Innovation in Decline?

By | September 12, 2005

An article in the October issue of Technological Forecasting & Social Change (only the abstract is available for free access online) proposes that technological innovation is not exponential and open-ended, but rather subject to economic limits. As explained in the article’s abstract:

A comparison is made between a model of technology in which the level of technology advances exponentially without limit and a model with an economic limit. The model with an economic limit best fits data obtained from lists of events in the history of science and technology as well as the patent history in the United States. The rate of innovation peaked in the year 1873 and is now rapidly declining. We are at an estimated 85% of the economic limit of technology, and it is projected that we will reach 90% in 2018 and 95% in 2038.

The author, Johnathan Huebner, comes to this conclusion by measuring innovation two ways:

  1. The relationship between the number of patents issued in the US over the past century and population growth.

  2. The relationship between total world population and the development of “important innovations” as (subjectively) defined in Bryan Bunch and Alexander Hellemans’ book, The History of Science and Technology.

So what Heubner describes as a decline in innovation is not, in fact, a decrease in the total number of innovations being developed, but rather a drop in the number of innovations per capita. According to Heubner, US patents peaked in the year 1914, while worldwide innovation peaked in the year 1873.

In an excellent review of this article, John Smart raises a number of questions about Heubner’s analysis. He begins by showing how even a per capita “decline” in patents depends largely on the years included in the sample set:

Huebner provides U.S. patent data which show that, when normalized to total U.S. population, there was a patenting peak in 1914, a significant drop from 1914-1985 to 50% of the 1914 value, and a recent rise between 1985 and 1999 back to 75% of the 1914 value.

…I do not know why Huebner’s patents graph didn’t have data more recent than an average from 1990-1999 as its most recent point. From my perspective, if 2003 data were included they would have refuted his argument that U.S. patents per capita fit a bell curve and are now in a declining trend. And when we take a longer view, issued utility patents increase 14 fold from 1870 to 2003, while U.S. population increased only 7 fold over the same period.

Smart observes that Heubner makes a better case for an overall worldwide decline in per capita innovation, noting that similar ideas have been proposed by Tessaleno Devezas and George Modelski, as well as Francis Fukuyama and John Horgan. He suggests that there may well be a per-capita saturation point for innovation within a given population, similar to a saturation point previously observed for a population’s energy consumption once its per capita income exceeds a certain point.

However, Smart also notes that Heubner’s analysis is countered by others (himself included) who see technological advancement accelerating continuously throughout human history. He suggests that an apparent decrease in innovation may be due to the fact that more and more innovations occur “under the hood,” below what he describes as the “threshold of easy perception.” These might include innovations taking place within open source development systems, or which are developed by machines themselves.

In addition to the points Smart raises, I think another question that bears asking is whether there is any particular significance measuring the development of innovations on a per capita basis. The entire human population potentially benefits from each new technological innovation. The size of the population might be a factor in determining how quickly (or whether) certain sub-groups within the population get to realize the benefits of that innovation, so there is probably a case to be made for the significance of per-capita adoption of innovation.

But development?

Consider agriculture. Crunching a few of the numbers presented here, in 1850 there were 16 US citizens for every one US farm. In 1990, there were 122 US citizens for every one US farm. Over that period of time, farmers dropped from making up about 70% of the US labor force to a slot somewhere between two and three percent.

Meanwhile, from 1930 to 2000, the number of irrigated farming acres in the US went from about 14 million to about 50 million. Over that same period, corn yields have increased from about 40 bushels per acre to about 150.

Total and per capita agricultural output have increased while total and per capita participation in agricultural activity have decreased. *

So there are clearly some fields of human endeavor, including those upon which we are most reliant for our survival and progress as a species, in which drastic decreases in activity when measured on a per capita basis have no impact on that activity’s ability to bring us ongoing (in fact, ever-increasing) benefits.

The decline of participation in farming is primarily due to one of the factors that John Smart suggests may be responsible for the per capita decline in innovation — automation. The tractor probably put more farm laborers out of work than any other single invention. Efficiencies from automation are then augmented by increasing yields, which come from improved pest control, better soil management, and genetically superior crops. The impact of all these factors is cumulative. Every year, it takes the efforts of fewer workers to provide more food faster. The analogy to innovation is not a perfect one, but the role of automation and the cumulative impact of past innovations are both factors that we have to consider when assessing whether innovation is in decline.

In listing those influential thinkers who share Heubner’s view that innovation may be in decline, Smart mentions Kenneth Boulding and Brewster Kahle:

They have independently suggested the era around the end of the 19th century, with the invention of the internal combustion engine and the commercialization of electricity, the era of Edison, and Tesla, was a far more innovative age than the one we live in today, as well as a time with significantly greater social impacts of accelerating technological change.

Smart contrasts major developments from that era from the ones we are seeing today:

Ask yourself, how many innovations were required to make a gasoline-electric hybrid automobile like the Toyota Prius, for example? This is just one of many systems that look the same “above the hood” as their predecessors, yet are radically more complex than previous versions. How many of the Prius innovations were a direct result of the computations done by the technological systems involved (CAD-CAM programs, infrastructures, supply chains, etc.) and how many are instead attributable to the computations of individual human minds? How many computations today have become so incremental and abstract that we no longer see them as innovations?

So here we have several factors at work: automation, the cumulative effect of previous innovations, and the fact that today’s innovators are working what is in some ways a more fertile and productive field than was available to their predecessors. None of that seems particularly indicative of a decline in innovation.

One final thought: even if technological innovation is truly in decline, either on a real or per capita basis, the total creative output of the species is definitely on the rise, both in real and per capita terms. I don’t think anyone would seriously argue that point. There are more literate human beings than at any time in the past, and literate human beings make up a greater percentage of the population than they have at any time in the past. There are more venues for creative expression than could even have been imagined a generation or two ago — not just publications and galleries and theatres, but blogs and podcasts and film studios run out of the garage.

The demand for creative output is at its highest level ever. Moreover, by evolving from consumers to producers of such output, the population is changing the nature of that demand. Creative content is increasingly something that we demand of ourselves, for ourselves. What can we expect, ultimately, from people who insist upon their own creativity, who appear to be willingly and willfully evolving themselves in a more creative direction? Such questions would be difficult to answer adequately in an entire book, much less a “final thought” which is already running a bit long. But it seems likely that we can expect such people, ultimately, to be equally demanding of the society they belong to and the world they live in. Demanding more of society would mean social reforms unlike any that we have considered before. Demanding more of the world itself would mean that the age of scientific discovery and technological innovation, far from slowing down as they approach some end point, might be on the verge of truly beginning.


* US population in 1850 was appx. 23,000,000. So the total number of farmers (70% of the population) was about 16,000,000. In 1990, the population was 248,000,000. So the total number of farmers (we’ll round up to 3%, even though it wasn’t actually that high) was about 7,440,000. A big drop both in real numbers and per capita.

  • http://www.blog.speculist.com Stephen Gordon

    When Edison invented the light bulb nobody could deny that he had created something new and unique. Ditto when Alexander Graham Bell invented the phone.

    But the team of engineers that work months or years to make slight improvements to the sound quality of a cell phone – they are forgotten. It pays to write on a blank slate I guess.

    Maybe improved communications (particularly the Internet) mean that duplicate patents are a smaller part of the picture today than in years past. If an innovator sees that a competitor has a head start on some potential development, he might choose to work on a related problem rather than compete head-on.

    My wife’s late paternal grandfather was an innovator without any patents to show for it.

    He was a machinist at an army depot. Someone would request a solution that required a tool or part that didn’t exist and he would fashion it. The family claims he invented several tools that remain in regular use today, including the oil filter wrench. Other than the military pay and pension, he never saw a dime from those inventions.

    He was an innovator by temperment – his gifts drew him to that kind of work, but he was also lucky to have the access to the tools to innovate.

    Phil made the point that computers have allowed end-user innovations. And think of all the people who will be empowered by fab labs.

  • http://www.portension.com jst33z

    Why is no one pointing to patents as the very cause for the decline in patents?

    The more we lock up innovation and restrict others from building on our past accomplishments, the more we can expect to see innovation decline.

    If we want to see new growth in innovation, we need to rethink patents, copyrights and all other forms of so-called Intellectual Property controls. We must set our ideas free.

  • http://www.theglitteringeye.com Dave Schuler

    jst33z has got it right, I’m afraid. The number of copyrights has declined both on an overall and a per capita basis since the passage of the Copyright Extension Act in 1999. The reason for this is obvious: new ideas don’t spring forth full grown as from the brow of Zeus, they’re built on other ideas.

    You can like our current system of intellectual property or you can like innovation but you can’t like both.

  • http://www.blog.speculist.com Stephen Gordon

    Dave, jst:

    The goal of intellectual property law should always be to maximize innovation. That might seem counter-intuitive when you are allowing a single person/entity to control an idea for a time.

    The idea is to allow innovators to profit from their efforts. Human nature is such that if we can’t profit from a thing, we are much less likely to devote our time to do that thing. Potential innovators would choose different work if they knew that the second their innovation is born, it’ll be stolen away by others.

    But you don’t want to lock away an idea for too long either. With so many ideas being built on old ideas, allowing one entity too much control of an idea for too long a time is…a bad idea.

    The goal should be to allow innovators to profit just enough from their innovations to encourage them to continue to innovate and also encourage new innovators to get into the act – even if, as you said, they are building on old ideas.

    It’s a balancing act. The legal pendelum swings back and forth on this – each generation has to decide what balance is appropriate.

  • http://www.blog.speculist.com Phil Bowermaster

    Stephen –

    Your comments reminded me of my own grandfather, who was an “engineer” (he never went to college) who worked for a company that manufactured grain silos — except for 1942-1945, when they made shell casings. He designed several pieces of equipment and processes that were still in use long after he retired. And, no, there were no patents involved.

    Dave/js –

    Good points. While I don’t personally believe that innovation is in decline, it is certainly not helped by things like draconian copyright and patent restrictions. The more friction would-be innovators encounter in these areas, the more likely they are to move to open approaches. Ultimately, we may well see innovators shrug off patents and copyrights altogether in favor of open source and creative commons licensing.

  • bobcrouse

    Good points, but remember that although our IP system is intended to promote progress by:

    1. fostering innovation by rewarding the inventor (as stated by many above); and

    2. fostering innovation by requiring others to innovate around patents.

    I think #2 is the more important. This is especially true given that potential infringers have some choices: buy a license (if the patent appears valid & broad etc.), ignore it if it appears invalid (or too narrow to be a threat), or innovate around it.

    A big portion of the benefit (there are others) stems from the fact that innovation around a patent (many times) results in a simpler solution than that described in the patent. This isn’t necessarily by accident as the structure of the patent law allows someone to avoid the claims of the patent by removing some part of what the claims recite (e.g., performs the function in fewer steps).

    fwiw,
    bob

  • Brent Michael Krupp

    A few folks commenting above hint at it, but I’ll say it outright: why assume patents issued have anything to do with the amount of innovation occuring? Patents are fundamentally a commercial event, not every innovation gets patented and not every patent represents innovation. I’d say the “declining innovation” theory suffers from garbage-in, garbage-out. Without a better surrogate marker for innovation, I am utterly unconvinced.

  • http://www.blog.speculist.com Stephen Gordon

    Brent:

    Precisely.

  • http://www.blog.speculist.com Phil Bowermaster

    Brent:

    John Smart has the following to say about patents:

    – Huebner proposes that patents can be considered a “basic unit of technology,” but I find them to be mostly a measure of the kind of technology innovation that humans consider defensible in particular socioeconomic and legal contexts, which is a crude abstraction of what technology is. Our judgments of importance are as much a measure of social custom as they are of assessed originality and value. –

    Having only read the abstract, I can’t comment on what rigor Heubner may have applied in drawing a connection between innovation and the number of patents. But even disagreeing with Heubner’s conclusions, I have no trouble with the idea that there is at least some loose correlation between the two.

    For example, I would expect that a rise in the number of patents would reflect economic conditions generally favorable for developing new solutions and technologies. But for the reasons stated above, a decline in patents — particularly on a per capita basis — need not lead to the conclusion that innovation itself is in decline.

  • http://triticale.mu.nu triticale

    A patent is a specific license to sue people. There are alternative business plans, especially in an environment of spectacularly rapid innovation where you need to have made your money in less time than it takes to go thru the processes of getting a patent and winning an infringement suit.

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