Odd Lots - 47: Why it's Time to Stop Using the Word 'Disruption'

Episode Date: September 23, 2016

"Disruption," "incubation," "innovation"... you hear these words nonstop these days as people talk about the incredible changes taking place in society thanks to technology. This week on the Odd Lots podcast our guest tells us we all need to stop. Or at least use these words a lot less. Lee Vinsel is a professor of science and technology studies at the Stevens Institute of Technology and he explains the harmful impact of language and buzzwords, and why we need to focus more on "maintaining" the infrastructure and technology that sustains everyday life.See omnystudio.com/listener for privacy information.

Thanks for listening to OddLots. Follow the show on Amazon Music for more future episodes or just ask Alexa play the podcast, OddLots on Amazon Music. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a very big line. It's a lot. It's a firm. a commitment to your clients. We're talking top grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com

slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing Corporation Distributor. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at cIT.com. Put knowledge to work. And welcome to another edition of the Odd Lots podcast. I'm Joe Wisenthal, managing editor of Bloomberg Markets. And I'm Tracy Alloway, executive editor of Bloomberg Markets. Hey Tracy, how's come? Pretty good. I get kind of nervous when you ask me stuff like that.

Oh, yeah, I just thought, you know, been a while. I wasn't on last week, so I wanted to catch up. That's true. That's true. You wore away. You missed Matt Levine and space robots, so I'm sorry. A little worried that he did better than me. So I'm kind of, I haven't listened to that yet because I don't want to see if he's better than me. You have to step it up today. So space robots, so technology is pretty cool, huh? Yeah, it's impressive and it seems to make a lot of people a potentially lot of money. So speaking of technology and making a lot of money, you know what another cool thing you can do with technology is? I feel like this is a trick. Go on.

You can catch up with old friends that you haven't seen in 20 years on Facebook. No way. And actually, our guest today is someone who I don't think I've seen probably. in like 22 or 23 years. He's an old middle school friend of mine from when I lived in Joliet Illinois, which is kind of a suburb of Chicago. Is this what Oddlots has been reduced to? You're just bringing on your school friends? It is, but there's also, it is. So part of it is just an excuse to catch up with an old friend. But we're also going to be talking about, there's also a relevant angle related to technology because our guest is,

is a historian of technology at the Stevens Institute of Technology in New Jersey. And he recently gave a great speech called the Innovation Fetish, which is about why it's so bad that we're obsessed with words like disruption and innovation and why it's so perverse that we can't stop talking in this sort of nonsense language that we've all constructed and come to accept. So those are words that we see on almost every technology press release that comes our way, right? We read them and see them unquestionably. No one ever talks about, why are we talking about innovation so much?

And are we really getting anywhere by hammering home the importance of innovation and disruption and entrepreneurship and all these things that we've just sort of taken for granted are good? and maybe there is a dark side to our endless focus on this language of technology. Ooh, I like this. I like where this is going. All right, you might be forgiven for bringing your friends on. My intro wasn't totally contrived. So with us is Lee Vinsel. He's a professor, as I mentioned, at the Stevens Institute of Technology. Lee, it's great to see you, and thanks for joining us. Thanks for having me here. So your talk, the innovation fetish and your work focused on all these buzzwords that we just mentioned. So tell us about your work and why is it important to focus on the language, focus on these words.

Right. So I'm a historian of technology. My first book I just wrote is on the history of auto regulation in the United States. But for this project, what I've been looking at is tracking word usage over time. And one surprising fact you find is that the term technological innovation only comes into use in about the 1960s, which ironically, if you read economists and economic historians like Robert Gordon, is about the time that really deep and meaningful technological innovation, revolutionary innovation, kind of came to an end in the United States, right? because we kind of hit the skids in 1970. And since then, with a couple of brief exceptions, we have not gotten back to really deep innovation and really meaningful economic growth. Immediately.

So that's very interesting. And I want to talk about that. But the first response that I think most people think is, is like, how can you say that we haven't seen much innovation since the 60s and 70s? I mean, our world is wildly different, largely thanks to information technology, computers and phones and the internet and all this. So this seems to be a contestable point right off the bat that that is actually the high watermark

for innovation as opposed to what many people would see is the very the founding era of digital technologies and the internet and all these things. Right. So how do you back up that claim that that was sort of the peak? Right. I mean, I think that the argument, Gordon, would make is that we see a period from about 94 to 2004 where businesses are adopting email and different internet technologies. And we see that in the economic growth numbers. But we just don't, for all of the hype about innovation and disruption, all of these things, we actually don't see that in our economic growth. So in the 1960s, did people suddenly start talking about

technological innovation or was it a gradual change? Or how did it? it come about and why? So the way it happened was that economists, especially Robert Sallow, by the late 1950s, they sort of had very good economic statistics. And they were realizing that traditional explanations like changes in capital and labor just weren't explaining the economic growth. So then they hypothesized that that hidden thing was technological change. So then amongst economists and economic historians in the 60s and 70s, you see in policymakers, too, you see more and more focus on innovation as something that we should try to foster and encourage. So what's wrong with that? Because intuitively, it doesn't seem like there's anything wrong

with policies that promote science and promote the application of science to business models and the promotion of technologies that will make us more efficient. So what is the downside to this rhetoric? I think there's two major downsides. The first is that it's not clear that these policies or changes in our institutions are actually getting us that innovation, right? So we can talk about it a lot, but is it actually producing it? And the second part is that this focus on innovation often leads us to just,

ignore fundamentals, like infrastructure and ordinary labor. Because even in a very innovative society, most people's labor is going into things like just keeping the world going. So is the implication here that because technological innovation sounds like a sexier kind of topic, that that's why people tend to focus on it more when it comes to economic growth? Is that what we're saying? Yeah, I mean, that's a big part of it. It taps into a much longer history, which is a kind of fetish around invention. There's cults of invention going all the way back to Edison and Tesla and people like this. But since 1970 or 1980, there really has been this kind of constant focus on the sexy topic of innovation to the neglect of many other basic fundamental issues, even basic technological issues.

Is innovation good and should, let's say there were a better way to achieve innovation besides talking about innovation? In your view, is that worth pursuing? Is the issue, like what I'm trying to get at is the issue with the language itself counterproductive or is there something more fundamental? Could we achieve, have higher rates of productivity and innovation by thinking about it in some different way? Right. I think that there are smarter ways to do innovation policy. And I think that in general, innovation is often good. So if we can find those ways to do those things, we should.

But the second part, then, is that there's a lot of things that we neglect when we just focus on innovation. And why is it zero-sum? So walk us through how policymakers, you know, every state wants to have its own Silicon Valley. It's sort of incubator programs for news. startups, but why does that have to be zero-sum? Why does the focus on all these things necessarily detract from the labor of most people? I would you say maintain, maintain the infrastructure, build the infrastructure. Why does it have to be one of the other? Let me give you an example. So Senator Sam Brownback in Kansas followed traditional conservative economic thinking

in cutting taxes for the wealthy in an attempt to induce innovation. in the state. Now, maybe we've seen some job growth and innovation, but what he's ended up doing is cutting the tax base, and for that reason, he's had to continually tip, go into the transportation fund, which means that kind of Kansas roads are falling apart. That would be one example. Doesn't this just speak to the fact that technology is often something that's about, you know, a series of small discoveries and then maybe you hit a jackpot that's something really revolutionary in terms of technology. I mean, by pursuing technological innovation, everyone is essentially going after that jackpot, right? And naturally, if they don't get the jackpot,

then it might look like they've lost out. That sounds good to me. I'm not sure how that's a counter example to what I'm trying to say. Is it essentially if I'm understanding, the question is it basically that if everyone is sort of pursuing technological innovation

in its own right and everyone wants to be the next Mark Zuckerberg or the next Steve Jobs or the next whoever, then that guarantees that a lot of people are just going to be major losers

and a lot of people are going to have spent a lot of money and human endeavor that gets us nowhere. Right, but one person is going to get the big payout, right? Like one person is going to invent the new Facebook. That's the problem. Right. That's part of the problem. And the other thing is I think if we look at education,

for instance, engineering education at the college level, it often focuses on innovation. So it's making students think to be a good person or a great person, you have to be an innovator. And yet about 80% of engineering labor just goes into maintenance and upkeep, like just totally ordinary stuff. And yes, to take care of technological systems, introducing new things that introduce new efficiencies is important. We know that. But there is a more kind of fundamental and basic way of thinking about things, which is caring for things. And yes, new things will be a part of that overall process. So is this inevitable? I mean, in your view, this was a choice. This is a value judgment that society has put on innovation, creating something new versus maintaining something

new and taking pride in keeping the infrastructure of society, whether it's sort of physical infrastructure or technological infrastructure working for people. In your view, this is a value choice that people have made. That's right. Yeah, I'm not sure that they made it intentionally. I think these kind of terms, especially very fattish terms, kind of seduce us, right? Because they seen nifty. And especially when people are telling you that innovation is how we get all these good things, both increases in quality of life and economic growth, it's very natural to kind of go after that thing. I want to take a quick word for a sponsor. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers

commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at CIT.com. Put knowledge to work. Okay, and we're back with Lee Vinsel. He's a professor of technological history at the Stevens Institute of Technology. And we are talking about the innovation fetish and the counterproductive

of our obsession with words like innovation and entrepreneurship and disruption. Something that I'm really interested in that I think maybe you can speak to is we've decided, as a culture and as a society that people who build a social network and become a billionaire a few years later are lauded to the moon. They're on the cover of magazines and everyone is told they have to hustle and everyone is told to go out and be the CEO of their own brand.

What does that do for, like, who wants to become a teacher in this culture? In a culture that rewards sort of going out and scoring big so fast, who would ever want to have like sort of like a simple profession like teaching school children? Teaching children. Yeah. It seems quaint, but it has to be done. On the subway ride over here, I actually saw an ad for people becoming teachers. And one of the taglines was that you could encourage children to be innovators, right? So even to get people into teacher jobs, the only way.

way you can do it is through innovation. I also saw someone running for the local school board in Maplewood, New Jersey, where I live, has the word, their name, and it says creativity and innovation, right? So it's like the only point of our education system has to be innovation at this point. So what's the solution to this problem? Because like the obvious one, I guess, is for governments or policymakers to put out some sort of disincentive program and say we're not going to talk about innovation anymore. We want to quash all the innovation, which sounds like a PR nightmare, right? And I can't imagine. I would not do that. Yeah. So what would you do? All right. This is kind of tough. On one level, what we're trying to do is engender a conversation

about this stuff. And what we find is just as innovation appeals kind of on both sides of the aisle to both political parties, we also see this maintenance discussion appeal to both political parties. So after we had this conference at Stevens Institute of Technology, it got covered by the American conservative online magazine. So, I mean, one of the things is trying to just create a conversation about that. But my co-author and I, Andy Russell, were kind of classic, progressives, right? So our answer would be to put more funding into infrastructure, which luckily more and more politicians are talking about, and then also thinking about labor policy. So how can we encourage people to be teachers when teaching jobs in the United States pay so poorly, for

instance? So sort of a spend more on it? Spend more. Yeah, spend more. Yeah, tax people and spend more. What about change, do you think that would change the culture around these things? Because, I mean, I agree, like, yes, economics would dictate if you offer teachers more money. You'll get more people who want to be teachers. But you still, I feel my gut would be that you'd still have this issue of no one is celebrating teachers. Yeah. And that the culture is still encouraging everyone to be a Mark Zuckerberg or a Steve Jobs or an Elon Musk. And that you still don't have, like, culturally, that's, that.

That's not a thrilling thing for people. Yeah. I mean, you know, I can talk about like a public information campaign around maintenance, but I'm not sure how much that actually does. I mean, I think ultimately we have to start in the organizations we work in, right, and recognizing those people who are doing all the crucial work to just keep things going around us. I want to go back real quickly because when I was watching your talk and thinking about this idea that this language around innovation

kind of shot up around the time productivity started to plateau. It's interesting thinking about going back to, say like the inventors like Edison or Tesla or the people who invented the steam engine. What were people talking about back then? Were people talking about we need to encourage innovation?

What was the culture around in those eras that got them really excited about inventing? I think they were excited about the technologies themselves. They were enthusiasts and there was new technology on the scene. It seemed like magic, you know? I mean, the light bulb is a piece of magic. And so they were enthusiasts for that. I don't think anyone had any sense that this was going to necessarily lead to economic growth at that time.

That just wasn't a part of the way they were thinking about it. But was there any sort of rhetoric around the cult of invention? Like, when did that spring up? Yeah. So that, you know, it develops throughout the 20th centuries. By the 20s and 30s, corporations are creating things like the House of Magic. That was GE. And so you started to see more and more encouragement of getting young people to think about technology and engineering.

And then, of course, in the 50s, you know, this starts to be tied really closely with the Cold War and, like, beating the Russians and things like that. I mean, part of what I deal with in my written war, is how in the United States, innovation is often tied to fear of other people, right? So, you know, we can think of the Cold War and science and technology and the Russians, but then in the 80s, innovation is really focused on the Japanese as a threat and as an economic threat. And, of course, by the 90s and 2000s, then that switches to the Chinese, and it's all about the United States' place in the global economic system. So despite Silicon Valley's sort of rhetoric about technology,

bringing everyone together, there's actually a deep-rooted relationship to fear of others. That's quite ironic. So I have a, maybe it's a stupid question, but if we think that part of this problem has to do with the language itself and the use of terms like disruption and innovation, could we solve the problem by just using other words? Like instead of technological innovation, could we say something more boring, like, I don't know, mechanical advancement? Could we call like Mark Zuckerberg the IT guy that like got lucky? Would that work? I mean, that would work for me. Yeah, I don't know if it would work for others.

I mean, you know, think about disruption. So people are still using the word disruption a lot. And yet social scientists over the last couple years have really undermined Clayton Christensen's notion of disruption and show that it happens far less frequently than he assumed and that it's far less important for the overall economy than he said. And that's not leaking into the broader community of users, right? I've noticed that with things like disruption and stuff like that and disruptive innovation, that the theory that that's, an important thing seems to be kind of unfalsifiable. Because every time there's some counter example, you're like, oh, no, you don't really get the theory. That actually, like, and so it's sort of hard to pin down what that really means.

But if you use his term, I think he had like 90 cases that he thought were cases of disruption, innovation. When economists reanalyze that data, they found that only like seven cases of his 90 cases actually fit. What is it? What is his definition and why does, what? Why do most examples fail to achieve it? I'm not sure in that study what definition they were working with, right?

I mean, I think the classic definition is the introduction of a new process or technology that undermines a traditional industry. One thing I saw a stat last night, I think it was just on Twitter. And so this is like the worst kind of like journalism or punditry because I'm just mindlessly repeating something I saw on Twitter. But that something like the percentage of output in the U.S. economy that's, done by like the top 10 companies is significantly bigger than it was 10 or 20 years ago, which sort of undermines this idea that technology is creating this world where the incumbents are always collapsing. In fact, you look at the economic landscape and it seems to be dominated by incumbents

that are harder and harder to remove from their perch or even look at something like a lot of people have talked about this, that if you look at it. say the App Store on your iPhone, the top 25 apps, almost everyone is either from Facebook, Google, or Amazon. There's actually... And most the apps have like one download or zero downloads. Yeah, right. And there's actually very little churn of who's leading at the very top.

Well, I mean, I think that this, part of what we're trying to do with our maintainers project, we're having the second conference in April at Stevens, because we're just trying to find more realistic and grounded ways of thinking about the economy and technology, right? So the kind of factoid you just threw out there is exactly the kind of thing we would point to and say, look at where rhetoric is pushing us and in thinking about the economy and then look at how the things are actually playing out on the ground. So in a conclusion, what do you, let's talk about some goals. I mean, you mentioned that, like exploring the gap between our rhetoric and what's actually happening. But what are a few things?

that you'd like everyone to be thinking about and going forward with this discussion? Because I think, you know, this is so novel, this idea to question the cult of this, that at this point you just want to have the discussion about it. But what are some big things that you'd really like people to be thinking about specifically to reground the discussion in a more productive way? I mean, so, right. I mean, I think the goal is to get people to think about what technology is. and what it's doing in their lives.

So most of the technologies around us are very old. You know, I can think about box fans, which have been around for a century and haven't changed. I assembled a fan the other day, and I was pretty proud of myself because I'm not much of an assembler, but I actually was able to. I just wanted to get that in there for the record.

So I think it's about thinking about technology in a grounded way, reminding ourselves what it is, and then reminding ourselves that what most people do in our society is just keep this world going, feeding ourselves, feeding each other, making sure things don't fall down on us. And yes, innovation is important for the technological world around us, but it doesn't play as big of a role as kind of hypemongers want us to believe. Well, Lee Vinsel, a professor at the Stevens Institute of Technology, thank you very much for

coming in. Thank you for having me. Looking forward to your conferences coming up next spring. Yeah, that's right. What's it called? The maintainers, too. Great. Well, we'll check it out and maybe we'll, maybe I'll come down for it. That sounds fun.

Send someone down. And again, thank you very much for coming in. Thank you very much for having you. So, Tracy, do you think I totally abused my position by having one of my, just bringing one of my old middle school friends in? Yeah, nephotism, nephotism right here. No, that was totally interesting and well worth a discussion. And very, as you see, said, very, very counterintuitive to the way that most people think about technology. But I expect it might not be forever, right? You are seeing more people talking about the potential negative effects of rapid technological change, its impact on productivity, as you mentioned, and also deflation.

So who knows? Maybe more people will come around to this view in the future. Yeah. And one thing that you said it's not intuitive, and I agree, but you think back to even the people, that we celebrate in sort of the era of innovation, like after the 60s when we first started talking about it. I mean, I don't know exactly what was in Mark Zuckerberg's head when he founded Facebook, but I doubt it was him saying, oh, I want to be an innovator. And I want to be, I want to innovate. It was like, oh, I want to create this cool thing to meet people at my college or meet girls. I think it was specifically.

Or Steve Jobs wanted to simplify the phone, whatever it is. None of these people that we revere as great innovators probably were really excited about innovation itself as a end. It was they were excited about some project they were working on. And they were not the product of, you know, I want to be an innovator. I totally agree with that. But do you think, like, were they excited about being maintainers, like to use, Lee's word? Like, I don't think that was it either. I think we have to find culturally maybe a middle ground between innovation and maintenance. No, I think that's right. None of those folks seem like

they wanted to be maintainers. But it would be nice, as you say, if we could have a world for both, where we obviously, we celebrate the people who make inventions that change our lives and the sort of the energy that that takes, while also recognizing that most of the good things, things we have in life are the product of people working tirelessly to maintain our systems in a in function of order. I like that. That's well said. I mean, I will, just one last thing, I will say the next time, next time we get a press

release that contains both the words innovation and disruption. I'm going to email a link to this podcast. Well, on that note, this has been another edition of the Oddlots podcast. I'm Joe Wisenthal. You can follow me on Twitter at the stalwart. I'm Tracy Allaway. I'm on Twitter at Tracy Allaway. You can follow Lee at STS underscore news. Thanks for listening.

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