Your current research focuses, one thread of it focuses on innovation. The topic of
this course involves information technology. Often information technology and innovation
are seen as linked up together. What do you see as the role of information technology
in some of these issues of sustainability and global change?
Some colleagues and I have looked at productivity of innovation by looking at a large database
of patent statistics. What we find is that overall the productivity of our system of
innovation is declining, and the reason is that our system of innovation like many other
areas of our life is growing more and more complex and costly. Once innovation was done
by lone wolf naturalists like Charles Darwin and now it's the province of large research
teams that have budgets and administrations and many people doing different tasks and
specialists, and so research is growing costly. It's taking more and more innovators to achieve
a single innovation reflected in a patent, and conversely the number of patents per innovator
which is our measure of productivity has been declining for over 30 years. Some people suggest
that in fact the productivity of our system of innovation may have plateaued as long ago
as 1870 although there aren't good data to support that. Now, the bad news I have for
you is that the productivity of innovation in the information technology sector is also
declining as it is in every sector that we've looked at. So, you wonder why is it that I
can go into the electronics stores and keep finding new products. The reason is that research
and development has simply grown so large within our societies that we throw a lot of
resources at it, but in fact innovations for inventors is going down.
Okay. That's an interesting realization with regard to the future.
That would be a slide this afternoon.
Yes. Are there any other things? Here is an opportunity to speak with a bunch of UC undergraduates.
Any other thoughts you would like to share?
What I would say is that we need social innovations as much as we need technological innovations,
and I think it really takes a new generation to come up with the social innovations that
we need. We need a society in which market incentives play less of a role in people deciding
what to do with their lives. We need a society in which people find happiness in things other
than material consumption. I think these are going to be necessary in the future. What
I would say to the students is the future is in your hands, it's up to you.
One of the things, you kind of mentioned a little bit about the fossil fuel input and
the way that we are burning through our savings in a sense, an energy savings that we have,
and thinking about the way that that has been played out a little bit. Sometimes when I
talk about this with people who have more of an economic back they say well, we're not
really in danger of anything like a collapse because as it becomes more and more expensive
to get the fuel out of the ground, the energy out of the ground, it's going to naturally
get more expensive and the market forces are just going to correct. Yeah, it will get more
expensive and we won't be able to do other things, but it's not going to hit some sort
of a tipping point or an inflection point. It's just going to sort of the market is going
to correct for itself. What do you think about that argument?
Well, the argument of a technological economist is that as a resource becomes scarce the market
signals that there are rewards to innovation so people innovate. This is what I call a
faith-based approach to the future. We assume that it will always be so. This depends in
the long run on the productivity of innovation, and what my colleagues and I have shown is
that the productivity of innovation is also declining as net energy declines. So, up until
this point we have in fact been able to offset depletion by innovation and by new technologies,
but a century from now it's not clear that we're going to be able to.
So it's not just the issue that the market is going to correct for the cost of fuel,
it's the fact that what happens when the fuel price goes up is people have to innovate in
order to keep the standard of life the same.
In order to keep the standard of living, yes.
And that innovation itself takes energy that is not available.
Yes, that is true too, yes.
Because I think that's a connection that when people make that argument they don't take
it the next step and say well, to compensate you need innovation and to have innovation
you need energy and that was the problem in the beginning.
Yes, particularly in some fields like physics.
Yes, that's right, where you have enormous football field sized labs.
Or in the field of information technology. It takes electricity to run the computers.
Yes, that's right. Yes. You were mentioning about the cost of energy to get energy. I
heard that the cost of getting energy out of the Canadian shale oil fields it took more
energy to get the petroleum out of the ground than is being put in.
No, it yields a net energy profit but it's very low. It's called the EROI. The Energy
Return on Investment for tar sands is something like 3:2 which is very low. What that means
is that if you want two barrels of oil to export to the United States you have to use
the equivalent of five barrels of oil. What they use is onsite natural gas which they
can get very cheaply because it's just there and available for them to use. The problem
here is the opportunity costs. We're using natural gas that 30 years from now we may
have wanted to heat people's homes, or to run factories, or to generate electricity.
In Eastern Utah they are talking about developing oil shale again using natural gas, heating
the shale in the ground and then getting something like petroleum kerogen out of the ground in
return, and I've seen EROI estimates of as low as 1.3:1 or 1.2:1, something like that.
These are very, very low EROI estimates. The only reason why these products are pursued
is because they still yield a monetary profit, but the subsidy from fossil fuels just goes
up and up and up and it takes more and more fossil fuels to produce a dollar.
When you say subsidy you mean actual subsidy?
What I mean is the subsidy of using stored ancient solar energy.
Right. To what degree is it a reasonable argument to say that while we have resources now we
could direct those resources and energy otherwise to doing innovations that move us in the direction
we're kind of talking about? Rather than innovations to get more energy, but innovations to smooth
the social process, innovations that are not directed in continuing the trajectory which
is diminishing the return, but taking that energy and shifting it to developing maybe
some of these social changes. It's very abstract. I'm not exactly sure what the connection is,
but one of the things that we've been sort of theorizing is that we've got energy now.
If we're smart about where we apply it we can take the future and make it not quite
so painful. We haven't gone so far as to say we can like simplify because as you talked
about it's not quite so easy just to say simplify.
Yes.
But maybe there are ways that we can like at least turn the ship a little bit while
we have the resources in a way that we couldn't do when energy is now costing five times,
ten times as much.
Well, you're right, and I would say that we should be using fossil fuels now to develop
alternative energy sources because the infrastructure takes several decades to develop on a large
scale. The problem is that alternative energy sources are more expensive than fossil fuels
right now so the argument is well, there isn't an economic incentive to do so, but in a few
decades if we have to make a transition to renewable energy sources and we have to do
it quickly it's going to be extremely painful. The wise thing to do is to start now. Even
if it costs more now and even if a lot of these projects fail, in the long run this
is going to pay off and we will all be better off if we start now to develop alternative
energy sources, but we're not doing that or not on a sufficient scale.
Do you have any favorites like any alternative energies?
This won't be popular, but I've never given up on nuclear. I think the benefits of nuclear
overall outweigh the costs looked at on a global basis. Now, if you live on the east
coast in Japan you might think differently, but overall I really think we should be looking
more and more at nuclear energy.
Okay.
Alright. Well, thanks very much for being here.
My pleasure.