Laszlo Balogh / REUTERS Taxis blocking a road during a protest against Uber, Budapest, Hungary, January 2016.

No Small Change

How to Manage the Costs of Innovation

In This Review

Innovation and Its Enemies: Why People Resist New Technologies
By Calestous Juma
Oxford University Press, 2016
432 pp.
Purchase

Regulators everywhere are going after Uber, a fast-growing ride-sharing platform. China, Denmark, France, Germany, Italy, and Norway have outlawed the app, while Australia, Dubai, India, and Taiwan have severely limited its operations. Even in the United States, several municipalities have questioned the legality of the cab services provided by the San Francisco-based firm. Cab drivers themselves have spurred much of this response: through blockades, lawsuits, and physical assaults, they have pushed policymakers to address supposedly unfair competition. As a London cabbie put it during a march against Uber in 2016, “Why has this American company come here and been given free rein?”

Such a vigorous reaction was predictable. Uber and apps like it are disrupting one of the world’s most protected industries. For decades, taxi drivers the world over have invested financial capital in gaining the support of public officials in order to curtail the number of driving licenses for sale and preserve their own revenue. Thus protected by thick barriers to entry, incumbents had little incentive to innovate and improve the quality of their service. Uber took advantage of this innovation inertia by combining readily available technologies such as GPS, smartphones, and the Internet. Its outspoken CEO, Travis Kalanick, has radically remodeled a previously inaccessible industry. Even in countries where taxi drivers have so far succeeded in pushing back the advances of Silicon Valley, the sector no longer looks the same.

The conflict between innovators and defenders of the status quo is a recurring pattern in the history of innovation. That is the focus of Innovation and Its Enemies, a new book by Harvard professor Calestous Juma. A leading scholar of innovation, Juma looks at the past 600 years of economic history to explain how and why incumbents, and society more broadly, resist technological disruption. With so many inventions coming out of the world’s many “Silicon Valleys”—inventions ranging from artificial intelligence to 3-D printing to gene-coding to Big Data—the topic could not be more relevant. Today, taxi drivers

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