silicon valley
Innovation for the Masses: How to Share the Benefits of the High-Tech Economy – review
In Innovation for the Masses: How to Share the Benefits of the High-Tech Economy, Neil Lee proposes abandoning the Silicon Valley-style innovation hub, which concentrates its wealth, for alternative, more equitable models. Emphasising the role of the state and the need for adaptive approaches, Lee makes a nuanced and convincing case for reimagining how we “do” innovation to benefit the masses, writes Yulu Pi.
Professor Neil Lee will be speaking at an LSE panel event, How can we tackle inequalities through British public policy? on Tuesday 5 March at 6.30pm. Find details on how to attend here.
While everyone is talking about AI innovations, Innovation for the Masses: How to Share the Benefits of the High-Tech Economy arrives as a timely and critical examination of innovation itself. Challenging the conventional view of Silicon Valley as the paradigm for innovation, the book seeks answers on how the benefits of innovations can be broadly shared across society.
When we talk about innovation, we often picture genius scientists from prestigious universities or tech giants creating radical technologies in million-dollar labs. But in his book, Neil Lee, Professor of Economic Geography at The London School of Economics and Political Science, tells us there is more to it. He suggests that our obsession with cutting-edge innovations and idolisation of superstar hubs like Silicon Valley and Oxbridge hinders better ways to link innovation with shared prosperity.
Lee stresses that innovation doesn’t make a difference if it stays locked up in labs; it needs to be shared, learned, improved and used to make real impacts.
Innovation goes beyond the invention of disruptive new technologies. It also involves improving existing technologies or merging them to generate new innovations. In this book, Lee illustrates this idea using mobile payment technologies as an example, showcasing how the combination of existing technologies – mobile phone and payment terminals – can spawn new innovations. He argues that “technologies evolve through incremental innovations in regular and occasionally larger leaps” (23). Moreover, Lee stresses that innovation doesn’t make a difference if it stays locked up in labs; it needs to be shared, learned, improved and used to make real impacts. It is important to think beyond the notion of a single radical invention and recognise the contributions not only of major inventors but of “tweakers” who make incremental improvements and implementers who operate and maintain innovative products (25).
In challenging the conventional narratives of innovation, this book guides us to expand our understanding of innovation and paves the way for a discussion on combining innovation with equity. When we pose the question “How do we foster innovations?”, we miss out on asking a crucial follow-up: “How do we foster innovations that translate into increased living standards for everyone?”. Lee argues that the incomplete line of questioning inevitably steers us towards flawed solutions – countries all over the world building their own Silicon-something.
While the San Francisco Bay Area is home to many successful start-up founders who have made billions, it simultaneously struggles with issues like severe homelessness.
While the San Francisco Bay Area is home to many successful start-up founders who have made billions, it simultaneously struggles with issues like severe homelessness. The staggering wealth gap is evident, with the top 1 per cent of households holding 48 times more wealth than the bottom 50 per cent. Other centres of innovation like Oxbridge and Shanghai are also highly unequal, with the benefits of innovations going to a small few.
The book introduces four alternative models of innovation – Switzerland, Sweden, Austria and Taiwan – that suggest innovation doesn’t inevitably coincide with high-level inequality.
The book introduces four alternative models of innovation – Switzerland, Sweden, Austria and Taiwan – that suggest innovation doesn’t inevitably coincide with high-level inequality. Through these examples, Lee highlights the significance of often-neglected aspects of innovation: adoption, diffusion and incremental improvements. Take Austria, for instance, which might not immediately come to mind as a global hub of disruptive innovation. Its strategic commitment to continuous innovation – particularly in its traditional, industrial sectors like steel and paper – sheds light on the more nuanced, yet equally impactful, facets of innovation. (92) Taiwan, on the other hand, gained its growth from technological development facilitated by its advanced research institutions such as the Industrial Technology Research Institute and state-led industrial policy. Foxconn stands as the world’s fourth-largest technology company, while the Taiwan Semiconductor Manufacturing Company (TSMC) accounts for half of the world’s chip production (116).
In all four examples, the state played a critical role in creating frameworks to ensure that benefits are broadly shared, showing that policies on innovation and mutual prosperity reinforce each other.
Building on these examples, the book highlights the vital role of the state in both spurring innovations and distributing the benefits of innovation. In all four examples, the state played a critical role in creating frameworks to ensure that benefits are broadly shared, showing that policies on innovation and mutual prosperity reinforce each other. Taking another look at Austria, ranked 17th in the World Intellectual Property Organization (WIPO)’s Global Innovation Index (99), its strength on innovation is accompanied by the state’s heavy investment on welfare to build a strong social safety net.
As the book draws to a close, it advocates for the development of a set of specific institutions. The first type, generative institutions, foster the development of radical innovations. These are heavily funded in the US, resulting, as British economist David Soskice claims, in the US dominance in cutting-edge technologies (169). The book shows a wide array of generative institutions through its four examples. For instance, in Taiwan, research laboratories play a crucial role in the success of its cutting-edge chip manufacturing, while the government directs financial resources towards facilitating job creation. On the other hand, Austria has concentrated its fast-growing R&D spending on the upgrading and specialisation of its low-tech industries of the past.
The second and third types, diffusive and redistributive institutions, aim to address issues of inequality, such as labour market polarisation and wealth concentration that might come with innovation. These two types of institutions offer people the opportunity to participate in the delivery, adoption and improvement of innovation. Switzerland’s mature vocational education system is a prime example of such institutions, “facilitating innovation and the diffusion of technology from elsewhere and ensuring that workers benefit.” (172)
Discussions about ‘good inequality’ where innovators are rewarded, and “bad inequality,” where wealth becomes too concentrated demonstrate the book’s strong willingness to call out inequality and tackle complex issues head-on.
Discussions about “good inequality” where innovators are rewarded, and “bad inequality,” where wealth becomes too concentrated demonstrate the book’s strong willingness to call out inequality and tackle complex issues head-on. (8) This integrity extends to Lee’s candid examination of the examples. Despite presenting them as models of how innovation can be paired with equity, he does not gloss over their imperfections. By recognising the persistent disparities in gender, race, and immigration status in all four of these examples, the book presents a balanced narrative that urges readers to think critically. Although these countries have made strides in sharing the benefits of innovation, they are far from perfect and still have a significant journey ahead to reduce these disparities. Take Switzerland, for example. Though it consistently tops the WIPO’s Global Innovation Index, maintaining its position for the 13th consecutive year in 2023, it grapples with one of the largest gender pay gaps in Europe. This gender inequality has deep roots, as it wasn’t until 1971 that women gained the right to vote in Swiss federal elections (71).
Lee warns against the naive replication of these success stories elsewhere without adapting them to the specific context. This frank and thorough approach enriches the conversation about innovation and inequality, making it a compelling and credible contribution to the discourse and a convincing argument for changing what we consider to be the purpose of innovation.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.
Image Credit: vic josh on Shutterstock.
In the Long Run: The Future as a Political Idea – review
Jonathan White‘s In the Long Run: The Future as a Political Idea examines how changing political conceptions of the future have impacted democracy, arguing that contemporary challenges like economic slowdown and climate change have led to reactive politics and short-termism. Though the book proposes ways to revitalise democracy, Aveek Bhattacharya suggests we may need to seek beyond our political institutions for strategies to build a more open future.
You can read an interview with Jonathan White about the book here. On Monday 11 March at 6.30pm White will speak at an LSE panel event, The politics of the future – find details and register here.
In the Long Run: The Future as a Political Idea. Jonathan White. Profile Books. 2024.
In the Long Run: The Future as a Political Idea is a book about the history of the future, and what it means for the present. More precisely, it describes how the way people think about the future has evolved over time, and the impact of these changes on democracy. Jonathan White’s central argument is that while optimism for the future once helped build democracy, economic slowdown, climate change, new technology and geopolitical tension mean that “the future no longer seems its [democracy’s] friend”.
For democracy to function, White observes, it is critical that people believe an “open future” is possible: that there are alternatives to the status quo, that society can evolve in a range of different ways, and that the people can choose between them. One of the key defining characteristics of democracy – the peaceful handover of power – is premised on changeability of the future: election losers believe that they will get their chance to achieve their vision of society again.
For democracy to function, White observes, it is critical that people believe an ‘open future’ is possible
In the present, White says, it is harder to maintain that patience and faith. The future is regarded with fear and claustrophobia. At various points he describes the future, far from being open, as “closing in”. Catastrophe – societal decay, conflict, environmental collapse – feels hard to avert. Insofar as there are options, they involve deferring to technocrats. There is a “now or never” urgency about politics, and a fear that waiting your turn means leaving it too late because the other side will destroy everything.
Via a tour of historical political thinkers, White sketches the ideas of the future that make for the most vibrant democratic system. Political and social outcomes must seem open, but not in such a destabilising manner as to trigger counter-revolution from those attached to the present. A strand of utopianism can be energising but must be linked to near-term political tactics to be practicable. Efforts to limit uncertainty, to render the future predictable, through calculation and technocracy risk squeezing out the necessary imagination and mass participation of vibrant democracy. At the same time, chaotic impulsiveness and pure disregard for expertise risks descending into fascism. Trying to control the future by keeping it secret is likely to generate conspiracy theories and discontent. Consumerism individualises the future and means we no longer share in it – we move from valorising Victorian steam trains to wanting our own personal cars.
Our perpetual state of emergency, while creating unpredictability, produces reactive politics, designed mainly to return things to the way they were.
The conception of the future we have arrived at today is not, in White’s opinion, sufficiently conducive to democracy. Our perpetual state of emergency, while creating unpredictability, produces reactive politics, designed mainly to return things to the way they were. Short-termism dominates – most notably, through the election cycle, but even longer-term threats like climate change are tractable only by converting them to benchmarks and deadlines. Managerialism and secrecy dominate, empowering organisations like the European Central Bank and the International Monetary Fund and triggering impulsive populist backlashes.
White’s proposals for rebuilding a more positive conception of the future and revitalising democracy are somewhat surprising. He is sceptical of direct democracy – while more referendums might give ordinary citizens more chance to shape the future, they raise the stakes and perpetuate the “all-or-nothing” politics he thinks is so baleful. Small-scale councils are too small-scale to create significant change, citizens’ assemblies too short-lived to pursue a persistent vision.
White calls for ‘radical representative democracy’, with mass participation in the development of party policy and party members having greater opportunity to recall politicians who fail to deliver on those agreed goals.
Instead, he puts his chips on political parties as the crucibles of a more inclusive, compelling and hopeful vision of the future. He calls for “radical representative democracy”, with mass participation in the development of party policy and party members having greater opportunity to recall politicians who fail to deliver on those agreed goals. It’s an argument with echoes of Peter Mair’s Ruling the Void, which also claimed that the disengagement of ordinary members and politicians from their political parties had led to “the hollowing of Western democracy”.
White’s rebooted party system sounds good in theory, but invites scepticism about its practicality. His central assumption is that citizens’ disempowerment is the root cause of our current democratic malaise, and that the opportunity for greater influence will suffice to tempt enough people to give up their evenings and weekends to political causes. It is not encouraging that the existing parties that have done most to engage with mass movements and improve participation with things like online platforms – Podemos in Spain and the Five Star Movement in Italy – do not seem to have restored democratic confidence in their countries.
The Victorian capitalists who built the factories and railroads may not have been personally attractive, but they inspired progressives and socialists to dream about how their innovations could be used to benefit all.
White is oddly dismissive of the pockets of optimism that do exist outside the political system – most notably Silicon Valley, where ideas like “Effective accelerationism”, the view that technological progress is likely to obviate many of our deepest societal challenges, has taken root. For White, they display the wrong sort of optimism: too consumerist and individualistic, too inclined towards anti-system chaotic thinking, tendencies encapsulated in the figure of Elon Musk, presented as fascistoid, if not fascist. Setting aside whether that is a fair characterisation of Musk, the question it raises is why the confidence of tech companies seems so divorced from the sentiments of wider society. The Victorian capitalists who built the factories and railroads may not have been personally attractive, but they inspired progressives and socialists to dream about how their innovations could be used to benefit all. There are some – figures like Aaron Bastani on the far left and Derek Thompson on the centre left – that are trying to do something similar today, but White does not recognise them as such.
White assumes that the problems of democracy are endogenous: that they are caused by political institutions and must be resolved by them.
Most fundamentally, White assumes that the problems of democracy are endogenous: that they are caused by political institutions and must be resolved by them. But there are more straightforward explanations for the modern morosity. Stagnant economic growth, and the failure of new technologies to demonstrably improve living standards, would naturally be expected to undermine confidence that things will improve. The demographic shift to an older population in rich countries may also have contributed to a lack of vitality and enthusiasm, and a tendency to look back with nostalgia rather than forward with hope. Even among the young, we should not necessarily take perceptions at face value. Phenomena like “climate anxiety” seem to reflect anxiety at least as much as they reflect the climate, and as such will often be psychological, not just political in nature.
That’s not necessarily a comforting thought. Maybe technological abundance is around the corner, maybe the economy will turn around, maybe the mental health crisis will abate – whether by sheer luck or unusually effective action – and people will start to feel better about the future. But In the Long Run suggests that fixing democracy’s problems, renewing our faith in the open future, is a much bigger task than tweaking its institutions.
This post gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics and Political Science.
Image credit: Ryan Rodrick Beiler on Shutterstock
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