A few months back, we wrote a bit about Matt Ridley’s new book called The Rational Optimist. I still haven’t had a chance to read the book, but reader sehlat points us to an essay that Ridley has written for Reason Magazine that is adapted from the book, which is an absolute must read, on how innovation occurs. Many of the points won’t surprise regular readers of Techdirt, since it talks about concepts and studies that we’ve discussed many times before. For example, it discusses some of the same research we recently wrote about how government funding of basic science research often does more harm than good for innovation. It also explains how money is often not a key ingredient in innovation. It’s helpful, yes, but not the key ingredient. There’s a nice bit on the fact, as discussed time and time again around here that intellectual property laws have never been shown to increase innovation:
Yet intellectual property is very different from real property, because it is useless if you keep it to yourself, and an abstract concept can be infinitely shared. These features create an apparent dilemma for those who would encourage inventors. People get rich by selling each other things (and services), not ideas. Manufacture the best bicycles, and you profit handsomely; come up with the idea of the bicycle, and you get nothing because it is soon copied. If innovators are people who make ideas, rather than things, how can they profit from them? Does society need to invent a special mechanism to surround new ideas with fences, to make them more like houses and fields?
There is little evidence that patents really drive inventors to invent. In the second half of the 19th century, neither Holland nor Switzerland had a patent system, yet both countries flourished and attracted inventors. The list of significant 20th-century inventions that were never patented includes the automatic transmission, Bakelite, ballpoint pens, cellophane, cyclotrons, gyrocompasses, jet engines, magnetic recording, power steering, safety razors, and zippers. By contrast, the Wright brothers effectively grounded the nascent aircraft industry in the United States by enthusiastically defending their 1906 patent on powered flying machines.
So what is it that leads to innovation? Well, it’s the sharing of ideas and building upon them — again, a point raised here time and time again. Ridley describes it as “ideas having sex.” This isn’t a new idea (though it’s “newish”). In the past thirty years, a growing number of economists have recognized that economic growth comes from the collision of information and new ideas, shared openly. As Ridley notes: “Innovators are in the business of sharing.” While he doesn’t bring this up, there’s actually a tremendous amount of research that show that communities that more widely and openly share ideas tend to have greater innovation (and, no, that doesn’t mean through such false disclosure systems like a patent system — which teaches little, and doesn’t let anyone really make use of the knowledge shared). But the key point that Ridley makes is that innovation happens when people keep building on what’s been done before:
The secret of the modern world is its gigantic interconnectedness. Ideas are having sex with other ideas from all over the planet with ever-increasing promiscuity. The telephone had sex with the computer and spawned the Internet.
Technologies emerge from the coming together of existing technologies into wholes that are greater than the sum of their parts. Henry Ford once candidly admitted that he had invented nothing new: He had “simply assembled into a car the discoveries of other men behind whom were centuries of work.” Inventors like to deny their ancestors, exaggerating the unfathered nature of their breakthroughs, the better to claim the full glory (and sometimes the patents) for themselves. Thus, Americans learn that Edison invented the incandescent light bulb out of thin air, when his less commercially-slick forerunners, Joseph Swan in Britain and Alexander Lodygin in Russia, deserve at least to share the credit.
It’s a great read that really highlights and ties together many of the points I’ve written about here for years.