A bird’s eye view on competition

So far, I have viewed the innovation landscape through the lens of a single society and what happens inside it. But it shouldn’t be a surprise that there is more than one society. Rather than one global society, there are many regional and even local societies instead. With partial overlaps, with some commonalities and many differences. That has significant influence on innovation as well. Therefore, I’ll have an initial glance at competition in the innovation landscape, and I’ll take that very much from a bird’s eye perspective.

I was triggered to think about societies’ competition in innovation when reading Joel Mokyr’s “The Lever of Riches”. As an economic historian, Mokyr focused his research and writing on the effects of innovation (he calls it technological creativity) on the economic progress of societies.  And he frequently refers to Donald S. Cardwell’s book on “Turning Points in Western Technology” as a valuable source of insight and inspiration. Cardwell observed that

No nation has been (technologically) very creative
for more than a historically short period.

This is what Mokyr calls Cardwell’s Law. It might seem a fairly abstract concept at first. But if you replace “nation” with “society“, and “technological creativity” with “innovation“, you get a better idea: the spot in the limelight, the position as “most innovative society” is held only temporarily. Mokyr himself delivers numerous examples from different historic periods and different region around the globe. And Matt Ridley  in “The Rational Optimist” provides an overview of the shift of “the hottest hot-spot of innovation“ in the course of time:

  • 50,000 years ago –– West Asia –– ovens, bows-and-arrows
  • 10,000 years ago –– Fertile Crescent –– farming, pottery
  •   5,000 years ago –– Mesopotamia –– metal, cities
  •   2,000 years ago –– India –– textiles, zero
  •   1,000 years ago –– China –– porcelain, printing
  •      500 years ago –– Italy –– double-entry book-keeping
  •      400 years ago –– Low Countries –– Amsterdam Exchange Bank
  •      300 years ago –– France –– Canal du Midi
  •      200 years ago –– England –– steam
  •      100 years ago –– Germany –– fertilizer
  •        75 years ago –– America –– mass production
  •        50 years ago –– California –– credit card
  •        25 years ago –– Japan –– walkman

Now, this list may not be entirely balanced or comprehensive, but the overall idea stands out very clearly: over longer periods of time, the innovation edge of a society seems to diminish, the society seems to fall behind. The question then is: how could we explain these observations? I would suggest taking two different ideas into consideration.

First, could it be that the former top-dog is simply outperformed by an even more innovative society? That would imply that the former leader would essentially maintain its own innovation capacity, while another society expands its innovation skills to take the lead. Could that be the case? If it was, then every single society would tend to become more innovative over time. Humanity as a whole would experience innovation as a race with leaders changing from time to time (that’s what Cardwell’s Law observes). But more importantly, that race would never slow down and always accelerate. Now, I don’t see evidence to support this idea. And I don’t think it is plausible either, as I do not believe in the myth of unlimited innovation capacity.

As an alternative, could it be that the society hits “peak innovation”? For the former leader, this would imply a reduction in innovation capacity after a previously outstanding performance. Of course that would make it comparatively easy for another society to take the lead in innovation. So this idea would fit with Cardwell’s Law. And it would not imply any automatism for mankind to inevitably become ever more innovative. But what could explain such a reduction in innovation capacity within one society?

Let’s remember that innovation consists of more than a brilliant idea; very importantly it comprises the implementation of that idea as well. And that implementation often entails change that is not embraced by everybody affected by it. As a result, innovation is not welcomed by a society as a whole. That is one essential characteristic of creative destruction. And it is highly likely that in the time after a significant innovation of wide-ranging impact society’s appetite for further innovation is saturated: the natural resistance to change regains the upper hand; innovation is not seen as the valuable driving force for progress and economic prosperity; innovation is rather considered as unsettling and uprooting. The negative connotations of innovation dominate public debate; as a result constraints are tightened, controls are reinforced. Stability is held in higher regard than progress. That conclusion is in line with an earlier post in which I have described society’s ability to cope with innovation as caught between a rock and a hard place: on one hand, incremental innovations are easily implemented, but they induce increasing rigidity and make society less resilient to future challenges. On the other hand, radical innovations that could effectively increase resilience are nearly impossible to implement, because they are considered to be too drastic.

To be precise, Cardwell’s Law describes the symptoms of societies’ competition in innovation. And it describes them well. But it does not give any hint as to why societies would be engaged in such competition. What is their motivation or benefit? That question deserves some attention, hence I’ll tackle in an upcoming post.

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