I wonder if this is a resource allocation process problem and RPP applied at a much larger scale – i.e. the capital markets or the capitalist society at large – could provide some insights. That we have focused on harvesting scientific breakthroughs of the past and not kept up with societal MCI of new scientific advances. I have not done the due research to back this up, but share the sentiment with Peter Thiel: that we have seen a burst of one-to-n breakthroughs and not enough zero-to-one’s.
The Capitalist’s Dilemma article highlights enabling technology as a key ingredient of MCI. What if we haven’t been as productive in developing new enabling technologies as in ages past? And why? As a society, I argue we have more resources (population, talent, capital, energy etc.) than ever. But what are the dominant processes and priorities in the society of today? Are the processes and our culture prioritizing scientific advancement, or is wealth the least common denominator of a yardstick of progress and success? Is our education system as a process – the article highlights business school’s contributions – gearing graduates (investors, managers, scientists, politicians) for performance improving innovations or MCI? If they are incompatible, theory would point to heavy-weight teams to alter the processes or autonomous organizations with disparate priorities/culture. Are these solutions possible at a societal or market scale?
At an individual level, what profit formulas are talents using to evaluate the investment of their resources (time, labor, skills) when making career or field of study decisions? And are these congruent with enabling conditions for MCIs? If we are only counting on billionaires willing to shun short-termism of today’s investors to make big bets on MCIs, we are severely underutilizing the resources, both capital and otherwise, of today’s society. The article focuses on the role of the financial sectors and the causal mechanisms there are convincing. But how about other societal processes (e.g. education sector, scientific communities)?
I echo Neha’s comment and doubt the majority of managers and executives disaggregate performance improving and MCI at the time of investment decision. Beyond the lack of framework, typical managers/executives are moving in and out of roles more quickly than ever. This makes the short-term nature of most performance improving innovations even more appealing.
There is also a prevailing intuition that innovating closer to the core is the default way to go. In BSSE, many times we default to constructing arguments for a course of action because it “leverages the core competency of the firm”, even when theory would point us in another direction. I suspect the inertia would be even stronger for someone unfamiliar with the BSSE theories and their implications. In the corporate setting, groupthink and consensus-based decision-making make the odds of MCI even smaller.