From nylon to a Covid vaccine: The good news about innovation

1024px-SARS-CoV-2_without_backgroundThus, an activity will in general have two valuable consequences: the physical outputs themselves and the change in information about other activities.

Kenneth J Arrow
Essays in the Theory of Risk-Bearing

That seems like an obscure theoretical point in academic economics but there are plenty of illustrations. Arrow himself drew attention to the development of nylon. DuPont developed the polymer nylon during the interval between the World Wars of the twentieth century. It was an enormous commercial success for them. That was the obvious valuable consequence of the “development of nylon” activity. Arrow’s point was that, if we look at this from the perspective of global wealth, the contribution of nylon itself was tiny compared with the value to society of knowing that things like nylon are possible and valuable. Once other companies knew that, they were emboldened and incentivised to revisit the physio-chemical fundamentals, learn the chemical engineering technologies and build their own knowledge base. DuPont now themselves had a lead in knowledge and an advantage in know-how teeming with commercial potential. The fast followers had the advantage of enjoying a big chunk of the risk already having been sunk by DuPont. The industrial development and marketing of polymers during the twentieth century played an important role in global wealth creation. You probably have to be a certain age to remember papier maché washing-up bowls. Or just washing-up bowls.

Arrow’s proposition is a broad and general economic principle not a mathematical theorem. My hunch is that it’s going to be validated again with the global response to the Covid-19 pandemic. On 9 November 2020, the news media covered the announcement by Pfizer and BioNTech that they had, in partnership, developed the first candidate for an effective vaccination against Covid-19. That is blessed news. My hunch is that the knowledge won in developing that vaccine will benefit society far beyond ridding us of this ghastly pestillance.

Since then there have already been other vaccines announced. The intellectual effort in developing the BioNTech vaccine was driven by two individuals, Uğur Şahin and Özlem Türeci. Şahin and Türeci’s discovery represents the unfashionable globalist, liberal intellectual culture of Europe and the Levant. But their ideas would have gone nowhere without the, equally unfashionable, American systematic productivity, capital and risk appetite of DuPont. It is a similar story to the development of penicillin. European creativity and American energy. British artist David Hockney loved California because he felt it offered the best of both worlds. Pace Harold Macmillan, the Europeans are ever the Greeks to the American Romans.

The Covid-19 vaccine itself was developed from the technologies that BioNTech had already fostered and exploited in the different field of individualised cancer immunotherapy. I have to confess that my scientific tastes are more for the mechanical and the electrical and I understand nothing of the science here. However, I can see that the benefits of novel cancer treatments have turned out to have created value in a wholly different area of medicine. As Arrow would have predicted. My bet is that the scientific and technological advances spurred by Covid-19, not least the management skills in expediting clinical trials, will turn out to have wider external benefits, individually unpredictable but a moral certainty as an engine of wealth creation.

Faith in economic laws is a useful mindset. Julian Simon used to remark that people in general find no difficulty in accepting that, if there exist conducive economic conditions, cheese will be manufactured. However, the proposition that, if there exist conducive economic conditions, technological innovation will occur, meets more skeptical resistance. Surely technological innovation is different from cheese. But is it?

There are lots of books about innovation around at the moment. They rehearse many fascinating anecdotes but I find there is no useful over-arching theory. I find anecdotes useful. So should you, but you need to be savvy about uncertainty and causation. I have some favourite anecdotes. That said, I think the following is an essential, and almost true, insight. Certainly for business.

While knowledge is orderly and cumulative, information is random and miscellaneous.

Daniel J Boorstin

Convivial knowledge management

If you want to teach people a new way of thinking, don’t bother trying to teach them. Instead, give them a tool, the use of which will lead to new ways of thinking.

Buckminster Fuller

All that suggests that the most important thing that any organisation should be working on is Knowledge Management, capturing as much of the byproduct learning the organisation produces that is not oriented to immediate goals. Again, software packages, holding themselves out as tools abound. I am sure many are worth the license fee. Try them and see. But do keep an account of costs and benefits.

I would like to suggest two simple technologies, what Ivan Illich would have called convivial tools. One I have talked a lot about on this blog is the Shewhart chart. The other remains, I think, under explored and under exploited, that is the Wiki. Wikipedia is one of those things that only works in practice, a collaborative encyclopaedia with no editorial authority. It’s for you to judge whether it has been a success.

My view is that the scope for using Wikis in intra-organisational knowledge building has yet to be fully exploited. Wikis can be used for collaborative development of searchable and structured manuals of fact, insight and open questions. A Shewhart chart that could be collaboratively edited would be a very powerful thing. But that was Shewhart’s original intention, a live document continually noted-up with the insights of the workers using it. Perhaps in modern times we would want this to be all cloud based rather than a sheet of paper on a workshop wall. A wiki-Shewhart chart.

Where can we buy the software?

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