Written by
Paul Kirkham

Published
26 Jun 2017

The limitless value of entrepreneurship

26 Jun 2017 • by Paul Kirkham

The nature of progress is such that over time even the most radical innovation is likely to be refined, revised, revolutionised and maybe even condemned to obsolescence. That’s how the winds of “creative destruction” blow. But none of this diminishes the value of the innovator’s efforts or, crucially, the inherent worth of the idea behind them.

We touched on this point in a previous article by referencing a paradox widely credited to renowned science writer and inventor Arthur C Clarke. To recap quickly:

Imagine you’re the pilot of a spaceship that’s travelling towards a far-flung star. One day, years into your journey, you glance in (the sci-fi equivalent of) a rear-view mirror and see another vessel closing in at remarkable speed.

When it sweeps past you, which is does with astonishing ease, you realise this vessel is from your own planet. It launched long after your mission but, thanks to major advances in technology, has covered the same distance in much less time. It has not only caught up but is about to leave you in its wake.

You could be forgiven for feeling somewhat dispirited. Given that something better has come along and comprehensively outstripped your own achievements, why did you bother in the first place? You’ve just wasted years of your life, right?

Clarke knew a thing or two about blazing trails, and what he was illustrating here is that innovations don’t just solve the problems of the present: they also lay the foundations for the future.

After all, the second spaceship wouldn’t have been built had the first never existed. Your vessel paved the way for its superior successor. Both are important points on the same learning curve.

 

The science of cooling technology

By way of further illustration, consider the science of cooling technology. Recent headlines have stressed the issue of the “cold economy”, with one report positing that the search for low-carbon solutions will represent the world’s biggest energy challenge by the middle of the next century.

Nowadays we’re so familiar with artificial cooling that it’s easy to forget what preceded it. In the past, it was necessary to rely on something altogether more elemental. There was once such a thing as the ice-harvesting industry, and the man who created it should in many ways be regarded a classic hero of innovation and entrepreneurship.

American businessman Frederic Tudor, scion of a well-to-do Boston family, supposedly hit on the idea of exporting ice to the Caribbean while enjoying a cool drink at a party. In 1806 he shipped 130 tons to Martinique, recording a $4,500 loss after most of the cargo melted en route.

Undeterred by his early failure, he ploughed on. Eventually, using sawdust as an insulator, he was able to reduce wastage sufficiently to make a profit. By the 1850s he was shipping almost 150,000 tons to more than 50 ports and targeting markets from China to Australia.

Of course, he couldn’t maintain a monopoly. With a shorter sea voyage and more dependable winters, Scandinavia soon dominated the trade to Britain. Even individual retailers gradually woke up to the notion of having small ice-making plants of their own.

Concurrently, other innovations were afoot. In 1841, facing an epidemic of yellow fever and malaria, Florida physician John Gorrie devised a practical mechanical method of refrigeration to keep his hospital ward cool; seven years later he filed for a US patent for an “improved process for the artificial production of ice”. Behold: air-conditioning.

The warm glow of a lasting legacy

And so the ice-harvesting industry dwindled and died – and Tudor, the so-called “Ice King”, was largely condemned to a footnote in the annals of business. Yet he deserves more than that, because all the advances that ultimately rendered his own particular vision redundant were the direct consequences of him identifying a demand that had occurred to no one else.

To put the matter into long-term perspective: domestic refrigeration, in its own way, has been as transformative as the PC. It’s not even a measure of poverty in the developed world. According to the Heritage Foundation, an American think tank, 99% of “poor” households in the US have a fridge. The Coca-Cola Company claims to sell products in more than 200 countries – which, not least since the US State Department recognises only 194 independent nations, suggests there are now very few places on Earth where it’s impossible to get an ice-cold drink.

Generally speaking, Tudor set all of this in motion. His eye for radical innovation and his entrepreneurial outlook provided the underpinnings for everything that followed. Accordingly, every innovator and entrepreneur in this field is to some degree indebted to him.

This is why the spirit of innovation and entrepreneurship is so vital – because ideas are how we progress. All ideas contribute to the learning curve, irrespective of whether they’re great, good or even garbage.

So we should never forget that the mind is the most powerful resource humanity possesses. And we should remember, too, that the potential for doing things better – or even for doing things differently – is limitless. This was true in Tudor’s day; it’s true now; and there’s every chance it will still be true when one manned interplanetary flight is capable of blasting past another.