Rory Sutherland
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Among all the highly visible Brunels and Turings and Jobses, much innovation consists of banal, incremental improvements in the everyday stuff of life whose effects are neither visible nor immediately realised. There are also many inventions which are relatively useless at the time of their conception, but which prove invaluable when combined with some later technology — by which time the inventor is dead or all but forgotten.
We are also perhaps prone to overrate the importance of technological innovation relative to innovations in marketing or design. The deciding factor in any success may lie not in devising something new but in presenting it in a way that makes people willing to use it. I owned an mp3 player about three years before the iPod was invented, and it was really rather good. But it looked boring and completely failed to capture the public imagination. James Dyson, the British inventor, is famously disparaging about advertising and design, believing that the popularity of his products is simply a matter of their superior functional performance. But had his vacuum cleaners been encased in a bland, beige, opaque outer shell, we would never have bought them. Engineers hate these aesthetic niceties, since to credit them with any value detracts from their own importance.
I recommend Terence Kealey’s book Sex, Science & Profits if you want to hear the libertarian case for business-led innovation and its superiority to the state-funded kind. (The Wright Brothers provide support for this argument. The Flyer, the world’s first aeroplane, was not returned to the Smithsonian from the London Science Museum until 1948 owing to official reluctance to accept that two bicycle shop owners from Ohio had succeeded where better-funded government projects had all failed.)
But there are other business figures who are never properly credited as innovators at all — simply because they are more famous for running businesses than for inventing things. I quite often wind up leftists by arguing that, for the people of Britain, Rupert Murdoch has been a far more important technology pioneer than Steve Jobs: the assertion drives them practically insane, but it is a perfectly tenable position.
First of all, the revolution he created in television benefited many more people than the iPhone or iPod. And, depending on your point of view, he either resurrected or destroyed English football. But it is also a story of extraordinary persistence: for many years the success of satellite television was far from assured.
In the early 1990s market research showed that the satellite TV project was dead in the water. British people would not pay for television, or so they all said, and were more than happy with the four channels they had already. The only people who showed a dim interest were the few who lived in areas with very poor TV reception.
And in the beginning, the project seemed doomed. First of all it was initially assumed that films, not football, would be the crucial content to offer. The perceptions were dire: ‘What do you call the box attached to a satellite dish?’ ran one common joke. ‘A council house.’
Then, when nearing success, a second huge bet was placed on the transition to digital satellite TV. Again it paid off. Like it or not, British television is much better for the competition. I am sure Murdoch is a nightmare to work for (he once said that ‘team-working is a group of 12 people all doing what I say’), but then what cautious, shareholder-owned, democratically run company would have taken the risks his did?
But there is a still greater name among the ranks of under-acclaimed innovators, and it is that of Robert Crandall, an executive with American Airlines, later its chief executive, and another famously irascible character. In the 1970s and ’80s his fascination with technology led him to introduce ideas which are still being played out in a host of other industries. He was instrumental in creating Sabre, the first online booking system for travel agents (until then you could book a flight only weeks in advance), and he shared the technology with competing airlines. He then developed the science of yield-management pricing (charging for seats according to demand, not from a fixed tariff). Then he went on to invent the airline frequent flyer programme.
This last invention may seem trivial. But it was in a way the first experiment in using new technology to create a parallel currency. He was hence the first person to prove Hayek’s prediction that technology could break the government monopoly in fiat currencies.
I would quite like the opportunity to invest part of my pension with One World or the Star Alliance, since on balance I trust the airlines more than the banks (they have a much better appreciation of risk). Sadly this option does not yet exist.
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