There may be no better time for a book on innovation than the middle of a pandemic. The world economy is choking in first gear as we indefinitely await a vaccine, having neglected inoculation research for decades. From Britain to Brazil, diagnostic testing drives have crashed and burned. Meanwhile, in almost shaming contrast, quarantine has turbocharged a digital revolution – not least mass video conferencing. As Matt Ridley puts it in his new book, How Innovation Works, “Innovation is the most important fact about the modern world but the least understood.”

So far, so daunting. But then Ridley, author of 2010’s The Rational Optimist, lands an exciting blow: there is almost an eerie inevitability about innovation – as if it were directed by invisible cosmic law. This radical meta-narrative runs like a lightning bolt through Ridley’s compendium of innovation past and present.

How Innovation Works yo-yos back and forth through history, from the rise of heat-melded tools in the late Stone Age to the dawn of gene editing. Neglected innovations like the number zero and the toilet S-bend are given meticulous attention alongside humanity’s most celebrated leaps forward, like the aeroplane. In this vibrant array of case studies, innovation is a gradual, collaborative, bottom-up phenomenon. The myth of the inventor who accidentally changes the course of history is dismantled: 21 people, Ridley reminds us, had a hand in inventing the light bulb. The origin of the steam engine is lost in the fog of the 1700s. It is impossible to say when the computer came into existence, because the process was so painstakingly incremental.

Out of the nitty-gritty of real life, How Innovation Works advances a rather abstract theory. If innovation is no accident, then what conditions cause it to flourish or fizzle? Inventions may be the soupy mixture of many minds, but for Ridley the “secret sauce” is freedom: the space to “exchange, experiment, imagine, invest and fail” is fundamental.

Ridley draws on examples from across history to make his compelling case. Necessity wasn’t the mother of invention when it came to farming, he points out. Humanity invented farming in a time of plenty, rather than famine, as only then could communities take up the luxury of learning by trial and error. The most innovative places on the planet have also been centres of trade. One of the reasons the United States has spawned so many entrepreneurs in recent decades is because bankruptcy is not a life sentence.


Democracy helps, but Ridley points out that it isn’t a necessary condition. Innovation thrives in the unlikely setting of totalitarian China, where entrepreneurs can operate surprisingly free of red tape. In Europe, by contrast, where Brussels likes to write rules that favour large incumbents, creative innovation has ground to a halt. (One of the most interesting sidetracks in the book is Ridley’s forecast for China, which is complicated. The country is innovating at breakneck speed but authoritarianism may yet prove its undoing: it is, after all, often easier in non-democracies for influential businesses to raise barriers to competition.)

If Ridley is compelling on the factors that aid innovation, he is devastating on what snuffs it out. He launches a detailed assault on the “creationist” myth that governments can magically conjure innovation.

Ridley also doesn’t fail to point out that state interference has historically only led to overregulation.

The Sunday Telegraph

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