Transcripts For CSPAN2 Matt Ridley How Innovation Works 2024

CSPAN2 Matt Ridley How Innovation Works July 12, 2024

Matt innovation is one of the least understood. Is the reason most people say, live in prosperity and wisdom. In the main ingredient in the secret sauce in these innovations is freedom. Freedom to exchange experiment in imagine invest in fail. Liberals have argued that from the 18th century that freedom means prosperity but i would argue if never found the neck mechanism to drive change in which one causes the other pretty innovation is that drug chain, the missing link. Innovation is a child of freedom and the parent of prosperity. Matt, you think you have written a contrarian book in 2020. There seems to be a growing belief. Living standards have been stagnant for decades, both only helps the elites rated and innovation comes from smart planners implementing industrial policy carefully chosen sectors. Matt this is a contrarian book. It is because i said that innovation is the product of free people exchanging ideas freely. And yes we are experiencing innovation although, i do argue first into the book that we are experiencing Something Like innovation famine. Particularly here in the western world. There are areas that we have not been able to get enough going. In the pandemic reminded us of that. They have not been able to innovate vaccines as much as we would have liked. James i think if you ask these days, so many people think that innovation is good. Im not sure as many people as you think innovation is good. They think of disruption, and job loss and ari run wild. But i think innovation is good, we need more of it, no short exactly question from having people would say well we just need more freedom. I think it was a we need more governments. More powerful innovation here the state to work its magic. On the private sector and on science that seems to be where the energy is right now. Matt i think youre right in this partly because people have is sort of topdown view of the world. They think the world is run by people. They dont think of it is being an organic and spontaneous effect of everybody reacting to each other. This event if something happens is because somebody ordered it to happen. And i very much argue that is not the case netbook. Innovation is something apocalypse and inevitably if you allow people the freedom to experiment and try new ideas. And you cant stop it and you cant direct in cant planet. People a tendency to say we must decide which innovations we want and which innovations were going going to get. In which innovations we will subsidize for the public. And i think that is a dangerous tendency. Because the history shows that you cant do that pretty cat suddenly make supersonic flights keep. There are limits two things. You can suddenly the something easily. It will come along instantly. Yes we have been innovating. Somewhere in the world and anyone time. And for goodness, we dont keep doing so, the prosperity will dry up pretty fast. James i think one reason im sure you remember this, is back in the 1980s, there was a concern about the United States, whether japan was going to silly economy of the future. The people looked at how japan lisa we thought with their innovation. Those through key agencies were a lot of people like that who said, we need to do what they do. Maybe they do Free Enterprise. That was they way to innovate. But now we are much smarter we do have very smart people making decisions in governments. It didnt work out so well. Now today, we look in china, very fast growth rate. They hear about advances about ai and become that leader in error ai and airspace anything else you think about plaintiff they seem to be doing great. To think thats one of the reasons that people are skeptical about the dream argument do they have a point. Has china figured out a better way to do innovations. Matt i think youre exactly right. Think people is read japan in the 1980s. Business is coming out because the industry. And then specifically singled out sectors of the future. They invested in them and thats why japan is such an innovative country. That was nonsense. Once you looked and wanted what was happening, it wasnt because bureaucrats were telling people what to invest in and went to event. It was because small firms in big firms, particularly middle sized firms, going out there and trying new things. In developing new technologies and an extraordinary rate. In the same as mistake is being made about china today believe can deny in some areas in terms of consumer electronics, digital behavior and so on. There are some parts of the pack stopped happening in china. To say this because the communist regime and plan to innovate is simply wrong. Given what happens in china. Yes it has a very strong monopolistic and authoritarian political regime. But as long as you dont ignore the communist party, below that level theres a huge amount of freedom. His most directing what the entrepreneurs do. In fact, an ordinary entrepreneur in china decided to do something new. And in the thing in a matter of weeks which in or would take years in the west to go through all of the bureaucracies and regulations. So in that sense, therefore your party that said, china is getting worse in terms of authoritarianism. It is becoming more for freight for a while it was drifting towards democracy. Is been reversed. You will find the chinese bureaucrats will think they can direct and control exactly what happens in innovation and if they do try that, they will kill the goose that lays the golden eggs just like japan, they will no longer be at the front of the packet for very long. Lofgren china being the lead innovator in the world. In the second on microsized and the right is regime. James im going to debate whether china can over longterm, be innovative entrepreneurial state without being much for your. By now the second managed to to vote. And managed to be an authoritarian country with one playful party. Kelsey also highlight innovative. Think that is not innovative. Were sustainable. That they would have to move slowly towards being a free more open. Matt in the long run, i think it would be right. I think it is simply not possible given the role that freedom plays in innovation as i argued. The ability of the entrepreneur to change his mind change direction to suddenly try it one thing and then another. To do a lot of trial and error and make a lot of mistakes. In the end, for something you and present that will change the world. Given the importance of that, i feel that in the long run, that is not compatible with the regime tries to control things from above. China has been here before. Run a thousand years ago, was the most innovative place in the world. In his and responsible for printing and all those kinds of things. This came about because it was not very centralized regime. It was fragmented. With a lot of autonomy and freedom. And then the mongrels, and after that came the main empire. They were quite the opposite. There were tight centralized of everything. They literally controlled where he could travel in needed a report from everett merchant from how much stock he held in warehouse and regular interval. This was a recipe for killing innovation and sure enough, china sank into a lack of innovation and eventually extreme poverty over the next few centuries. Lesson there is that if you run into an authoritarian regime and get more interested in the lives of ordinary small businessman, then you will stop innovation. James i wonder that if we worry too much about china being a leading technological power and has an authoritarian country and the technological frontier. Those two things are not sustainable and worry about feminine figure on different model. Already in the United States is more talk about policy and we need to be Everybody Knows ai is the future. Everybody knows that biotech is also in future. They may be the is theres not a lot of confidence in United States right now. Every human Free Enterprise is very important in pushing forward that frontier. Matt they dont often quite picking the winners for the government. Go back to 1980s, noise about japan. All of the emphasis was having a policy manufacturer. This is when be absolutely vital and strategic in keeping memory manufacturing on short. He completely missed that memory turning into a commodity, the memory chips. The action was moving to microprocessors and eventually to software. If you go back even further, 19 oh three, the u. S. Government had an enormous amount of money and the time to project to develop the first airplane. And it was five from langley, head of the soviet union and very distinguished astronomer anyone often secret and built an enormous machine. Any date just the parts of the machine and get in touch other people. And it was stanched. Theres humiliation humiliation on the u. S. Government. Ten days later, an island off of north carolina, to bicycle mechanics in dayton ohio, done it completely differently. They tested all of the components separately again and again and again. And other devices, they talk to as many people as a going around the world. They looked at what words do they use when the tunnel experiments. They shared their ideas it with as many people as possible. An important no, no, in an airplane into the air predict and for years, no one would believe them. Number to the u. S. Government and said we really can give you a fantastic technology to use military the u. S. Government said no, weve burned her fingers with mr. Langley. So the governments record in syria is not great. There is some truth in that. But the internet, relied on a lot of sector important evenly came out darker, into the outside world, he needed to go through a huge amount of innovation to turn into what we have now. Like given the beaver the credit to the hoover dam. James you mentioned earlier, forcing of the book you talk about this innovatio innovatio, the desert, and perceived in earlier. Elise you look at the physical government, this sort of downshift and productivity growth which things related to innovation in the early 1970s. It never really rebounded and started light 1990s and you look at all the productivity numbers. We do not see what we saw in the 1950s and 1960s. The highly debated is still debated question. Reading happened. What you think that happened. Sounds downshift and productivity which perhaps in of american brookwood, reading happened there. The productivity downshifted and really came back. Matt i dont really think its quite that bad. I hesitate to get into an argument about the statistics. I think when you take into account the sizes of households in all these kinds of things, to be correct for that. There is still productivity. But you are right, theres not as much as one would expect. We had a period of enormous innovations. And Better Computers and telephones and mobile phones, extraordinary amount of innovation during that period. We wanted flying cars and we got 140 characters. In other words, most of the innovation has ended up being digital and bits rather than actions. And the reason for this is because its emotionless to out and start a new business on intranets. To start an ecommerce. You dont need and ask anybodys permission you just another sergeant doing it. The contrast they want to devise new drug or medical device or a new way of building a bridge, this would be an enormous amount of regular victory progress that you have to make before or not even start. As result, we have diverted the energy of entrepreneurs and innovators into Digital Innovation rather than real structures. We didnt quite specifically. The Clinton Administration has measures in the 90s, very much were permissive to the farmers. They cleared the undergrowth a way to make it possible for me to Start Building Online Retail and communications. It worked really well. We diverged our Energy Online in the last few decades. Im not sure that is what innovation is going to look like in the next few decades. We might get back to Bio Technologies being the way coming next. The american 2020, is no better in america in 1970. I just cant see the arguments. The quality of life is extraordinary better. People are leaving longer lies in working shorter hours needing better at all of these kind of things. I think we are saying the fruits of innovation. Just are not showing a particularly the productivity statistics. For elsewhere in the world. And in prosperity for the last ten 20 years. James and isolation, the one you gave, the one that peter talks about two. Make it hard to do that sort of real world, adam and innovation and deregulation, is not someone who loves freedom, loves markets, i love that exclamation. In fact the word the limit too much. It is such a comfortable explanation for me. Its so totally informed like my inherent belief. My biases but i love it too mu much. Maybe im missing something. It would be missing something else. Might it be that Government Spending less on investments. Or something happened with schools. It really isnt regulation, some other explanation. Matt is of course. I have to make the point that we saw incredible changes in the transportation credit but almost no changes in communications and then in the 20 century, we saw very little change in transportation but huge changes in computing. I want to show a cartoon of 1958 of what life would be like in the 31st century. The shot of a very oldfashioned moment delivering justice anybodys doing selling doing so the rocket elisabeth. Thats exactly the wrong way around. Using emails over the have rockets on the back of individuals. So get the future wrong in that sense. Was that because of government regulations intervention interference bit hard. In these because get some kind of physical limits that were hard to preach in terms of efficiency of bringing goods and things around on devices pretty to it feel it is not very efficient on a supersonic rocket. I think that some of the reasons why innovation shifts from one sector to another is not about the obstruction of your press things of god. Some of them definitely are. By the way if you havent seen improvements in transports, one of the most spectacular improvements that we have seen in recent yours, is actually is in transport predictions on speed. In safety. If you look at the fatalities in commercial passenger jets, they have gone some gigantic amounts in the last three four years. For million revenue passenger kilometers pretty different from about 3000 a year to about 50 year. Unbelievable change. In 2018 midyear zero fatalities in commercial jets. Thats extraordinary we think about how many were flying around the world, in the millions. Lasting improvements but they arent necessarily showing up in a pocketbook. Other aspects of our lives i think. Click safety. James clinic right right about this for this issue of innovation, what is the wrong and if we think something is going wrong over the past decade. People start pointing out, maybe there is a cultural reason. Though maybe a future oriented or thinking society. How many of our films and books portray an optimistic future. Tell the story that technology can lead to a Better Future instead of a future but ruined planet rai taking over the earth. I did sit down and went right out movies, would be way easier pretty where its all terrible and we should fear the future. Matt absolutely. Ive been complaining about this for years. I cant remember hollywood film which the future is portrayed positively. There might be some but i cant remember one. Or in which business portrayed possibly. An architect, is not really a businessman writing is more of an artist. Theres these strange obsessions with these pictures. By the way theres nothing new. The book a bright new world. Boys been told that the future will be terrible. Im quite passionate about this. Most over 13 years old, with the Environmental Movement just getting started, is very interested in history and i was interested in all of this. I became pessimistic because the grownups were telling me, noel was running out and pesticides are killing us and etc. Etc. And it went on and on and on. On the well is been blessed be elected now, preaching my teenagers. Sunday i will die a poisonous death. So in the 1980s came along we started prospering quite mightily, i was genuinely shocked. Some of the things that are trying to today still a 12 yearold and 14 yearold kids in schools, they are telling you they do for their future. We have stolen your future. Its just not true. Even the Climate Change projections show that we are going to get richer in this century. Maybe not quite so much richer. This was a model site. James i wonder if it. Im sort of worried doesnt matter, the stories we tell ourselves. People seem to be really right that ai is going to take all of the jobs we need robot maybe or somehow slow down technology. Given that we just spent ten minutes talking, that there has been this downshift. Yet the same time, everyone, they will own all the robots. In the rest of us will be living in humble on universal based income or something. I think it matters. Maybe no way did not in the past for some reason, the stories we tell ourselves. Matt i think you have automation still stops on his novel idea. Spiriva more than 200 years. It is the wrong all along. They said for this. The automation is going to kill jobs. Nearly 1960s, the u. S. President ial Commission Look into the inevitable mass unemployment that was when come about as a result of the introduction of computers into factories. It did not happen. We have more people avoid than ever before. I should say before the current crisis. And that is because what innovation does is it creates new jobs and opportunities. In the prosperity in which consumers levees News Services from other people. It will always be things we want other people to do for us. But is also worth considering i think, we are sharing out and working as hard. If you take someone in the early 20th century when Life Expectancy was less than 60. No such thing as a retirement. Most people at school for 14 or 15 went straight into the workforce. The average workweek was about 60 hours. He did not get much holiday. They were spending 25 percent of their entire life i work. The rest was sleeping writing. Our church are something. Today less than 10 percent. And its quite probable that the lien retirement have the life will be five days away, and the working eight hours everyday. So one third of every day. In taking normal holidays. And someone pretty is less than 10 percent of their life to be spent at work. So for 10 percent of your lifetime you can earn enough to support life to give other people a livin

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