My hypothesis is that Musk’s name in the header makes this the most viewed thing I ever write. This is probably amusing only to me.
But this post is really about John Pike!
This is genuinely fascinating. Not sure if it’s true!
- Suggests there’s a class of problems for which incremental change isn’t possible!!
- Why is this? Because the intermediate steps produce no demand (it’s not that there aren’t intermediate steps… just that no one /cares/ and will pay for someone to go halfway to Mars)
- So this suggests one of two things for this class
- Someone must front the money in between, which can be prohibitively costly
- We’re actually underestimating (or misidentifying) the demand at intermediate steps.
Especially, we might expect useful spillovers to e.g. getting someone halfway to Mars that can be monetized in the meantime, and suffice as demand to pay for the stuff. There must be some class of problem, however, for which this is strictly untrue — there truly are zero spillovers until the step change.
Theoretically, for some subset of this no-spillovers class, the step change is actually going to be a larger gap than anyone will ever pay for. That is, there may be some class of innovations which we will never pursue, not as a verdict on their usefulness but rather our own tolerance for risk/uncertainty and long investment time horizons.
I think this accords with the Audretsch/Link basic model explaining when government steps in as a science/innovation funder, but adds some richness in saying why.