Is green growth just a fantasy? Knowledge, innovation and the promise of a better life for all

I don't know about you, Steamnocchio, but I have my doubts about this black growth strategy

Steampunk describes a world of airships plying the aether and mechanical computing based on Babbage’s Difference Engine. Artists show great imagination in describing a world where coal is still king, streets are gas lit, and rock oil has not yet been rebranded as petroleum.

They play with the ideas of lock-in and path dependence, a situation where a technology that may be inferior to alternatives still dominates because switching would create too many problems, or be too expensive, or where an early decision limits the options available later, even if the original conditions are no longer relevant.

A new study from the OECD Fostering Innovation for Green Growth looks at these issues too, but with more of a policy focus than say Steamboy or FreakAngels. It may be hard to see what government bureaucracies with their rules and procedures could do to promote innovation other than shut up and leave the innovators to get on with it. In fact, they can do quite a lot. History has plenty of examples of inventions and other innovations that came about thanks to public money.

Traditionally, the means used was to create a prize. For example, hunger and scurvy were provoking more losses than the enemy during Napoleon’s Russian campaign, so the government launched a competition to find a way of preserving food for the soldiers. In 1809 Nicholas Apart came up with the winning entry – canning.

Today, prizes have given way to R&D funding or other systematic efforts to promote innovation, and thanks to public programmes we have the Internet, World Wide Web, and GPS navigation. But you may have noticed I said “inventions and other innovations”. It’s not just about new technologies. Innovation covers new ways of using existing technologies as well as new processes for production and marketing. For example, miniature storage devices and portable music players both existed before they were combined to create MP3 devices, while online music stores represent a marketing innovation.

The paper argues that while “green” innovation is the same as other kinds of innovation in many respects, government policy is needed to address a number of specific issues where the market alone is unlikely to provide a solution. One of the main issues is that if firms and households do not have to pay for the environmental damage they inflict, there will be little incentive to invest in green innovation. Dominant designs can be a barrier too – the costs of supplying the infrastructure needed to replace today’s automobiles with electric or hydrogen-powered vehicles for instance.

Innovation is also the theme of the OECD Global Forum on the Knowledge Economy taking place today and tomorrow. Among all the proposals for unleashing of entrepreneurship, the title of Session 2 is quite innovatively sobering: “Science and innovation policy on a shoestring”.  (You can see a webcast here.)

As the conference presentation says, fostering innovation and scientific breakthroughs is tough even when governments and companies have money to spend. It will be interesting to see what the participants think can and should be done now that budgets are tight, and how developing countries can benefit.

Let’s hope that future audiences of alternative history and fantasy will be as amused or horrified by a world that stayed on the path we’re on just now as we are by steampunk.

Useful links

OECD work on green growth

OECD work on innovation

The future is not what it used to be

They all laughed when Katie tried to explain her broadband idea

1961, what a year, eh? The OECD, George Clooney and Barack Obama were born. And of course, Yuri Gagarin proved Joseph de Lalande wrong, yet again.

In 1782, a year before the first manned balloon flight took off from the site that would become OECD headquarters [insert your own hot air joke here], the eminent expert from the Académie française declared that: “It is entirely impossible for man to rise into the air and float there. For this you would need wings of tremendous dimensions and they would have to be moved at a speed of three feet per second. Only a fool would expect such a thing to be realised.”

Of course, it’s easy to get it wrong, but it takes a rare form of genius to fail to predict what has actually happened. So a special mention goes to the Engineering Editor of The Times, who, three years after the Wright brothers’ first flight, informed the cream of British society that:  “All attempts at artificial aviation are not only dangerous to human life, but foredoomed to failure from the engineering standpoint.”

Britain’s outstanding record in technology forecasting was maintained by Astronomer Royal Richard Van Der Riet Woolley, who in 1956 declared that “space travel is utter bilge”. The following year, his predecessor, Sir Harold Spencer Jones, showed that timing is everything when he upgraded the rating to “Space travel is bunk” two weeks before the first Sputnik.

Four years later, Gagarin orbited the Earth, and only eight years after that Neil Armstrong walked on the Moon. Astronautics was the most spectacular proof that the pace of change in science and technology had accelerated dramatically, but major breakthroughs were occurring in every domain in the 1960s.

One Brit who got it right was Harold Wilson, the future prime minister, who said that that the type of country being “forged in the white heat” of the scientific and technical revolution would need different ways of dealing with the potentials and problems of the new discoveries.

However, policymaking often lags behind the pace of change in science and technology, and we’re no exception: the OECD’s Committee for Scientific and Technological Policy wouldn’t be created until 1972, long after Committees overseeing other areas such as agriculture or tourism.

Then as now, scientific discoveries that would prove crucial often appeared unimportant to all but a few specialists. For instance, putting E. coli cells in a cold calcium chloride solution doesn’t sound exciting, but they then become permeable to nucleic acid fragments, allowing scientists to carry out numerous genetic engineering operations.

This illustrates a dilemma for science and technology policy makers. They are faced with demands to finance “useful” research, but it’s practically impossible to predict where science will lead, and which technologies will ultimately make the most money.

A funding strategy that relies on spotting winners ignores the role that unforeseen connections and insights play in science and technology.

The OECD has been a major influence in changing how governments approach science, technology and innovation, and how economics as a discipline tries to understand these phenomena. In 1963 already, Science, economic growth and government policy convinced governments of something that seems obvious now: that science policy should be linked to economic policy. In 1971, Science, growth and society anticipated many of today’s concerns by emphasising the need to involve citizens in assessing the consequences of developing and using new technologies.

For many experts though, the OECD’s major contribution was the concept of national innovation systems, presented in 1992 in a landmark publication, Technology and the Economy: The Key Relationships. Economists working at the OECD pioneered a new approach that saw innovation not as something linear, but as a kind of ecosystem involving interactions among existing knowledge, research, invention; potential markets; and the production process.

Since then, the way science is done has been changed radically by the connectivity offered by the Internet and other communication tools. This allows scientists and technologists to interact better with each other, and it also allows scientists and technologists to take advantage of other types of expertise to develop the tools and foster the innovation  required to meet emerging economic, sustainability and even social challenges.

This means that what has been called the science of science policy will have to change too. The OECD will have a role to play in this. As in the past, the OECD will be expected to spot emerging issues; provide the data, analyses, and policy recommendations needed to make the most of them; and to provide a forum where problems, contradictions and differing aspirations can be debated in an objective, productive fashion.

Useful links

OECD work on science and technology

The OECD Innovation Strategy

Looking back at looking forward – great forecasting mistakes