We associate innovation with dramatic technological or market breakthroughs that revolutionize industries overnight. So much so that despite continuing evidence to the contrary—that both today’s most succcessful organizations and most revolutionary technologies were not new—organizations, policy makers, and the public show a breakthrough bias when pursuing, funding, or anticipating innovation. This bias becomes even more salient in the pursuit of sustainability, reflected in outrageously ambitious “goals” that, as a result, create significant challenges for those trying to manage the innovation process.
(this post is part of a series attempting to recognize the unique challenges of sustainable innovation)
The breakthrough bias favors the pursuit of bold technological or market leaps that separate us from our unsustainable past and ignores, if not outright resists, efforts to advance through incremental changes in known solutions. Indeed, the past half-century of public investments and policies toward energy innovation have reflected this focus on technological invention and scientific discovery—based on the assumption that such breakthroughs would set major energy transitions in motion.
In 1945, Harry Truman’s science advisor Vannevar Bush published Science: The Endless Frontier and set the course for the public understanding and pursuit of innovation. His emphasis and the resulting federal policy have focused on the generation of innovation from within basic research because, in Bush’s view, basic research creates the inputs that feed applied research, development, demonstration, and wide-scale deployment:
Basic research leads to new knowledge. It provides scientific capital. It creates the fund from which the practical applications of knowledge must be drawn. New products and new processes do not appear full-grown. They are founded on new principles and new conceptions, which in turn are painstakingly developed by research in the purest realms of science.
This view sees scientific and industrial practices as a linear flow in which ideas first emerge in basic research and move downstream through development, demonstration and deployment—each “subsequent” stage characterized by an increasing priority on implementation rather than innovation. In other words, the innate potential for breakthrough is baked into the idea from the initial and basic research—the rest is just execution.
This bias has shaped not only public support for R&D but also, increasingly, the management of corporate R&D. As Martin Kenney and Richard Florida describe in their book, The Breakthrough Illusion, Research and development laboratories emerged toward the end of the 19th century to focus innovation efforts on improving manufacturing processes (and on engineering products for mass production) as organizations grew in scale. Over time, however, R&D labs were increasingly populated by scientists connected more to their disciplines than to the problems of the manufacturing floor. This schism increased as manufacturing was outsourced, resulting in R&D organizations focused on developing novel breakthroughs rather than incremental improvements to the organizations current challenges.
There are two reasons the breakthrough bias can undermine innovation. First, because it’s foolish to ignore the bird in hand while you’re waiting for the bird in the bush to break through—you might be stuck with it longer than you thought. In 2007, my only interaction with Al Gore ended with an argument over the rate of change we might expect of clean technologies. Needless to say, I was not invited back to Aspen. This was the Al Gore that demanded no new coal plants be built because they would perpetuate incremental change when nothing short of a radical break would save us. Yet here we are: China’s expected to more than double it’s coal-fired electricity generating capacity (from 2007 levels) by 2035. As China, India and other economies rapidly adopt today’s OECD standards of living, they are doing so by adopting the energy, transportation, and other systems that are currently working at scale in the OECD countries—and as a result creating an infrastructure that will last for the next 40 – 50 years. Not taking incremental improvements seriously is as foolish as not investing longer term opportunities.
The second reason: what if the biggest breakthroughs actually came from incremental improvements to existing technologies and systems already in use? The bias towards breakthroughs would suggest (a) such solutions must not be breakthroughs since they’re already in use (and haven’t changed the world), and (b) therefore, our investments are better spent on the next promising breakthrough to come from university and national labs. Yet ths bias persists despite considerable evidence to the contrary.
The internet was 30 years old, and incrementally improving beyond its original use of sharing computing resources, before it dramatically changed our lives. The transistor’s impact occurred long after and far outside its original development as a replacement for copper switches in phone lines. The steam engine was almost a century old when James Watt sought to improve its efficiency. In an earlier post, I described how breakthroughs were not the result of a single technology but the steady co-evolution of several existing ones. Quoting the late economist Rudi Dornbusch, this process takes a long time and then happens overnight:
Things take longer to happen than you think they will and then they happen faster than you thought they could.
Innovations are noted for their impact—the rate of change they set in motion relative to the time it takes to diffuse—dramatic impacts like agriculture, wheels, fire, music, written language all took millenia to emerge and diffuse and as a result, as Jean Henri Fabre once said,
History records the names of royal bastards, but cannot tell us the origin of wheat.
For this reason, an innovation’s impact is often inversely related to its novelty—if the surrounding infrastructure isn’t there to support it, novel technologies can take decades, centuries, or millennia to develop.
On the other hand, innovations that recombine and tweak existing technologies and resource, on the other hand, can deploy and scale more rapidly. In my book How Breakthroughs Happen, I described in detail how this recombinant process enabled Henry Ford’s mass produced automobile to have the impact it did. It was neither the first automobile nor did Ford develop new production techniques. Instead, Ford combined proven technologies from bicycle production, foundries, food processing, and textiles. As he explained,
I invented nothing new. I simply assembled into a car the discoveries of other men behind whom were centuries of work.
The breakthrough bias becomes particularly salient in the pursuit of sustainability, where public and political calls for outrageously ambitious “breakthroughs” create significant challenges for those trying to manage the innovation process. Electric vehicles, hydrogen fuel cell vehicles, solar PV, wind power—all of these are promising new technologies but they will take longer to happen than everyone thinks. With business-as-usual, all-electric vehicles are expected to only reach roughly 3% of the market by 2020 (and with best-case aggressive policies, 10%). Solar PV is growing dramatically (from a small initial base) but still represents less than half a percent of the energy supply and has similarly low expected marginal contribution over the next several decades.
Pursuing radical breakthroughs in sustainability technologies diverts attention away from the more critical challenges of building on those solutions we already know. For example, a 2009 National Academy of Sciences report found that the energy savings from accelerated deployment of existing energy efficiency technologies (in buildings, industry, and transportation sectors) could offset all expected growth in electricity demand through 2030 (approximately 35 percent of the 2030 total demand). Further, the McKinsey Global Institute report found that existing energy efficiency opportunities had negative costs—investments in these technologies had a positive net present value. Yet this evidence has had little effect on the collective breakthrough bias. If existing sustainable alternatives do indeed have untapped value, the limiting factor may not be our ability to generate novel technologies, but rather to execute on what we already know how to do.
This puts entrepreneurs and corporate leaders in a difficult position. When federal policies and public sentiment favor the pursuit of breakthroughs, despite the evidence that true gains come from the pursuit of incremental improvements, only the most visionary will be able to resist the pull of visionary breakthroughs.
Great post, my unknown author (I´m sorry)!
I was just looking for some work regarding this topic, the bias for breaktrhough R&D that neglects the role of incremental R&D!
I fully agree with you, but of course there is a major problem with incremental R&D: it hardly supports academic papers!