A few years ago, I wrote the history of a retailer that tried lots of new things: it invented the business of selling tea by mail and then reinvented itself as the first discount grocer; it figured out how to slash supply-chain costs by becoming a manufacturer and then transformed its industry by replacing thousands of small stores with supermarkets. The Great Atlantic & Pacific Tea Company's innovations, mundane as they may seem, helped it become the world's largest retailer. It stayed that way for four decades.
That sort of innovation, the kind that successful businesses undertake constantly as they navigate a changing world, gets short shrift in Does America Need More Innovators? The thesis of this conference volume is that promoting innovation has become all the rage in government and academia, and the authors consider whether this is a good idea. “Much of the rhetoric about innovation portrays it as a natural and unquestioned engine of economic and social progress,” Matthew Wisnioski writes in an introductory chapter. “However, with the growth of so many pro-innovation initiatives, critics are beginning to ask: To what end?” (p. 5). That's a question well worth asking. But, almost uniformly, the essays in this book conflate three very different concepts: innovation, invention, and technology. By characterizing innovation as an engineering task rather than as an intrinsic aspect of good management, they misunderstand its economic benefits and the role government can play.
Innovation, as historian Benoit Godin shows, has not always been deemed beneficial. “From antiquity through most of the nineteenth century, ‘innovator’ was one of the most odious epithets one could hurl at a rival,” he writes (p. 148). The reason, of course, was that innovation, whether in religion, politics, or the economy, was destabilizing. It was well into the twentieth century before innovation came to be seen as a process that could bring about desirable changes rather than as a disruptive act or a heretical idea.
More recently, as the United States came to have a chronic international trade deficit, innovation became associated with the concept of “competitiveness.” The underlying notion is that if the United States beats other countries to the punch in creating new technologies, it will fare better in international competition and narrow the gap between its exports and its imports. Such thinking has given birth to a federal Strategy for American Innovation, government grants to promote innovation by small business, and a raft of other state and federal programs overseen by “innovation experts” (p. 17).
There is, as Mariana Mazzucato shows in her 2013 book, The Entrepreneurial State, strong historical evidence that government can help speed the development of new technologies both through support of research and by judicious use of its purchasing power. But Mazzucato also emphasizes important points that many innovation enthusiasts ignore. The timing of the economic benefits from technological innovation is highly uncertain: it is impossible to know whether an additional tax dollar invested in research will bring faster economic growth in five years, or ten years, or never. If the benefits eventually arrive, they are very likely to be diffused across borders. Although U.S. government support for nanotechnology is probably good for the world, it does not follow that such support will create thousands of U.S. jobs, raise U.S. living standards, or make the United States a net exporter of products incorporating nanotechnology. Who captures those benefits depends on public policies relating to taxes, education, law, capital markets, industrial subsidies, and social welfare—all factors that have nothing to do with where something was invented.
Inspired by the historical growth of the car industry in Detroit, the pharmaceutical industry in New Jersey, and the computer industry in Silicon Valley, advocates insist that governments and universities can fertilize innovation by encouraging entrepreneurs in a particular field to cluster in a single place. Historically, though, many such clusters emerged by chance. As economic geographer Maryann Feldman admits in one of this volume's more thoughtful essays, it is wrong to think “that policymakers could simply line up the appropriate inputs and then turn the crank” (p. 84). Clusters take time to mature and often fail to develop. The idea that they will emerge from government support for local entrepreneurs is generally wrong, Feldman adds; in a world of global value chains, clusters are more likely to center around outposts of large corporations, to which local start-ups can become suppliers.
Historians Andrew L. Russell and Lee Vinsel object to the policy focus on innovation, which, they write, will never be the main job of engineers. They argue rightly that maintaining old things well is more important in economic terms than inventing new ones. “Most engineers are going to be maintainers,” they assert. “Yet innovation-speak actively devalues this essential work, which will never be radical, revolutionary, or ‘whole new’” (p. 257). Their complaint about current innovation-speak is accurate, but it also reveals how misguided the discussion of promoting innovation has become. Earth-shattering discoveries are few and far between. People who find ways to extend the life of a highway paving job or to speed up the line at the coffee shop will never have entries in Wikipedia, but that does not make their innovations any less valuable. Even though they receive little public acclaim or financial support, those humdrum improvements in the way businesses and government function are the main source of the higher productivity that is critical to economic growth. We need to remember that maintainers can be innovators, too.
