Readers of my blog[1] and
other writings[2]
have reliably identified the shortfalls of accounting methods as one of my
passions-in-interest. And, sure enough, I am ready to take a stab at it again.
Innovation is arguably one of the few nearly unlimited renewable
resources. The human collective has proved capable of accumulating an
incredible quantity of knowledge over the past 300 years, setting out to
transcend new horizons like a mountaineer that reaches summits only to discover
ever taller peaks. Humans as a species continue to increase their dominance,
but in an elliptic fashion reminiscent of ‘three steps ahead, two steps back’ –
a perpetual pendulum swing between solutions and their unintended or, most
often, unforeseen consequences. We burnt a lot of coal and later hydrocarbons
to fuel the industrial revolution, only to discover that CO2 is now accumulating in the atmosphere and not going
away that soon. Europeans discovered in the 19th century that they
did not have to import sugar from the Caribbean but can grow sugar
beets domestically. Prices plunged as everyone could suddenly afford it.
Then came a surprise: sugar ruined
people’s teeth. They discovered how to protect and harden teeth with
fluoride rather than cut back on sweets. Tap water and certain foods in many
countries are now spiked with
fluorides. Next, it turned out that sugar
promotes obesity and diabetes. Nature hits back at every progress, forcing
continuous innovation so as not to fall behind in the innovation game where no
solution is ever final.
For example, innovation in terms of robotics is now at a similar stage
as computers were in the 1960s: at that time, it had become clear that there
would be computers, but not quite obvious what would be done with them.
Similarly, we are just beginning to discover the potential of robotics without
having a tangible sense of the journey’s destination. Robots will take all
kinds of shapes and sizes and take on helpful tasks not conceivable to date.
There is research on nano-sized
injectable robots programmed to attack cancer cells, but it has barely
scraped the surface yet.
Another area is genetic engineering. It has been around since the dawn
of humanity. Think of horses – the breeds we have are not “natural,” they were
bred by protracted human interference and selection. God did not create poodles
– people did. But breeding is a slow and crude tool for genetic engineering.
Genetic modification can achieve results a lot more expeditiously and with
greater precision. It will be essential because climate is changing faster than
“natural” breeding will, and since it does not appear to be possible to reverse
climate change, it is living species that will need
to be re-engineered to adapt to a changed environment. It is less likely
that humans will be modified anytime soon, but plants, animals, grain, fish,
mammals, penguins will be. European resistance notwithstanding, genetic
engineering will be done, in the U.S., in Asia or wherever. Somebody will do it
because there is a benefit to innovation.
More recently, innovation primarily creates “growth” by creating “progress”
–
allowing the same output to be produced with less input (of time,
knowledge, skill, or other factors). It adds new products that had not
previously existed: ten years ago, smart phones did not exist. While all this
is “growth,” conventional metrics fail it. Products improve continually –
vehicle safety in automobiles improved dramatically compared to some decades
ago, although the task, speed limit, and traffic rules remained essentially
unchanged. All these evolutionary changes form part of “growth,” but metrics
for accounting purposes ignore qualitative aspects. Take anesthesia – a vast
improvement of the quality of patient experience that became common
since the 1860s. Yet, the change it brought is not reflected anywhere in
GDP statistics. The same is true of antibiotics and many other innovations: as
their price comes down, and it typically does rather quickly, it ceases to
appear as a blip on GDP metrics entirely – although there have been studies putting
the price tag for resistance to antibiotics by 2050 at “$100 trillion.” Our
post-millennial observation of “shrinking
growth” almost certainly reflects profound flaws in methodology of
measurement and valuation.
Another, probably even crasser failure of valuation and accounting
metrics is its treatment
of time. A great measure of innovation and progress creates efficiencies of
time, freeing up considerable human resources in the process. Leisure time is
valuable, but not to GDP accounting, and therefore not to “growth.” An economy
can “grow” without producing more goods, by creating the same output with
considerably lesser input. In the future, many people will work considerably
less than they do today – a process that has started already. While it
continues to be ignored by regulators and managers, there is no question that
it will profoundly change the work place. And it is happening already as we
speak: at the beginning of the twentieth century, the average
worker spent 3200 working hours a year. Today,
the average is half that number. This is a form of growth. Once robots will
produce our food and garments, we will work even less, trending
toward a world where work is optional and almost exclusively creative,
thoughtful and intellectual. “Growth” in terms of “progress” may mean that we
produce more steel or pump more oil, but it may also mean that we have more
time to enjoy and reflect on our existence.
Technological innovation took off in Europe at the dawn of the modern
age when people became less respectful of tradition and the knowledge handed
down by previous generations. A certain respect for the wisdom of ancestors is
natural and necessary. In ancient China, it was believed that truth had been
revealed by mystical means to people who had lived in the distant past. Similar
traditions existed in Judaism, in Islam and in medieval Christianity. Aristotle
and the classical canon had answers for everything. But their answers did
not hold up to verification. The enlightenment led people to think for
themselves and seek evidence for the teachings in ancient scriptures. Galileo,
Torricelli,
Tycho
Brahe all discovered things wholly inconsistent with the ancient canon.
Concluding that nothing should be believed that had not been tested and
verified, innovation started with the realization that one’s ancestors had been
wrong on many issues. Only this realization unlocked the prison of respect for
established tradition and knowledge and liberated the human mind – but nothing
to date has liberated it from the constraints of valuation methods that insist
on ignoring supremely qualitative aspects.
[2]
Legal
Aspects of Technology Assessment and Systems Analysis in Sustainable Urban
Development, Consilience 14, no. 2 (2015): 71-89.
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