Things we forgot to invent...

Charles Chu reflects on Gene Wolfe's observations about things we forgot to invent. Before we start, if you haven't read Gene Wolfe's 'Book of the New Sun', you've missed a real treat.

Chu cites wheeled luggage (or rather cites Nassim Taleb's insight), invented around 1970 and not widely available until some time later. Something as mind-bogglingly obvious as sticking wheels on luggage somehow got missed in the 3,000 years between the invention of the wheel and those pioneering wheeled suitcases.

This was Wolfe's realisation - some things like, for example, the hot air balloon got invented a lot later than their simplicity and logic suggest. Wolfe also spotted that somethings got invented more than once (steel smelting - invented in the 5th century BC in China and then again in Britain in the 19th century):

“They had indoor plumbing in Ancient Crete. It was lost with the fall of that civilization, and did not reappear until long after it was needed. A model airplane, carved from wood, has been found in an Egyptian tomb. (Don’t get me started on the Egyptian girl wearing sunglasses.) Electroplating seems to have been invented at least twice. And so on. I decided to put the hot-air balloon in the Dark Ages, and I threw in a few other things too. Thus the story you have just read. Was there ever a time like that? No. Could there have been? Certainly.”

We think of invention as a sort of linear process where x leads to x+ and so forth. The reality is that, not only does x quite often go straight to x++++ but it's a long time before some clever human backtrack to actually invent x+.

In speculating about how we create the right environment for invention, Chu suggests that instead of throwing loads of cash at posh research and development we should do what every bloke with a shed knows:

The answer, then, may not be to pour more funding into R&D. Rather, we should encourage tinkering — we need to repeat many rounds of random, playful and curious trial-and-error to actually discover the amazing ideas that are sitting, invisible, right in front of our faces.

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Inconvenient truths - public funding of science doesn't promote economic growth

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I'm in favour of science. Mostly for the "cor, wow" factor and because what scientists do at the far boundaries of our knowledge is fantastic. I'm even in favour of some of our taxes being spent on that science. But not because it helps in any way towards the growth in our economy.

In 2003, the Organization for Economic Cooperation and Development published a paper on the “sources of economic growth in OECD countries” between 1971 and 1998 and found, to its surprise, that whereas privately funded research and development stimulated economic growth, publicly funded research had no economic impact whatsoever. None. This earthshaking result has never been challenged or debunked. It is so inconvenient to the argument that science needs public funding that it is ignored.

When I did my masters degree, I looked at this stuff and the evidence is pretty clear - investment in research and development by firms is very effective in drive economic growth whereas there's no link between said growth and investment in research and development by governments or government agencies. Rather than the preferred university-led approach to research we need to look at firm-led approaches. Here's what I found:

There is evidence to suggest that university-led innovation strategies focusing on collaboration and the spinning off of businesses from HEIs leads to a misplaced focus on scientific research rather than business growth (Jones 1995, Frenz & Oughton 2005). Perhaps the most effective way to generate effective innovation at the level of the firm (where it has a direct impact on economic performance) is to reduce the barriers to innovation. The biggest of these barriers is cost and econometric models suggest that reducing innovation costs is more effective that investing in R&D or building innovation networks and systems (Martin 1999).

It won't happen, of course, because the system is controlled by universities and the friends of universities.

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A brief thought about innovation strategies and growth...

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The innovation strategy - or innovation-led growth -  isn't usually about "innovation" but is about government investment in science and in manufacturing industry. Stuff like:

A £200m fund for early-stage ventures; freedom to raise money for the Green Investment Bank, and a new business bank to lend to growth sectors including advanced manufacture and life sciences.

..and

Invest the proceeds of the forthcoming 4G spectrum auction - estimated at £4bn - in science, technology and innovation.

Plus...

Higher education funds for radical inventions around knowledge creation - putting design thinking at the heart of the new Catapult centres.

All good stuff and "targeted" at the things that made regions "competitive" - at innovation. Or so we're told. The truth is that innovation - or a great deal of it - isn't about science but about boring things like systems and distribution. Amazon's success is as much built on getting super swift logistics as it is about whizzo techie wonderments. But it's the latter that suck up the innovation funding from governments.

The problem is that, while innovation is awfully important at the firm level, at the macro level there's not much evidence that R&D spending impacts on growth:

And here lies our problem. We know that innovation generates growth (by reducing costs, by creating new products and so forth) but we can't capture that growth by looking at the sort of investments that typify government innovation strategies. Indeed, if a firm only innovates because of grant-funding (or 'soft loans' which amount to the same hill of beans) then we have to question whether the innovation is real or merely staged to secure the funding.

It seems to me - and there is some evidence to support this - that the real benefits lie in:

• Concentrations of private sector knowledge workers (think Thames Valley)
• Low (or no) taxes on capital gains
• A focus on service/process innovation (services are 80% of our economy after all)
• Active incentives (such as reduced taxes) for business innovation
• Similar incentives for individual investors in innovation (tax reliefs or lower personal taxes)

What is clear however is that schemes predicated on the activities of universities - clutching another batch of government funding to their chests - do not deliver innovation and do not benefit growth.

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On the value of R&D...

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I wrote an essay once that explored this subject. To my surprise I found a great deal of research suggesting that the economic benefit of government spending on basic science was pretty negligible. A bit like this:

As B.L.S. (US Bureau of Labor Statistics) economist Leo Sveikaukas found in a 2007 review of the literature, “The overall rate of return to R&D is very large….  However, these returns apply only to privately financed R&D in industry.  Returns to many forms of publicly financed R&D are near zero.”

Of course this doesn't mean we shouldn't spend money on basic scientific research just that we can't justify that spending on the basis of economic benefit.

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