What is Innovation?

“Innovation Nation” is the title of a recent Financial Post series,11“Innovation Nation,” The Financial Post, http://innovation.financialpost.com. the sub-heading of which tells us that Canada is competing in a “cutthroat global ideas economy.” An editor’s note adds: “Canada has a rich history of innovation, but in the next few decades, powerful technological forces will transform the global economy… At stake is nothing less than the country’s prosperity and economic well-being.”

It is difficult to dissemble a concept like innovation; in its conventional use, the term is propagandistic, not analytical. It is yoked to the concept of growth, discussed in the previous column (see SDUK03, p. 20), and within popular economic discourse if growth is the goal, then innovation is the means.

At no point in the Financial Post series is innovation defined. There are mentions of new technologies, as well as research and development. It is implicitly assumed that these are part of innovation, but there is no examination of how innovation could be something more. And there is certainly no question that we always want more of it. But what if innovation is not inherently desirable?

For starters, innovation is not invention, which we can think of as the subset of art deriving newness from the practices and materials of production. The climate crisis demands radical transformation of our productive systems, so invention is needed now more than ever. But what about innovation?

When economists speak of innovation, the most prominent theoretical touchstone is Joseph Schumpeter, for whom entrepreneurs were a key component. He wrote, “[T]he function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention […]. This function does not essentially consist in either inventing anything or otherwise creating the conditions which the enterprise exploits. It consists in getting things done.”22Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper Perennial, 2006 [1942]), 132; emphasis added. Schumpeter is best known for the phrase “creative destruction,” which he considered the “essential fact about capitalism.”33Ibid., 83. To get things done is to bring inventions—new products, new processes, new organizational forms—to the market. It is the market that will then pass judgement, deciding whether the new destroys the old. Market success is taken as proof that the new is preferable.

Innovation is the process of channelling invention to satisfy the need for financial returns. The term “exploit” is perfect in this sense. There are many possible trajectories of an invention as it transforms society; different inventions could alter technologies in various ways with wildly different consequences. Among these evolutionary paths, expected profits provide a selection mechanism: entrepreneurs must show investors that their offering will generate market-beating returns. This means acquiescing to the “one dollar, one vote” economy dominated by the wealthy. For example, middle-aged men humiliated by their erectile dysfunction have more disposable income than children dying of malaria, so pharmaceutical companies prioritize the development of boner pills over anti-malarial medication.

The demand for returns also encourages externalization. If costs can be shifted to others, then profit margins can be increased or prices can be reduced, further enticing buyers. Capitalists put their money into new projects, which are always assessed on their ability to generate returns. However, there is no necessary correlation between financial returns and the betterment of society. For decades, investment in oil and gas, used to develop new technologies for faster and cheaper production, enjoyed sizeable returns. But those returns were predicated on the externalizations that produced the climate crisis. Are we really better off for innovations in the oil and gas industry that facilitated the increased use of fossil fuels?

The reflexive insistence on innovation accepts that virtue is aligned with money; where money circulates the good is found. To question the correspondence of the good with the valuable, or to suggest a negative correspondence—that money sows destruction—invites derision. When outlets like the Financial Post sound the alarm that Canada is failing to be as innovative as other countries, they express concern that we will fail to attract investment and spending dollars. It is simply a given that we want to attract those dollars, that we must attract those dollars, and we must vigorously pursue whatever might do so. In other words, we just assume that we must allow the wealthy to pass judgement on our creativity and productive output.

In Forces of Production, the historian David Noble describes the process by which one automation technology rather than another was chosen in the machine tool industry.44David F. Noble, Forces of Production: A Social History of Industrial Automation (New York: Alfred A. Knopf, 1984). The rejected technology was proven to increase output per work-hour more than the chosen technology. However, the other technology deskilled machine tool workers. Since skilled workers have more bargaining power, they can demand higher wages and better working conditions; this increases costs, cutting into profit margins. As such, the deskilling technology was adopted.

The philosopher Cornelius Castoriadis observed that our creativity is just as capable of harm as it is of betterment: “Auschwitz and the Gulag are creations just as much as the Parthenon and the Principia Mathematica.”55Cornelius Castoriadis, Philosophy, Politics, Autonomy: Essays in Political Philosophy, ed. David Ames Curtis (New York: Oxford University Press, 1991), 3.

It was the demand for returns that made it logical for Exxon to obfuscate the knowledge that fossil fuels were drastically changing the global climate. By the Schumpeterian definition of “getting things done,” oil executives and their functionaries were highly innovative, introducing new forms of public ignorance. For example, they leveraged the scientific language of hypothesis to cast doubt on the near-consensus among scientists that human activity was transforming the climate in ways that may doom humans as a civilization, or even as a species. As well, profitability in the oil and gas business means that the market has greatly rewarded this innovation.

As mentioned above, invention must be part of grappling with the climate crisis. But, as Schumpeter understood, invention is not sufficient; we must get things done by introducing sustainable practices and changing destructive habits of production. However, there are also existing social practices we wish to sustain, which we need to shore up. We cannot expect the mechanisms that rewarded innovations like Exxon’s deliberate obfuscation of climate science to offer what is needed—both the old and the new—to save us.