First in a #ReadWithMe Series
Matt Ridley’s How Innovation Works is a remarkable book. It is the third book in a row that Ridley, better known as a scientific journalist and, indeed, one of those rare people who makes highly complex scientific arguments understandable to the average educated reader, devoted to the _economic_ and _social_ realm. The first was The Rational Optimist, followed by The Evolution of Everything.
The book is masterful in two different ways. It is, of course, insightful. But it is also a pleasure to read. As a good journalist, Ridley knows that the human brain is a “stories processor” and not an “argument processor”. He showers the reader with anecdotes and stories, which make his points more cogent and clearer.
I will highlight some points that Ridley makes very effectively in a series of posts. This is the first.
Why did Ridley choose to devote a book to innovation? Because, he maintains, “innovation is the most important fact about the modern world, but one of the least well understood. It is the reason most people today live lives of prosperity and wisdom compared with their ancestors, the overwhelming cause of the great enrichment of the past few centuries, the simple explanation of why the incidence of extreme poverty is in global freewill fort the first time in history: from 50 per cent of the world population to 9 per cent in my lifetime”.
So, Ridley is perfectly attuned to Deirdre McCloskey’s understanding of innovation as what is a truly peculiar of modern economies: so not “capitalism” (in the sense of the accumulation of capital being the primary force behind betterment) but “innovism” (ideas breeding the modern world).
Why is innovation not properly understood? “The surprising truth”, he writes, “is that nobody really knows why innovation happens and how it happens, let alone when and where it will happen next”. This is an unbearable thought and a very hard sell, both for the economist who consults with the government on how to foster innovation in the economy and for the corporate executive who boasts about the future achievements of his company.
One of the problems is that “innovation is nearly always a gradual, not a sudden thing.” Yet Ridley argues that it is seldom understood as such. People like to focus on great breakthroughs and their makers, on their stories. Ridley does his fair share of that, too, but always highlighting how great innovators actually built on what other great innovators did before them. “It is all too easy and all too tempting for whoever makes a breakthrough to magnify its importance, forget about rivals and predecessors, and ignore successors who make the breakthrough into a practical proposition”.
So How Innovation Works is also a book on how innovation doesn’t work: through eureka moments (well, sometimes they happen too) irrespective of culture and institutions.