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Kindle Notes & Highlights
by
Matt Ridley
Read between
August 31 - September 20, 2020
innovation in one technology borrows whole, working parts from other technologies, rather than designing them from scratch. The inventors of the motor car did not have to invent
The inventors of modern computers took the idea of vacuum tubes from the ENIAC and the idea of storable programs from the Mark 1.
most human innovations evolve through a process that looks awfully like natural selection, rather than are created by intelligent design.
In some states, the ‘homestead exemption’ essentially allows an entrepreneur to keep his or her home if their business fails under Chapter 7 bankruptcy rules. Those states with homestead exemptions have shown more innovation than those without.
Kevin Kelly explores this phenomenon in his book What Technology Wants, finding that six different people invented or discovered the thermometer, five the electric telegraph, four decimal fractions, three the hypodermic needle, two natural selection.
Technology is absurdly predictable in retrospect, wholly unpredictable in prospect.
Swedish author Hjalmar Söderberg put it, you have to be an expert in order not to understand certain things.
Stanford University computer scientist and long-time head of the Institute for the Future by the name of Roy Amara. Amara’s Law states that people tend to overestimate the impact of a new technology in the short run, but to underestimate it in the long run.
between the early disappointment and the later underestimate there must be a moment when we get it about right;
We expect too much of an innovation in the first ten years and too little in the first twenty,
Reason to be optimistic about blockchain and crypto
But in the real, messy world of crowded streets, rules and etiquette, bad weather and remote rural tracks, it is a huge jump from these kinds of increasingly smart assistance to the moment you can go to sleep at the wheel secure in the knowledge that your car will go all the way to your destination. Handing over total control of a road vehicle to a computer is a much harder problem than the equivalent in the air, for example. And then there is the need to re-engineer the entire infrastructure around roads to suit automated vehicles, not to mention the insurance market. These things take time.
Any innovation that requires buy n from multiple stakeholders will take time. Unlike internet,which started as a more broadcasting mechanism - anyone could create a website and anyone could access that. For autonomous cars, as wi5 blockchain, the ecosystem of services built around it is going to push back on changes at such drastic level. Like with genomics, where it took multiple decades for the innovation to bear fruit, blockchain is going to come back strongly in the next 5-10 years
David Hume, writing in the eighteenth century, already realized this truth, that China had stalled as a source of novelty because it was unified, while Europe took off because it was divided.
Geoffrey West of the Santa Fe Institute made a remarkable discovery about cities. He found that cities scale according to a predictable mathematical formula called a power law.
London proportionately burns less energy than Bristol, has a bigger collective brain and behaves in a more complicated way. The same is true throughout the economy.
This has a counterintuitive implication: those who say growth is impossible without using more resources are simply wrong. It will always be possible to raise living standards further by lowering the amount of a resource that is used to produce a given output. Growth is therefore indefinitely ‘sustainable’.
The nineteenth-century economist William Stanley Jevons discovered a paradox, since named after him, whereby saving energy only leads to the use of more energy.
Our planet has amply supplied us for our journey. Especially since we’re slimming, swapping, optimizing and evaporating our way to dematerialization.’
Then, in 1928, an economist named Allyn Young raised the issue of Smith’s contradiction, saying that the invention of new tools, new machinery, new materials and new designs involved the division of labour as well. In other words, innovation was itself a product of increased specialization, not a separate thing.
1942 Joseph Schumpeter argued that innovation was the main event, that increasing returns were potentially infinite: ‘It is one of the safest predictions that in the calculable future we shall live in an embarras de richesse of both foodstuffs and raw materials, giving all the rein to expansion of total output that we shall know what to do with.’ This was a distinctly unfashionable view even at the time, and it remains so today, though the intervening years have shown it to be true so far. Keynes, for instance, thought the Great Depression represented the arrival of diminishing returns and the
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In 1990 a young economist named Paul Romer took an interest in the problem of increasing returns and the growth of knowledge. Romer devised an answer that would eventually win him the Nobel Prize. He tried to make innovation as the source of economic growth an ‘endogenous’ factor in models. To put it another way he made innovation into a product, something that is an output as well as an input of economic activity.
His crucial argument was that a characteristic feature of new knowledge is that it is non-rival, meaning that people can share it without using it up; but it is also partially excludable, meaning that whoever gets hold of it first can make money exploiting it, at least for a while. People can either keep new knowledge secret (as Haber and Bosch did with their iron catalysts) or patent it (as Morse did with the telegraph) or just use their ‘tacit’ knowledge to steal a march on their rivals in time (as most software pioneers did), and do so long enough to get a burst of partial-monopoly profits.
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it is not a matter of whether the state has caused some innovation. The question is whether it is better at doing so than other actors, and whether it does so in a directed fashion.
Nobody has claimed that government set out deliberately to create a global internet when it funded the Defense Advanced Research Projects Agency’s computer networking. Indeed, the internet only took off when it eventually escaped the clutches of the Defense Department and was embraced by universities and businesses. In addition, although some of the key technologies of the internet, including packet switching, originated in public institutions, others came from the private sector. The TCP/IP protocol came from Cisco, while glass fibre came from Corning.
This is a stretch now. Pure conjecture on the limited role of the government in furthering innovation. Government directed innovations at the policy level is largely ignored here. I think Ridley focuses all his efforts on innovation in technology and products and basic sciences and not as much in processes, policies, etc.
the chain reaction of nuclear fission built upon a key insight that supposedly occurred to an unemployed refugee waiting at a traffic light on Southampton Row in London on 12 September 1933: Leo Szilard.
invention is the parent of science: techniques and processes are developed that work, but the understanding of them comes later. Steam engines led to the understanding of thermodynamics, not the other way round. Powered flight preceded almost all aerodynamics. Animal and plant breeding preceded genetics. Pigeon fancying laid the groundwork for Darwin’s understanding of natural selection.
example, Vannevar Bush, wartime scientific adviser to the United States government, wrote a book in 1945 called Science: The Endless Frontier, which is supposed to be the bible of the linear model.
1958 an influential book called The Sources of Invention by the economist John Jewkes argued against the idea that science was the source of technology and warned governments against investing in pure science in the hope of stimulating economic growth. Edgerton, writing in 2004, was blunt: ‘My claim is then, that the “linear model” did not exist in even the earliest generations of academic work on innovation.’
In 1969 the physicist Robert Wilson, testifying to the US Senate about funding for a particle accelerator, was asked if it would contribute to national defence. He replied: ‘it has nothing to do directly with defending our country except to help make it worth defending’.
Cool statement!
the Jet Propulsion Laboratory boasts that camera phones, CAT scans, LEDs, athletic shoes, foil blankets, home insulation, wireless headsets and freeze-dried food are all examples of things we would not have without space travel, because at some point in their development somebody in the space programme contributed to their development.
To contribute to human welfare, and therefore catch on without subsidy, an innovation must meet two tests: it must be useful to individuals, and it must save time, energy or money in the accomplishment of some task.
The grand theme of human history, I have argued, is the increasing specialization of production combined with the increasing diversification of consumption.
Innovation has enabled both the narrowing of ‘work’ and the broadening of everything else.
A recent survey found that 82 per cent of Americans think that over the next thirty years robots and computers will ‘probably or definitely do most of the work done by humans’ but that only 37 per cent think they will do ‘the type of work I do’: a big contradiction there.
automation does create extra leisure, and that instead of forcing that leisure upon the unemployed, we share it out fairly equitably.
The chief executive, A. G. Lafley, set out to change P&G’s culture, by obtaining half of all innovations from outside the firm. This ‘open innovation’ strategy had the desired effect, with P&G reviving the rate at which it launched successful new products.
Richard Stallman’s Free Software Foundation in the 1980s began a rebellion against the proprietary software of big firms and bet on the idea that users could contribute to innovation. He developed GNU (standing for Gnu’s Not Unix) to challenge the position of the Unix operating system. In 1991 Linus Torvalds invented the open-source Linux operating system, incorporating features of GNU, which gradually took over much of the computing world, gaining total dominance of the supercomputer market and more recently colonizing the mobile market through Google’s Android devices.
Most do so during their free time and share them freely with others. He gives the example of Nightscout, a technology for monitoring the sugar levels in diabetics via the internet. Nightscout is the brainchild of several parents of diabetic children. A company called Dexcom developed the sensors that record blood sugar levels from skin patches and display them on a pager. In 2013 a supermarket software engineer in Livonia, New York, John Costik, worried about knowing his young son’s glucose level while he was at school, hacked the device so he could see his son’s data on the web, then shared
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Andrew Torrance, argues that under the common law and the US constitution, individuals have fundamental legal rights to engage in free innovation, to use their innovations and to disclose and discuss them, under the right to free speech. This has not stopped politicians throwing obstacles in their way. The Digital Millennium Copyright Act (DCMA) of 1998, intended to clamp down on free copying or ‘piracy’ has caused severe collateral damage
Google’s ‘X’ team, which specializes in crazy ‘moonshot’ innovation schemes, calls this the ‘monkey first’: if your project aims to have a monkey recite Shakespeare while on a pedestal, it’s a mistake to invent the pedestal first and leave till later the hard problem of training the monkey to speak.
innovation failure not because of fraud or fakery but because of diminishing returns.
It is hard not to conclude the hype over hyperloop is because we have come to believe innovation can solve almost any problem.
So innovation cannot solve any problem"?
Lockheed Martin pioneered this idea of a high-risk company within a company, licensed to try crazy things in case some of them led to immense rewards. It opened its secret Advanced Development Programs, better known as the ‘skunk works’ in 1943 and produced some of the first jet fighters and high-altitude spy planes.
Google X, skunkworks, bell labs - examples of innovation centers of excellence
In 2001 Bekker put $32m into Tencent for a 46.5 per cent stake. Seventeen years later that stake was worth $164bn.
Here we see all the characteristic features of opposition to innovation: an appeal to safety; a degree of self-interest among vested interests; and a paranoia among the powerful.
how hansom cab operators in London furiously denounced the introduction of the umbrella; how obstetricians long rejected the use of anaesthesia during childbirth; how musicians’ unions temporarily prevented the playing of recorded music on the radio; how the Horse Association of America for many years fought a rearguard action against the tractor; how the natural-ice harvesting industry frightened people with scares about the safety of refrigerators.
Haters of innovati n come in and bring concerns
Golden Rice was developed by the Swiss-based scientist Ingo Potrykus and colleagues, in a long and laborious endeavour during the 1990s, purely as a humanitarian, non-profit project designed to alleviate the high mortality and morbidity caused by vitamin-A deficiency in people who rely on rice for food.
One way in which the precautionary principle works to prevent innovation is by making experimentation difficult in the period between prototype and practical application.
In 1970 the FCC at last suggested allocating some spectrum to cellular, and in 1973 Marty Cooper, vice-president of Motorola, placed the first cellular call with a mobile handset.
On 28 July 1984, thirty-nine years to the day after Mr Jett had said it ‘won’t be difficult’ to launch cellular telephony, America’s first cellular mobile service went live for the opening ceremony of the Los Angeles Olympics. Who says that the pace of change is breathtaking?
A key concept in the study of innovation is Baumol’s ‘cost disease’. This is the economist William Baumol’s realization that innovation in one sector can cause an increase in the cost of products or services in another sector if the latter experiences less innovation.
