Is Innovation Over?

economist coverThe Economist/Screen capture

Perhaps it is the cover on the Economist that set me off. Anyone who thinks that the toilet is an innovation doesn't really know what the word means; the toilet is a trivial update of an Elizabethan invention that only worked because of a vast investment by government in a water supply for one and of it and a sewer system for the other end. The innovation isn't in the porcelain, it's in the network. So what is the problem?

So it may come as a surprise that some in Silicon Valley think the place is stagnant, and that the rate of innovation has been slackening for decades. Peter Thiel, a founder of PayPal, an internet payment company, and the first outside investor in Facebook, a social network, says that innovation in America is “somewhere between dire straits and dead”. Engineers in all sorts of areas share similar feelings of disappointment. And a small but growing group of economists reckon the economic impact of the innovations of today may pale in comparison with those of the past.

They all sound a bit like the patent office official in 1900 who thought there was nothing more to be discovered.

Mr [economist Robert] Gordon sees it as possible that there were only a few truly fundamental innovations—the ability to use power on a large scale, to keep houses comfortable regardless of outside temperature, to get from any A to any B, to talk to anyone you need to—and that they have mostly been made. There will be more innovation—but it will not change the way the world works in the way electricity, internal-combustion engines, plumbing, petrochemicals and the telephone have.

Really? What about computers?

As Mr Thiel and his colleagues at the Founders Fund, a venture-capital company, put it: “We wanted flying cars, instead we got 140 characters.” A world where all can use Twitter but hardly any can commute by air is less impressive than the futures dreamed of in the past.

Then the Economist points out the upside, particularly in computing technology.

Across the board, innovations fuelled by cheap processing power are taking off. Computers are beginning to understand natural language. People are controlling video games through body movement alone—a technology that may soon find application in much of the business world. Three-dimensional printing is capable of churning out an increasingly complex array of objects, and may soon move on to human tissues and other organic material.

They note that innovation is slower than we think.

Steel boxes and diesel engines have been around since the 1900s, and their use together in containerised shipping goes back to the 1950s. But their great impact as the backbone of global trade did not come for decades after that.

Working as I do in a job that didn't exist a decade ago, with technology where my office is in my pants, watching our cities and businesses change as they adapt to new ways of working and new ways of using technology that its creators never even thought of, it looks like we are just getting started with innovation. On the other hand, the Economist worries that " the main risk to advanced economies may not be that the pace of innovation is too slow, but that institutions have become too rigid to accommodate truly revolutionary changes."

Read more in the Economist.

Is Innovation Over?
The Economists looks at the "growing debate over dwindling innovation."

Related Content on