Big Change, Little Change
We linked earlier this week to piece by Richard Florida on Cato Unbound about the future of the creative economy. Robin Hanson has now written a critique of Florida's ideas aimed not so much at that particular essay as it is Florida's book on the creative economy, which I have not read so I am not prepared to discuss the merits of the case.
I am inclined to agree with Hanson when he states that the next major development in the evolution of human society will be driven by technology. No surprise there, I guessd. In fact, if anyone reading this is new to this blog (and hasn't read about this kind of stuff before), you may be wondering what the heck this "Technological Singularity" thing is. Hanson provides an excellent introduction to it:
In a universe that was doubling in size about every ten billion years, life and animals appeared on Earth. The largest animal brains then doubled in size every thirty million years. About two million years ago humans achieved important brain innovations, and the number of humans then doubled every quarter million years. About ten thousand years ago we learned to farm instead of hunt, and the human sphere then doubled every thousand years. Finally the industrial revolution occurred, and the world economy has since been doubling every fifteen years.
Our history has thus been a sequence of steady exponential growth modes, with sudden transitions between them. Could yet another new mode appear soon, growing even faster?
Looking at the number of doublings each previous mode experienced before the next mode showed up suggests that a new mode should appear sometime in the twenty-first century. Since each mode grew over one hundred times faster than the previous mode, the next economic mode should double every week or two. And since each transition has taken less time than the previous doubling time, the next transition would take less than fifteen years.
Smart machines, Hanson argues, are what will get us there. And I agree. But in dismissing the significance of Florida's Creative Economy, Hanson describes a model of change that I can't fully subscribe to:
The truth is that the artistic creations or intellectual insights we most admire for their striking “creativity” matter little for economic growth. Instead, most of the innovations that matter are the tiny changes we constantly make to the millions of procedures and methods we use. And changing these procedures does not require free-spirited self-expression. Instead, it is quite natural for people to constantly think about tiny changes to their procedures as they follow those procedures. In fact, we imagine far more such changes than we can afford to pursue.
Numerically, this is undoubtedly true. In that sense, "most" of the changes that occur are, in fact, these small incremental improvements that Hanson describes. Such changes are indispensable and amazingly powerful over time. The Japanese business culture of quality is predicated on the idea of fostering gradual, continuous improvement. But even in the business world, such a model is not sufficient. Occasionally, a bigger level of change is required -- where what is needed isn't a tweak on a procedure, but a full-blown redesign (or re-engineering) of fundamental processes.
A call center can continuously improve its call-handling methodology, helping its customer service representatives grow more efficient and effective. Over the years, little changes to the script, to how calls are worked through the queue, to who handles which problems, and so on can make for a much more efficient operation. But then one day somebody has the bright idea of implementing an AVR system and everything changes.
An AVR system isn't a phase change on the scale of humanity, but it is one on the scale of a call center. Hanson correctly describes the trade-off between incremental and transformative (or continuous and discontinuous, if you prefer) change. But he does not acknowledge that the trade-off occurs at all levels. The fact that the Creative Economy isn't the next big step in human evolution doesn't mean that it isn't an important change; and the fact that incremental procedure changes occur more frequently than creative leaps forward doesn't mean that they are more important.