Innovation is the creation of new problems. Or rather it is the embodiment of a radical new idea that forces people to reckon with it, and that leads to new problems, or questions, for people to solve. Improvement is then the solving of problems that follows innovation. All of that improvement built on top of innovation translates to progress, or the creation of value, or whatever you want to call it. Most of what we do is improvement, very little is actual innovation.

Why do we care?

Well, when the mixture between innovation and improvement is just right, you have a healthy system of growth and new idea generation. It’s exciting to be a part of such a system.

But when the mixture isn’t right, when there’s not enough innovation to keep up with all of the improving that is endlessly happening, or when the innovation that is occurring is not of the big, paradigm-shifting sort but is of the minor, isn’t-that-nice sort, then you get problems. Things start to stagnate. People keep working on the same problems over and over, trying to eek out improvements, but they start to see less and less return on their efforts. Left alone, without being given something new to work at, some new idea to improve upon, their efforts at improvement will eventually yield no return at all - no improvement. Beyond that, if they continue, their efforts will actually have negative results.

Improvement of innovation over time yields diminishing returns.

As an example, think of the steam engine. The steam engine was an enormous innovation, and after its invention it was improved upon for years and years in innumerable ways. Today nobody bothers to improve on the idea of the steam engine any more, because newer innovations in transportation have allowed people to turn their focus elsewhere. The steam engine is obsolete. But imagine if newer innovations had not displaced the steam engine - imagine if people were still improving on the basic idea today. What would those improvements be like? The answer is that they would be very difficult and expensive to come by, and the value they yielded would be very small, especially compared with the value of much earlier improvements. Improvement, over time, yields diminished returns.

Luckily innovation has moved us beyond the steam engine, and nobody is faced with the problem of trying to improve on an idea that has been essentially perfected.

There is a book that I read a while back, called The Collapse of Complex Societies. In it, the author, an archaeologist, argues that every complex society ever to have existed has eventually collapsed under the weight of its own increasing complexity. As societies grow, they naturally become more complex, and complexity beyond a certain point yields decreasing returns on investment. Constant improvement over the tools by which you keep society operating smoothly becomes costlier and costlier, and yet gives you less and less in return. Past a certain point, it isn’t worth the effort to keep up the work. The work you put in is greater than the reward you get out. When this happens, societies collapse - they revert to a simpler form, with less complexity. That, in the end, proves to be more profitable for the people in question.

The only thing that offsets this ever-decreasing return on investment for societies, which would otherwise lead to collapse, is innovation - the introduction of new ideas that give them new ways to meet their challenges. Those new ideas, being so rough and new, also make improvement very cheap and rewarding. So people can set to work solving problems and improving profitably again for a while before diminished returns set in once more.

Innovation then, at the macro level, is literally forestalling the otherwise inevitable implosion of society, keeping its means for dealing with all of its challenges cheap enough to be worth the effort.

At the micro level, which is the point from which I experience things, it just makes the world a more interesting and fun place to be from day to day. Solving big, rewarding problems is a lot more exciting than solving small problems with little reward.

Whichever way you look at it, we need difficult ideas, ideas that force us to question everything we take for granted. We need big, new problems, a continual stream of them, to keep us engaged, and to keep our work rewarding. We need this more than we need improvement, really. Improvement is essential, but it is also a given - we are creatures of improvement, we do it naturally and consistently on whatever is placed in front of us. Innovation is more of a wildcard, a mutation - it happens sporadically, not necessarily when you need it and are hoping for it.

Which of course makes us love it all the more.

Posted on Wednesday, February 20th, 2008. Filed under Random.
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