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Home » Uncategorized » Ridley, Matt – How Innovation Works

Ridley, Matt – How Innovation Works



The main idea of this book is to review historical examples of innovation in various functional areas from energy to computing, to look at historical patterns of innovation from before humans become humans, to analyze societal conditions that promote or restrict innovation, and, finally, look at the future trying foresee where and how innovation will happen next.


Introduction: The Infinite Improbability Drive

Here author discusses improbability of everything due to the second law of thermodynamics, then discusses nature of innovation and offer this definition:” Innovation, like evolution, is a process of constantly discovering ways of rearranging the world into forms that are unlikely to arise by chance – and that happen to be useful. The resulting entities are the opposite of entropy: they are more ordered, less random, than their ingredients were before. And innovation is potentially infinite because even if it runs out of new things to do, it can always find ways to do the same things more quickly or for less energy.” Author also links it to the individual freedom without which innovation is nearly impossible.

1. Energy

In this chapter author presents history of steam engine and overall conversion of heat into work going all the way back to 1700.  He moves the narrative through all various phases of industrial energy acquisition and use: steam, electricity, internal combustion engines, turbines, nuclear, and finally oil and gas acquired via fracking technology.

2. Public health

Here author also starts in early 1700s with initial attempts to use smallpox inoculation. He than moves to the story of Pasteur and discovery of vaccination. The next he jumps to 1908 and implementation of chlorine for water supplies. Other innovations with significant impact on health of population that author discusses in this chapter are: vaccination against whooping cough, penicillin, polio vaccine, anti-malaria nets with insecticide, and prevention of tabaco use.

3. Transport

The chapter on transportation starts with steam locomotive then moves to the use of screw for ships propelling, then to various engines: from internal combustion to diesel. Author also discusses here flight and innovations by individuals with passion such as brothers Wright versus government driven fake attempts by Samuel Langley. After that author extends discussion of engines and flight to jets and completes chapter with discussion of extreme safety of air travel.

4. Food

The chapter on food starts with the story of potato and its implementation in Europe. After that author moves to implementation of ammonia production that provided practically infinite amounts of fertilizer. The addition of new dwarf genes to existing plants in the second part of XX century and development of genetical engineering technology the humanity achieved practical independence of food production from normal range variations in weather leading to very recently unimaginable situation when problems of people in poverty changed from hunger to obesity.

5. Low-technology innovation

This chapter starts with discussion of numbers notation and how Indian numbers are much more effective than Roman and how much value this added to al numerical processing. Then author moves to another innovation that he considers low tech – sewage. He obviously not familiar how hi-tech sewage processing is, but at least he understands value of this process. Other low-tech, but highly valuable inventions author discusses are: corrugated iron, containers, wheeled baggage, restaurants, and the latest business methodology – shared services.

6. Communication and computing

Probably the most innovated area over last century is communication and information processing. Author starts this chapter with telegraph and then wireless transmission that practically moves increased speed of communications to speed of light, making them instantaneous. He then moves to discussion of computer, Moor’s law, and Internet, all of which so much increased human data processing ability that new and formerly unimaginable application become a reality.

7. Prehistoric innovation

Here author discusses slow moving, but critical innovation of developing agriculture, which actually was evolution of symbiotic development between humans and domesticated plants and animals. Author then discusses domestication of dogs, development of stone tools and use of fire. Author even classifies beginning of life as innovation.

8. Innovation’s essentials

In this chapter author concentrates on essentials: Innovation being gradual, different from invention, often serendipitous, and nearly always recombinant. Author also discusses conditions and methods under which innovations occur such as use of trial and error, team of people dividing effort according to skills and abilities. It is also occurring in conditions when governance is fragmented, opening options to try, while overall technological level of society achieved some level development that is causing multiple people coming up with similar ideas and products.

9. The economics of innovation

Here author touches on unusual economic characteristics of innovations such as increasing returns, sometime dramatically, advantage of bottom up development instead of economy of scale, practical development before there is scientific or theoretical understanding of corresponding processes. Author also makes somewhat interesting claims that it does not increase unemployment because opportunity for leisure is so widely distributed, that it increases independence.

10. Fakes, frauds, fads and failures

Here author discusses specifics of contemporary world when innovation became so popular that opportunities and rewards for cheating dramatically increased. Author provides examples: fake bomb detectors, phantom game consoles, and Theranos. Author also bring in failures of innovation through diminishing returns using example of mobile telephones. The final part of the chapter is about necessity for failure as part of the process of innovation.    

11. Resistance to innovation

Here author provides a few examples of resistance to innovation: coffee, which was considered a drink solicitous of subversion, GMO food, weed killer chemicals, and cell phones. Author also looks at forces that prevent innovation – government directives and law protecting monopolies, big companies suppressing competition, various requirements to obtain permission for this or that. Author also provides a brief note on successful evasion of limitations in digital domain of economy.

12. An innovation famine

In the last chapter author looks at contemporary world in which innovation in developed countries somewhat stalled, but it speeds up in China, expressing concern that West will be left behind. However, author believes that freedom is necessary condition for innovation, and China is far from being free, so he hopes that innovation will be expanding to India, which has huge and increasingly well-educated population combined with political freedom. The final word: the future is thrilling and innovation will grow.


It is an interesting review of innovation, but I think it a bit too heavy on technological history and not sufficiently concentrates on analysis of drivers of innovation in some societies, but not others. I also skeptical about author’s believe that China is the next big innovator. I think author underestimates to what extent current Chinese innovation in 5G, and what not, relies on Chinese companies’ R&D conducted in western world. Author understands value of freedom for innovation, but seems to believe that it is not completely applicable to China. Actually, I would say that Chinese people are great at innovation, but only when they are free. Corruption and suppression that are unalienable features of any socialist country, China included, would make innovation stop there as soon as decoupling with West become reality.

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