I recently read a thought-provoking new book by Robert Gordon, called The Rise and Fall of American Growth. It raises some big questions about the future of innovation, productivity and the degree to which either can positively impact the standard of living for middle-class Americans.
Gordon’s vision is big picture. His analysis makes me think of an advanced alien civilisation patiently studying the human species for thousands of years and recording data on our ability to scale innovations and raise the quality of life for masses of people. From this perspective, nothing much happens for millennia. But then, in around 1870, a series of ‘great inventions’ were born (or began to scale) that dramatically altered the quality of life of millions of Americans.
These ‘great inventions’ include electricity, refrigeration, the combustion engine and indoor plumbing and heating, which led to a productivity boom and a standard of living that would be entirely unrecognisable to anyone living in an earlier time.
The underlying argument Gordon makes is that this innovation/productivity trajectory was extremely unique and ultimately short-lived. We’ve been on the downward slope of it for going on 50 years now. For Gordon, the data just doesn’t support viewing the IT revolution as equally productive or as impactful on our standard of living.
Granted, the book is focused on the United States. Gordon does a tremendous job of painting a vivid picture of life in both urban and rural America during the latter half of the 19th century, but what you quickly realise when reading the book is that much of the world’s standard of living is similar to that of America 140 years ago. Many of the great inventions have yet to scale to low- or middle-income countries across the globe. Clearly, globally we have a long way to go as far as productivity and innovation are concerned.
For me, Gordon’s book raises the question of where in the American, and global, economy we might see breakthrough societal innovations with the ability to lead us to higher standards of living.
The one area that comes immediately to mind is healthcare, and I’m not referring to the amazing technological and therapeutic innovations that we hear about all the time. Right now, many of these innovations are out of reach for a lot of people, so the scaling factor is not there.
I’m interested in process and service innovations that could bring ‘ordinary’ efficiencies and productivity enhancements to a sector of the economy that’s desperately in need of them. In other industries, these developments are created through platforming – a base capability from which a wide variety of products and services can be delivered cost effectively. Amazon, for instance, is extremely adept at creating platforms and deploying at scale.
Check out the following depiction of the process flow at a hospital pharmacy taken from the Institute of Medicine’s publication, Best Care at Lower Cost: The Path to Continuously Learning Healthcare in America.
Just think of the absurdity of any organisation ‘platforming’ this service. Of course, no one would, but the point is this: ‘process’ is repeated in many health systems across the world. Dispensing medication isn’t that unique, or at least it shouldn’t be. If customisation is needed, for whatever reason, that customisation should be built from a base platform.
Healthcare needs platforming. It needs the expertise of the likes of Amazon or Tesla – that have the engineering mindset and vision – to develop more efficient platforms that can be rolled out across a system that’s desperately in need of innovation and productivity. We have SpaceX, which is one of my favourite examples of the power of platforming. What we need, however, is a Healthcare X.
I don’t know if historically we are on a downward trend in productivity and quality of life. However, if there’s any sector where breakthrough innovations would lead to more time and money in people’s pockets, it would be healthcare. Platform engineers, please step forward.