No, we have not seen the end of industrial innovations. In fact, the pace of technology development continues to accelerate, and the world depends on innovations to drive economic growth. New technologies continue to appear, promising to improve human health, accelerate business processes, open new avenues for renewable energy generation, or accomplish any number of other worthwhile missions.

Without risk capital many of the innovations of the past 40 years would have had a negligible impact on the economy. Throughout this book we have seen the crucial role that venture capital has played, particularly in the US, in funding innovative young companies that create new markets and new industries with their technology.

But the story is not wholly positive. For two decades, between 1980 and 2000, venture capital availability increased at a remarkable rate, giving venture capital firms (VCs) the means to finance all those startups. Then, with the bursting of the Internet and telecommunications investment bubbles, the environment changed. The capital available for investment by VCs declined from its peak of $104 billion in that year, as shown in Figure 2.1 (p. 44), to only $28 billion in 2008.

To make matters worse, during the same period there has been a marked reduction in the average financial returns of venture capital funds.