Tim Harford is currently in Wellington attending the New Zealand Association of Economists annual conference. He will present the McMillan Lecture, on Wednesday 29 June, drawing from his work as The Undercover Economist on the economic motivations of everyday behaviour. In his new book ‘Adapt‘ Tim Harford argues that the process of innovation is bogged down in the sheer complexity of the modern world.
Good ideas are suffocated by bureaucracy while bad practices and dangerous errors flourish in dysfunctional markets. To find solutions to some of the big problems – climate change, financial instability, global poverty – we must go back to basics, examining the circumstances in which ingenuity has broken through in the past, and then considering how to replicate them.
The starting point is evolution. Harford cites compelling statistical evidence that the way companies have risen and fallen throughout history neatly resembles Darwinian selection. Clusters of bankruptcies occur amid periods of relative stability in a pattern that can be accurately mapped, albeit on a different time scale, on to patterns of extinction in the fossil record. Computer models that simulate how the fittest species mutations survive can also accurately predict likely survival rates for new businesses in the marketplace. This is a bit of an ego blow to swaggering executives who think their tremendous commercial acumen is what has saved them from ruin and earned them their fat bonuses. Luck and timing are just as important, if not more so. Guardian Weekly
Below: Tim Harford launches his book at the RSA