How Innovation Works: And Why It Flourishes in Freedom

by Matt Ridley

Innovations come in many forms, but one thing they all have in common, and which they share with biological innovations created by evolution, is that they are enhanced forms of improbability.

innovation is potentially infinite because even if it runs out of new things to do, it can always find ways to do the same things more quickly or for less energy.

So long as human beings apply energy to the world in careful ways, they can create ever more ingenious and improbable structures.

The more ordered and improbable our world becomes, the richer we become, and, as a consequence, the more disordered the universe becomes overall.

Innovation, then, means finding new ways to apply energy to create improbable things, and see them catch on.

‘innovationism’: the habit of applying new ideas to raising living standards. No other explanation of the great enrichment of recent centuries makes any sense.

The Industrial Revolution therefore was in effect, as Phelps has argued, the emergence of a new kind of economic system that generated endogenous innovation as a product in itself.

One economic historian, Angus Maddison, wrote that ‘technical progress is the most essential characteristic of modern growth and one that is most difficult to quantify or explain’;

Serendipity plays a big part in innovation, which is why liberal economies, with their free-roving experimental opportunities, do so well. They give luck a chance. Innovation happens when people are free to think, experiment and speculate.

the main theme of human history is that we become steadily more specialized in what we produce, and steadily more diversified in what we consume: we move away from precarious self-sufficiency to safer mutual interdependence.

Innovation has made it possible to work for a fraction of a second so as to be able to afford to turn on an electric lamp for an hour,

Roy Amara, who first said that we underestimate the impact of innovation in the long run but overestimate it in the short run.

Unless it is of obvious use to ourselves, we tend to imagine the bad consequences that might occur far more than the good ones.

Before 1700 there were two main kinds of energy used by human beings: heat and work.

These two kinds of energy were separate: wood and coal did no mechanical work; wind, water and oxen did no warming.

They were not the first to notice that steam has the power to move things, of course. Toys built to exploit this principle were used in ancient Greece and Rome,

Here’s to not being the Greeks or Romans

Innovation seems so obvious in retrospect but is impossible to predict at the time.

Watt, brilliant inventor though he undoubtedly was, gets too much credit, and the collaborative efforts of many different people too little.

‘He is distinguished from other public benefactors, by never having made, or pretended to make it his object to benefit the public . . . This unpretending man in reality conferred more benefit on the world than all those who for centuries have made it their especial business to look after the public welfare.’

To the too rarely made point that entrepreneurs help more lives in their employment and investments than they do with their charity and politicking

The truth is that the story of the light bulb, far from illustrating the importance of the heroic inventor, turns out to tell the opposite story: of innovation as a gradual, incremental, collective yet inescapably inevitable process.

Having hubristically claimed to have made a light bulb that would reliably last a long time before failing, he began a frantic search to prove his boast true. This is known today in Silicon Valley as ‘fake it till you make it’.

what he was doing was not invention, so much as innovation: turning ideas into practical, reliable and affordable reality.

A minute of work in 1880 on the average wage could earn you four minutes of light from a kerosene lamp; a minute of work in 1950 could earn you more than seven hours of light from an incandescent bulb; in 2000, 120 hours.

As the economist Don Boudreaux put it: ‘Any legislation forcing Americans to switch from using one type of bulb to another is inevitably the product of a horrid mix of interest-group politics with reckless symbolism designed to placate an electorate that increasingly believes that the sky is falling.’

The story of nuclear power is a cautionary tale of how innovation falters, and even goes backwards, if it cannot evolve.

The transcontinental railroads in the United States were all failures, resulting in bankruptcies, except the one privately funded one. One cannot help thinking that nuclear power developed in less of a hurry, and less as a result of a military spin-off, might have done better.

The problem is simply that nuclear power is a technology ill-suited to the most critical of innovation practices: learning by doing.

We build nuclear power stations like Egyptian pyramids, as one-off projects.

According to one estimate, per unit of power, coal kills nearly 2,000 times as many people as nuclear; bioenergy fifty times; gas forty times; hydro fifteen times; solar five times (people fall off roofs installing panels) and even wind power kills nearly twice as many as nuclear. These numbers include the accidents at Chernobyl and Fukushima.

But Mitchell, like many innovators, was not reasonable, so he kept trying to get the gas to flow.

For the vast majority of history, argues John Constable, the supply of energy, from wheat and wind and water, was just too thin to generate complex structures on a sufficient scale to transform people’s lives.

So, yet again, innovation proves to be gradual and to begin with the unlettered and ordinary people, before the elite takes the credit.

All she did was save hundreds of thousands of lives at modest cost. Secure knowledge of that fact is the very best reward.’

Globally, the death rate from malaria almost halved in the first seventeen years of the current century.

in an echo of the Prohibition era, while the British government encourages vaping but strictly regulates the products, the American government discourages it then does little to ensure its safety.

Failure is only the opportunity to begin again more intelligently. HENRY FORD

Innovation is not an individual phenomenon, but a collective, incremental and messy network phenomenon.

As soon as the peak of the new bicycle-selling season was over in the summer, they returned to Kitty Hawk in 1902 with a third design of glider/kite, made more adjustments, especially to the rudder, and learned the hard way how to pilot a device through the air, crashing frequently till they mastered the art. Bit by bit they had put together everything except the motor.

Now this is the definition of a “pilot”.

Most aviation pioneers, like Langley, were dilettanti gentlemen or scientists, rather than practical craftsmen. A distinguishing feature of the Wright brothers, who lived together with their preacher father, Milton, and their teacher sister, Katharine, was their dedication to hard work.

As John Daniels, the Kitty Hawk resident who took the photograph, put it, they were the ‘workingest boys I ever knew . . . It wasn’t luck that made them fly; it was hard work and common sense.’

but in truth it was a step in a lengthy evolutionary path that began with strange, usually fatal attempts by eccentrics to leap into the air with big flapping wings.

In America, you are now at least 700 times more likely to die in a car, per mile travelled, than in a plane.

The simplest ingredients – which had always been there – can produce the most improbable outcome if combined in ingenious ways.

Francisco Pizarro and his band of conquerors encountered the potato and ate it while decapitating and looting the Inca Empire in the 1530s.

Farmers all over the world were forced to make saltpetre from manure and pay it as a tax, to support the monopoly on violence claimed by their rulers, thus depriving their fields of a source of fertilizer.

One of the motives for the British conquest of Bengal was to gain access to the rich saltpetre deposits at the mouth of the Ganges.

Desperate to get access to guano, the American Congress passed an Act saying that any American who found a guano island in the Pacific could claim it for the United States – which is why so many mid-Pacific atolls belong to America today.

He wanted perfect reliability and lightning speed. He wanted a machine that combined the strength of a sumo wrestler, the speed of a sprinter, and the grace of a ballerina.

About 1 per cent of global energy is used in nitrogen fixation, and that provides about half of all fixed nitrogen atoms in the average human being’s food.

If Haber and Bosch had not achieved their near-impossible innovation, the world would have ploughed every possible acre, felled every forest and drained every wetland, yet would be teetering on the brink of starvation,