INNOVATION = ∆

INNOVATION = ∆

BRIAN WIXTED (PHD)INDEPENDENT RESEARCHER

ADJUNCT PROFESSOR, Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan

RESEARCH FELLOW, Centre For Policy Research on Science and Technology (CPROST) SFU, Vancouver.

PRINCIPAL, TECHNOMICS RESEARCH

∆ = ?

Introduction

• The point of this lecture is to point out some of the weak points of the innovation literature albeit from the position of one who is sympathetic to its overall vision.

• It is worthwhile occasionally asking of a field or discipline; what are it is assumptions, where is it coming from – what is its worldview.

• The innovation literature started mostly our of a critique of mainstream neoclassical economics, so it is certainly possible to pass the same critical eye over the massing ‘innovation’ field.

Innovation vs Disrupted Everything

• What we used to mean by ‘innovation’

• Progression – faster (286, 386, 486 – i5) lighter, 5kg laptops to tablets & better

•

• 2014 - Appropriability Mechanisms, Innovation and Productivity: Evidence from the UK (Bronwyn H. Hall, Vania Sena http://www.nber.org/papers/w20514 - yet hard to pin down a definition of innovation –

• Generally, the literature still does not include markets, new inputs etc…

• Newspaper industry disappearing and with it upsteam forestry production

• But what does it mean when Apps – Uber / Airbnb / Netflix disrupt ‘industries’

• Robotics are introduced to mining

Super fast history lesson• 1960s – Chris Freeman organized OECD countries to collect R&D data

as a proxy for innovation as a proxy for development (post WWII)

• 1970s – go read Research Policy – they are all online – many articles about technology – new technology was a proxy for competitiveness and innovation

• 1980s – rapid rise of Japan in high R&D industries

• Late 1980s / early 1990s realisation that business doesn’t innovate alone.

• Innov systems lit – Freeman, Lundvall, Nelson, Edquist

• Go read Chris DeBresson – the very best at systematising ‘systems’

1990s• National innovation systems

• Clusters

• Regions (provinces or states) not econ regions

• Borders are / were largely still absolute (see Wixted 2009), start of globilisation but the literature quiet.

• Rise of ICT industries – not digital yet (Innov lit loved this stuff)

• Internet mid 1990s

• Japan – stagnant and non-innovating (literature quiet on this)

• Non conformist economies (Canada, Australia, Norway – irrelevant to literature)

• Start of innovation surveys – do you sell new products?

2000s• Dot com bust - little comment

• Rising globalisation – little comment

• Innovation clusters literature focusses on cities

• Europe having problems ‘innovating’ already

• Financialisation

• Massive rise of China

• Massive rise in commodity prices – no comment

• Global Financial Crises

2010s - Literature• Entrepreneurship

• Policy mixes (whatever that is)

• Open innovation

• University technology commercialisation

• Non innovation based literature

2010s - Reality• Itunes/Ipods/Smartphones

• wiped out retail music stories – perhaps fastest structural delayering of economies

• Drones, Robotics, Algorithms

• Netflix – destroyed video stores

• Uber – tipping point – tiny company leveraging society against an industry

• Removing economic frictions and transactions costs

• Mobilising more possible `taxis`

• Reducing wages – huge potential impact on immigrant workforce - OECD nations

Innovation Policy #1

Source.

Innovation Policy #2

Source: Guy 2012

The EconomistJan 2013

What’s the irony???

The London Sewer System

• The London sewers were a public investment.

• Some Government innovations have had the biggest impact of all…

Mundane is not ‘interesting’ but importantSECTOR FOCUS OF RESEARCH POLICY PAPERS –SEARCH ON GOOGLE SCHOLAR – “INNOVATION” AND

• computer/PC ---717

• car/automobile ---284

• television/TV/radio ---209

• camera/video ---134

• video/electronic/interactive game ---120

• hard disk/disk drive --- 42

• cell/mobile phone --- 37

• VS

• refrigerator/freezer/fridge --- 11

• washing machine/tumble drier --- 6

• vacuum cleaner --- 2

• washing powder/detergent --- 2

• domestic/toilet/kitchen/bathroom cleaner --- 0

Source: Ben Martin 2013

Policy Velocities #1

Topics Number of times covered

Cybersecurity 4

Drones 4

New vehicles 3

Policy issues 3

Nanotechnology 2

Digital 2

Uber 2

Mining 1

Labour markets 1

Bitcoin 1

So what topics were discussed in this blog during 2014?

Source: http://scipol-velocity.blogspot.ca/2014/12/policy-velocity-2014-year-in-review.html

The blog tracks (ad-hoc) coverage of where innovation policy is needed – not to create innovation but to regulate it.

Policy Velocities #2

BUT NOW.. The Tech-ecology• Once upon a time we only had nature power (water /

human / animal)

• Then the IR and we had carbon power (coal /oil & gas / etc) powering mechanical devices…

• We are now see the confluence of three additional technologies simultaneously

• Biotech / genomics

• Nanotechnology

• Digital

• These can come together in unique combinations.

Fully Automated 300 tonne trucks - Australia

Agriculture sensor network in Australia

Confluences, contradictions, weirdness

Digital

Digital mfg

New crop mgt

Bio minin

g

Bio ?

?

?

Nano

Mech3D

printing

Algorithms

AppsSenor

s

Robots

How do we measure any of this

PRODUCTIVITY

• Measures labour per output

• 1.Problems measuring this

• 2. Labour of 1.

• So seriously productivity is really problematic

• Count $

• R&D, innovation sales (rubbish numbers)

KEEP SCEPTICAL

The World Economy

– total value of activities.

Data calculated from WIOD

Business services

Construction

Real Estate

Government

Finance industry

The World Economy

– MOST TRADED $

Data calculated from WIOD

Energy

Metals

Elec & Optical equip

Transport equip

Construction

The World Economy

– Trade share of all output.

Data calculated from WIOD

Energy

Elec & optical equip

Transport Equip

Basic metals

Water transport

Innovation, Technology or Technium• Innovation is a fairly linear concept –

• build a better product and you will be more competitive

• Societies & economies need to encourage as much innovation as possible – that will create jobs and wealth.

• Maybe yes maybe no – but it is far too simple.

• Read Brian Arthur’s – The Nature of Technology sometime.

• Kevin Kelly talks about the Technium – technology as its own life structure – somewhere perhaps between fungus and mammals.

• Not without problems but concept is getting richer – watch him at www.longnow.org

The Global Economy

What is written isn’t the sum of what is true• Richard Feynman

• A very great deal more truth can become known than can be proven.

• We have a habit in writing articles published in scientific journals to make the work as finished as possible, to cover all the tracks, to not worry about the blind alleys or to describe how you had the wrong idea first, and so on. So there isn't any place to publish, in a dignified manner, what you actually did in order to get to do the work.• "The Development of the Space-Time View of Quantum

Electrodynamics," Nobel Lecture (11 December 1965)

• For a successful technology, reality must take precedence over public relations, for nature cannot be fooled. http://history.nasa.gov/rogersrep/v2appf.htm