The organization of innovation--the history of an obsession.

The Economist s mission statement, printed on the contents page in every issue, proudly proclaims that it has been leading the debate about progress since 1843, yet the January 12, 2013 issue struck an uncharacteristically pessimistic note on this core topic. The cover carried an illustration of Rodin s The Thinker perched on a new base—namely a toilet with a cistern. A thought bubble over The Thinker s head reveals the question he is pondering: “Will we ever invent anything this useful again?” The reason for his inner turmoil is stated in a caption at the toilet s exit point, where his physical “output” is soon to be flushed down into the sewer; it is “the growing debate about dwindling innovation”. This illustration is doubly apt, seeing as how the The Economist had not even come up with the idea for this image in the first place. What sort of debate are we speaking about here? The cover story cites high-tech entrepreneurs and academic economists in arriving at the prognosis that our society is standing on a technological plateau, with the economic way forward destined to rise no higher. The authors of this piece in the The Economist proceed to tack on a diagnosis to this prognosis, and maintain that our degree of technological innovation does not even come close to keeping up with the previous pace, up to and including the 1960s, even though more people than ever work in research today, more money than ever flows into science, and there is more competition than ever in the marketplace of innovation. We are told that even the attainments of the digital age—from the personal computer to the internet—have not been reflected in “the productivity statistics”. Despite what the authors would have us believe, the “innovation blues” lamented in the The Economist have little to do with the current course of technological development. The source of the perceived problem arises instead from a sense of disappointment over the fact that their innovation theory does not hold up to its empirical promise. The theory is made up of a chain of causation that sees science as the most important driving force behind innovation, and innovation as the most important driving force for the economy, and an organizational principle maintaining that the three links in the chain function most efficiently under market-oriented competition. The problem with this theory is that only the first part of its causal chain stands up to empirical scrutiny. There is every indication that progress in scientific knowledge leads to technical innovations, but it is highly unlikely that a higher level of innovation results in greater prosperity. Most innovations do not succeed in the marketplace, and of the few that do catch on, only a fraction get to the point of offsetting the magnitude of their “creative destruction” with their own growth impulses. In fact, there are even economic sectors that achieve high rates of increase by means of a strategic and concerted effort to skirt innovation. Year after year, the Swiss watch industry has expanded the market for its mechanical watches, which in comparison with quartz watches are not only technically outmoded, but also more expensive, less accurate, and more fragile. Evidently their consumers are seeking identification rather than innovation. What ultimately emerges from the analysis in The Economist is the plausibility of the claim that, in spite of continuously rising investments in research and development, countries in the West are experiencing weaker and weaker attainments in the realm of innovation. With the single exception of the communications industry, the age in which we are living is marked by big promises and small advances. No matter which area we look at—energy, health, transportation, or household—the significant breakthroughs that have been prematurely hailed over decades of earnest efforts have yet to materialize. The technological foundation of our daily life is now 50–150 years old. If we accept the above-mentioned diagnosis that innovations are moving along at a snail s pace these days, we ought to take a closer look at the era that today s observers, including the authors in the The Economist, regard as the golden age of technological innovation, namely the decades between 1920 and 1960. What distinguishing features did the organization of science and technology have in that era, and what do today s research structures lack in this regard? There is no definitive answer to this question, but we can take tentative steps in the right direction by looking to the formulas that leading figures in academic and industrial research in the United States at the time used to enhance the creation of fresh approaches. [*] Prof. Dr. C. Hirschi Lehrstuhl f r Allgemeine Geschichte, Universit t St. Gallen Gatterstrasse 1, 9010 St. Gallen (Switzerland) E-mail: [email protected] . Angewandte Essays