Business | Opinion
Finding new spirit of enlightenment
Even the most innovative businesses should understand their limitations, according to Joel Mokyr. Their strengths lie not so much in dreaming up new ideas but making use of them.
- By Peter Marsh, Financial Times
- Published: 23:22 August 11, 2008
Even the most innovative businesses should understand their limitations, according to Joel Mokyr. Their strengths lie not so much in dreaming up new ideas but making use of them.
One of the world's leading economic historians and a professor at Northwestern University in Chicago, Mokyr argues that those companies that want to gain the most from new concepts should not necessarily seek to hire the most original thinkers, but instead tweak their management structures so they are as receptive as possible to outsiders with something new to say. He backs up his theories with research stretching back 5,000 years. The so-called "knowledge society" - the modern-day term for a world dominated by flows of information - has in fact been with us for centuries, he says. What is important is how to devise the conditions for creating knowledge and then capitalising on it.
The 61-year-old academic is the author of a stream of books about the links between history and change, including The Lever of Riches, probably his best-known work. He is also the editor-in-chief of the Oxford Encyclopaedia of Economic History. His views about how knowledge has led to wealth creation contain some important messages for business. The process happens most efficiently in the US, despite its image as a fading superpower. It does not matter that the US's mean scores in areas such as science and technology education are poor, he says. "What matters is we have Caltech and MIT ... It is the top 0.1 per cent of smart people, the whizzkids and brilliant geeks, who will move the world."
Such people - even if they remain in universities all their lives - can be vital for businesses, if companies can find ways to tap their thinking. It is a theme that emerges in Mokyr's forthcoming book, The Enlightened Economy, which is centred on the 18th-century "age of enlightenment" in Europe. The heroes of this era included the French philosopher Voltaire and the British scientist Joseph Priestley - people who were the 1700s equivalents of today's "whizzkids and geeks". "They were interested in trying to encourage people to behave better, and to lay the basis for material improvements in society, and to a large degree they succeeded," he says. Even leaving aside the achievements of specific people, he adds, the age of enlightenment "provided us with the basic ideas that have conditioned us ever since: that the creation and dissemination of useful knowledge is the key to economic progress".
Mokyr was prompted to write his book because, he says, in recent years some historians have espoused the view that the "enlightenment" was not enlightened at all. In this view, it was a dismal time that set the tone for a long period of grasping materialism, despotic governments and even world wars.
The professor is having none of this. He says the changes of the past - driven by technology - have been mainly for the better. "Think what surgical operations were like before anaesthetics were used for the first time in 1846. The doctor had 90 seconds to do his job, before the patient died from shock."
Macro-inventions
Mokyr admits that that knowledge does not always have positive effects. "Technology will not stop people being greedy, stupid or starting wars. It won't necessarily make people happy. But it provides a basis, if people want to use it, for improving human comfort and creating wealth." Which technologies have the biggest impact? Mokyr dwells on what he calls "macro-inventions", such as steam power, electricity or the mass production of steel. The macro-inventions of the future will be considered not just as single technologies but as clusters of ideas, such as communications technology. It is not one but several groups of technology: storage devices such as optical disks and flash memories, satellites and fibre optics.
One way in which this "cluster" of new ideas is having an effect, he says, is by changing how the world's brightest people interact. "There are limits on what an individual can do [in terms of brain power]. This naturally pushes people towards specialisation. But specialisation works only if you can get access to all the individual areas of thought. Because people can connect sources of information so much more easily [through new communications technology], the process of knowledge discovery will get faster and faster." Connecting ideas in medicine and engineering, for example, could lay the basis for radically new products or services.
As to where this knowledge can be applied, there are lots of problems that need solving, says Mokyr, and this is where the challenge for business people lies. The basic knowledge to tackle, for instance, global warming, already exists. All that is needed is for companies to apply themselves properly to make use of it. "My point is that most of the technologies [such as wind turbines or using hydrogen as a fuel] that produce carbon-less energy are technologically not particularly challenging in principle and have been known for a long time, some for centuries," he says. "The devil is in the fine details of design and performance."
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