Highlights

Can the pandemic help us fix our technology problem?

We have a technology problem.

By that, I mean that we currently lack the technology to deal with the coronavirus pandemic. We don’t have a cheap, easy, self-administered test. We lack effective medicines. Above all, we don’t have a vaccine.

But I also mean something vaguer and more diffuse. We have a technology problem in the sense that scientific and technological progress has been sputtering for a while. That is evident in the data. The 2010-19 decade of productivity growth in the UK was the lowest for the past couple of centuries, and coronavirus can take no blame for that.

If productivity statistics do not speak to your poetic soul, go into your kitchen and look around. You’ll see little there that you couldn’t have seen 50 years ago. The same could not be said of, say, the 50 years between 1920 and 1970. Or ponder air travel, if you can remember what that is like. Between 1920 and 1970, we went from aviator goggles and fabric-covered biplanes to the Boeing 747 and Concorde. Not only have we failed to surge forward since then, one could even argue that we’ve gone backward.

Given how much we keep being told about the disruptive pace of innovation and the boundless creativity of Silicon Valley, the reality is both surprising and disappointing. After several years pondering the history of inventions and inventors, I wondered whether these two problems might shed light on each other — what can we learn from the pandemic about technology, and what does the history of technology teach us about the pandemic?

Get the incentives right

In 1795, the French government offered a prize of 12,000 francs for inventing a method of preserving food. Napoleon Bonaparte was an ambitious general when the prize was announced. By the time it was awarded, he was France’s emperor, and two years away from his disastrous invasion of Russia. Napoleon may or may not have said: “An army marches on its stomach,” but he was keen to broaden his soldiers’ provisions from smoked and salted meat.

One of the hopefuls who tried his hand at winning the prize was Nicolas Appert, a Parisian grocer and confectioner credited with the development of the stock cube and — less plausibly — the recipe for chicken Kiev. Through trial and error, Appert found if you put cooked food in a glass jar, plunged the jar into boiling water and then sealed it with wax, the food would keep — all this was before Louis Pasteur was born.

Having solved the problem, Monsieur Appert duly claimed his reward.

This is by no means the only example of an innovation prize, a policy tool that has waxed and waned over the years. The most famous was the 1714 Longitude Prize, for solving the problem of how far east or west a ship was. The Royal Society for the encouragement of Arts, Manufactures and Commerce, the RSA, also awarded prizes on a frequent basis, often for safety measures that were regarded as unprofitable but socially valuable. Anton Howes, author of Arts and Minds, a history of the RSA, reckons that the society awarded more than 2,000 innovation prizes between the mid-1700s and the mid-1800s. Some were “bounties”, ad hoc recognition for good ideas; many, however, were classic innovation prizes like that awarded to Appert, which pose an important problem and promise to reward the person who solves it.

Nowadays such prizes are out of fashion. Governments tend to favour a combination of direct support for researchers and the award of an intellectual monopoly, in the form of a patent, to those who develop original ideas. But just like the innovations the RSA rewarded, rapid vaccines can be unprofitable but socially valuable. So a group of the world’s leading economists believes that if we are to maximise the chances of producing that vital coronavirus vaccine at the speed and scale that is required, we need to bring innovation prizes back in a big way.

This team, known as “Accelerating Health Technologies”, includes Susan Athey, the first woman to win the prestigious John Bates Clark medal, and Michael Kremer, a Nobel laureate.

“Whoever discovers the vaccine first is going to get such a big hug,” joked the Financial Times cartoonist Banx. It’s safe to say that they would get much more than that, but would they get enough? Major pharmaceutical companies have been scarred by earlier experiences, where they sank money into vaccines for diseases such as Zika or Sars, or in 2009 rushed to fulfil large orders for flu vaccines, only to find that demand had ebbed.

The problem is that most vaccine research programmes do not produce successful vaccines, and so companies — understandably — try to keep a lid on their spending until one is proven to work. Anthony Fauci, director of the US’s National Institute of Allergy and Infectious Diseases, lamented the problem in February: “Companies that have the skill to be able to do it are not going to just sit around and have a warm facility, ready to go for when you need it,” he told an Aspen Institute panel.

We need the leading vaccine contenders to invest vastly more in trials and production than they normally would, even though much of that investment will ultimately be wasted. And of course, they already are investing more — up to a point. That is partly an act of good corporate citizenship and partly in response to subsidies from governments or the Gates Foundation. But it may not be sufficient.

After all, the cost of failure will be borne mainly by the companies involved, while the benefits of success will be enjoyed by all of us: the IMF estimates the benefits are more than $10bn for every day that widespread vaccine delivery is hastened. Any inducement the rest of us can offer might be money well spent. So Athey, Kremer and their colleagues have proposed a kind of prize called an “advanced market commitment”, a promise to buy hundreds of millions of doses of a vaccine for a premium price.

This is not an untried idea. In 2004, Kremer and Rachel Glennerster, the current chief economist of the UK’s Department for International Development, proposed the concept of an advanced market commitment (AMC). In 2010, donors promised $1.5bn as an AMC for a pneumococcal vaccine for low-income countries; this dramatically accelerated the rollout of successful vaccines and saved hundreds of thousands of lives. But the AMC is really just a sophisticated variant on the innovation prizes of the 18th and 19th centuries, such as the one claimed by Nicolas Appert. Incentives are not the only thing that matter — but matter they do. If we want a solution that badly, we shouldn’t hesitate to commit to rewarding those who produce it.

It is not such a leap from food preservation to a vaccine.

Don’t overlook what seems simple

On August 4 1945, as the US and USSR were manoeuvring for position in a postwar world, a group of boys from the Young Pioneer Organisation of the Soviet Union made a charming gesture of friendship. At the US embassy in Moscow, they presented a large, hand-carved ceremonial seal of the United States of America to Averell Harriman, the US ambassador. It was later to become known simply as “the Thing”. Harriman’s office checked the heavy wooden ornament for signs of a bug, but concluded that, with neither wires nor batteries, it could do no harm. Harriman mounted the Thing proudly on the wall of his study. From there, it betrayed his private conversations for the next seven years.

Eventually, a British radio operator stumbled upon the US ambassador’s conversations being broadcast over the airwaves. These broadcasts were unpredictable: scan the embassy for radio emissions, and no bug was in evidence. It took yet more time to discover the secret. The listening device was inside the Thing. And it was so subtle, so simple, as to have proved almost undetectable.

The Thing had been designed — under duress in a Soviet prison camp — by none other than Léon Theremin, famous even then for his eponymous musical instrument. Inside it was little more than an antenna attached to a cavity with a silver diaphragm over it, serving as a microphone. There were no batteries or any other source of power. The Thing didn’t need them. It was activated by radio waves beamed at the US embassy by the Soviets, at which point it would broadcast back, using the energy of the incoming signal. Switch off that signal, and it would go silent.

The US agents who examined the Thing for bugs did not understand its potential to do them harm. It seemed too simple, too primitive, to matter. And I worry that we often make the same mistake. When we think about technology, we think of the flashy, sophisticated stuff. We overlook the cheap and the simple. We celebrate the printing press that produced the Gutenberg Bibles, but not the paper that many of those Bibles were printed on. Alongside paper and the RFID tag, place the brick, the postage stamp and, for that matter, the humble tin can: inventions that are transformative not because they are complicated but because they are simple.

We should remember the same lesson when it comes to the innovations that fuel public health. The simplest technologies — such as soap and gloves, and, it seems increasingly likely, cloth masks — have proved invaluable, and are much-missed when in short supply.

And those are just the obvious technologies. The UK and the US stumbled in their efforts to scale up testing in the crucial early weeks of the epidemic. It will take post-pandemic inquiries to establish exactly why — and incompetence is clearly one explanation — but reporters highlighted a shortage of the chemical reagents necessary to conduct the test, the protective gear needed to shield the medical staff and even something as simple as cotton swabs.

Even now, it is too easy to dismiss the potential of truly cheap and simple testing. The economist Paul Romer, another Nobel memorial prize winner, argues that if everyone in a country could be tested twice a month — the equivalent, in the UK, of more than four million tests a day — that should provide enough information to suppress the virus whenever there was an outbreak. That is a vast leap beyond our current testing capacity — but the benefits could be enormous. Imagine a reliable test that was cheap and self-administered, like a pregnancy test or a thermometer. Highly sophisticated is good, but being cheap has a sophistication of its own.

Contact tracing is another simple but vital approach. An age-old idea that requires little more than a phone, a notebook and a small army of persistent and diplomatic people, it was abandoned in the UK for the three gravest months of the crisis, apparently on the basis that the army had yet to be recruited and so the tracing system could cope with no more than five new cases a week. Since the lockdown was eased, we have well over a thousand a day.

Then there are the everyday logistical miracles made possible by other simple inventions, the barcode and the shipping container. Nobody cares about logistics until things go wrong. It has been remarkable to see how resilient retail supply chains have been in the face of the most extraordinary disruption. At a time when much of the world’s population was told not to venture beyond their own front doors, we saw little more than a brief awkwardness in sourcing flour, pasta and toilet paper.

But it has not been so straightforward to duplicate this feat when it comes to testing. Embarrassed by the early deficiency, the UK government set ambitious targets. Ministers then claimed to hit them, first by including testing kits that had merely been posted out, and then by bragging about “capacity”. Meanwhile, the government simply stopped reporting how many people had been tested at all. The logistics of conducting, or even counting, the tests proved challenging enough that for the purposes of meeting targets, logistical problems were simply assumed away.

In our desperation to develop high-tech solutions such as drugs or contact-tracing apps, there is a risk that we ignore the simple technologies that can achieve a lot. As Averell Harriman discovered, it is a mistake to overlook technologies that seem too simple to matter.

Manufacturing matters too

There is more to innovation than a good idea. The food-preserving “Appertisation” technology did not stay in France for long — it migrated across the Channel to seek London’s entrepreneurialism and venture capital, allowing production to scale up. (This was a time when the British were, evidently, not too proud to borrow a good idea from the French.) Appert himself was also trying to expand his operations. He invested his prize money in a food-preservation factory, only to see it destroyed by invading Prussian and Austrian armies. Ideas matter, but factories matter too.

Factories are likely to prove equally fateful for vaccine production. Developing a successful vaccine is far more than just a manufacturing problem, but manufacturing is undoubtedly the kind of challenge that keeps experts awake at night. The candidate vaccines are sufficiently different from each other that it is unfeasible to build an all-purpose production line that would work for any of them, so we need to build several in parallel.

“Imagine that your life depended on completing a home construction project on time,” Susan Athey told the Planet Money podcast. “Anyone who’s ever done a construction project knows that none of them had ever been completed on time . . . literally, if your life depended on it, you might try to build five houses.”

Or to put it another way, if your life depends on a letter being delivered on time, send multiple copies of the letter by as many methods as you can find.

In the case of a coronavirus vaccine, setting up multiple redundant production lines costs money — tens of billions of dollars. But remember that an accelerated vaccine is worth more than $10bn a day. Any reasonable subsidy would be value for money, assuming it increased the probability of quick success. Some subsidies are already available — for example, as part of the US “Warp Speed” project, and from the Gates Foundation. But Michael Kremer wants to see more international co-ordination and more ambition. “We think the scale of the problem and the risks associated with each candidate warrant pursuing a substantially larger number of candidates,” he told me.

Alex Tabarrok, another member of the team, added: “Bill Gates is doing the right thing but even Gates can’t do it all. Governments are acting too slowly. Every week that we delay a vaccine costs us billions.”

Athey, Kremer, Tabarrok and the rest of the team behind the Advanced Market Commitment proposal want to supplement it with generous 85 per cent subsidies for the immediate construction of vaccine factories. The calculation here is that firms are the best judges of their own prospects. A firm with a marginal vaccine will not build much capacity, even with an 85 per cent subsidy. But anyone with a decent chance at producing a vaccine will see the prize on offer, and the subsidies, and start building factories at once.

On the principle of not overlooking what seems simple, even the most sophisticated vaccines rely on ingredients that are all too easy to take for granted. Consider the supply of glass vials. Several doses can be included in a single vial, but that still suggests a demand for hundreds of millions of them if a successful vaccine is made. The vaccine industry is used to operating at scale, but this would be something new: vaccines simply aren’t given to everyone in the world all at once.

Or perhaps the hold-up won’t be the glass, but something else. James Robinson, a vaccine manufacturing expert, told the science writer Maggie Koerth: “A vaccine manufacture . . . might source several thousand ingredients to make a vaccine. But each material is coming from factories with hundreds of sources, and those sources have sources.”

For example, GlaxoSmithKline uses an extract from the soap-bark tree to produce a vaccine-enhancing ingredient called an adjuvant; for some of the vaccines now in development, the adjuvant may enhance their effectiveness or make a certain quantity stretch to more doses. As Koerth noted, however, the bark is harvested in Peru, Chile and Bolivia during the summer months of the southern hemisphere. Last year’s crop was harvested before the coronavirus had become a household name; this year’s harvest will not begin until November.

Disruption can help

It hasn’t just been the past few decades in which apparently remarkable technologies have made an underwhelming impression on the productivity figures. Consider the history of electrification in American factories. In the 1890s, the potential for electricity seemed clear. Thomas Edison and Joseph Swan independently invented usable lightbulbs in the late 1870s. In 1881, Edison built electricity-generating stations at Pearl Street in Manhattan and Holborn in London. Things moved quickly: within a year, he was selling electricity as a commodity; a year later, the first electric motors were used to drive manufacturing machinery.

Yet by 1900, less than 5 per cent of mechanical drive power in US factories was coming from electric motors. Most factories were still in the age of steam. This was because when manufacturers replaced large steam engines with large electric motors, they were disappointed with the results.

I’ve written about the work of economic historian Paul David before. He argued it wasn’t enough merely to replace steam engines with electric motors. The capabilities of those new motors could only be used fully if the factories were redesigned.

While replacing a large steam engine with a large electric motor had achieved very little, electric motors could be efficient at a smaller scale. That meant that each worker could have a small motor at their bench. Wires could replace driveshafts; factories could spread out into lighter, airier spaces; the flow of product could be optimised, rather than being constrained by proximity to the power source.

But a fascinating part of David’s argument is that all this was catalysed by a crisis. After 1914, workers became more expensive thanks to a series of new laws that limited immigration into the US from a war-torn Europe. Manufacturing wages soared and hiring workers became more about quality, and less about quantity. It was worth investing in training — and better trained workers were better placed to use the autonomy that electricity gave them. The recruitment problem sparked by the immigration restrictions helped to spark new thinking about the design of the American factory floor.

Some of the modern parallels are obvious. We have had email, internet and affordable computers for years — and more recently, video-conferencing. Yet until the crisis hit, we had been slow to explore online education, virtual meetings or telemedicine. 3D printing and other agile manufacturing techniques have moved from being curiosities to life-saving ways to meet the new demand for medical equipment. We are quickly learning new ways to work from a distance because suddenly we have had no choice. And we are learning about resilience.

There is no guarantee that a crisis always brings fresh ideas; sometimes a catastrophe is just a catastrophe. Still, there is no shortage of examples for when necessity proved the mother of invention, sometimes many times over.

The Economist points to the case of Karl von Drais, who invented an early model of the bicycle in the shadow of “the year without a summer” — when in 1816 European harvests were devastated by the after-effects of the gargantuan eruption of Mount Tambora in Indonesia. Horses were starved of oats; von Drais’s “mechanical horse” needed no food.

It is a good example. But one might equally point to infant formula and beef extract, both developed by Justus von Liebig in response to the horrifying hunger he had witnessed in Germany as a teenager in 1816. Or, if we are to recognise art as well as science, there is Mary Shelley’s masterpiece Frankenstein, written that same rainy summer beside Lake Geneva; the creature’s isolation mirrors that of the starving peasants she saw, begging for food. One crisis may lead to many creative responses.

The same may be true of this pandemic. Disruptions — even calamitous ones — have a way of bulldozing vested interests and tearing up cosy assumptions, jolting people and organisations out of the status quo.

It is just possible that future generations will point to 2020 as the year the innovation slowdown ended. Even economists need to be able to hope.

Written for and first published in the Financial Times on 11 June 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is NOW OUT; this article is based in part on ideas in that book. Details, and to order on Hive, Blackwells, Amazon or Watersones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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1st of July, 2020HighlightsOther Writing • Comments off