Intangible Innovations Drive Pervasive Change


[ The Note for May 2014 ]

When we try to judge what comes next, economically, scientifically, politically and culturally, we have some very specific and significant limitations. We can only use past experience and our perceptions about our current situation to make judgments about what has not yet happened. We can only quantify what is quantifiable, and what is not observable can hardly be quantified. When we think about future roads, we tend to look at roads we have now; when we think about future energy, we tend to look at combustible fuels as the most commonplace and naturally occurring way of harvesting energy for human uses. When we think about economic behavior, we tend to assume that all future values will be related to what we are already observing now. The intangible element of human thought, innovation, collaboration and discovery, is generally left out, leaving us looking through a very problematic blind spot.

It is not reasonable to assume we can accurately quantify specific as-yet-unforeseeable innovations that will flow from these intangible, nonlinear breakthroughs in human thought. That does not mean it is reasonable to entirely exclude such future values from attempts to quantify and chart the landscape of future economic values. But, in the interests of forthrightness and honest reporting, economists are wary of quantifying the value of intangible, nonlinear breakthroughs in human thought. As a result, our attempts to calculate the defining values across the evolving future energy landscape tend to be exceedingly conservative, assuming that our future accomplishments will all have to be achieved using today’s technologies and business models.

That may be the right choice, but we have to come to grips with the fact that there is a powerful driver of future value which we are not including in our calculations about future value. That means we can be more optimistic about what a serious structural change in the market landscape for valuing energy technologies will do to make us more efficient at harvesting and delivering energy to where it needs to be. There are certain innovations we can’t set a timeline for, but which we know will come: we know more and more devices will be made from composite materials that allow for harvesting energy, either as a supplementary energy source or as the primary way of feeding energy into that device. Will it be 5 or 10 or 20 years, before we have iPhones made from smart composite materials that capture energy through photovoltaic processes as well as piezoelectric kinetic energy processing? We don’t know. But we can say that the intangible value that flows from that transformational moment of human insight will come into existence, and will play a role in shaping the future.

We might be able to establish a vocabulary for speaking intelligently about future breakthroughs in human imagination and effective-innovative prowess, if we look specifically at the role these factors play in shaping structural improvements in the human condition. For instance, is innovation just about novelty? Or is it about bringing together elements of human knowledge and capability that make specific kinds of human behavior more efficient in their use of time and energy? The specific location and manner in which transformative innovations arise may be hard to predict, but the kind of efficiency gains that will come in that non-linear way might be within reach of our vocabulary. They might even be natural expressions, and so extensions, of what we already know how to do now. The conceptual framing of a problem, a system, a mechanism or a solution, may evolve according to a pattern of accumulating interactive human knowledge. In education, in business, in economics, in public policy, we cannot afford to ignore the value of intangibles in the project of human-ecological improvement.


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