by Matthew Syed
When Bernard Sadow, another enterprising executive, brought the idea of wheeled suitcases to market, the secondary beneficiaries – the department stores – seemed determined to throw the new profits away, too. Sadow had come upon the idea in 1970 while struggling with two heavy suitcases through an airport when returning from a family holiday in Aruba. ‘It just made sense,’ he would later say.
And yet when he took the idea to the New York stores, who had so much to gain in new sales, he was knocked back. It was like the experience of Dudley Bloom all over again. ‘Everybody I took it to, threw me out – from Stern’s, Macy’s, A&S, all the major department stores,’ Sadow has said. ‘They thought I was crazy, pulling a piece of luggage . . . At this time, there was this macho feeling. Men used to carry luggage for their wives.’7
It was only when he got to see Jerry Levy, a vice president at Macy’s, that he managed to secure a deal. Levy called in Jack Schwartz, the original Macy’s buyer who had rejected the bag a few weeks earlier, and urged him to buy it. Customers, for their part, experienced no resistance to the new invention. ‘The people accepted it immediately,’ Sadow said. ‘They could see what it was doing. It took off. It was terrific.’
As for the history of electrification, this defies logic even more than the history of wheeled suitcases. The executives of the industrial trusts were far from unintelligent. Many were among the early wave of professional managers, handpicked for their keen minds. And yet they turned a gilt-edged opportunity for growth into a disaster on an epic scale. As McAfee and Brynjolfsson put it: ‘In the first decades of the 20th century, electrification caused something close to a mass extinction in US manufacturing industries.’8
II
So far we have looked at how diversity can enhance collective intelligence in everything from problem solving to coming up with new policies to cracking secret codes. In this chapter, we are going to look at arguably the most important context of all, and the one with the biggest implications for growth: innovation and creativity. Later in the chapter, we will examine the big picture. Why are some institutions and societies more innovative than others? How can we harness diversity to boost economic prosperity? But first, we will focus on individuals. Why do some people embrace change while others fear it? Why do some master the art of reinvention, while others seem stuck with the status quo?
Experts on innovation often distinguish between two different kinds. On the one hand, there are the directed, predictable steps that take one deeper into a given problem or specialism. Think of James Dyson patiently tweaking the design of his vacuum cleaner, learning more about the separation of dust from air as he adjusted the dimensions of his famous cyclone. With each new prototype, he learned ever more about separation efficiency. With each new step, he gained deeper knowledge of this small segment of science. With each new experiment, he came ever closer to a functional design. This kind of innovation is sometimes called incremental. It neatly denotes the idea of knowledge deepening within well-defined boundaries.
The other kind of innovation is embodied in the two examples just discussed. This is sometimes called recombinant innovation. You take two ideas, from different fields, previously unrelated, and fuse them together. A wheel with a suitcase. A new form of power generation with a reformed manufacturing process. Recombination is often dramatic, because it bridges between domains, or breaks down silos altogether, opening up new seams of possibility.
The logic of these two forms of innovation has an echo in biological evolution. We might think of incremental innovation as somewhat like natural selection, small changes occurring in each generation. Recombinant innovation is rather more like sexual reproduction, genes from two distinct organisms joining together. And while both are important, the science writer Matt Ridley has persuasively argued that we have long underestimated the power of recombination. He writes:
Sex is what makes biological evolution cumulative, because it brings together the genes of different individuals. A mutation that occurs in one creature can therefore join forces with a mutation that occurs in another . . . If microbes had not begun swapping genes a few billion years ago, and animals had not continued doing so through sex, all the genes that make eyes could never have got together in one animal; nor the genes to make legs or nerves or brains . . . Evolution can happen without sex, but it is far, far slower. And so it is with culture. If culture consisted simply of learning habits from others, it would soon stagnate. For culture to turn cumulative, ideas need to meet and mate. The ‘cross-fertilisation’ of ideas is a cliché, but one with unintentional fecundity. ‘To create is to recombine’, said the molecular biologist François Jacob.9
Ridley has a neat phrase for recombinant innovation: ideas having sex.
History has thrown up plenty of examples of recombinant innovation, such as the printing press, which fused an existing method for pressing wine with various other features such as soft metals to create block techniques, and movable type. Recombinant innovations have always coexisted alongside the incremental innovation expressed in the continual modification of existing ideas. But something has happened over recent years that has escaped the notice of many people, indeed many scientists. The balance between incremental and recombinant innovation has started to tilt dramatically. Recombination has become the dominant force of change, not just in science, but in industry, technology and beyond.
To get a sense of this dominance, consider a study led by Brian Uzzi, a professor at the Kellogg School of Management. He looked at 17.9 million publications across 8,700 journals in the Web of Science, the world’s largest repository of scientific knowledge.10 That is pretty much every paper written in the last seventy years. He was looking for patterns. What creates great science? Where are the hot ideas?
What did he find? The papers with the most impact were those that had what the researchers called ‘atypical subject combinations’; that’s to say, papers that bridged across traditional boundaries. These papers were blending, say, physics and computation, or anthropology and network theory, or sociology and evolutionary biology. This is the scientific equivalent of ‘ideas having sex’. These papers broke through the conceptual walls between subjects and thought silos, creating new ideas and possibilities.
As Uzzi put it: ‘Many of these novel combinations are really two conventional ideas in their own domains. You’re taking well-accepted ideas, which is a wonderful foundation – you need that in science. But when you put them together: wow! That’s suddenly something really different.’11 Classic examples of recombinant science include behavioural economics, which transformed the field by bringing the concepts and insights of psychology to the domain of economics.
This isn’t just about science, however. The US Patent and Trademark Office has broad categories such as utility patents (the light bulb), design patents (the Coke bottle) and plant patents (hybrid corn), with 474 technology classes and 160,000 codes. In the nineteenth century, most patents were classed by a single code. The majority of innovations were confined to a specific silo. They were typically the product of incremental innovation. Today, the number of patents classed by a single code has dropped to just 12 per cent. The vast majority of patents now reach across traditional boundaries and codes.12 As Scott Page, Professor of Complex Systems at the University of Michigan, Ann Arbor says: ‘the data reveal the value of combining diverse ideas and an unmistakable trend towards recombination as a driver of innovation’.13
The link between recombinant innovation and diversity should be obvious. Recombination is about cross-pollination, reaching across the problem space, bringing together ideas that have never been connected before. We might call these ‘rebel combinations’: merging the old with the new, the alien and the familiar, the outside and the inside, the yin and the yang.
This trend is not slowing up but accelerating in the computer age, with its vast networks. Think of Waze. This is classically recombinant, combining a location sensor, data transmission device, GPS system and social net
work. Or take Waymo, the self-driving car technology company, which brings together the internal combustion engine, fast computation, a new generation of sensors, extensive map and street information, and many other technologies.14
Indeed, almost all tech innovations connect disparate ideas, minds, concepts, technologies, data-sets and more. This pattern applies to Facebook (which connected an existing web infrastructure with technology enabling people to build digital networks and share media) and Instagram (which linked Facebook’s most basic concepts with a smartphone application complete with the capacity to modify a photo with digital filters) and beyond. Recombination is the leitmotiv of digital innovation. With each new combination, fresh combinations loom into the terrain of what the biologist Stuart Kauffman calls ‘the adjacent possible’. New prospects open up, new vistas come into view. ‘Digital innovation is recombinant innovation in its purest form,’ Brynjolfsson and McAfee write. ‘Each development becomes a building block for future innovations . . . building blocks don’t ever get used up. In fact, they increase the opportunities for future recombinations.’15
But this leaves us with a critical question. Why do some people grasp the opportunities of recombination, while others seem blind to its potential? In the examples of suitcases and electrification, the coming together of diverse technologies was rejected by the very people who stood to benefit most from them. This is part of a deeper pattern. Many of us struggle with change, not because recombination is beyond our reach, but because we turn our backs on its possibilities. We assume that innovation is for creative types, or for boffins in Silicon Valley. We unconsciously reject changes that might make our own jobs and lives more productive and fulfilled.
But there is one group of people who do not seem to be hampered by this barrier. People who are often behind the success stories we have mentioned, and who hold out lessons for all of us.
III
Take a look at the following list of names: Estée Lauder, Henry Ford, Elon Musk, Walt Disney and Sergey Brin. Can you see what they have in common? On the surface, they look like a list of famous entrepreneurs, people who have made an impact on American society. But dig a little deeper and you will note that they share a pattern with dozens of others, including Jerry Yang, Arianna Huffington and Peter Thiel, each of whom have helped to shape the modern economy of the United States. The link between these people? They are all immigrants, or the children of immigrants.
A study published in December 2017 revealed that 43 per cent of companies in the Fortune 500 were founded or co-founded by immigrants or the children of immigrants, rising to 57 per cent in the top thirty-five companies. These companies produced $5.3 trillion in global revenue and employed 12.1 million workers worldwide in everything from tech to retail and finance to insurance.16 This is not an isolated finding. Immigrants make disproportionate contributions to technology, to patent production and to academic science. A 2016 paper in the Journal of Economic Perspectives showed that US-based researchers had been awarded 65 per cent of Nobel Prizes over the preceding few decades. Who were these innovators? More than half were born abroad.17
Different studies have shown that immigrants are twice as likely to become entrepreneurs.18 They account for 13 per cent of the US population, but 27.5 per cent of those who start their own businesses. Another study, this time by Harvard Business School, showed that companies founded by immigrants grow faster, and survive longer.19 Yet another showed that around a quarter of all tech and engineering companies started in the United States from 2006 to 2012 had at least one immigrant cofounder.20 This is not just about immigrants into the United States, it is a property of immigration more generally. Data from the 2012 Global Entrepreneurship Monitor shows that the vast majority of the sixty-nine countries surveyed reported higher entrepreneurial activity among immigrants than among natives, especially in high-growth ventures. None of these studies is conclusive on its own, but together they present a persuasive pattern.
Now, think back to the examples from the previous section. Why did existing luggage companies struggle to perceive the benefits of wheels? Why did established manufacturing companies struggle to fuse electrification with modified assembly lines? Why is it so often the people in the best position to gain from innovation who are blind to its opportunities? Could it be that when you are immersed within a paradigm, it is difficult to step beyond it? Think of luggage executives operating in 1950s America. Their lives were centred on conventional luggage. Their entire careers had been spent working with unwheeled suitcases. Their lives were bound up in the paradigm. It was a part of their world view, their most basic frame of reference.
As for the executives and owners of the large industrial companies, they had worked with steam engines all their careers. This was their conceptual centre of gravity, the way they filtered ideas and conceived of opportunities. It was the premise around which everything else orbited. This deep familiarity with the status quo made it psychologically difficult to deconstruct or disrupt it. As McAfee and Brynjolfsson put it:
It is exactly because incumbents are so proficient, knowledgeable and caught up in the status quo that they are unable to see what’s coming, and the unrealised potential and likely evolution of the new technology . . . Existing processes, customers and suppliers all blind incumbents to things that should be obvious, such as the possibilities of new technologies that depart greatly from the status quo.21
In fact, this can be seen experimentally. A classic study by Robert Sternberg and Peter French pitted experts and novices at the card game bridge. Unsurprisingly, the experts performed better. They were the experts, after all. But then the researchers made some structural changes to the rules. Instead of players who put out the highest card winning, this was reversed.22 This change had little effect on the performances of the novices. They rapidly absorbed the change and carried on. For the experts, who had much deeper familiarity with the rules, and had spent years playing the game, the change was more disconcerting. They had much greater difficulty dealing with the disruption. Their performance declined.
This dovetails with our analysis of immigrants. They have experienced a different culture, a different way of doing things. When they see the business ideas in a new country, or a particular technology, they do not see something immutable. Irrevocable. Set in stone. They see something that could potentially be changed. Reformed. Amended, adapted, or subject to recombination. The very experience of seeing different places seems to offer psychological latitude to question conventions and assumptions. Let us call this the outsider mindset. Immigrants are not outsiders in the literal sense of physically standing outside a particular convention or paradigm. Rather, they are outsiders in the conceptual sense of being able to reframe the paradigm. To see it with fresh eyes. This provides them with the latitude to come up with rebel ideas.
Immigrants have another advantage, too, inextricably linked to the notion of recombination. They have experience of two cultures, so have greater scope to bring ideas together. They act as bridges, facilitators for ‘idea sex’. If the outsider perspective confers the ability to question the status quo, diversity of experience helps to provide the recombinant answers.
Years of patient empiricism have validated these truths. A study led by the economist Peter Vandor examined the capacity of students to come up with business ideas before and after a semester. Half the students went to live and study abroad during the semester, while the other half stayed in their home universities. Their ideas were then assessed by a venture capitalist. Those who studied abroad had ideas that were rated 17 per cent higher than those who had not. Indeed, those who stayed in their home universities actually experienced a decline in the quality of their ideas over the course of the study.23
In a different experiment, students were given a test of creative association. They were presented with sets of three words, and asked to come up with a fourth word that links them together. One set was ‘manners, round, tennis’. Can you think of the fourth word that links
them? Another set was ‘playing, credit, report’.FN1
Before the task, half the students were asked ‘to imagine living in a foreign country and, in particular, about the types of things that happen, how they feel and behave, and what they think during a particular day living abroad. They were then asked to think and write about this experience for several minutes.’ A control group was given a different task: they were asked to think about a day not living abroad but in their hometown.
What happened? Those who imagined living abroad were 75 per cent more creative, solving more puzzles, and seeing connections that those who had focused on their hometown just couldn’t see.24 Dozens of other experiments have found similar results, in multiple contexts. It is as if imagining living across national borders helps us to step beyond conceptual borders.
But this isn’t about travel, or even immigration, it is about the outsider mindset. After all, a fresh climate doesn’t have to be geographical. Charles Darwin alternated between research in zoology, psychology, botany and geology. This did not diminish his creative potential, but enhanced it. Why? Because it gave him the chance to see his subject from the outside and to fuse ideas from diverse branches of science. One study found that the most consistently original scientists switched topics, on average, a remarkable forty-three times in their first hundred published papers.25
Meanwhile, a team at Michigan State University compared Nobel Prize-winning scientists with other scientists from the same era. The Nobel Laureates were twice as likely to play a musical instrument, seven times more likely to draw, paint or sculpt, twelve times more likely to write poetry, plays or popular books and twenty-two times as likely to perform at amateur acting, dancing or magic.26 Similar results were found for entrepreneurs and inventors.
