Innovation is key to economic growth and the improvement of human welfare. In his new book, How Innovation Works, Matt Ridley examines how new technologies, products and medical advances come about. He notes that innovation is more than mere invention – the aim is not simply to create an interesting new device, for example, but to produce something that is genuinely useful and widely available. The book examines not simply the principles of innovation, but tells a series of stories about innovation that illustrate these points – from steam engines to search engines, from vaccines to vaping.
Far from the product of individual genius, Ridley argues that innovation is an incremental process, one that is bottom-up and based on trial-and-error experimentation. It is based on ‘perspiration not inspiration’, to quote Thomas Edison.
When new inventions come along, they are very often the subject of multiple claims to have got their first. When are conditions ‘ripe’ for a new innovation? How do we explain the paradox that invention is both unpredictable – we rarely ‘see it coming’ – and yet in retrospect often seems inevitable, given the development of science, technology and productive capacity?
Ridley, in a lecture in 2018, argued that ‘innovation is the most important unsolved problem in all of human society. We rely on it, yet we do not fully understand it, we cannot predict it and we cannot direct it.’ He rejects both the idea that there is a finite amount of innovation possible but also that innovation is ‘speeding up’. Rather, it shifts from one area to another. Where transport leaped forward in the early to mid twentieth century, it has remained little changed in 50 years. Telecommunications, which changed very gradually for most of that century, has been transformed in a mere 30 years or so.
What drives innovation? Is he right to conclude that we cannot speed up innovation through central direction? What are the barriers to greater innovation now and in the future?
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author, How Innovation Works and The Rational Optimist. Visit his website here.
How Innovation Works, by Matt Ridley
Hayek Lecture 2018: How Many Light Bulbs Does It Take To Change The World?, Institute of Economic Affairs via YouTube