Are we just practicing “defensive innovation”?

by on August 2, 2017 at 2:05 am in Economics, History, Science, Web/Tech | Permalink

That is the topic of my latest Bloomberg column.  Electric cars, insofar as they limit climate change, are an example of defensive innovation.  Here is further explanation:

Defensive innovation is when you create a new product or capability to protect yourself against an impending disaster, such as the worst scenarios for climate change. It’s important, of course, to practice defensive innovation, but don’t confuse it with progress. The defense only stops your living standards from falling.

The military response to foreign threats is another example of defensive innovation. The risk and potential costs of cyberwarfare are escalating rapidly, and terrorist threats seem worse than they did in the 1980s or 1990s. The best case scenario is that we come up with better means of tracking and hindering cyber and terrorist attacks — by cutting off funding or by tracing and halting potential perpetrators. Those too will be defensive innovations, aimed mostly at preserving capabilities we already have.

The American military might someday develop better protection against the new threat of North Korean intercontinental ballistic missiles, which might be capable of delivering nuclear weapons to U.S. cities, possibly even New York and Washington. Imagine something akin to Israel’s “Iron Dome,” but protecting a broader geographic area against a greater diversity of weapons. That would be an impressive achievement, but would be an essentially defensive innovation.

Here is the uh-oh sentences:

Note that in the earlier stages of economic growth, there is usually less defensive innovation, if only because there is less to defend.

Do read the whole thing.

1 llengib August 2, 2017 at 2:18 am

It would be hard to classify anything as solely defensive or progressive innovation. Electric cars can be progressive if the exhaust leads to health improvements to quality of life. An advanced Iron dome could spin off into improved computer simulations, mapping accuracy etc. Same as the ‘where are my jetpacks’ progressive innovation type could also have military applications, or be used to repair old infrastructure, which is defensively maintaining past innovation/improvements.

As for the ‘uh-oh statement – can it be regarded as purely negative that we are at advanced stages of growth? Isn’t it nice to have it already, from a ‘my standard of living today’ standpoint?


2 Winston Chai August 2, 2017 at 7:31 am


I hated it when people few years ago started using the term ‘disruptive’ innovation. Tyler is hoping to coin and popularize the term ‘defensive’ innovation.


3 Anonymous August 2, 2017 at 7:57 am

+1 as well, though I think “disruptive” has a correct, if narrow, use.

I would also say that we can love technology without getting hung up on “new” technology. 1945 Monarch lathes are great(*). People enjoy restoring them and putting them to use. Perhaps they will build model steam engines(!). That is not terrible, and there is not necessarily an opportunity cost. The skills acquired might lead to something genuinely disruptive and non-defensive.

* – to meld old and new, you can add digital readout


4 Todd K August 2, 2017 at 8:20 am

“Perhaps they will build model steam engines(!). That is not terrible, and there is not necessarily an opportunity cost.”

Of course it’s terrible! Bring on the Musk hyperloop, the health pills, and sex robots!


5 carlospln August 2, 2017 at 8:43 am

‘Health pills’

Repeat: The magnitude of magical thinking on this blog is incomprehensible.

6 Anonymous August 2, 2017 at 8:45 am

I believe those were coequal jokes. Poor Elon, grouped with the sex robots.

7 Anonymous August 2, 2017 at 8:48 am

I am a fair techno utopian, but any utopia will have old technology and new. It is unavoidable. A compost pile is a compost pile, stirred by fork or by robot.

8 T August 2, 2017 at 8:21 am

Yes, Tyler is not including the environment in the utility function. For example, same living standards + less forests cut down counts as progress. The GDP is only a part of the calculation, lot of things including liberty can change without a correlating change in GDP.


9 Jeff R August 2, 2017 at 9:33 am

I think the solution to the the uh-oh sentence to invade countries that aren’t in the late stages of growth and then force them to develop? That way our defense industry gets to practice offensive innovation and then we can steal whatever offensive innovations our new subjects produce. Two birds, one stone.

Yes, this is a silly response to a silly column, thank you.


10 Hazel Meade August 2, 2017 at 11:55 am

I think this is Tyler expending on his idea in the great stagnation that we’ve hit all the low-hanging fruit. So now our new innovations are just “defensive”.
Or maybe defensive innovation is the new low hanging fruit. Or maybe securing one’s gains and retrenching is a good thing to do when you don’t have any immediate new problems you can easily tackle.


11 Hazel Meade August 2, 2017 at 11:58 am

Anyway, not sure the war analogy is a great one. Is innovation really like a war on non-innovation or something? How does that work?
Civilization: A constant battle against barbarism! Be vigilant and continue to innovate, or else the stagnation will destroy us!


12 Ahmed August 2, 2017 at 2:58 am

“On April 30, South Korean officials told The Korea Times and YTN TV that North Korea’s test of a medium-range missile on April 29 was not a failure, as widely reported in the world press, because it was deliberately detonated at 72 kilometers altitude.

72 kilometers is the optimum burst height for a 10-Kt warhead making an EMP attack.”
[End Quote]

This is much more serious and doesn’t require North Korea to master either missile accuracy or reentry technology.


13 prior_test3 August 2, 2017 at 4:20 am

And is straight out of a 70s nuclear warfare scenario. Interestingly, where the West thought that vacuum tube technology in advanced Soviet fighters ( ) might have been an indication of using EMP to take away a major Western advantage (and leading to decades of ‘defensive innovation’ involving hardening electronics).

In the case of North Korea, the fact that they are not all that likely to have much in the way of even late 1970s electronics integrated into their military infrastructure, they might get an advantage that even the Soviet Union would not have been able to enjoy.

(Though EMP has also become sort of bugaboo in the last decade or two. The serious work I remember from the 70s and 80 involved a megaton range burst in the ionosphere designed to fry systems connected to major electrical infrastructure where transmission cables served to channel the energy, so to speak -based on actual experience from Starfish Prime.

But though the North Koreans might be able to use EMP tactically, they have a long, long way to go before this becomes possible – ‘These man-made radiation belts eventually crippled one-third of all satellites in low Earth orbit. Seven satellites failed over the months following the test, as radiation damaged their solar arrays or electronics, including the first commercial relay communication satellite, Telstar, as well as the United Kingdom’s first satellite, Ariel 1.’ )


14 Thanatos Savehn August 2, 2017 at 3:01 am

You have no idea what today’s cyber warfare is about. It is, it seems, far beyond your reckoning. Be glad of it though.


15 Axa August 2, 2017 at 3:17 am

Vaccines are defensive innovation……boring.


16 sanford August 2, 2017 at 7:22 am

“Necessity is the Mother of Invention”

….you’re correct — this contrived ‘defensive innovation’ theme is boring (and weak)


17 Hugh August 2, 2017 at 3:22 am

Lots of innovation comes in response to threats – for example in wartime – and is then used for other purposes. In the past think jet engines, rockets, radar etc. So is it not a positive thing that we are perceiving threats, and hence driving innovation, without actually starting to kill each other?


18 Ray Lopez August 2, 2017 at 3:30 am

You must be kidding me. TC writes a whole column on innovation and does not use the word “patent” once. CNTRL + F + “patent” = 0 hits. Amazing. Reminds me of when I used to live in Arizona. Me and my friend used to bet that every day we would see at least one stalled car, or one fire, on I-10 (the interstate that runs through Phoenix). Sure enough, we lived there for a year and not a single day passed without seeing one stalled car or one fire, and a few times, a car *on* fire. I hear in parts of Texas, the same holds for armadillos run over in the street.

Bonus trivia: “Fire on the Board” is the autobiographical book by GM Alex Shirov on his best games.


19 Anonymous August 2, 2017 at 8:07 am
20 Ray Lopez August 2, 2017 at 1:44 pm

Historians invent history. I rather trust a patent battle to accurately portray who invented what rather than a bunch of historians who take anecdote as fact. When real money is at stake, both side fight hard to uncover evidence, as opposed to historical anecdotes.


21 Adam August 2, 2017 at 11:06 am

What would dragging in patents add? The rest of your post is pointless filler.


22 Ray Lopez August 2, 2017 at 1:45 pm

“What would dragging in patents add?” – I’m not here to school you Adam. If you don’t know how patents relate to innovation, a few lines of comment by me won’t save you. Pointless filler is accurate, it’s part of my shtick.


23 David H August 2, 2017 at 3:32 am

This kind of “defensive innovation” is exactly what you would expect of a species that’s getting close to saturating its desires and preferences. Those were fixed by evolution way back in caveman times, and now we’re getting pretty close to fulfilling every material wish that a caveman could have. Or rather, maybe we fulfilled those wishes earlier, and now we’re fulfilling the meta-wish of cleaning up the mess caused by the prior wish-fulfillments.

Innovation becomes hard when we invent prima facie awesome stuff like the Segway, Google Glass, 3D TVs, VR goggles… and once we have them, we say “Naah, I guess I didn’t actually want this crap after all”. How are we to innovate for the caveman who’s got everything? There might really be a saturation point for human desire (of the sort that innovation could satisfy). This wouldn’t mean that human desire for innovations would ever end. It’s just that satisfying the next still-unsatisfied desire would give us a progressively smaller satisfaction bump. At some point, the rush of the next bump will be so small that the effort to achieve it (which isn’t proportionately shrinking) will be judged to not be worth it. Consider signs of this in the medical industry: Heroic new cancer treatments cost billions to develop and deploy, but in practice they amount to an extra 90 days of life when we’re lucky. If the next generation gives us another 50 on top of this, and the subsequent generation even less, at what point do we just say “fuck it”? (I’m not saying that there won’t be huge cancer breakthroughs – there might be. But this kind of grim trudge for shrinking margins is also possible, not just for cancer, but for everything.)


24 Anonymous August 2, 2017 at 7:58 am



25 Brian Donohue August 2, 2017 at 9:44 am



26 Todd K August 2, 2017 at 10:19 am

“and once we have them, we say “Naah, I guess I didn’t actually want this crap after all”

I tossed out my TV in 2004, so you are correct here – television was fun for over 60 years but then we all said “Nahh, I guess I didn’t actually want this cap after all.” Same for smart phones? Remember back in 2007 when so many people wanted one and even *Cowen* praised them? But now we realize what a time wasting toy they were after saying “Nahh, we don’t need this junk”. Same with email – it took a two decades but now hardly anyone uses that and writes thoughtful letters again. And it seems only yesterday when we still had air bags in our cars, not appreciating that, while sort of nice to have in a head on collision, they just made us complacent drivers.


27 RPLong August 2, 2017 at 10:36 am

Agreed, but in practice isn’t it hard to get a read on how much we enjoy some of these things due to their so often being stifled by regulatory barriers. As I recall, the inventor of the Segway first invented a self-balancing wheel chair that could climb stairs.


28 Roger Sweeny August 3, 2017 at 9:20 am

+1 -1 = 0

If I asked a random sample of 1,000 people what they would do if their income went up by $10,000, I doubt many of them would say, “Nothing. I have all I want.” Even more, I doubt that if they actually got $10,000 more a year, they would spend the same amount in the same ways.


29 David H August 3, 2017 at 10:19 pm

Hello non sequitur.


30 prior_test3 August 2, 2017 at 3:47 am

‘Electric cars, insofar as they limit climate change, are an example of defensive innovation.’

Please – the electric car has a history with about an equal length to that of cars with internal combustion motors – ‘Thomas Parker built the first practical production electric car in London in 1884, using his own specially designed high-capacity rechargeable batteries. The Flocken Elektrowagen of 1888 was designed by German inventor Andreas Flocken. Electric cars were among the preferred methods for automobile propulsion in the late 19th century and early 20th century, providing a level of comfort and ease of operation that could not be achieved by the gasoline cars of the time. The electric vehicle stock peaked at approximately 30,000 vehicles at the turn of the 20th century. Advances in internal combustion engines in the first decade of the 20th century lessened the relative advantages of the electric car. The greater range of gasoline cars, and their much quicker refueling times, made them more popular and encouraged a rapid expansion of petroleum infrastructure, making gasoline easy to find, but what proved decisive was the introduction in 1912 of the electric starter motor which replaced other, often laborious, methods of starting the ICE, such as hand-cranking.’

Battery technology has advanced enough (in large part driven by demands that did not exist in the early 20th century, such as laptops, tablets, and smartphones) that electric vehicles are starting to again achieve parity with IC vehicles for personal transportation. In major part because their simple efficiency (think regenerative braking) plays into increasing battery effective.

Then there is the idea of inductive charging, so that something like a bus can take advantage of being flexible in its routing compared to a streetcar, and yet being charged at each of its stops, solving one of the major concerns when talking about range (why yes, Mercedes is operating a couple of busses like this right now). For a country like Germany, which imports most of its liquid fossil fuels, but which is also a major net exporter of electricity, being able to reduce its use of fuels bought from Putin or Saudi Arabia probably looks like defensive innovation – emphasis on ‘defensive’ in this case, as such countries lose their leverage in determining how large the kowtowing needs to be on the part of an importer dependent on their suppliers.

‘but don’t confuse it with progress’

Even you cannot believe that to be true. Stuttgart has wretched air quality (geography plays its role, as does its leading multinational), and replacing combustion byproducts by using electricity generated from natural gas or renewables would provide significant progress in better air quality. Of course, a bit closer to home, California has been working along these lines for a generation.

Not everything is about climate change, really.

‘The risk and potential costs of cyberwarfare are escalating rapidly’

Don’t believe the hype.

‘and terrorist threats seem worse than they did in the 1980s or 1990s’

But compared to the 70s? Remember Black Sunday? And how realistic it actually seemed – (some people might know the author for his other fictional work).

The real uh-oh is a so-called libertarian columnist again seemingly shilling for the military-industrial complex.


31 The Engineer August 2, 2017 at 8:33 am

There is literally no demand for electric cars. You can get a two year old Nissan Leaf with ~35k miles for around $10k, a car that sold for over $35k new.

Electric car availability is being driven by government fiat, not organic consumer demand. There is absolutely no evidence that that will change anytime soon.

And what is driving that government fiat? Irrational and innumerate fear of “climate change”.

Even internal combustion doesn’t escape defensive innovation. Increased costs and decreased reliability due to engine downsizing in response to the Obama CAFE standards are yet more innumerate government fiat (the real world increase in mileage does not justify the increased cost).


32 Anonymous August 2, 2017 at 8:36 am

There is very high uncertainty about the total cost of ownership on that $10,000 Nissan Leaf. I don’t believe secondary buyers get any battery warranty whatsoever.


33 prior_test3 August 2, 2017 at 9:17 am

‘There is literally no demand for electric cars.’

That is an interesting point – you are familiar with the fact that electric cars have been sold in Germany for at least the last 3 decades, right? A small market by any measure, but there literally is a demand for electric cars, at least in Germany.

‘Electric car availability is being driven by government fiatÄ’

Which explains why electric cars became so common in the 1970s, right? A bit of history – ‘ Congress took note and passed the Electric and Hybrid Vehicle Research, Development, and Demonstration Act of 1976, authorizing the Energy Department to support research and development in electric and hybrid vehicles.

Around this same time, many big and small automakers began exploring options for alternative fuel vehicles, including electric cars. For example, General Motors developed a prototype for an urban electric car that it displayed at the Environmental Protection Agency’s First Symposium on Low Pollution Power Systems Development in 1973, and the American Motor Company produced electric delivery jeeps that the United States Postal Service used in a 1975 test program. Even NASA helped raise the profile of the electric vehicle when its electric Lunar rover became the first manned vehicle to drive on the moon in 1971.’

Or this, showing just how that government fiat worked in the 1990s – ‘In the early 1990s, the California Air Resources Board (CARB), the government of California’s “clean air agency”, began a push for more fuel-efficient, lower-emissions vehicles, with the ultimate goal being a move to zero-emissions vehicles such as electric vehicles.[39][40] In response, automakers developed electric models, including the Chrysler TEVan, Ford Ranger EV pickup truck, GM EV1 and S10 EV pickup, Honda EV Plus hatchback, Nissan lithium-battery Altra EV miniwagon and Toyota RAV4 EV. The automakers were accused of pandering to the wishes of CARB in order to continue to be allowed to sell cars in the lucrative Californian market, while failing to adequately promote their electric vehicles in order to create the impression that the consumers were not interested in the cars, all the while joining oil industry lobbyists in vigorously protesting CARB’s mandate.’

‘And what is driving that government fiat?’

Air pollution, as noted in the case of California, above.

‘Irrational and innumerate fear of “climate change”.’

Not everything is about climate change.

‘Increased costs and decreased reliability due to engine downsizing ‘

This is hilarious for someone claiming to be an engineer.


34 JWatts August 2, 2017 at 10:04 am

“There is literally no demand for electric cars.”

There’s plenty of demand for cheap cars that have low fuel costs. Most people don’t really care about “electric” cars. But if you postulate another 10 years of battery develop on the same trend we’ve seen for the last 20 years, then electric cars will out perform IC cars in many use case scenarios. And they’ll be cheaper.

An industrial grade electric motor can run for hundreds of thousands of mile with little to no maintenance. No transmission is required. The fuel is half the cost (in the US). The limiting factor has been and remains the battery.

But we no longer require factor of x10 improvements in battery technology. It’s virtually certain that a x2 improvement in per kwh cost will give battery powered cars the economic edge in normal day to day commuting.


35 Crikey August 3, 2017 at 1:30 am

“There is literally no demand for electric cars.”

Tesla has sold around 300,000 electric cars and up until this year their advertising budget was $0 per car.


36 Govco August 3, 2017 at 2:28 am

Do you know the per square ft lease cost on the Santa Monica Promenade? Or lobbying costs in Nevada and Calif?


37 Crikey August 3, 2017 at 3:17 am

Nervada? That’s in the US isn’t it? No idea where Calif is.

Anyway, in my land, which is a foreign place, people still buy, and to a very limited extent make, electric vehicles. Saving on operating costs is why we’re knocking together some electric buses and a few trucks. There is an indirect subsidy in the form of a taxes on gasoline and diesel, but that’s pretty much it. So far it has resulted in pretty much every taxi being either LPG powered, or particularly now that LPG has increased in price, gasoline hybrid. All electric taxis seem the likely next step.

38 Chip August 2, 2017 at 3:58 am

Beyond defensive innovation there is also a tendency to frame regress as progress. Sam Harris did this the other day in a podcast, when he argued that solar is better than coal energy because it employs a lot more people.

But requiring more people to produce a unit of energy is obviously not progress. (He also cited the 97% canard, putting a real dent in my opinion of his intelligence).


39 prior_test3 August 2, 2017 at 4:21 am

‘But requiring more people to produce a unit of energy is obviously not progress.’

Then you must really be an opponent of fracking then.


40 Alain August 2, 2017 at 12:55 pm

No. It saved the world, and I am pretty happy about that.


41 prior_test3 August 2, 2017 at 1:10 pm

Fracking saved the world so much that the Saudis singlehandedly dropped the price of oil to the point where fracking collapsed in the U.S.

The Saudis are the world’s swing oil producer, having taken over that role from the Texas Railroad Commission sometime in the 1970s, and still the only people who are able to unilaterally decide how much fracking for oil the U.S. will engage in.

Fracking is a sign of desperation, as it requires an oil price somewhere comfortably above 40 dollars a barrel to be worth engaging in at all. If the price of oil was to drop to 35 dollars a barrel, oil production based on fracking will decline. This website is a fine place for facts, by the way –

And provides a good overview.


42 JWatts August 2, 2017 at 2:47 pm

“ the point where fracking collapsed in the U.S.”

Can you show me on the graph the point where fracking collapsed?

There was a large drop in new drilling, but production wasn’t affected very much. The Saudi’s tried to collapse US fracking, and they failed.

43 Chip August 2, 2017 at 1:01 pm

Only if you frame your argument solely in terms of labour inputs. Fracking also reduces the cost of energy.

Lower gas prices last year saved drivers $115 billion compared with 2014.

As for labour, the workers required per unit of energy are: coal 1, fracking 2 and solar 79.


44 prior_test3 August 2, 2017 at 1:13 pm

The Saudis are the ones to thank for an oil price where fracking is barely sustainable as a profitable business.

Swing producer is a term you should be familiar with at this point –

And do especially note the final line when looking at Saudi behavior – ‘In such cases, the swing producer switches to the punitive mode and greatly increases its product output in order to reduce prices, causing losses for other producers and making them cooperate.’


45 prior_test3 August 2, 2017 at 1:19 pm

And since AEI requires a security check, I do wonder how they compare a coal worker needing to labor twenty years to produce coal, as once a solar panel is installed, there is essentially no further labor required. And does the AEI study factor in the requirement of a transport system for that coal? Something like a 1/3 (let me check calculated risk – – yep, about a third) of American rail traffic concerns transporting coal – day in, day out, for same twenty year life span of a solar panel.


46 msgkings August 2, 2017 at 1:47 pm

All your Saudi love posts are among your most unintentionally hilarious. The Saudis (and Russians and Venezuelans and Iranians and….) are far more screwed by frackers than the other way around. Real talk.

47 Brian Donohue August 2, 2017 at 3:33 pm

+1 @msg.

48 Harun August 2, 2017 at 6:01 pm

Once you install a solar panel…there is zero maintenance?


49 KM August 2, 2017 at 6:37 am

Well the total cost is cheaper for solar, so if the labor costs are higher I’m guessing the capital (and regulatory) costs are lower. Maybe the argument is that you get more equality on the cheap because its cost base is mostly low skilled jobs while being overall more productive.


50 mulp August 2, 2017 at 8:08 am

Try restoring the productivity of a coal mine, or oil and gas field 50 years after it started being worked. How labor will be required to fill up the land subsurface with all the fossil fuels to restore the land for more mining?

A wind and solar farm will be productive with steady investment in a thousand years, but no fossil field will be productive in a century no matter how much you invest.

You build capital to produce sustainable energy. Fossil fuels is based on selling capital for burning with nothing of value remaining. Nature created the capital that is burned over about a hundred million years.


51 Todd K August 2, 2017 at 8:28 am

Sam Harris is a neurology-philosophical guy, who until the last couple of years, has devoted almost all of his energy to discussing free will, atheism and Islam. He has blind spots like the two you just mentioned, but I get a sense he is willing learn when someone points out his errors.


52 Alain August 2, 2017 at 12:57 pm

Can you link to the podcast?

As for the 97% thing, I’m guessing he can only fight so many battles.


53 Chip August 2, 2017 at 1:06 pm

With Scot Adams. I’ve followed Harris for years and he was – as the title suggests – totally triggered. Even the cadence and pitch of his voice changed from his normal thoughtful tones into a strident hectoring with references to Nazis, the Exorcist and other hysterical notions.


54 prior_test3 August 2, 2017 at 4:23 am

OK, one too many thens.


55 Sergey Kurdakov August 2, 2017 at 5:03 am

defensive innovations do bring actual good.
Let’s recall Is War Necessary for Economic Growth? by Ruttan: defensive spending has quite a significant spillover effect.

let’s take electric car – it is not only for fighting global warming, but cleaner cities, potentially ( not now, but in foreseeable future – yes ) – cheaper rides, better driver satisfaction ( better dynamics, less noise etc )

so innovation is good for well being, even if it’s defensive innovation


56 Sergey Kurdakov August 2, 2017 at 5:11 am

another thing to think about on the issue is ‘how technology evolves’ – and it evolves by recombining existing things – say Watt engine was based on previous design – but brought much greater influence. In this context Newcomen engine might be viewed as a defensive, not particularly new invention – to help alleviate forest shortage by replacing it with somewhat cheaper coal ( as Newcomen engine just increased coal production ), but then it led to ‘new’ things – like factory automation, railways, modern economic growth.


57 Matthew Young August 2, 2017 at 5:15 am

Making electric cars for no reason except the other company does it.


58 yipee August 2, 2017 at 7:52 am

Making electric cars for no reason except coercive legislation or government incentives.


59 mulp August 2, 2017 at 7:52 am

LIke 70 years making computers because others are doing it. Clearly no big change from Hollerith unit record (punched card) technology.


60 chuck martel August 2, 2017 at 5:56 am

“halting potential perpetrators.”

The great goal of all supposed crime fighting, identifying the bad guys before they prove their evil and preventing them from performing it.


61 chuck martel August 2, 2017 at 6:25 am

That goal fits in well with the Puritan concept of predestination, there is no change in the human soul and forgiveness and redemption are much less important than punishment.


62 rayward August 2, 2017 at 6:20 am

I’ll focus on electric cars, which are only marginally better than gas powered cars. Both are highly inefficient but convenient (or convenient until traffic congestion renders them useless). The solution is a better way for moving people from place to place, what is usually referred to as public transit. Unfortunately, public transit in America is about as popular as the income tax; and the people who pay much of the income tax don’t use public transit and have no interest in paying for it. Elon Musk’s electric cars are not intended to be the solution, but one step in the direction of the solution, the solution being privately operated electric autonomous vehicles on a dedicated public right of way. Musk gave it away when he proposed on Twitter an underground right of way to connect the cities of the northeast for use by the autonomous electric vehicles produced by Tesla, a public/private partnership in which the public pays for the dedicated right of way and the private collects the revenues. Musk could have been clear about his vision and simply called it “transit”, but he knows that he must use a euphemism instead, “transit” being packed with negative connotations. Why would autonomous vehicles require a dedicated right of way? For the reason stated by the Google engineers: to operate safely, autonomous vehicles will be limited to about 30 mph if they have to share the right of way with non-autonomous vehicles. Musk’s proposal for a dedicated underground right of way was just a ridiculous way to get people focused on the need to construct a dedicated right of way for the autonomous vehicles he intends to produce.


63 mulp August 2, 2017 at 7:48 am

Elon is merely updating an American innovation of a century ago, the underground, made feasible by electric drive trains. First underground electric drive in Boston, which then became the foundation for everything in NYC. A century ago.

Tunneling a century ago was faster than it is in the US today. But that’s because the lack of demand means no innovation. In Europe and Asia, tunneling is big business, with lots of innovation. Why climb the Alps when you can go straight through? Testing has been done for a 30 minute crossing, with the target 10 minutes at 200kph by electric train. Merely refined Boston underground of a century ago.

Elon is proposing something like sending capsules through tubes like Sears and the NYC Post Office used to deliver cash, messages, etc. Some drive up bank tellers use them to cross several lanes. Remove the air and travel at 500-600kph seems reasonable. Lowering air pressure raises the sound barrier so such speeds are very subsonic in Hyperloop. Obviously the drive is electric.


64 carlospln August 3, 2017 at 9:04 am

Astutely envisioned.


65 Blaise August 2, 2017 at 6:21 am

Obviously military is by definition a defensive innovation (or offensive if your country has bad intention). But I don’t see that the share of military innovation in all innovations has increased over time. Throughout history military innovations have costed a lot (think about the Manhattan project, Reagan’s Star Wars or medieval castles) whereas the economy was much smaller. Humans have always tried to build a better weapons than their neighbors,

Innovations that damage less the environment are real progress. Environmental costs should be taken into account and, in a sense, when using petrol cars we are not as rich as we think we are. Otherwise an innovation like farming is a defensive innovation as it has replaced the appropriation of wild natural resources that were depleted over time.

For health care, I don’t see how it can be considered defensive. I think I would derive quite a lot of utility not spending the last few years of my life pissing myself in a retirement home. And that’s pretty good if it can save some money along the way. So was the fight against polio a defensive innovation?


66 Strick August 2, 2017 at 6:25 am

Isn’t this like saying, for instance, undeveloped areas build the roads they don’t have while developed areas maintain (“defend”) the ones they have? And the stimulus from the investment in new X fades as new opportunities for X diminish?


67 rayward August 2, 2017 at 6:44 am

I’ll focus on the Iron Dome: President Bush identified Iraq, North Korea, and Iran as the Axis of Evil, then promptly invaded Iraq, killing Iraq’s leader and turning Iraq into Hell on Earth. North Korea and Iran respond to the threat by accelerating the development of nuclear weapons, no doubt fearing they would be next. President Obama attempts to reduce the tension, and is marginally successful with Iran but not with North Korea. Trump becomes president and promptly threatens to annihilate North Korea and Iran with “beautiful” nuclear weapons. Cowen suggests that what we need is an Iron Dome to protect us from North Korea’s and Iran’s nuclear weapons, a peaceful solution because it is only defensive. Defensive? What might North Korea and Iran (or Russia for that matter) think about such a “defensive” shield? That America could attack them with impunity because America has a “shield”? Would that be “innovation”? Identifying Iraq, North Korea, and Iran as the Axis of Evil was far from “innovation”, and Cowen’s Iron Dome would likely be the same, increasing the threat of attack on America not reducing the threat.


68 mulp August 2, 2017 at 7:24 am

The most clueless statement I’ve seen in a while…

“Electric cars, insofar as they limit climate change, are an example of defensive innovation”

Electric drive is far superior technology to variable speed combustion engines connected by gear boxes to the drive mechanism.

Far superior in efficiency.
Far superior in torque when it counts.
Far superior in cost/simplicity.

Trains switched to electric drive from steam locomotives because gear boxes were just too impractical to connect diesel engines to wheels. Steam locomotives are direct drive with no gear box.

Electric drive for trains started with primitive control systems, but quickly took over the industry. But advances in semiconductors in the 90s transformed the power control, and that transformed lots of electric drive, seen mostly in automation systems. But combine the high power from trains with the control innovation of servo motor control, think robotics, and you get Tesla Ludicrous mode with smooth 0-60 in 2.28 seconds.

On 0-100-0, Tesla Model S P100D is fifth on Motor trends list as a sedan beating two dozen two seat sports cars, and bested by only four cars, two McClaren , Porsche, and Audi, all low volume cars compared to Tesla Model S, though perhaps not the P100D version.

Several other startups are seeking to repeat Tesla delivering the Roadster, now out performed by Tesla sedans, with astounding performance to gain attention for their future electric cars, eg Faraday Future.

BMW and others are switching to electric drive while retaining diesel engines for “energy storage”. But the diesel engine will have no gearbox, but only a generator-motor directly connected with the diesel running at a single speed only to charge a a battery pack, and will start-stop only for that purpose. This will largely solve the diesel emissions problems as the system will be turned for single speed single load. The location of this unit will be independent of the drive train.

Just as trains switched from steam direct drive to electric drive, electric drive cars will be a major leap forward in performance.


69 Sergey Kurdakov August 2, 2017 at 8:17 am

not only that,
electric cars will cause mentioned russia and iran to behave differently, because one of the major cause ( except for N Korea where the system is specifically constructed to support one person rule, while in both russia and iran there are some elements of group negotiations ) for authoritarian regimes is a use of easily extractable, very profitable and controllable resource to support power in one hand. Maybe global changes will not go smoothly after oil goes out of the picture, but in the end – removal of oil from world politics will cause a lot of changes. And the consequence will be a safer world, which will not require mentioned iron dome.
Electric car – is not merely about replacement of fuel in a car in a fear of global warming. It is because many people attach hopes with other consequences which electric car will cause, so that this technology is considered as transformative.

so, I would say – very provocative piece by Tyler.


70 Eric August 2, 2017 at 8:24 am

I don’t tend to agree with Tyler here. Karl Popper said that innovation is fundamentally revolutionary, not cumulative. Therefore defensive innovations will more likely than not require new ways of doing things that may have many positive spill over effects, rather than just generating more efficiency out of existing technologies.

Crises like climate change may even induce more revolutionary innovations rather than redirecting them because such issues also force cultural attitudes to change. The marginal person may be pushed from the arts into the sciences.


71 Anonymous August 2, 2017 at 8:38 am

I thought in my youth that innovation implied something slower and more iterative and the word invention was reserved for revolutionary ideas.


72 Eric August 2, 2017 at 2:52 pm

Fair, Karl Popper actually said the “scientific method” is revolutionary and not cumulative, which nevertheless is the basic method for both innovation and invention (namely, trying out solutions, learning from erroroneous trials and starting again with better defined problems).

But I think the distinction between innovation and invention is only useful after the discovery is made and after enough time has elapsed to understand it. Even then it is difficult, but certainly when you embark on innovation you may easily end up inventing, and vice versa.


73 joe August 2, 2017 at 9:18 am

Is the quest for fusion energy defensive or progressive? There’s a greater emphasis now because of the defensive nature, but it’s progressive aspects would probably transform the economy beyond anything we’ve seen since the beginnings of agriculture.

Is there some metric that maps material wealth to the efficiency of each unit of energy available per capita? Material wealth is ultimately a measure of the local reversal of entropy. The more efficiently a unit of energy can be used, the greater the possible material wealth. As we’ve reached the limits of available energy and the efficient use of that energy, material wealth is itself limited. If fusion unlocks essentially unlimited energy, poverty as we know it would cease to exist. It becomes an entirely new world.


74 Brian Donohue August 2, 2017 at 9:41 am

This breathless running after material progress feels kind of like a mug’s game to me.

You like to bemoan the great stagnation in contrast to the post-war boom. Per capita GDP grew 2.5% per year between 1947 and 1973 and just 1.6% per year since then.

But the average dollar increase in per capita GDP was $525 in the former period and $684 in the more recent period. Why do we posit continued exponential growth? We’re rich already.

I suspect that it is not regular people who are clamoring for continued exponential per capita growth, but rather those who have embedded Ponzi in their models from the git-go.

Modern society is complex. And it spends more on maintenance than a primitive society, in the same way that the human body spends more on maintenance than a bacterium.


75 Anonymous August 2, 2017 at 10:00 am
76 Brian Donohue August 2, 2017 at 10:20 am

Meh. These are all the richest countries in the world. On some measures, we’re near the top of this group, on others, we’re near the bottom, but it’s pretty much the same boat.


77 Anonymous August 2, 2017 at 10:25 am

I am much more competitive than this. (High T?)


78 Floccina August 2, 2017 at 12:05 pm

@Anonymous I couldn’t tell to the very end if the author of the article you liked to was being fallacious or not.

He is mostly measuring inputs (years of schooling PISA scores). The US is the country with the economy that greatly out performs its PISA scores. In developed countries PISA is close enough to an IQ test to be useless for measuring schooling and/or education, median PPP income would be a better measure of education (though not schooling).


79 Anonymous August 2, 2017 at 12:25 pm

I think the meta-question is how people relate to, or accept, cross national comparisons. I mean, it is one thing when American Exceptionalism is paired with a Tomorrowland optimism. It is something else when Exceptionalism is paired (kicks dirt) with a pessimism that we can’t do any better than this.

(if you don’t like PISA, use life expectancy)


80 JWatts August 2, 2017 at 12:21 pm

I read that article a few days ago. The author fails to prove his point. He doesn’t even make a case for it. He just randomly states some facts, then concludes with an opinion.

Here’s the conclusion:

“One major difference between the U.S. and most of the rest of the developed world is ideological: People and politicians in the U.S. are much more ambivalent about the modern welfare state than their peers in other wealthy nations and have been less willing to raise taxes to finance it. A report from the IMF or an opinion column by the likes of me isn’t going to change a lot of minds on that. Perhaps in part because otherwise their economies would have collapsed under the weight of all that welfare-state generosity, though, other wealthy countries also seem to have figured out better, more cost-effective ways of raising revenue, providing education, helping the jobless, fighting poverty, and keeping citizens healthy than the U.S. has. This country has some catching up to do.”

Huh? What? The US has a different ideology than some other countries. Those other countries haven’t collapsed. Ergo, the US is going to collapse, or is behind or something….

That’s not a logical argument.


81 Anonymous August 2, 2017 at 12:27 pm

I don’t have to agree with those political particulars to share the view that we suffer an extreme (and uncompetitive) pessimism.

What ever happened to wanting to be “the best of the best the best, sir!”


82 Brian Donohue August 2, 2017 at 12:38 pm

I don’t want to live in a country where people are exhorted to be “the best of the best of the best, sir!” That sounds awful.

I do want to live in a country where some people choose to strive to be “the best of the best of the best, sir”, and other people maybe want to live their lives out on less ambitious grounds, and that’s all ok.

83 Anonymous August 2, 2017 at 12:52 pm

Well in a concrete example: obesity(*) and life expectancy

I don’t believe trends away from health and well-being should be accepted as a revealed preference, and “the best us” on our own reduced terms.

* – or opiate dependency

84 Floccina August 2, 2017 at 11:53 am

Great observation.


85 Evans_KY August 2, 2017 at 9:52 am

Innovation thrives with investment by government and industry. Government is hamstrung by debt and short-sightedness. Industry is increasingly consolidated and protective. Defensive innovation is the product of pragmatists.

To invigorate offensive innovation, we need to have a larger conversation about what we want our country to be. Are we satisfied with our way of life or do we dream of something better? True innovation requires dreamers as well as pragmatists.


86 Anonymous August 2, 2017 at 10:24 am

+1 to that too. We may not need to send a Juicero(*) to every welfare recipient, but we should be doing directed research to improve American lives.

* – this funny teardown vid shows the Juicero to be great, but seriously misdirected technology. As AvE says, we already have teeth.


87 Floccina August 2, 2017 at 12:11 pm

The AARP is destroying the Fed budget.


88 JWatts August 2, 2017 at 9:55 am

Tyler this column is a solid miss:

First, the classic phrase: “Necessity is the mother of invention” is applicable here.

Second, developing Nuclear bombs and then Nuclear energy would also be classified as Defensive innovation. Indeed, going to the Moon and all the spin off inventions from the defense industry and NASA would also be “defensive innovations”.
So, the internet and transistors are also “defensive innovations”.

Third, the electric car is not actually a defensive innovation. Companies have been doing serious work on electric cars since the 1990’s. GM put a lot of work into the EV1. Unfortunately battery technology made the EV1 an over priced show room exhibit that was never practical for sale. Battery technology has been rapidly progressing making electric cars truly feasible. This has nothing to do with global warming. Sure, there’s a marketing opportunity and maybe some Government rebate money to take advantage of, but those aren’t fundamental conditions.

It’s all about the battery technology.


89 prior_test3 August 2, 2017 at 12:55 pm

‘It’s all about the battery technology.’

No, according to a commenter above, it is all about ‘government fiat.’

Of course it is essentially about battery technology making electrical vehicles attractive at this point in time. Apparently, a Tesla battery pack is essentially a number of laptop Li batteries tied together (very simplified, and I’m sure things have progressed since then anyways).


90 Ed August 2, 2017 at 10:29 am

Not sure the electric car was Tyler’s best possible choice for a “defensive innovation” (nicely topical though!). My layperson’s understanding is that electric cars mean:

– Less energy needed for transport (because even with fossil-fuel based power stations & transmission losses, they are much more energy efficient than an internal combustion engine
– Perhaps 10X fewer moving parts => much longer service life => much lower total cost of ownership even ignoring the energy savings
– When plugged in, their batteries can smooth energy consumption/production, creating massive efficiencies for our electrical grid (because generators brought online to cope with sudden changes in demand are very expensive, and because it’ll let us make better of renewable power)

Lots of value there that has nothing to do with lower pollution or faster acceleration (although that sounds good too!).


91 JWatts August 2, 2017 at 11:08 am

Most of what you said was spot on.

“When plugged in, their batteries can smooth energy consumption/production, creating massive efficiencies for our electrical grid”

This is not however. It’s a silly idea that keeps being propagated by people without any economical sense.

Mobile batteries always need to have a high performance per kwh and low weight. So they will always be more expensive than batteries without those constraints. The cost of a battery is largely determinant by two factors, cost of manufacture and durability. The second factor durability highest constraint is the number of charge cycles. Essentially, the value of a battery is determined by how many charge cycles it has left divided by the number of charge cycles it had when originally manufactured. IE a battery that has 1,000 remaining charge cycles out of 2,000 original charge cycles is worth, at most, 50% of a replacement new battery with 2,000 cycles.

Logically Utilities can always use large stationary batteries for a cheaper price than what anyone can use a large amount of small mobile batteries. Ergo, the price a utility will pay for a mobile battery will be lower than it’s value in nearly every case. So, while a Utility would certainly be willing to buy charge cycles from your battery for a cheap price, only a foolish vehicle owner would expend their pricey charge cycles for less than they cost to buy.


92 Tim August 2, 2017 at 10:46 am

I liked David (manifestly not Donnie) Deutsch’s argument in “The Beginning of Infinity” that given our propensity to innovate, we should worry less. We’ll figure it out. Sort of the physicist’s specific take on the libertarian economist’s view.

I wondered why, though, things that mitigate climate change weren’t considered one of those innovations – until today! Now I know! They’re merely defensive!

I once knew a man who refused to evacuate his home when floods threatened because he knew God would protect him. As the waters rose to his doorstep, he refused to leave with an evacuation van because God would protect him. With the waters at his living room window, he turned down a boat because God would protect him. Standing on his roof, he shooed away a helicopter because God would protect him. After he drowned, he asked St. Peter why God didn’t protect him. “Geezem Crow, we sent a van, a boat and a helicopter!” said St. Peter. “I thought those were just defensive moves!” said the man.


93 Floccina August 2, 2017 at 11:12 am

This gets to a pet peeve of mine. Democrats push for cleaner environment and then say wages for below median jobs have not risen without including the dollar benefit of living in a much cleaner environment.


94 byomtov August 2, 2017 at 11:13 am

It’s important, of course, to practice defensive innovation, but don’t confuse it with progress.

What is the point of this distinction. It merely depends on the baseline you are comparing against.

If climate change is a real threat then innovation that mitigates its effects will leave us better off than we would otherwise have been. Not progress?


95 pnow August 2, 2017 at 11:16 am

Can’t imagine anyone reads this far down, but should a professor not know the difference between ‘practice’ and ‘practise’? Two really jarring examples in the piece.


96 Borjigid August 2, 2017 at 11:54 am

Tyler writes in American English, so it is always ‘practice’ and never ‘practise’.


97 prior_test3 August 2, 2017 at 12:45 pm

Except when he uses ‘plough’ in a post title, as the American English spelling is ‘plow’.


98 pnow August 3, 2017 at 5:57 am

I did not know that. Many thanks for the correction.


99 Pshrnk August 2, 2017 at 11:22 am

North Korea: A paragon of Defensive Innovation


100 Nigel August 2, 2017 at 11:26 am

” but don’t confuse it with progress. The defense only stops your living standards from falling.”

But self-driving electric vehicles have the possibility of lowering the cost of motoring for the average family by around 70%.
That sounds like progress to me.


101 Hazel Meade August 2, 2017 at 11:52 am

Since everyone knows that the best defense is a good offense, doesn’t this imply that aggressive innovation is just all around better?
In other words, defensive innovations will just happen naturally the more we innovate.


102 Albigensian August 2, 2017 at 12:09 pm

The distinction between “defensive” innovation and other innovation seems strained, especially when one looks at some of the “defensive” innovations of the past.

For example, petroleum. Whale oil, used for illumination and lubrication, was becoming costly as the whales were hunted beyond sustainable levels. Yet a few decades later petroleum would revolutionize transportation, and chemicals derived from petroleum would create entire new industries.

Electric streetcars (followed by electric subways) could be seen as a defensive innovation against an epizootic that decimated the urban horse population in America, as well as at least a partial solution for the public health threat produced by all that horse poop (which would dry up and blow around in a long, dry, hot summer and just get into everything).

Mechanical refrigeration could be seen as a defensive innovation against warmer than usual winters and increasing demand for ice, yet refrigeration technologies have revolutionized the whole farm-to-table chain, and air conditioning has made formerly miserable climates far more tolerable (with resulting population shifts).

And so it goes: more than a few of these “defensive” innovations have, when fully developed, lead to enormously larger changes.

Perhaps a more useful distinction would be between innovations that create something no one knew they needed or wanted, as opposed to something that does something that’s already being done but does it better. Examples of the latter would be replacement of steam locomotives with diesel-electric ones, replacement of electro-mechanical calculators with electronic ones, replacement of vacuum-tube based radios and TVs with transistorized one, etc., etc.

It will almost always be easier to promote a “just does it better” invention than a “Here’s something you didn’t know you’d need or want” one, so no one should be surprised that many inventions take that form, at least initially. Thus, LED lighting may change residential and commercial lighting as the LEDs themselves are very small and may be durable enough so that lighting can be built into a structure in ways that are not practical with incandescent or fluorescent lighting. Perhaps, but for now its “killer app” is Edison-base light bulbs that fit into the millions of existing sockets.


103 Bill August 2, 2017 at 12:29 pm

I don’t think Schumpeter drew the distinction between offensive or defensive.

It’s called creative destruction.


104 Matt August 2, 2017 at 7:02 pm

‘but don’t confuse it with progress. The defense only stops your living standards from falling.’

This just sounds like the wrong comparison. We want innovations to make our living standards better than they would be without the innovation. To the extent that they will mitigate climate change, electric cars indicate progress on that score. The fact of our living standards being better, worse or the same as living standards at some previous time is psychologically and culturally important to be sure, but I don’t think that’s as good a measure of progress (or of the progress-ing impact of any particular innovation).


105 Brian August 3, 2017 at 10:16 am

Really? I have never understood why you seem to give such short shrift to energy as a primary modulator of the economy. Is the modern economy not based on fossil fuels? Where would we be without coal or oil? Does the cost of energy not define limits to growth, limits to transportation? So, why is a technology that would enable the (potentially) more efficient use of energy (transitioning from fossil fuels to renewables, or at least to cheaper, cleaner natural gas) not a positive development? If this ends up lowering costs of transportation (not guaranteed but seems likely), and ultimately even of property, it is hard to see this as merely defensive. Mitigating climate change is a bonus, but in and of itself likely won’t be nearly enough (scale-wise or time-wise — climate change is going to require a much larger “fix”). Certainly there is a lot of hype and overly-optimistic timelines, but it seems to me likely a net “positive innovation.” Think horse to train to car. A Tesla is still a car, but one with far fewer moving parts, and once it drives itself, once our “tiny homes” become self-driving, self-fueling “vehicles,” allowing spontaneous “neighborhoods” to spring up and dissolve within days or even hours, always in communication via the SpaceX satellite internet, is that not positive innovation? Will it not foster positive innovation? It’s very hard to view this as defensive. You made a convincing argument in TCC that declining mobility was impacting growth. And yesterday there was this in the WSJ:


106 Nigel August 4, 2017 at 8:29 pm

Missile defense is also a poor example for your thesis.
The development of adqptive optics was a direct result of the earlier anti-missile program.

Technologies are not hermetically sealed within some container marked ‘defensive’ or ‘progressive’.


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