Some innovation is speeding up, but some is slowing down

Tuesday, May 19th, 2020

The Covid-19 pandemic reveals that far from living in an age of incessant technological change, we have been neglecting innovation, Matt Ridley says, in exactly the areas where we most need it:

Faced with a 17th-century plague, we are left to fall back mainly on the 17th-century response of quarantine and closing the theaters.

It is commonplace today to say that innovation is speeding up, but like much conventional wisdom, it is wrong. Some innovation is speeding up, certainly, but some is slowing down. Take speed itself. In my lifetime of more than sixty years, I have seen little or no improvement in the average speed of travel. Congestion on the roads and at airports has in many cases increased the scheduled travel time between two points. A modern airliner, with its high-bypass engines and less-swept wings, is designed to save fuel by going more slowly than a Boeing 707 did in the 1960s. The record for the fastest manned plane, 4,520 miles an hour, was set by the X-15 rocket plane in 1967 and remains unbroken. Boeing 747s are still flying half a century after they were launched. Concorde, the only supersonic passenger plane, is history.

Moreover, recent decades have seen innovation stalled or rejected in a number of technologies. Nuclear power has been unable to roll out plans for new reactor designs. Genetic modification of crops was effectively rejected by Europe. The flow of new pharmaceutical drugs has slowed to a trickle. Ride-sharing apps have been banned in many cities. As the investor Peter Thiel has pointed out, innovation is now largely a digital phenomenon, because bits are lightly regulated and atoms heavily regulated. On all sides we hear arguments that innovation threatens jobs, the environment, privacy and democracy.

Of immediate relevance to the current emergency, the development of vaccines has languished in the 21st century as an orphan technology, insufficiently encouraged by governments and ignored by the private sector. New vaccines are rarely profitable. By the time a company develops one for a new epidemic, the worst may be over. Last year Wayne Koff, president of the Human Vaccines Project, warned that the world was poorly prepared for a pandemic because vaccine development “is an expensive, slow and laborious process, costing billions of dollars, taking decades, with less than a 10% rate of success.”

It is not just vaccines. Throughout the economy, with the exception of the digital industry, the West is experiencing an innovation famine. The Austrian economist Joseph Schumpeter’s “perennial gale of creative destruction” has been replaced by the gentle breezes of rent-seeking. Two recent books argue that big companies in cozy cahoots with big government increasingly shy away from change, sheltered against competition by regulation and intellectual property rights. In “The Captured Economy” (2017), Brink Lindsey and Steven M. Teles make the case that to the extent that incomes have been stagnating and opportunities for social mobility drying up, the cause is not too much innovation but too little. In “The Innovation Illusion” (2016), Fredrik Erixon and Bjorn Weigel argue that Western economies have “developed a near obsession with precautions that simply cannot be married to a culture of experimentation.”

Innovation relies upon freedom to experiment and try new things, which requires sensible regulation that is permissive, encouraging and quick to give decisions. By far the surest way to rediscover rapid economic growth when the pandemic is over will be to study the regulatory delays and hurdles that have now been hastily swept aside to help innovators in medical devices and therapies, and to see whether such reforms could be applied to other parts of the economy too.


Surprisingly, there is no good evidence that patents are helpful, let alone necessary, in encouraging innovation. A 2002 study by Josh Lerner, an economist at Harvard Business School, looked at 177 cases of strengthened patent policy in 60 countries over more than a century, finding that “these policy changes did not spur innovation.” James Watt, Samuel Morse, Guglielmo Marconi, the Wright brothers and many others wasted the best years of their lives in court defending their intellectual property, when they might have been busy developing new devices.

The expiration of patents often results in a burst of innovation, as with 3-D printing, where the recent lapse of three key patents has resulted in notable improvements in quality and a drop in price. The historian Anton Howes, of the Royal Society of Arts in London, points out that the French government bought out Louis Daguerre’s patent for photography in 1839 and made the technology freely available, unleashing a burst of creative innovation. Dr. Howes argues, “As we look to fight coronavirus and any future pandemics, we should perhaps consider which patents—for antivirals, vaccines, ventilators and other hygienic equipment—might be bought out in order to remove…innovation bottlenecks.”

Execution matters as much as the creative idea:

Charles Townes, who won the Nobel Prize for the physics behind the laser in 1964, was fond of telling the story of a beaver and a rabbit looking up at the Hoover Dam. “No, I didn’t build it myself,” says the beaver. “But it’s based on an idea of mine.”

That’s adapted from Ridley’s new book, How Innovation Works: And Why It Flourishes in Freedom. I have some catching up to do on his previous books, but I’ve been a fan since I read The Red Queen.


  1. Harry Jones says:

    I’ve often wondered what would happen to publishing if copyright didn’t exist. It seems to me there are other business models, especially now that publishing is so cheap.

    But they all involve the author having an agenda behind the work. Example: advertising. The point of a supermarket flyer is to get you to buy groceries. That’s why they mail you those things for free. Example: political propaganda. No, wait. That’s just a domain of advertising.

    When you buy a book, you pay for the privilege of reading something designed mainly to please you. When you buy a magazine… actually, I don’t know why anyone would buy a magazine.

    As for technology, perhaps the real investment and barrier to entry is in the manufacturing infrastructure. A rubber alligator for a kid shows a patent pending warning prominently because it’s way too easy to make a rubber alligator. But the world doesn’t need rubber alligators all that badly. Things that are hard to make need no legal protection.

  2. Harper’s Notes says:

    The USA is a cash cow. China a rising star. That seems to be the political-economy trend. Of course, when a totalitarian government is the rising star different innovations patterns emerge than in open-societies. When totalitarian governments are the rising stars they borrow and steal technology from what has been developed in the open-societies. When they fail, the trend reverses. The cycle repeats every fifty years or so. Perhaps. This may be relevant to the old observation that wars are associated with large bursts in innovation. Rocketry and jets developed by Germany leading up to and during WWII may be an example of this.

    (Edit: Boston Consulting Group Quadrant Model of course, regarding rising stars and cash cows.)

  3. MacKinnon says:

    How can the developer/inventor expect to recoup his investment of time and resources if he can’t claim a patent? The article states that the Wright bros, etc, wasted so much time in court. That tells me that they pursued their inventions in the first place at least partially with the motivation of securing a patent. And saying they could have spent the time inventing other stuff is ridiculously presumptive.

  4. Steve Johnson says:

    James Watt, Samuel Morse, Guglielmo Marconi, the Wright brothers and many others wasted the best years of their lives in court defending their intellectual property, when they might have been busy developing new devices.

    The conclusion there is totally backwards. That they spent time in court implies that the existent IP law was strong enough that they had hopes of getting paid off for their time in court and that spending time doing that was more productive than sinking time into producing inventions with an uncertain payoff. If you strip that protection you simply make all inventions have a certain payoff of zero (above and beyond the payoff of manufacturing whatever it was in a perfectly competitive market).

  5. Kirk says:

    Harper’s Notes,

    You might want to re-examine your premises, there. The US raped the UK and many other European countries for IP during its rise to economic power. Trying to enforce your European patent here in the US was difficult, and even things like copyright were blown off. Case in point, Charles Dickens, whose nightmares trying to enforce his rights to his own works here in the US were legendary.

    I don’t think it’s got a damn thing to do with totalitarianism-vs-open market economies. It’s got a hell of a lot more to do with things like “Is there even any money for us to get at…?”, which is why Microsoft pretty much leaves Third-World copyright issues the hell alone, and sells at wildly reduced rates in those countries when it does.

    I think a better model would be “rule of law” economies vs. “lawless nations with no real property rights”. The US was one such, for a lot of foreigners, not all that long ago.

  6. Dave says:

    And some innovation has regressed, like the social technologies that allowed safe, affordable, family-friendly housing to exist in proximity to good jobs.

    Imagine a color-coded map of the world where green means “safe to walk through at any time”, yellow means “OK in daylight, dodgy at night”, and red means “don’t go there ever”. There’s a lot more red and a lot less green today than there was in 1950.

    This decline has been severe for all races. A black person is much more likely to be murdered today than at any time in the early 20th century, the heyday of the KKK.

  7. Harry Jones says:

    The way for an inventor to recoup his investment is to manufacture and sell his product.

    Reminder: you don’t have a product until you have a cost-efficient production process. Don’t waste time trying to patent a lab experiment when you should be making and selling a product.

    If you’ve got something worth the bother to patent then you’ve already got a trade secret firmly in hand. Make the most of it so long as you can keep it secret. If you even attempt to patent it, you instantly lose the secret for an uncertain future gain.

  8. David Foster says:

    If there was no patent protection, then the only people/entities who could profit from a new invention would be those who had substantial manufacturing & marketing capabilities, or the funds to develop those rapidly.

    It is fairly common in the Pharmaceuticals industry for new drug development and initial trials to be conducted by a startup, after which, the startup is sold to a large pharma company for final frials and commercial deployment. Getting a new drug through final approval can cost $100 million or more, not to mention the costs of ramping up production and marketing.

    Eliminate IP protection and you have eliminated most startups in the pharma industry.

  9. Sam J. says:

    Harry Jones says,”I’ve often wondered what would happen to publishing if copyright didn’t exist.”

    We already know the answer to this. Look at music companies and file sharing. There’s your answer. Profits will fall and the product must be put out cheaper to compensate.

    Kirk says,”You might want to re-examine your premises, there. The US raped the UK and many other European countries for IP during its rise to economic power…”

    Kirk’s wisdom is, as best I can tell, that if someone does something wrong then it’s ok to do wrong things also.

    I don’t buy this because it wasn’t Chinese IP we stole it was the British and Europe so the Chinese have no call on our IP. It would seem that we having done this with great success we would be super diligent to not have the same happen to us. Make me King for a day and I would put so many encumbrances on Chinese goods they wouldn’t be able to even sell paper party hats here. In fact I would have never let the situation get as bad as it has become in the first place via China or Japan. I don’t care about the cost, short term, the long term it would be in our interest. If they wanted make changes then I would change also but…them first.

  10. Sam J. says:

    David Foster is correct 100%.

  11. Harry Jones says:

    Sam, you’ve got it backwards. The product became cheaper to put out as a direct result of the file sharing. If the music industries weren’t making a profit, it’s because they failed to embrace the new reality promptly. The fact that they lower costs after the fact shows that they could have had lower costs all along.

    Competition kills waste.

  12. Sam J. says:

    Harry Jones says,”…Sam, you’ve got it backwards…Competition kills waste…”

    Well aren’t you just an overflowing fountain of bullshit. Are you trying to compete with Kirk for what I call “pronouncements!!” where you just say whatever nonsense comes into you head with no empirical facts at all? Many times these are laced in certain quarters with a big whollop of Jewish disinformation and mind fog to agitate the goyim of a more mushy mindset.

    Competition kills profits.

    It took me all of 30 seconds to find this and it isn’t really needed because it’s so obvious that only the the obtuse would try to convince people differently.

    “…In 2000, computer owners’ mean CD expenditure decreased $4.77, a statistically significant 10% decrease.
    Non-computer owners’ mean CD expenditure increased $3.30 (20 %) in 1999.
    In 2002 and 2003, years in which Napster-like services continued to grow in popularity, computer owners’ mean CD expenditures decreased by $4.79 and $5.55 (11% and 14%), respectively.
    Computer owners’ income was $934 higher in 2003 than in 1998 (the year prior to the Napster launch), suggesting income changes may not explain the decline in these consumers’ CD purchases…”

    The effect of file sharing, lower cost to produce and most important much easier production of even the most Byzantine audio from digital instruments and effects means a much wider range of music, more availability but a decline in quality for most of it.

    I heartily approve as any profit loss in the Hollywood music industry makes me gleeful with joy. Partially excluding the actual musicians themselves. I have mixed feeling about this as some are such narcissistic pricks they deserve the be destroyed and disheartened in any way possible.

  13. Huey Pierce Long, Jr. says:

    “And some innovation has regressed, like the social technologies that allowed safe, affordable, family-friendly housing to exist in proximity to good jobs.”

    It’s true that the accountant ends up working for the golfer, but that doesn’t mean that the golfer doesn’t know the system better than the accountant — of course he does.

    You must understand the underpunnings of the double-entry accounting system. It is very simple:

    There are three Little Numbers: Assets, Liabilities, and Owners’ Equity.

    Assets include real estate, credits, equipment, stocks, bonds, etc.

    Liabilities include rents, debts, accounts payable, wages payable, etc.

    Owners’ Equity is the latter subtracted from the former.

    These three Little Numbers are boiled down to one Big Number:

    ROI, the annual value thrown off by an asset, as a fraction of its sale price.

    Understand this and you are equipped with the precursors to knowledge.

    The knowledge is this: when the libertarians and the conservative establishmentarians talk about their divine moral duty to “maximize shareholder value”, what they are saying is that they are running a maximin utility function on all of society.

    It is immensely profitable that there are no “safe, affordable, family-friendly houses in proximity to high-paying jobs”.

    Firstly, high-paying jobs are a liability, usually the greatest liability that a corporate entity is obliged to sustain as a condition of its existence.

    Secondly, high-paying jobs are a liability because if people are permitted to save enough resources, they exit the labor pool. The logical consequence of a nation of “independently wealthy” persons is an economy of shareholders unable to hire anyone to do anything.

    For the same reason, there can never be any affordable housing. It’s called a “FIRE” economy for a reason. The banks hold all the houses and the workers hold all the mortgages. Coincidence?

    A helpful rule of thumb is to ask the very simple question, “How is this making a small number of people filthy fucking rich?”

    Usually to ask the question is to answer it.

  14. Huey Pierce Long, Jr. says:

    H, competition kills profit.

  15. Sam J. says:

    Something occurred to me.

    “… The product became cheaper to put out as a direct result of the file sharing…”

    It happened to occur to me that music has now become like air. Like how hard is it to sell air? I mean mostly you just breath it in. Yes it true you may want a little special air every now and then. Say clean mountain air which people travel for or equipment to clear air, (which sorta doesn’t count because it’s not the actual air). So saying that the music industry is foolish for not making profits on music is liking blaming people for not being profitable “air” merchants. It’s stupid. It’s very stupid to do this.

  16. Harry Jones says:

    SCUBA divers and astronauts likely have a very different view of air than you or I.

    Is music a commodity? I suppose mediocre music is. They’ve been using computers to compose europop music for a while now. We’ll have to define creativity up.

    Buy Bach. They’re not writing any more of that stuff.

  17. Sam J. says:

    “…SCUBA divers and astronauts likely have a very different view of air than you or I…”

    Your mother must have given you kisses when you made mud pies and declared them ginger cookies and most everything you say is some garblism created to discombobulate any thread of thought. I wonder what type of people would do such a thing?

    It’s so tiresome, cliche and pedestrian.

  18. Harry Jones says:

    Haters gonna hate.

  19. Sam J. says:

    “…Haters gonna hate…”

    And discombobulators who try to distort, confuse and derail any sort of logic or conversation will discombobulate. And then of course they will decry how mean everyone is to their little innocent selves. That of course is disingenuous also.

    Every thing you said was silly and nonsensical. You asked what would happen with no copyright and conveniently overlooked that such exist right now. When I informed you you then blamed people who could not make a profit when their product was free. Then when compared to air you equated it to something completely different a product in a multi atmosphere pressurized engineered container.

    All I’ve done is made it perfectly clear that your silliness is silly and to show where it is. Is that hate? I would much less direct if you would try not to keep trying to covering up errors with lies and obfuscation over and over. It makes you appear to be dishonest. I hate people who are consistently dishonest so I guess it is honest to call me a hater. You can’t seem to help yourself. I see this frequently in people who are Jewish. It’s glaring and annoying. No wonder Jews have been thrown out of every single country they’ve ever been too in thousands of years. They either refuse to learn anything or they have some sort of nervous genetic twitch that doesn’t allow them to be honest and straight forward.

    “Any people who have been persecuted for two thousand years must be doing something wrong”

    Henry Kissinger

  20. Huey Pierce Long, Jr. says:

    “Your mother must have given you kisses when you made mud pies and declared them ginger cookies and most everything you say is some garblism created to discombobulate any thread of thought. I wonder what type of people would do such a thing?”

  21. Sam J. says:

    I can do that too and better.

    “History of the Jews in one Gif”

    The Jews try to control, dominate, cheat and destroy any place they go and have done so for thousands of years. They have also been eventually thrown out the same places for the same reasons. Of course it’s always someone else’s fault.

  22. Sam J. says:

    Harry Jones,”Lest my point be unclear: not everyone is capable of being shamed. Not everyone, given a face-saving out, will take it. The very worst people are beyond shame because they simply don’t know or care what others think of them.”

    I couldn’t have said it better.

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