THE WEST DESPERATELY NEEDS MORE MADCAP SCHEMES LIKE THE HYPERLOOK / THE FINANCIAL TIMES COMMENT & ANALYSIS

August 16, 2013 6:42 pm

 

The west desperately needs more madcap schemes like the Hyperloop

 

By Stian Westlake

 

Animal spirits built the the railways, highways and the Panama Canal, writes Stian Westlake

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Silicon Valley product launches are a dime a dozen. But Monday’s announcement was something rather special. Elon Musk, founder of PayPal, Tesla and SpaceX, had promised the world he would publish the design for the Hyperloop, a revolutionary new form of transport – and it is hard not to love it. It’s fast. It’s solar-powered. And it’s a bargain: according to Mr Musk, it would cost 10 times less to build than the high-speed railways now beloved of the American and British governments. No wonder the world’s geeks and dreamers have been poring over the space-age sketches.

 

But there is a darker side to the hype. The excitement is an indicator of just how rare big, ambitious, groundbreaking projects are. We hunger for schemes such as the Hyperloop because we live in an age where businesses and governments seem gripped by a lack of ambition and a wilful blindness to the future.

 

This is most visible when it comes to investment. Willingness to invest in the future is a powerful indicator of a business’s optimism – or of a country’s. By this measure, the US is in trouble: recent McKinsey Global Institute research suggests it is underinvesting in infrastructure to the tune of 1 percentage point of gross domestic product. The LSE Growth Commission, an independent panel of experts, said much the same about the UK; anyone regularly using Britain’s creaky, costly rail network will agree.

 

The business world is little better: corporate investment in both the US and the UK began falling well before the crisis of 2008, and has continued to drop, with companies piling up large cash balances at the expense of capital expenditure. Even in Silicon Valley, pioneers such as Mr Musk are the exception. For many entrepreneurs, innovation means a new app or a slightly slimmer phone.
 

Western states’ technological ambitions are contracting too. The US government once backed grand schemes to develop the technologies of the future. As the economist Mariana Mazzucato pointed out, the Defense Advanced Research Projects Agency bankrolled the creation of the internet and of the Global Positioning System. The Small Business Innovation Research programme gave tech giants such as Amgen and Qualcomm some of their earliest funding.

 

But in recent years, Darpa and SBIR have been criticised by everyone from Congress to Nature magazine for drawing back from big risks, and concentrating on opportunities that are closer to market. The UK government’s recent investment of £50m in Skylon, an inspiringly madcap reusable spaceplane, is a welcome exception but in the grand scheme of things this is a small sum. Even thinking about the future seems to be less popular: research by Ben Martin of the University of Sussex shows that the British government has been reducing its expenditure on technology foresight, just as China, Brazil and Singapore increase theirs.
 
This pessimism might be written off as good old Yankee pragmatism, or its British equivalent. But coolheadedness has only ever been one part of the Anglo-American psyche. It was animal spirits as much as pragmatism that built the first railways, the Panama Canal and the interstate highway system, and that brought first Britain and then the US to global dominance.
 
The opposition to grand designs runs deep in today’s intellectual culture. Indeed, a powerful theme of some of the most influential English-language best-sellers of recent years has been the limits of humans’ ability to plan. Writers such as Daniel Kahneman, Nicholas Nassim Taleb and Philip Tetlock have devoted themselves to explaining how poor we are at planning.
 
The implication of this argument is that politicians and managers should keep their options open and avoid making big commitments for the future, because they are very likely to be wrong. They should emulate Pandolfo Petrucci, the tyrant of Siena, who according to Machiavelli “conducted his government day by day, and his affairs hour by hour, because the times are more powerful than our brains”.
 
But making plans is not simply about prediction. The best investments do not anticipate the future: rather, they help shape it. Research by Tali Sharot, an economist at University College London, has shown that optimists are worse than pessimists at knowing what the future will hold, but they tend to be more successful anyhow, partly because they have the guts to try and partly because their can-do attitude carries others along. Anyway, imagination can be just as important as reasoned analysis.
 
After all, it was science-fiction writers who first envisaged robots, satellites and cyber space.
 
This creates a problem for governments that cannot, or will not, think big. The modern state may be large, but its greatest power comes from moral suasion. A government of clerks and pessimists may look like good value for money, but it will not inspire. So getting things done requires more effort and often more expenditure: a point which America’s Tea Party and Britain’s TaxPayers’ Alliance would do well to note.
 
Political thinkers once knew this. Princes used to garner praise for the virtue of “magnanimity”. The word now means the propensity to overlook faults in another but it used to mean the ability to encompass and strive for lofty goals. The urbanist Jane Jacobs observed that being “magnificent” – literally, makers of great things – has been a characteristic of leaders throughout the ages, not because they love opulence but because they need to show the scope of their ambition to bring people along with them.
 
Who knows whether the Hyperloop really will deliver a cheaper, faster, greener means of transport? But perhaps it can accomplish something subtler but more important. If it can inspire businesses and governments to think more boldly about the future, to shed our fear of ambition and grandeur, it will be a tremendous breakthrough.
 
 
The writer is executive director of policy and research at Nesta, the UK’s foundation for innovation
 
 

Copyright The Financial Times Limited 2013.