Technological Innovation and Social Change

Editorial for INNOGRIPS Newsletter no 7:

at: http://grips.proinno-europe.eu/newsletter/
This is the full original text, it had to be edited down considerably!

The slogan “crises are opportunities” may be of ancient Chinese origin, but it is strikingly relevant today. The economic crisis has certainly caused havoc in the lives of millions, and thrown innovation policies in many countries into disarray along with other government spending programmes. But as we saw in the last issue of this newsletter, the new US administration is investing substantially in science, R&D, information infrastructures, and a host of other measures designed to catch the next waves of innovation. The economic crisis might have been expected to tie the hands of the new president, but in many ways it seems to have empowered him to undertake more radical measures than would otherwise be the case. There are risks in public borrowing, in bailing out banks and other financial institutions whose leaders have behaved – and in some cases appear to delight in continuing to behave – in ways that are politely described as questionable, in striking out in new directions in geopolitics just at the same time as others are sticking in their heels. But the bankruptcy not just of a horde of companies, but of the systems of ethics and jurisprudence by which they were supposedly regulated, and the political worldviews on which they were founded, have made it possible to think the unthinkable.

The economic crisis is an opportunity to think again about how we are handling what is in all likelihood a slowly unfolding problem of far greater magnitude – the crisis of climate change. This is itself just one part of a multifold environmental crisis, where even without global warming the issue of some resources being exploited beyond the limits of sustainability would be ringing alarm bells. If projections of temperature rises are even partly accurate – and currently climate scientists are warning that some phenomena seem to be evolving more rapidly than feared – then we are looking at threats to the biosphere and to human habitats and economies that could last for centuries. Dislocation and conflict are inevitable consequences of even the more optimistic scenarios in which too little is done, too late. Just as “everyone knew” that there was something unsustainable about ever-inflating house prices, subprime mortgages and toxic assets, so “everybody knows” that current growth trajectories are environmentally unsustainable. The problem lies in converting this knowledge into action, and – since no one country can head off the growth in carbon emissions by itself - this means into collective action. The recent G20 summit may have been startlingly vague where it came to explicating its green rhetoric, as compared to its more conventional measures for recovery, but at least it shows that with a degree of creative leadership it is possible to pull together the major policy players in the world economy – which means the governments of the countries responsible for the lion’s share of global CO2 emissions.

What is needed now is serious effort to “green” the economic recovery, and this issue of the newsletter explores some of the efforts being undertaken here. What these brief appraisals reveal is the need to bring analysis of innovation far more centrally into the equation. Mainstream economics has habitually found it difficult to deal with innovation issues – this is why schools of evolutionary and neoSchumpeterian economics have arisen – and so it is not surprising that policymaking by economic and financial experts has largely neglected them. We will need to confront the prospects for more radical technological change if the way out of economic crisis is to be an opportunity to confront, rather than deepen, the environmental crisis. Innovation policy cannot be sidelined while we wait for the recovery – it has to be integrated with efforts to colour the recovery green.

And what sorts of opportunity are presented by the environmental crisis, then? The threats are so substantial that pious hopes are not enough. Policymakers will have to take bold steps, or risk being overwhelmed by the discontents of their electorates. Bold policymakers will make common cause with those citizens pressing for environmental criteria to become routine rather than one-off, for full-on confrontation of the problems of global poverty and inequity, and for rethinking the bases on which we measure social and economic progress and incentivise socially and environmentally sustainable practices. With mounting evidence from social research that a civilisation based on ever-increasing material consumption is a civilisation of discontent and diminishing returns in terms of happiness, it is an opportunity to rethink priorities of all sorts. Capturing this in terms of innovation and innovation policy is by no means an easy affair – “alternative technology” movements have foundered, and “ethical consumption” remains marginal in all but a few areas. Social innovation will be needed, to enable people to realise self-worth without unsustainable consumption, and to enable firms to pursue innovation – and marketing – that reinforces this. We are not used to thinking of social innovation policy, but more conventional innovation policymaking will need to be aware of the ways in which social and technological innovations can be mutually supportive in favour of a greener agenda. The combination of economic and environmental crises provides a strong signal about this, to those willing to listen. Hopefully, it will not be long before “everybody knows” this, too.