Business

Will future innovation help us live long and prosper?

From: Blog

Viewers were introduced to Captain Jean-Luc Picard and the new Enterprise just over 25 years ago, but much of the “innovative” technology used on his ship can be frustrating for today’s audiences. When he lends a book, why does he have to physically hand over a Kindle-like object? And why does he have one Kindle for every book? Haven’t digital content, Flash technology, and wireless internet been invented in the 24th century? Or is the problem that Gene Roddenberry, America’s answer to Jules Verne, simply ran out of good ideas?

This week, the IGM Economic Experts Panel was polled on this very topic—the question of whether technological innovation is somehow limited. The panelists were asked to consider whether it is true that future innovations will not be transformational enough to promote sustained growth rates in the US and Western Europe over the next century as high as those of the past 150 years. An unusually high 50 percent of them replied they are “uncertain,” and 13 percent chose to give no opinion.

“The surprises of the last 150 years should make clear the folly of trying to forecast the next 150,” said Richard Schmalensee, of MIT, with his “uncertain” vote. Many of the panelists felt the same, including Caroline Hoxby, of Stanford. “I am certain that anyone sensible should be uncertain. If one can predict innovation well, one should not be an economist but an inventor,” she said.

Meanwhile, Jonathan Levin, also of Stanford, conducted a little thought experiment. “Maybe if the answer is a clear no, we can reconvene the panel in 150 years to discuss,” he hypothesized.

Others of the economists who voted “uncertain” were cautiously optimistic. “The last 150 years have seen huge increases in living standards. Similar future increases are an even bet given the IT revolution and human ingenuity,” said Steven Kaplan, of Chicago Booth.

Perhaps of even greater interest than the high number of “uncertain votes” is the number of panelists who voted “no opinion” but left an explanatory comment. “I’m unaware of any serious evidence that would help one formulate a reliable opinion,” said Michael Greenstone, of MIT. Carl Shapiro, of Berkeley, agreed. “History suggests optimism, but 150 years is a mighty long time,” he said.

Nearly 30 percent of the panelists did disagree with the notion that innovation would not sustain growth. “Billions of people escaping poverty unleashes billions of minds for innovation,” said Christopher Udry, of Yale. Daron Acemoglu, of MIT, qualified his vote. “The right answer is ‘uncertain.’ But ‘disagree’ emphasizes that the view that we are running out of ideas has little basis,” he said.

Then, there are the handful of pessimists that agreed we are in for less growth in the next century. David Autor, of MIT, was skeptical of being able to keep up with the recent past. “That’s a ridiculously high bar to cross, since no other period in human history has ever seen anything like the last 150 years!”

Still, this week’s poll leaves us to wonder what the future holds and whether those of us who will reside on starships will have easy access to good reading material.

—Robin Mordfin

Cat:Business,Sub:Economics,