Silicon folly: The pitfalls of innovation policy
Innovation is taking the world by storm. Or at least the word “innovation” is. From Russia to England, from Singapore to the United States, policymakers, business leaders, and university administrators sing innovation’s name. With Malcolm Turnbull’s elevation to the leadership of the Coalition, and victory at the election, Australia has become yet the latest nation to join the craze. Turnbull promised an “ideas boom” when announcing his innovation statement in December. “Unlike a mining boom, [innovation] is a boom that can continue forever,” he said. “It is limited only by our imagination, and I know that Australians believe in themselves. I know that we are a creative and imaginative nation.”
Yet innovation-centrism often skews our understanding of how technology actually fits into our social and economic worlds. For most of the minutes in most of our days, we spend more time maintaining and sustaining existing things. Imagination and creativity are important, but if we only think about the things we can make in the future, we risk the wellbeing of the things we already have. Put another way, if Turnbull and others like him celebrate The Innovators, who will celebrate The Maintainers, those ordinary individuals who keep our world from falling to pieces?
To answer this question, we must first examine how we came to this place. The notion of innovation has a peculiar history. Indeed, our valuation of a few words has changed so radically over time. In the church-dominated late-Middle Ages, innovation was a distinctly bad thing. Innovation was heresy. For instance, the King of England, Edward VI, issued “A Proclamation Against Those that Doeth Innovate” in 1548.
Many factors led to a reassessment of innovation. In the 18th and 19th centuries, political liberalism and freethinking came to value and defend the right to original and challenging ideas, including ideas that called for an end to monarchy. Innovation undermined the old and called in the new.
But the single most important factor was how innovation became intertwined with the fate of industrial capitalism. The human introduction of new technologies and new industries changed patterns of work and production, revolutionising economic growth and quality of life. Such changes also exacted a toll, as old industries matured, withered and died, often leaving jobless workers immiserated and filling whole regions with depressed ghost towns. This dual nature of simultaneously making and unmaking famously led the Austrian economist Joseph Schumpeter to describe capitalism as a “gale of creative destruction”.
Since World War II, the notion of innovation has become more and more tied to technology. Indeed, the phrase “technological innovation” did not really exist before the war but sprang into use in its wake, particularly after 1960. It was about this time that economists discovered the central role that technological change played in economic growth. It seemed to these thinkers that technology was the driver of economic development. Understandably, then, economists and their audience of policymakers began to ask themselves more and more: how can innovation be encouraged, fostered, spurred on? They almost came to view innovation as a national resource – like arable land or mineral deposits – something that could be harnessed or exploited.
With the apparent triumph of the mode of technological capitalism embodied by California-based companies such as Apple, Google and Facebook, economists and policymakers began to look at Silicon Valley as the model for stimulating growth. The mantra of “fail fast”, which nobody would recommend to school-aged children, suddenly and bizarrely became accepted as valid business advice.
The worship of failure is only one of many ironies in the rise of innovation-speak. First off, although we hear the word “growth” more and more today, with few exceptions we have been in an extended period of low economic and productivity growth since 1970. Rhetoric is not reality. Second, innovation policy and innovation studies have become burgeoning fields since the late 1970s, but there is little evidence that specific innovation policies have direct and measurable effects. Moreover, advocates for such policies emphasise how innovation is good for everyone, particularly because it creates jobs and improves quality of life. Yet, in practice, innovation policies, including facets of Turnbull’s plan, such as tax breaks, research funding and incentives for entrepreneurs, primarily benefit people who already have money.
It is no coincidence, then, that the age of innovation-speak is also the age of increasing inequality in many industrial nations. It was no surprise, for instance, when West Australian Liberal politician Andrew Hastie criticised Turnbull’s innovation plan for alienating voters. During the campaign, a man asked Hastie how the plan would benefit his children. “I struggled to answer,” Hastie said. “He couldn’t understand the reason for company tax cuts, he wasn’t earning enough to benefit from the increased tax thresholds and he wasn’t an innovator – he was just an everyday Australian who was trying to pay down his mortgage and look after his children and ensure they had a brighter future.”
Nevertheless, innovation seems to be irresistibly appealing to politicians and policymakers. Really, who could be against it? Before Turnbull announced his much-hyped innovation statement, Labor unveiled its own proposals, looking to build regional innovation hubs. “Basically we have got an aspiration to help turn Silicon Valley into Kangaroo Valley,” Opposition Leader Bill Shorten said, having earlier proclaimed 2015 the “year of ideas”.
Rhetoric around innovation is full of talk about ideas, imagination and creativity. Indeed, contemporary innovation-speak comes with a full package of jargon, much of which is reflected in Turnbull’s plan: angel investors, agility, thought leaders, entrepreneurship, change agents, start-ups, incubators, regional innovation hubs, unicorns and STEM education, focused on science, technology, engineering and mathematics. It’s Orwellian double-speak for the Innovation Age. Many of these terms come from Silicon Valley, which in this case truly deserves one of its nicknames, Silly Valley.
The emptiness of all of this jargon should alert us to a more distressing problem: when cast as a guiding light for policies of all kinds, “innovation” turns attention away from fundamentals such as health, labour and infrastructure policy. These are areas that all should agree are of profound importance to a nation and its citizens, but that aren’t necessarily well served by a fixation with novelty.
This message should resonate with both conservatives and progressives, and there is plenty of evidence that it does. After all, modern conservatism is based on two fundamental ideas: a belief in the importance of conserving what we have inherited from our ancestors and an attack on airy-fairy plans and programs that have little to do with grounded reality. Meanwhile, progressivism was born out of the belief that we should mitigate the worst aspects of industrial capitalism and work to ensure the wellbeing of all. Both of these political programs are best served by focusing on the basic issues that we face. And neither necessarily supports the conclusion either that societies should direct substantial energies and resources towards innovation or that innovation is a value in itself. It isn’t; it is but a means to ends, and it is ends that matter.
Having said that, we cannot deny that innovation has been important for achieving the social goals that both conservatives and progressives support. Life for many people on this planet is much different today than it was in, say, 1850. Yet such technological change has left us with numerous and enormous systems that now require our care if we are to sustain and improve our current quality of life. And that should be our ultimate goal. Everything from power grids, highway systems and modern hospitals now require upkeep and conservation, and that means work. We cannot forsake all of the people who simply keep our world going and the policies that support them for the often empty promise of “innovation”.
Citizens and even seemingly out-of-touch politicians know this. Turnbull may or may not have been right when he attacked Labor’s scare campaign on a privatised Medicare, calling it a “grotesque lie”. But even he was forced to admit that Labor’s criticisms fell on “fertile ground” because “a material number of Australians were sufficiently concerned about our commitment to Medicare that they changed their vote”. Voters’ basic concerns went unaddressed in Turnbull’s innovation-centred campaign.
Transport policy provides more good examples of this general pattern. While it can be entertaining to argue about futuristic technologies such as the self-driving cars contrived by the icons of Silicon Valley, the daily lives of Australians would be improved by policies that devote funds to the maintenance of existing modes of transport: roads, trains, bridges and airports.
Obviously not all aspects of Turnbull’s plans are bad. It makes sense to retool schooling to give students the skills they need in today’s world, as long as such changes do not endanger the traditional goals of education, such as fostering critical thinking, a continually scarce resource. We will need new technologies and new systems in the coming years to deal with difficult problems, including the serious threat of global climate change. But we must always make such changes in the context of maintaining and caring for each other and the world that we already have, instead of some fantasised, prognosticated vision of the future, which may or may not come to pass. On this front, our leaders could do much better. We do not want to be left refugees of a destroyed planet, surrounded by the fruits of innovation.
This article was first published in the print edition of The Saturday Paper on Aug 27, 2016 as "Silicon folly".
A free press is one you pay for. In the short term, the economic fallout from coronavirus has taken about a third of our revenue. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.