Book Review — “How Innovation Works” — by Matt Ridley (Part 1)

I’ve been reading the book “How Innovation Works” by Matt Ridley, and I’m certainly enjoying it, even though my INFJ-brain finds its detail-heavy stories about the tiny intricacies of how inventors and innovators invented and innovated a bit dry and hard to focus on at times. However, I know for a fact that this book is quite important for people to keep in mind when thinking about what it takes to achieve technological innovation. As Mr. Ridley says in the opening chapter…

“In this book I shall try to tackle this great puzzle. I will do so not by abstract theorizing or argument alone, though there will be some of both, but mainly by telling stories.” — Matt Ridley

There’s some useful patterns of innovation and technological advancement, that are remarkably suited to trial-and-error antifragile systems and are absolutely despised or crushed in central planner, fragilista systems.

Ultimately, this book is much more about the history of innovation, with the occasional tidbits about the underlying pattern of stochastic tinkering underneath. I’m going to try to lay out the pattern, which is basically my takeaway from this book.

The Nature of Innovation

• Innovation, fundamentally, is an enhanced form of improbability. i.e. it’s an unlikely combinations of atoms, digital bits of information, and so on.
• Innovation and evolution coincide, and is a process of constantly discovering new ways to rearrange the world into forms unlikely to arise by chance and that happen to be useful to human beings.
• Serendipity i.e. luck (and happy accidents, useful mistakes, etc) play a massive role in innovation, and free-market economies give luck a chance far more than centrally planned economies.
• Innovation thrives when people are free to think, experiment and speculate. This includes being free to test out bad ideas.
• Innovation allows us to become even more specialized in what we produce, but more diversified in what we consume. This is the result of moving away from self-sufficiency and into greater interdependence.
• We overestimate the impact of innovation in the short run, but underestimate it in the long-term.
• Nuclear Power and the Nuclear Energy — through fission — are an excellent example of an industry deteriorating by a phenomenon of dis-innovation, for many reasons. It is an industry in decline because of the lack of opportunity to experiment. Cost inflation (through a rising demand of safety costs and more) without innovation ultimately strangles and kills an industry. With nuclear power, both trials and errors are too costly.
• The primary means humans use to pull down costs — Trial-and-error. If the industry doesn’t allow this, costs will stay high.
• Technology pushed by governments before they are really ready for the world, are more likely to sputter and falter, and stagnant.
• “Learning-by-doing” is a very critical practice for innovation. If the doing is way too costly, the industry will suffer stagnation and decay.
• Success in the nuclear fusion will likely be humanity’s saving grace in the coming decades to combat climate change without forcing an awful lifestyle change of impoverishment upon 1st and 2nd world countries. Fingers crossed.
• Chlorination Story — Invention is rather enigmatic and confused, and only in retrospect do we see it as a disruptive and successful innovation that saved millions of lives.
• Innovation and new inventions evolve rather slowly, with luck and serendipity unlocking new possibilities, often from mistakes.
• Women have contributed a great deal to the curing of diseases in the past, with the story of Pearl Kendrink and Grace Eldering curing whooping cough between 1920s to the 1940s as a great example of such. These two women were particularly remarkable, because of all the sacrifices they made to get their cure out there, but most especially their remarkably behavior after they accomplished their groundbreaking work. They got little recognition and rejected the media and interviews. They were all about being open-source before it was trendy, sharing their methods and formula freely with the world, and didn’t even set out to defend their intellectual property. Honestly, these women were perfect scientists operating for the good of mankind and never for personal fame and recognition. It’s quite beautiful really. A quote to consider: “Dr. Kendrick never became rich and, outside a relatively small circle of informed friends and colleagues, never became famous. All she did was save hundreds of thousands of lives at modest cost. Secure knowledge of that fact is the very best reward.”
• Penicillin Story — making a scientific discovery is only the first step. It gets the ball rolling. After that, there’s a mountain of practical work to take it out of the laboratory and into the market. This is probably one of the most important steps. The step from theoretical to practical is fraught with difficulty that must be overcome.
• Be careful with huge rewards for those who invent X or creating innovation Y — the bigger the reward and greater the fame, the more likely corners will be cut on the final product.
• The story of Sarah Stewart and the polio vaccine — basically showcases the brutal politics within scientific institutions. Don’t be so naive as to believe science is about dispassionate analysis of the facts and figures to reach an unbiased conclusion. If what you’re pushing upsets the status quo or overturns tradition, expect pushback, sometimes severe. Humans be human.
• Everyone knows smoking is bad for you, but it’s a habit we do anyways. However, the e-cigarette or vaping is an innovation that provides the lesser of two evils. Basically, if you must smoke, vape instead. Healthier? Yes. Healthy? No. This is similar to giving herion addicts clean needles because if you must shoot opioid into your veins, at least keep the HIV infection rate down.
• Crony capitalist corporate lobbiests, blind ideological activists, and government bureaucratic regulators are some of the greatest obstacles to innovation humankind has produced and will continue producing. The book doesn’t go too much into detail in this front, but I’d bet money on the inverse correlation that the greater the number of your cronies, activists, and regulators, the lower your innovation, invention, and general prosperity.
• “Failure is only the opportunity to begin again more intelligently.” — Henry Ford.
• Innovation = incremental tinkering + Trial-and-error + many people working on the same problem. The myth of the lone, imaginative genius is a myth.
• All innovation comes with a long prehistory, simultaneous breakthroughs among different inventors who may or may not know about each other, and incremental evolution over many years afterwards.
• Internal-combustion engine story — Long and deep prehistory characterized by failure; finally a breakthrough that leads to affordability and countless patent litigation; then finally, evolutionary improvement through trial-and-error.
• Most innovations that really take off start off as luxury goods for the upper-middle classes, eventually becoming something that everyone can afford when the right inventor — such as Henry Ford — comes along.
• Innovation is not an individual phenomenon, but a collective, incremental, and messy network one.
• The story of Langley and the Wright brothers is a story about how to fail at being an innovating, and how to succeed at being one. This is an excellent case study actually, and perhaps deserves a deeper article later. But ultimately Langley spent tons of money, depended on the government, consulted few others, and decided to not stand on the shoulders of giants i.e. build a plane from scratch and refusing incrementalism. Wright brothers on the other hand, work hard everyday except Sunday, collaborated with experts, and got their hands dirty with a lot of trial-and-error in their garage.
• The history of airplane invention ultimately leading to the Wright brothers is that of a continuum, with the beginning starting off with some fatal attempts by eccentrics in the beginning, to helicopters and drones today.
• Nuclear fusion will be realized the same way the steam engine was realized back in the 1700s: through the discovery and creation of new materials or tools, so that what was once just conceived, can now become a reality.

I’ll stop for now, continue more of this in Part 2 as I finish this interesting book. I’m hoping to create a much easier to grasp “List of Principles” to keep in mind after this book. Adding to all the other books I’ve read on this subject.

Stay tuned for Part 2!

A lot of these principles actually tie into some of my antifragile musings on the videogame Hades.