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New technologies raise living standards, not when they are invented but when their cost falls within most people’s range

My latest Mind and Matter column for the Wall Street Journal is about the innovation that leads to the cheapening of technologies, as opposed to the invention that leads to new technologies.

Cheapeners deserve as much credit as inventors.

Last week a Minneapolis firm called TenKsolar announced that it reckons it can soon cut the cost of rooftop solar power in sunny locations to as little as eight cents a kilowatt-hour-which is almost competitive with conventional electricity. It borrows an idea from computer memory technology to wire up solar panels in a new pattern so that the current can take many different paths through the cells in the array. The result is that the output of the panel is no longer limited to the output of the worst-performing cell. Until now, a shadow passing over one cell would cut the output of the whole panel.

This mundane innovation will not in itself transform the prospects of solar cells, but it’s a glimpse of the kind of small steps that, while winning no Nobel Prizes, are needed to bring the cost of solar power down to the point where it can be a cost-saving boon to, rather than a subsidized drain on, economic activity. That “cheapening” is vital.

A feature of innovation is that the greatest impact of a new idea comes not when the light bulb goes on over the geek’s head, but when the resulting technology eventually becomes cheap enough for many people to use-perhaps decades later. The first plane at Kitty Hawk had zero impact on the world economy, but budget airlines have a huge impact; the first computer was a curiosity, but cheap laptops changed the world.

With some technologies, the cheapening happens almost immediately. The Post-it note springs to mind. With others, the cheapening takes a surprisingly long time: Lasers remained the preserve of labs for five decades before suddenly showing up in consumer goods. With some technologies, like helicopters, the cheapening has never happened at all.

Most of us consider the original idea rare and noble, the later cheapening inevitable and dull. Who would imagine today that Napoleon III of France reserved his newfangled aluminum cutlery for only his most honored guests, leaving commoner folk to eat with silver?

We also disrespect the people who achieve the cheapening. The robber barons of the late 19th century generally made their fortunes by drastically cheapening new technologies, grabbing market share by undercutting rivals-and ending up with terrible reputations. Cornelius Vanderbilt cut the price of rail freight 90%, Andrew Carnegie slashed steel prices 75% and John D. Rockefeller cut oil prices 80% between 1870 and 1900. Malcom McLean, Sam Walton and Michael Dell did roughly the same for container shipping, discount retailing and home computing a century later, and were also unloved for it.

Yet it’s the cheapening that raises the world’s living standards. And cheapening is often mighty hard work.

As Kevin Kelly argues in his book “What Technology Wants,” once an idea is ripe, simultaneous invention of the same thing by different people is so common that it is almost the rule. This implies that inventors are more dispensable than cheapeners: If Thomas Edison had not existed, electricity would still have been invented. It’s harder to argue that had Sam Walton not existed, discount retailing would have grown as fast.

The length of the usual gap between invention and cheapening implies that some of today’s expensive technologies will eventually flower into prosperity-enhancing time-savers. All they need is a good cheapener to work on them.


Solar power may be one of these technologies, and others may be high-temperature superconductors, discovered in the 1980s, but yet to have much economic impact; biotechnology, still mostly helping research rather than therapy; and space travel, still far too expensive to be of any commercial interest. They await their Carnegies.


By Matt Ridley | Tagged:  rational-optimist  wall-street-journal