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The Innovation Illusion: How So Little Is Created by So Many Working So Hard

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The Innovation Illusion: How So Little Is Created by So Many Working So Hard
By Fredrik Erixon and Bjorn Weigel
Yale University Press, 2016
312 pp.

It has become common to hear warnings that in the near future, automation will destroy jobs and technological advances will accelerate economic and social turbulence. The authors of this sobering book argue the contrary: innovation—by which they mean the commercialization of new discoveries, not the discoveries themselves—is slowing down, mainly because Western societies have become sclerotic. Corporations have grown more risk averse, owing to three factors: their increased reliance on financial markets (as opposed to internal funding), a shift in the corporate world from entrepreneurship to rent seeking, and the growth in complex and continually changing government regulations. Erixon and Weigel take aim in particular at the so-called precautionary principle, which holds that companies must prove that their products or practices are not harmful before they can bring them to the market. This approach is common in Europe, where, the authors contend, it severely penalizes risk taking and flies in the face of the eu’s official goal of encouraging innovation.

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