Senate committee asked one of Jewkes’ co-authors, David Sawers, for an update on his study of the US and European aircraft industries. Sawers had found lots of growth, but not much serious innovation. US aviation had not come up with anything very new since the Second World War and it was still living off a few, mainly German, inventions that had been made in wartime. Almost none of the major advances in aircraft design, anywhere in the world, had come from private firms, and firms had been particularly resistant to jet propulsion. Jet airliners, he said, had only become established thanks to the US government underwriting the development costs and guaranteeing a military market for the Boeing 707. Major advances such as streamlining, swept-back wings, delta wings, and variable geometry all came from outside capitalist firms and had had a job being accepted by them – unless underwritten by military contracts. The only significant pre-War improvements made by capitalist firms that he had been able to find were the split flap (invented by Orville Wright, an old-school inventor, so not exactly representative) and the slotted flap (introduced by Handley Page in the UK). After the War, some modest innovation had been done by European aircraft firms on delta wings – the least adventurous of the new geometries (this work eventually led to the Concorde supersonic airliner, which was built largely at public expense, as a prestige project).
In the steel and automobile industries it was the same story: in general, no innovation except with lots of government support, or via the dogged persistence of independent inventors. In the photographic industry, Kodachrome (the first mass-market color film, launched in 1935) was literally invented in the kitchen sink by two musicians, Leopold Godowsky Jr and Leopold Mannes, in their spare time. The two men had struggled at the project largely at their own risk since 1917.
Sawers’ colleague, Richard Stillerman, put it thus:
Making profits is the primary goal of every firm. Few, if any, firms would support the kind of speculative research in manned flight undertaken by the Wright Brothers at the turn of the century after experts proclaimed that powered flight was impossible. Or the risky experiments on helicopters which a horde of optimistic individuals carried forward over several decades. Or the early rocket research pursued by individuals with limited financial backing.28
Turning to electronics, the committee learned that one of the industry’s greatest success stories, xerography (the technology behind the huge Xerox Corporation), had only seen the light of day after its inventor, Chester Carlson, approached the non-profit Battelle Memorial Institute for support. Other major innovations had been actively resisted by the firms in which they were being developed. Arthur K Watson (son of Thomas J Watson, founder of the IBM Corporation) was quoted to the effect that:
The disk memory unit, the heart of today’s random access computer… was developed in one of our laboratories as a bootleg project – over the stern warnings from management that the project had to be dropped because of budget difficulties. A handful of men ignored the warning … They risked their jobs to work on a project they believed in.29
The committee learned that talented researchers were fleeing capitalist firms to set up or join small, independently funded outfits where they could develop their ideas without interference. The ‘small startup’ subsequently became one of the iconic conventions of the electronics/computer industry and was touted as a great success, but small startups didn’t, don’t and can’t carry out the sustained research effort publicly funded teams are capable of. While some get rich, the vast majority do not.30
INNOVATION IN THE ‘NEW ECONOMY’
In the early 1980s the British government faced concerns about the country’s ability to compete in what was tentatively being called ‘the new economy’. Not all experts shared the government’s deep conviction that more intense commercial competition would deliver the requisite innovations, so they commissioned two US academics to nail the matter: Nathan Rosenberg and David Mowery.
Mowery examined nine major pieces of research into industrial innovations that claimed to have been inspired by market demand. On close inspection, he found that, while it was true that they had arisen within firms, most of them had been the fruit of researchers following their own interests, and ‘the most radical or fundamental ones were those least responsive to “needs”’.31 He also explained that most of the key innovations in computing and electronics had happened well outside the reach of the market: in universities and government research organizations. He concluded that ‘while one may rely upon the ordinary forces of the marketplace to bring about a rapid diffusion of an existing innovation with good profit prospects, one can hardly rely completely upon such forces for the initial generation of such innovations’.
Another big study, published in 2004 by Daniel Cohen and colleagues for the Rodolfo Debenedetti Foundation,32 also found ‘scant’ evidence of any link between competition and innovation,33 although any innovations that were adopted did seem to be diffused more rapidly by competition – the same point that Mowery had made 20 years earlier.
The study also found that the innovations carried out by individual firms tended to consist of adding ‘tweaks’ of their own, preferably patentable ones, designed to secure a positional edge in the market and perhaps monopolize some particular aspect of it. The story of the World Wide Web (now known simply as ‘the Web’) is a classic demonstration of how difficult it then becomes to preserve the innovator’s original vision, and the surprisingly large environmental cost of departing from it – this is described in detail in Chapter 10.
WHY CAPITALISM INHIBITS INNOVATION
The 19th-century artist, writer and socialist William Morris described capitalist competition as ‘a mad bull chasing you over your own garden’34 – a view now supported by a wealth of research. Governments and firms started to take interest in creativity as the pace of technological change accelerated after the Second World War. Creativity became a major area of study, which has consistently found that even mildly competitive environments and situations of unequal power are completely incompatible with creative thinking.35
In one of many experiments described in a popular book about creativity by Guy Claxton, two groups of non-golfers were taught putting.36 Both were instructed in exactly the same way, but one group was told that they’d be inspected at the end of the course by a famous professional. This group’s performance (measured in balls successfully ‘sunk’) was far lower than the other group’s. The small anxiety of knowing a professional would be watching them devastated their ability to learn.
Firms became very keen on using the new research to teach their staff to be more creative, and some psychologists found creative ways to teach creativity, without challenging the creativity-stifling structures of the firms that paid them. Brainstorming, team away-days and the creative enclaves mentioned earlier, are all products of this ‘creativity movement’.
Claxton has an illuminating anecdote about George Prince, co-founder of a popular ‘creativity-enhancing’ system called Synectics. To Prince’s chagrin, his own research led him to realize that the business context made his enterprise hopeless:
Speculation, the process of expressing and exploring tentative ideas in public, made people, especially in the work setting, intensely vulnerable, and that… people came to experience their workplace meetings as unsafe.
People’s willingness to engage in delicate explorations on the edge of their thinking could be easily suppressed by an atmosphere of even minimal competition and judgement. ‘Seemingly acceptable actions such as close questioning of the offerer of an idea, or ignoring the idea … tend to reduce not only his speculation but that of others in the group.’ 37
Even
