Innovation Potential: More Abundant Than It May Seem

The good news? Innovation is not composed solely of major economic events. Nor is it simply the latest high tech advances. Likewise, wealth creation need not be limited to what occurs along the frontiers of knowledge in major universities or corporations. Fortunately, much of the "outside the box" thinking which could lead to eventual progress, is so incremental in nature, as to scarcely be noticed at first. Still: whether or not incremental gains can translate into larger economic gains, depends on whether innovation is believed to an economic option for all of society, and not just the few.

In recent years, I've been learning to describe the incremental patterns of time arbitrage as a potential template for economic interaction. Time arbitrage is a representational tool which would allow individuals to explore more meaningful contexts for services formation, one incremental matched hour at a time.

Presently, economic progress is mostly pursued in ways which leave little room for the contributions of average citizens. Yet policy makers are hardly alone, in believing innovation is mostly a matter of cutting edge technology and efforts from the most skilled members of society. However, this approach ensures that most of the innovation which takes place, is compensated and intended for specific purposes and outcomes.

Indeed, many earlier innovators whose contributions benefited all members of society, were not necessarily compensated by either governments or firms. Instead, innovators were similar to other individuals who were pursuing personal challenges and journeys of discovery, through their own means. It's time to reclaim the average citizen, as a part of the networks which include personal challenges and journeys of discovery.

A new book from Kevin Laland, "Darwin's Unfinished Symphony", appears to provide some interesting context for the role of innovation as well. As Arnold Kling notes, "The book is focused on the co-evolution of brain capabilities and culture in humans". Laland's description of culture is apt: "The extensive accumulation of shared, learned knowledge, and iterative improvements in technology over time".

His book also highlights a social learning strategies tournament. The three moves available to players in this game, are reminiscent of the ways we choose to respond to our environments: exploitation, observation, or innovation. When a given environment is stable, exploitation is often a reasonable option, for one can simply take advantage of available opportunities. Observation, on the other hand, includes the additional effort of verifying existing economic patterns, before taking action. Whereas innovation may become necessary to some extent, if the normal adaptations of exploitation or observation have become less well suited for replication.

Nevertheless: some readers are aware, that I hesitate to attribute cultural patterns to major differences in economic outcomes. The danger lies in assuming it is impossible - or at least not worth the effort - to encourage some groups to overcome ingrained habits and patterns which lead to negative economic consequence. Likewise, Hernando de Soto was skeptical, regarding the importance of culture as essential to economic progress. In "The Mystery of Capital", he wrote:

Throughout history people have confused the efficiency of the representational tools they have inherited to create surplus value with the inherent values of their culture. They forget that often what gives an edge to a particular group of people is the innovative use they make of a representational system developed by other cultures.

Regarding the three environment options described above: consider de Soto's emphasis of the importance of observation. He implored governments to closely observe the activities of their own citizens, to discover where the clues of economic dynamism were already in abundance. If governments wanted better economic representation for all their citizens, much depended on acknowledging how citizens were already adapting, and reinforcing those ongoing efforts through legal validity.

Since developing nations also imply developing general equilibrium conditions, the observation role has added importance for equilibrium outcome. But what of developed nations which consist of more mature equilibrium formation? Exploitation or observation may not be enough, which suggests a larger role for innovation than a society is sometime inclined to allow. But when innovation remains disallowed, the fact the "low hanging fruit" has mostly been picked, comes to mind.

If only the "high hanging fruit" were being discussed more often! I have no qualms suggesting time arbitrage as a "high hanging fruit" available for the "picking", in terms of innovation potential. Time arbitrage is a representational system which could augment human capital, and allow people to participate more fully in the daily functions, habits and patterns of knowledge use.

And the groups which implement time arbitrage would not have to resort to extensive funding or compensation from outside sources. They would not have to rely on other institutions which already have extensive commitments elsewhere. Instead, research and development would be a natural outcome of the ways these environments are internally structured, so as to leave ample room for the challenges of innovation and discovery.