Friday, 23 August 2013

The Process of Innovation: not as straightforward as you think

Did you think all swans are white?
If you did, you've just experienced the
devastating black swan effect! (Commons)
The long vacation from medical school has allowed me to catch up on some good old reading. This month I'm trying to finish up a beautiful philosophical work titled The Black Swan by Nassim Nicholas Taleb. A prominent author and professor in epistemology (who's witty style of discussing unintuitive philosophical concepts and passionate arguments leaves me absolutely refreshed after every reading session) which is simply the study of knowledge, Nassim Taleb explores in the book the theory that he calls 'the Black Swan theory' which describes probabilistic events with the following characteristics:

  1. They are rare enough to surprise us.
  2. They have drastic consequences.
  3. They are prone to erroneous retrospective rationalisation i.e. we try to explain them away after they have happened.
A good example is the 2008 financial meltdown which resulted in a global recession which some regions like Europe are still trying to recover from. Nobody expected it, it hurt us and arrogant economists are trying to explain it away (and in some cases have no idea what they're talking about).

Without going into too much details about the book, the point is that Mr. Taleb hits on an interesting idea that I have never before imagined. In chapter eleven of the book he talks about the role of randomness in fostering scientific and technological progress in the world today. He posits that most of the designed technology today yield are simply toys that wait for an application to appear. As he aptly puts it 'solutions waiting for problems'.

We tend to apply retrospective historicism to explain that x invention was  made to solve y problem and so on in a neat chain towards today's progress. Taleb tries to squash that version of history and replaces with something less romantic but probably more grounded in reality. In fact, according to him, there might be no difference to evolution and our progress.

Evolutionary theorists posit that innovations in biological designs are actually a product of random mutations that are filtered out by environment and internal pressures such as food availability, selection during mating. He considers the laser (whose inventor was in fact ridiculed by colleagues) and Viagra (which started out as a drug for hypertension). Today we can't live without laser and its field of uses is ever expanding even today as for Viagra, it has uplifted the lives of so many men living with impotence. Or consider the internet for that matter. It was originally designed for military purposes, now we all live online.

Some companies even capitalise on such a process according to Talab; scientists can sit down in such companies and simply tinker just for the fun of it. Commercialisation comes later. Whether such a thing is feasible in the long term is unknown to me but it certainly is tantalizing to see a business model that doesn't force a scientist to become a businessman full time.

Now considering this seemingly random process of innovation, how do we make of something like '3d printing' work? Some describe it as the biggest thing since the Industrial Revolution and it honestly looks like it. You can print anything you might fancy in 3d, your face, prototypes, shoes, designs and what not. Sceptics call it a gimmick, a toy with no future, a fad. In short, the solution is so elegant, but what's the use of a layman having it in his house?
An example of a 3d printer; the ORDbot Quantum printer
Recently, a new desktop scanner has come out on sale that allows small items to be scanned by a laser in 3d and a computer prints a 3d copy. So we now have a desktop scanner and a home ready printer that anyone can use.  So now what? Is the technology going to be for fun or art or what. Some analysts suggest that 3d printing is only for industries and they may be right but then again, who really knows? It seems to me like we're living in the age of another growing bubble; the 3d bubble. Like the dot-com bubble of the late 1990s and early 2000s, this one might burst and make a lot of investors up on Wall street lose their breakfast.

The moral of the story is that its very hard to predict these kinds of things. Randomness has gotten the better of us and no amount of risk management will ever remove it and it is ludicrous to imagine that we will ever master risk management. Th least we can do is enjoy the ride. At least, that's what Nassim Taleb says.