Decentralized systems accelerate innovation
The most effective means of accelerating innovation is by maximizing the greatest number of possibilities and variations that are considered. This happens readily in decentralized systems that have minimal friction in the sharing and exploration of ideas.
In the 1980s, the economists Richard Nelson and Sidney Winter examined the record of human innovation and devised what is now called the “evolutionary” model of innovation. Their thesis implied that in fact innovation is much more a process of trial and error than theretofore imagined. General human ignorance about the future leads to a great many human errors. Furthermore, the human element always introduces an irrationality, even to the point of such paranoia as Bell evinced concerning magnetic recording. Thus if everything is entrusted to a single mind, its inevitable subjective distortions will distort, if not altogether disable, the innovation process. By contrast, Nelson and Winter argued, the most rapid or efficient innovation typically results when the widest range of variations are proposed and the invisible hand of competition, as proxy of the future, picks among them.[1]
See also:
- Liquid Networks foster innovation
- Centralized systems are efficient, not disruptively innovative
- Centralized innovation is beset by two weaknesses
The Master Switch – Wu (2010), ch. 7, § “One Mind or Many?” ↩︎