Over the past several years two seemingly independent ideas have been gaining traction:
- New technology allows developing nations to leapfrog over traditional growth patterns (M-PESA, long-range wi-fi).
- The increasing move towards “convenience models” may be pointing the US’ tech sector away from innovation (Peter Thiel’s “they promised us flying cars but instead we got 140 characters”).
In a recent working paper for the National Bureau of Economic Research, economist Robert J. Gordon writes that the US’ current wave of innovation is less of a step forward and more of a lateral move, merely finding novel ways to use innovations made 20 years ago, sitting him squarely alongside Thiel. To illustrate, Gordon asks the following hypothetical question between two options, A and B:
With option A you are allowed to keep 2002 electronic technology, including your Windows 98 laptop accessing Amazon, and you can keep running water and indoor toilets; but you can’t use anything invented since 2002. Option B is that you get everything invented in the past decade right up to Facebook, Twitter, and the iPad, but you have to give up running water and indoor toilets. You have to haul the water into your dwelling and carry out the waste. Even at 3am on a rainy night, your only toilet option is a wet and perhaps muddy walk to the outhouse. Which option do you choose?
Gordon goes on to write:
I have posed this imaginary choice to several audiences in speeches, and the usual reaction is a guffaw, a chuckle, because the preference for Option A is so obvious.
If you’d been in one of those audiences, most likely this would be the obvious choice for you as well, nicely supporting the innovation vs. convenience theory.
However, as Kevin Kelly writes in a response essay, this choice is not as obvious as one might think. For tens, possible hundreds of millions of people, the choice is not hypothetical. Rural farmers in China, he notes, are choosing cellphones and Twitter over toilets and running water. Kelly writes:
As you can see from these farmers’ homes in Yunnan, they definitely could have at least built an outhouse if they found it valuable… But instead they found the intangible benefits of connection to be greater than the physical comforts of running water.
Given that mobile penetration in developing communities all over the world is growing at an increasing pace, and that technologies like Facebook and Twitter are beginning to take the place of more traditional modes of communication, the two seemingly independent lines of thinking are suddenly pitted against each other making the value of today’s convenience models suddenly up for new debate. Is there really an obvious choice between Facebook and running water?
Of course the maturity of massive innovation is never measured in years, seldom even in decades, so perhaps we’ll really only be able to see the value of the new app economy looking back from the turn of the next century. And from there, who knows? Perhaps 140 characters really will prove more valuable than flying cars.