!VAR HAGENDOORN

Silent Innovations

In a recent article in the New York Times the economist and prolific blogger Tyler Cowen argues that in the mid-1970s developed countries reached a technological plateau. He develops the thesis at greater length in an e-book called The Great Stagnation. I haven't read it yet, because it's only available for kindle, so I can only comment on the NY Times précis.

Tyler Cowen claims that "although America produces plenty of innovations, most are not geared toward significantly raising the average standard of living" and that "the basic accouterments of life have remained broadly the same" as several decades ago. Basically the claim as I understand it, is that the technological gap between a horse carriage and a mid-20th century car is bigger than the gap between a mid-20th century car and a contemporary car.

I believe that the late 19th and early 20th century saw an acceleration in innovation, economic growth and standards of living. By comparison, and despite the flood of new technological gadgets, it may look as if we are currently living through a period of stagnation. However, I don't believe we have reached a plateau. Apart from the problem of measuring technological progress, the problem is that the impact of some recent innovations may go unrecognized, for instance because they occur in a different realm, in the social sphere for example, rather than health or wealth. These are what I call silent innovations: innovations that few people know about or understand but that have major impact.

To give just one example, one of the greatest silent innovations in recent years is virtualization. Now virtualization can mean many things. For instance it may mean that a server is divided into several virtual servers each acting like a real server and running its own operating system with its own disk space and memory. It can also refer to the separation of the desktop environment from the physical machine on which it runs, this is often called desktop virtualization. The fact that you can run Windows on a Mac and switch between both operating systems is another example of virtualization. But it is desktop virtualization that I believe is the most revolutionary. For one thing, it makes it possible to log on to your office desktop from your own computer and access all files, software and so on. This in turn means that you no longer need to go to the office to work.

I believe that virtualization will bring about major changes in the way people work. People who would otherwise call in sick may work from home. Just the other day a colleague of mine became father. Both he and his wife have a full-time job, but since they can work from home they can share their parenting duties. There is no more need to take the child to a nursery school or for one of both parents (usually the mother) to work part-time or quit working altogether. Needless to say that this is a major benefit for both parents and child.

Since more and more people are choosing to work at home for one or several days a week already commercial real estate agents in the Netherlands and Germany expect that, as a consequence, demand for office space will decline. Every day many desks at the office where I work stand empty because people work from home. Last year a consultancy firm was hired to measure the building's occupancy rate. The days that every employee has his or her own desk will soon be numbered. Indeed, some organisations have already switched to flexible workplace solutions.

In addition to being a largely unrecognized innovation it is also hard to credit any particular person or organization with the invention of virtualization. What is currently referred to as virtualization is the result of numerous innovations. It also builds on a whole ecology of other innovations, from high speed internet to advances in data security.

To give an example of another silent innovation, millions of people around the world benefit from the invention of proton pump inhibitors, which first came onto the market in the late 1980s. They are among the most prescribed drugs and significantly raise the standard of living for those who take the drugs. Also, the discovery in 1982 that the majority of peptic ulcers are associated with a particular bacterium, Helicobacter pylori, meant that an effective treatment could be developed for these cases. Given the incidence rate of peptic ulcers this marks a major advance. (The scientists who discovered the role of Helicobacter pylori in gastritis and peptic ulcers were awared the 2005 Nobel prize in Physiology or Medicine. See also this timeline for a history of discovery and innovation in the treatment of peptic ulcers). While these drugs and treatments do not prolong life, they do raise the quality of life for those who suffer from various stomach diseases. By the way, to only measure progress in medicine in terms of life expectancy is just plain silly.

I could name various other silent innovations which have considerable externalities that go largely unnoticed. I have written before (and here) about how my own life has changed over the past few years due to technological progress and about the changes that I foresee in the not too distant future.

Even though the number of technological innovations may appear to decrease, some seemingly small innovations may nonetheless bring about fundamental social changes and improve the standard of living for some people some of the time.