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Has the World Reached the End of Innovation?

January 20, 2013, 4:56 PM

We are witness to the end times.

Some economists believe the staggering increases in wealth experienced by Western nations during the last century were one-off events. They argue that there are only a few truly fundamental innovations—the ability to use power on a large scale, to keep houses comfortable regardless of outside temperature, to get from any A to any B, to talk to anyone you need to—and that they have mostly been made. "There will be more innovation—but it will not change the way the world works in the way electricity, internal-combustion engines, plumbing, petrochemicals and the telephone have."

The best is yet to come. 

Other economists argue that the historical evidence is on the side of groundbreaking innovations to come. Essential to their argument is the idea that innovation (having new ideas) is not the same as technology (what new ideas bring to the economy). Once the steam engine was invented, for example, its effect on the British economy was still virtually unknown for another century. Technological changes that result from current innovations in computation, for example, may take years, even decades to be fully realized. Once they do, however, the gains would be expected to be quite large. 

Photo credit: Shutterstock.com

Read it at The Economist


Has the World Reached the E...

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