Compared to the past, progress is perceived to be slower and more difficult, despite technical innovations. But here, too, less can sometimes be more.
There was a time when American experts were envious of the German economic system, which was constantly producing new discoveries. In 1861, American scientist William Barton Rogers wrote about Germany, “One shouldn't underestimate the growing daily evidence of the beneficial influence a culture of science can have on the industry and civilization of entire nations.” He called for a new discipline of “industrial arts.” It wasn't long before he founded the Massachusetts Institute of Technology, which would henceforth concern itself with one thing above all – organized progress.
In the meantime, many parts of the world, including Germany, now envy the success that was ushered in by MIT and other elite US universities. One question, however, has yet to be satisfactorily answered by the excellent researchers on both sides of the Atlantic: Why does progress seem to be getting slower and more difficult? How can we succeed in further raising people's standard of living?
Productivity growth has slowed to a snail's pace, even as rapid technological progress is the order of the day. While investment in computers and new technologies has increased, sometimes at double-digit rates, productivity growth actually declined. American economist Robert Gordon has described this phenomenon as the “productivity paradox.” There was no sign of it in the first industrial revolution, when electricity and the steam engine unleashed a veritable productivity boom. Contrast that with today. Is progress a dying concept?
Not at all. But you have to look closely to understand what's going on. The first important question is: Is progress an endless, linear process, in which we can constantly reinvent and redesign everything? My guess is no. In the 19th century science made many great discoveries that facilitated equally great leaps in civilization, with corresponding growth spurts. The discovery of electricity, the invention of the steam engine, and the breakthroughs in atomic and quantum physics revolutionized society and the economy. It took a revolution in the natural sciences, intelligence and faith to go from the clerics of the Middle Ages, who still believed in a flat earth, to Galileo Galilei. Maybe that kind of transformation can't go on forever, perhaps because the portfolio of human possibilities is indeed finite. We may be able to fly to Mars today, but the laws of quantum physics remain valid.
The leaps in innovation are getting smaller
Some people may not even want to entertain the idea, and yet it is important to address it. After all, it's the only way we can work out how to reconcile world population growth, the scarcity of natural resources, the consequences of climate change, and people's expectations of a rising standard of living. If the theory of diminishing marginal utility applies not only to consumer behavior but also to our progress, it will change our future.
This has been described as the “burden of knowledge,” an economic concept coined by American economist Benjamin Jones in 2009. Using a large data set, he showed that technological progress and a growing knowledge base are making it increasingly difficult to discover anything new at all, and that the leaps in innovation have become smaller. Inventors are getting older and older before they make their first invention, while professional specialization and teamwork are increasing.
India doubles solar capacity in seven years
Moreover, progress is not the same for everyone. For example, a recent study showed that how companies use artificial intelligence depends to a large extent on their size and the previous experience of their teams. Large companies benefit from the use of AI applications; smaller companies benefit more from using AI on a meta-level to develop new and innovative processes. So even the process by which progress can emerge is becoming more complicated.
And finally, progress doesn't mean the same thing to everyone. Since the beginning of industrial society in the 19th century, the narrative has been that a society's economic and moral progress go hand in hand. In the meantime we have learned that different parts of the world ascribe to very different views of what progress actually is. India is currently constructing one of the world's biggest solar parks about a three-hour drive north of Bangalore. Three million solar panels will be able to produce as much energy as two large nuclear reactors. That means India will have doubled its solar capacity within seven years, while it took Germany two decades to do so. That's progress.
Education and training in society, companies and institutions is important
Unfortunately, the expansion of renewable energy in India is not resulting in a corresponding decline in carbon dioxide emissions. About 55% of India's energy is still being produced by coal. Assuming India's GDP will increase fivefold by 2040, the country's energy demand will at least double, and carbon dioxide emissions will increase by 80%. That's not progress.
“If I have seen further, it is by standing on the shoulders of giants.” Isaac Newton wrote these words in 1676 in a letter to a colleague. Today, the sentence would have to read, “Although I have laboriously climbed up the back of a giant, I still can see only a limited horizon.”
It is becoming more difficult to make great strides. That's why education and training are so important in society, but also in companies and institutions. And the realization that we need to take a different view. Even when it comes to progress, sometimes less can be more.
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