Interested in the conditions that make for successful innovation, Steven Johnson investigated the types of environment that nourish fledgeling good ideas, and presented his analysis in Where Good Ideas Come From. In his conclusions – a little hidden and maybe not receiving the attention it deserves – he suggests an experiment on the history of innovation. Exploring the available data on about 200 of the most important innovations and scientific breakthroughs of the past 600 years, he derives some insightful advice for fostering innovation in the 21st century.
Framing 600 years of good ideas
Johnson’s approach is refreshingly simple. He categorises innovations according to only two criteria, each with just two properties.
- The first criterion is the environment for an innovation’s genesis: Did it spring from a small, closed group (or in an extreme case even an individual)? Or did it originate from collaboration of many people in a collective, distributed effort? Johnson labelled innovations of the former kind “individual” and called the latter kind “networked“.
- The second criterion is the motivation for an innovation: Was there a specific economic interest, for example selling or licensing the result of the innovative endeavour? Or was the underlying purpose more general, seeking to expand human knowledge and sharing new ideas openly? Johnson classified the first as “market” and broadly identified the second as “non-market“.
Through these categories, Johnsons obtains four quadrants. In the first quadrant – individual / market – you’ll find the solo entrepreneurs and those private corporations that prefer to work behind closed doors. The second quadrant – networked / market – comprises the private firms that favour cooperation in the market place. The third quadrant – individual / non-market – is the home of amateur researchers and hobbyists. Finally, the fourth quadrant – networked / non-market – is the realm of open-source communities and academic environments.
With this rough layout in mind, Johnson classified around 200 of the most influential innovations and scientific discoveries of the past six centuries to allocate each of them to one of the four quadrants. In order to gain better insight in the historic changes of innovation patterns, he then reviewed his findings in three temporal slices, each covering two centuries of good ideas.
The early period – 1400 to 1600
The first period begins in the Middle Ages, well before our modern notions of science or business emerged. Nevertheless, our ancestors produced many groundbreaking innovations, including the printing press, double-entry bookkeeping, the heliocentric model, the microscope, and complex numbers.
Johnson observes that the majority of these good ideas cluster in the third quadrant: non-market / individuals. Endulging in innovative endeavours was the privileged pursuit of “solo artists working on their own private obsessions.” Either financially independent or under the patronage of local princes and rulers, the likes of da Vinci, Copernicus, and Galileo helped create an image that we hold dear to the present day: the genius lone inventor, who single-handedly extends the reach of human knowledge.
The middle period – 1600 to 1800
Encompassing the dawn of the Enlightenment, the Scientific Revolution, and the beginning Industrial Revolution, this period is often considered the dawn of modernity. Without a doubt, it was an inventive era that produced an impressive range of good ideas, including the steam engine, the spinning jenny, the laws of motion, the mercury thermometer, the barometer, calculus, and the mechanical calculator.
Looking at the distribution of good ideas across the four quadrants, Johnson notices a dramatic change: a shift from “individual” to “networked” innovation. Breakthroughs depended less and less on the lone genius working behind closed doors; instead, the collaboration in groups became a new driving force for progress. Before 1600, only ten percent of the good ideas fell in the networked category, but during the next two centuries, more than half of the innovations resulted from collaborative efforts.
The main cause for this shift was –in today’s parlance– the tremendous progress in information exchange. Gutenberg’s printing press allowed for the multiplication of information, while the newly established postal services facilitated the distribution of ideas. The density of information networks increased together with growing urban populations. And informal settings such as coffee houses as well as formal institutions like the Royal Society boosted the density, intensity, reach, and speed of information sharing to a whole new level. Ideas could travel further and faster than ever before to launch an explosion of innovation.
The later period – 1800 to today
And that story continued throughout the industrialisation to the present day. We saw the advent of vulcanised rubber, programmable computer, dynamite, airplane, telephone, photography, X-rays, the periodic table, aenesthesia, Penicillin, plate tectonics, quantum mechanics, satellite navigation, and many more. But the distribution of those good ideas across Johnson’s four quadrants shifted further, and somewhat against what we might have anticipated.
Most strikingly, the first quadrant (“individual” and “market-driven”) is the least populated. So our standard assumption that innovation occurs behind closed doors and is clearly driven by economic incentives is flawed; our preconceived idea does not pass Johnson’s reality check. Contrary to that conventional wisdom, but in full continuation of the trend that started in the previous period already, activity in the fourth quadrant exploded since 1800. That’s the domain of networked, non-market innovation, where both, the potential economic return and its distribution amongst contributors are far from guaranteed.
Steven Johnson’s analysis severely questions our “standard model” of innovation incentives and leaves us with a new dilemma: If it’s not the prospect of monetary rewards, what then motivates innovation? In his own words: “Why have so many good ideas flourished in the fourth quadrant, despite the lack of economic incentives? One answer is that economic incentives have a much more complicated relationship to the development and adoption of good ideas than we usually think.“
Into the 21st century
The mainstream image of an economy is still shaped around the concepts of scarcity and efficiency. Scarce resources and products are perceived as more valuable, because they can be sold at higher prices to yield higher profits. And efficiency is the Holy Grail of business operations to avoid the wasteful allocation of resources and to minimise transaction cost. In this image, control has become the primary path to success: control over scarce resources can guarantee a steady stream of revenue, while control over resource allocation within an organisation keeps cost down.
However, this image essentially stems from the Industrial Revolution, it describes a physical, visible, tangible economy with equally physical, visible, tangible resources and products. We have to realise that ideas do not fit that frame. Sitting in the same category as information and knowledge, ideas have fundamentally different characteristics than physical resources: They are non-rival and non-excludable: you can use them for multiple purposes, and share them with multiple users, all at the same time. They are also non-depletable, so you can re-use them at will. Unlike physical resources that loose their value when used or shared, good ideas do the exact opposite: The more you share them and work with them, the more valuable they become.
It is therefore only natural for good ideas to resist our attempts to keep them under control, to constrain their dissemination, to limit their reach. This is all the more important as our economy increasingly relies on non-rival, non-excludable resources to generate value. In the 21st century, exclusive arrangements won’t be successful anymore. On the contrary: If we really want to pursue the transformation to an information and knowledge economy, we’ll have to enhance our information sharing, we’ll have to promote open knowledge networks, we’ll have to develop and mature our good ideas together. Citing Steven Johnson one last time:
If you want to make a major new incursion into the adjacent possible, you need company.
understanding innovation 
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