out]( You can either maintain full throttle, navigating the turbulence, or opt for a smoother ride with greater control. Traditional sources of trading insights often rely on lagging indicators and historical data, leaving you a step behind, struggling to keep pace and risking burnout. Imagine having access to a [revolutionary dual-patented tool]( that leverages past data to forecast future stock movements effortlessly. Our Pro Trader is ready to unveil 4 real-time A.I. scanned stock trends in this complimentary [LIVE A.I. TRAINING CLASS.]( In my new book in preparation, “Life After NVIDIA” perhaps, and in my newsletters, I describe a new paradigm that threatens the entire established empire of computer, database, silicon chip and information technology. It is a breakthrough in the field of the material sciences with a likely impact in the 21st century comparable to the Industrial Revolution in the 19th century or the rise of aluminum and silicon in the 20th century: the discovery of a two-dimensional sheet of carbon called graphene. The science behind this breakthrough already has garnered five Nobel Prizes and has generated some 40 related peer-reviewed papers a day during the 17 years since it was first widely recognized. Two-hundred times stronger than steel, as flexible as rubber, a thousand times more conductive than copper, and the best transmitter of heat ever discovered, graphene resembles diamonds that can be manufactured from garbage or plastic waste. The thousands of companies pursuing this concept will transform every industry from electronics and health care to the power grid and space travel (NASA has declared that it is needed in “every part of the space program”). Major graphene breakthroughs have come from a laboratory at Rice University in Houston run by chemistry prodigy, James Tour. But when his students sought to form companies to pursue their transformative ideas, Tour discovered that American venture capitalists, preoccupied with software and AI, were indifferent. “I would have to teach them organic chemistry,” he commented. Of the total of 18 companies emerging from his laboratory—devoted to new memory technologies, new batteries, new methods for DNA sequencing, new cures for Down Syndrome and pancreatic cancer, new ways to repair severed spinal cords, and new forms of nanorobotics —17 finally found funding and manpower in Israel. As the world’s most innovative country, with redemptive public sector spending on defense technology, Israel’s economy has grown an estimated two times faster even than the per-capita income measures showing it surpassing Germany, the United Kingdom, France, and Japan. It was a stunning economic miracle. Amazingly, Israel's economic miracle occurred in the face of a series of invasions, intifadas, missile attacks, and other assaults by its neighbors, from the wars of 1948 and 1967 through the Yom Kippur War in 1973 to the Hamas atrocities and the accompanying Hezbollah missiles of 2023 and 2024. Israel repeatedly made zero-to-one breakthroughs — in Peter Thiel's vivid phrase — such as drones and anti-missiles, which mitigates the effects of the larger populations, the brutality, and the element of surprise of its jihadist assailants. Israel’s achievement is deeply relevant to the defense of the United States, which focuses on elaborating and embellishing existing systems with diminishing returns that potential enemies already understand and can counter. If there should ever occur an all-out missile attack against the United States, Israeli technology will be the reason we will likely survive it. Indeed, Israel’s advances have made such an attack increasingly improbable. Ultimately, laser weapons will replace hitting bullets with bullets. Lasers propagating at the speed of light, rapid-firing multiple “rounds,” each costing not tens of thousands but a few dollars’ worth of electricity will do to missiles (and all military aircraft) what the machine gun did to the cavalry charge. It will be a Drucker’s Law advance. After several decades of agonizingly slow development, over just the past couple of years the United States, the British, the Chinese, and the Russians have all demonstrated truly impressive missile-destroying laser weapons. Once again, however, Israel got there first with its “Iron Beam” for the same reason that it was the first to “hit a bullet with a bullet.” Under constant existential threat, Israel brings new weapons to the field faster than any other country. Israel acts and creates while other defense establishments are still critiquing, still meeting in committees, still putting efficiency and quantity of existing weapons ahead of quality and effectiveness of new inventions. Recognizing and acknowledging the contributions of Israelis to the global economy and to the defense of the West constitutes for all of us an “[Israel Test](” as I put it in the title of my book now being updated and republished after two decades in print. P.S. Keep an eye on your inbox for something I'm excited to share with you: a groundbreaking AI company trading under $1 a share with the potential for a 10X surge! Sincerely, [The Editors] George Gilder, Richard Vigilante, Steve Waite, and John Schroeter Editors, Gilder's Guideposts, Technology Report, Technology Report Pro, Moonshots, and Private Reserve About George Gilder: [George Gilder]George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives. 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