The Science of Innovation
Matt Ridley, author of "How Innovation Works", explains how innovators improve our lives and why governments should stay out of their way. Interview by Nick Cater.
Nick Cater: Matt, I was in one of those endless round table meetings recently, and somebody got up and said, "Look, the government has to invest more in the innovation sector." Now I can see two things wrong with that sentence. What about you?
Matt Ridley: Well, government's really bad at innovation. Not only does it fail to innovate within government itself when you think about the institutions of government, they've changed very little over the years, but also when it does set out to stimulate innovation, it quite often picks losers rather than winners, because it tends to fund whoever has its ear, rather than paying attention to what is going to work or what the market wants.
There's a very nice parable of this dating way back to 1903, when the government heavily funded a first airplane. It was by a guy called Samuel Langley. He got a huge grant from the US government. He did the whole thing in secret. He built it, it was a very large machine. He launched it, it flew 20 feet and flopped into the water. Ten days later, two bicycle mechanics from Ohio, who'd done it entirely on their own, but learning from every experiment that had ever been done with gliders and other devices around the world, gradually and incrementally had put together something that did work.
So that was a nice parable of what happens when government tries to do innovation and the private sector beats it at it. Now, of course, given that government pours money into science and technology, it would be surprising if it didn't sometimes come up with innovations that we can use, like GPS, and SATNAV, and things like that came out of government programs. But does it get good value for money by supporting innovation? On the whole, government doesn't, no.
Government … quite often picks losers rather than winners, because it tends to fund whoever has its ear, rather than paying attention to what is going to work or what the market wants.
Nick Cater: The other thing that was wrong with that sentiment for me is that to talk of an innovation “sector “sounds rather strange. It seems to me that every smart business is innovating all the time.
Matt Ridley: That's right. And I think what government often means by the innovation sector tends to end up meaning universities. In other words, there is this general view that innovation starts in academic institutions, spills out into the commercial world gradually, and that it's all about spinoff from academic research.
Actually, while that does happen, it's surprisingly rare. It's just as often, if not more often true that what happens is industry tinkers and changes the way it does things, whether it's using less material in a drinks can, or tweaking with a video game, or something like that. These kind of innovations are happening all the time in there, in the commercial world. And often, academics get involved to explain what's going on.
So, the people who designed the steam engine eventually had to come up with the science of thermodynamics to find out what they'd done. It's something similar in the dye industry and the chemical industry, the people who developed vaccines had no idea about the immune system for hundreds of years before it was understood. So the idea that you have to start with academic research is also a big mistake that government often makes.
Nick Cater: In your new book ‘How Innovation Works” you go through a fascinating long list of innovations. But in the vast majority of cases the innovator was not necessarily a scientist. And more than that, it's very hard to pick one innovator for each innovation, isn't it?
Matt Ridley: Well, one of the points I'm trying to make in this book is that it's much more of a team sport than we generally recognise. We give a Nobel Prize or a patent to one individual. And we tell stories about him having a sudden insight one day and jumping out of his bath and running down the street shouting, "Eureka!" Or whatever it might be. And it very, very rarely happens that way.
We should tell people that anyone can be an innovator, that what you have to do is share your ideas with other people, learn from your mistakes, change direction if you have to, change your mind about what you're inventing if necessary, do a lot of trial and error.
It's much more collective enterprise, much more people sharing ideas, much more about people standing on the shoulders of their predecessors, and indeed contributing things that came afterwards. So the way we tell stories about innovation tends to give the impression that you need one or two geniuses who have particular capabilities that the rest of us don't have, something called creativity that that other people don't have.
And I think that's a pity. I think we should tell people that anyone can be an innovator, that what you have to do is share your ideas with other people, learn from your mistakes, change direction if you have to, change your mind about what you're inventing if necessary, do a lot of trial and error. That's what really works in producing innovations. That's been the story of most innovations over time.
Nick Cater: The other thing I took from your book was how much better a free market system is for innovation. And this goes back for me to something you covered in your previous book, ‘The Evolution Of Almost Everything’, that in a free market things happen in an evolutionary manner, whereas a centrally planned economy is an exercise in playing God.
Matt Ridley: Well, in the end, what socialists and other central planners are trying to be is creationist. They're saying, "Look, if there's one person in charge, the world will be an ordered and well-organised place and we will get the results." So let's put one person in charge of making sure everybody in London has enough lunch tomorrow. This is an example taken from Frederick Bastiat who talked about how to feed a city like Paris.
There are 10 million people in London every day, not at the moment, maybe, but in normal conditions, there are 10 million people eating lunch every day. How on earth do we make sure there's enough food in the right place and at the right time? And the answer is, that if there was a London lunch commissioner, it would be catastrophic.
He would make the wrong decisions. He would not have enough information. He would not know what people wanted. Whereas the market system evolves a solution to this problem by continually doing trial and error. By some cafe ordering a little more avocado and a little less smoked salmon one day, and then realising they made a mistake and learning from it, and maybe going bust if they make a big mistake and somebody else taking over their market.
That's what I mean by evolution. It's a form of natural selection, and we are still far too creationist in the way we look at the real world. When we look at the natural world, we now say, all this beautiful structure, and order, and pattern that you see in a rainforest, or something like that, didn't come about because one bloke was in charge. When we look at the human world, we still seem to make this mistake of thinking that it only works if somebody is in charge.
Nick Cater: Things evolve, not necessarily according to known science, but according to when a necessity arises and produces a market. You draw on the example of the wheeled suitcase, and point out that we were landing on the moon before we successfully developed a commercial wheeled suitcase. Why was that?
Matt Ridley: Well, what I was looking at was why some innovations come along too late. In other words, why didn't we invent the wheel suitcase a lot earlier than we did? It's not really till the 1980s that people have wheels on their suitcases. And in the end, I use that example because it's a relatively rare one. It's very hard to think of something that we should have invented decades before we did. That's a neat example.
But even that one, when you think about it hard enough, you think, "Well, hang on. Airports were quite small. Porters were quite numerous with luggage carts, wheels that you would have put on suitcases in the 1960s, 1970s would have been big and clunky." And actually, quite a lot of people tried wheeled suitcases in the 1920s onwards and they never caught on. So I think actually, that's an example that kind of proves the rule that when the moment is ripe, we will solve the problem if it's soluble. But you can't, for example, invent the search engine until you've invented the internet.
You can't put the cart before the horse, as it were. So often, technologies come along when the previous technology that enables them has reached the point that it's ready. So on the whole, I'm impressed by the fact that we don't leave ideas on the shelf for decades or centuries that we should have invented earlier.
And by the way, this leads to simultaneous invention. So, 21 different people came up with the idea of the light bulb independently in the 1870s. Why was that? Is that because some deity had decided to implant the idea of the light bulb in 21 different brains?
No, it's because the contributing technologies, the glass blowing, the vacuum pump, the use of electricity, the use of electrical grids, these things had come together to the point where it was just inevitable that people would use glowing filaments in glass bulbs as a way of illuminating rooms.
Nick Cater: Let's continue on this point about the evolutionary process of innovation. There comes a natural point at which the new innovation is ready for use. This is something we have to take note of when we're talking about energy. I think the British government has committed to zero emissions by 2050. A lot of Western governments are.
The Australian government is holding back from that position, and wisely so, because unless I've missed something, we do not have the innovation yet, which could allow us to get to that position without totally shutting down our economy and going back to live in caves. So what are the dangers of setting targets like that, hoping somehow that the evolution of technology will work fast enough, but not actually knowing that it will?
Matt Ridley: I think that's a very good example of a huge policy mistake made with the hope that you can drive a technological change. Because it simply is not feasible to fly airplanes, for example, without carbon-based fuels at the moment, and it probably won't be for a very long time. Electrical airplanes are a nonstarter and there is no prospect of them becoming one.
Likewise, in the UK, we heat our homes with gas. That's a far more efficient and cheaper way of doing it than heating them with electricity. And though we could heat them with electricity, where are we going to get the electricity from? Well, there's a huge lobby from the renewable industry, which is making a ton of money out of subsidies for renewables, which says, "Oh, we can do it with windmills and solar panels." But as Australia and other countries have discovered, and the UK discovered last year, if you have too much unpredictable solar and wind energy on your grid, the grid quite often collapses. And you become very unstable and unpredictable.
Now we have got one technology that could deliver low carbon energy on scale, and that's called nuclear, but the environmental movement's mostly against that anyway, and besides which, nuclear is an industry that has been cut off from innovation for about half a century, because of over-regulation. The immensely complicated rules and regulations that have to go into the design of a new reactor before any construction begins, and that cannot be changed once you start construction, means that it is impossible to do the normal trial and error process, the normal changing of your mind as you're going along, that is how innovators work.
So we're stuck with a 1950s version of nuclear power when we should have a 2020s version using molten salt and all these other technologies. So the first country to reform nuclear regulation so it's just as safe, but more flexible will, I think, win a bonanza. And by the way, that's Canada at the moment.
The nuclear industry has been cut off from innovation for more than half a century, because of over-regulation.
Nick Cater: This is an example where basically, governments are very poor at innovation, but they're quite good at stopping it when they want to for putting too many regulations in the way.
Matt Ridley: Companies like to stop innovation too, because they don't like competition on the whole. And they often lobby governments to put barriers in the way of innovation. But governments have a track record of standing in the way of innovation from the Ming Empire, to the present day, to the European attitude to genetically modified crops, for example. Again, and again, and again, governments lobbied by special interests place huge barriers in the way of innovation.
In the book, I'm writing about the story of coffee. Coffee was an innovation in the 1500s and 1600s, and pretty well everywhere in Europe and the Middle East, rulers tried to ban it. Two reasons, one, they were being lobbied by the beer and wine industry saying, "Hang on, we don't like this new competitor."
The other reason that governments tried to ban coffee in the 15th, 16th and 17th century was because coffee was drunk in coffee houses, and people would have conversations in coffee houses. Indeed, they'd probably have quite animated conversations if they were drinking a lot of coffee.
And some of those animated conversations would be about whether the King was doing a good job or not. And the King didn't like that. So there's a wonderful proclamation from King Charles II in England in 1672, shutting down all the coffee houses of London for the very explicit reason that people are telling lies in them. He's basically trying to outlaw fake news. And we can laugh about that, we can say that was 400 years ago, but actually, if you look at what's happened with a lot of gene-based technologies in recent years in agriculture, et cetera, it's a very similar story. Utterly specious reasons why governments try to stop innovation happening at the behest of special interests.
Under pressure from the beer and wine industry, rulers in Europe and the Middle East tried to ban coffee when it first emerged.
Nick Cater: I've noticed this during the COVID-19 pandemic. I mean, we don't yet know what the best way of curing this virus or curing the effects of this virus will be, or whether indeed we'll get a vaccine. But a lot of people, a lot of governments, and a lot of individuals have been very quick to rule out certain options, often on quite political grounds, it seems to me, without actually giving them a chance. Is that your impression?
Matt Ridley: I am concerned by just how political all these discussions are. Why can't we have a straightforward conversation about, does this drug work? Does this vaccine have a prospect or not? I think what we're finding in this epidemic is the cost of not doing enough innovation. We tend to think we live in a world with a lot of innovation. Actually, we're living through something of an innovation famine. If you leave aside the digital industry, we've really slowed down the rate at which we produce new ideas, and new concepts, and new devices.
And that's particularly true, I think, in the medical arena. We have not developed a platform for producing vaccines against new infectious diseases that we should have done. Just in the last few years, the Coalition for Epidemic Preparedness Innovation was set up by the Welcome Trust and the Gates Foundation to do exactly this, to say, "Look, next time a pandemic comes along, we should be ready with a vaccine pretty well ready to go," but they only set that up a few years ago. That should have been done 20 years ago, and we'd then be in a much better position.
I write in the book about the development of the whooping cough vaccine in the 1930s, which took four years from start to finish and was very efficiently done by two rather remarkable women in their spare time. That would be quite good going even today in terms of developing a vaccine. So we have neglected the development of vaccines, the development of medical devices. It takes up to 17 months to get approval for a new medical device, including diagnostic devices for testing for viruses, for example, which is far too long. And the consequence of that is that entrepreneurs have gone off and developed video games instead of medical devices.
Excessive red tape has hindered the process of developing vaccines and medical devices.
Nick Cater: You published a great book in 2010, which I think really brought you to a lot of people's attention, The Rational Optimist. And I thought it was just such a refreshing book, because you were prepared, unfashionably, to stand up against this idea that we're all going to hell in a handcart. And that actually, quite the contrary, that for most people, most of the time, whether rich or poor, in most countries, life is considerably better than it was. And we can have every expectation that it will continue to get better. You don't seem to have won that argument though, Matt, because there's so much of this extinction rebellion and this apocalyptic fear of COVID-19. You're going to have to work harder, I think, to convince people of what you said.
Matt Ridley: I know. And it's a passion of mine, this. And one of the reasons it's a passion of mine was when I was 15, 16, 17, I was a keen, I think you'd call it now, an environmentalist. And I was exceedingly pessimistic about the future of the world. And the reason I was so was because all the grownups were telling me pessimistic things.
They were saying the population explosion was unstoppable. The pollution was getting worse. Species were dying out. The rainforests were disappearing. The deserts were advancing. All this stuff. And it came as quite a surprise to me that actually the world became a better place for most people, and environmental trends improved. I mean, there were 5,000 humpback whales in the world when I was a boy, there are now 80,000. So there's a lot of good news out there.
People are living longer. Their children are dying less. Infectious diseases are on the retreat, with some exceptions, obviously, et cetera. People are getting happier, they're healthier, they're less likely to starve. These are extraordinary improvements. Forest cover globally is increasing, most people don't know that.
I wrote that book, The Rational Optimist, in 2010 saying the world has been getting better and is likely to go on getting better. As I went around the world over the next few years talking about it, people would say, "Well, you can't still believe that. Have you seen what's happened to the financial crisis? Or have you seen what's happened in the war in Ukraine? Or have you looked at the Ebola epidemic? Come on, you must now be a pessimist given what's happening?" And of course, they're now saying that to me about COVID, "You can't still be an optimist?"
Well, I'm saying, actually, the last 10 years have been incredible years for poor people. They've not been great years for rich countries, but somewhere like Ethiopia or Mozambique, has had a spectacular 10 years. Doubling the average income of their people. Almost getting rid of malnutrition. In countries where before that, people said it couldn't be done.
HIV is on the decline. In the 1990s, malaria was getting worse, huge number of predictions saying, "Because of climate change it's going to get dramatically worse than the 21st century. It's going to go back into Europe and other places where it's long extinct." Well, in 2003, the graph turned downwards and the annual mortality from malaria has now halved. That's an amazing human achievement, largely down to a simple innovation; the insecticide treated bed net, championed by the Gates Foundation.
So it's innovation that will solve these problems. Not everything's going to go right in the future, but a lot of things are, and we should, we've got to stop indoctrinating our children in apocalyptic predictions, because I think it's irresponsible of us.
Nick Cater: Matt, thank you very much. Your book is available with Harper Collins and it's available, of course, on Kindle, another great modern innovation. It's been great talking to you, and thank you very much for what you're contributing to this very fraught debate on science.