When The Magic Happens

The biggest innovations seldom happen when everyone's happy or safe. They happen when people are a little panicked and worried, and when they have to act quickly.

In 1932, the stock market fell by 89%. It was an economic disaster where almost a quarter of Americans were out of work. However, the 1930s was also the most productive and technologically progressive decade in history. Economist Alex Field writes that in 1941, the U.S. economy produced almost 40 percent more output than it had in 1929, with little increase in labor hours or private-sector capital input.

• While the 1920s were the era of the automobile, the construction of roads took off in the 1930s with multilane engineering marvels, including the George Washington, Golden Gate, and Bay Bridges, cutting travel times.
• Electrification surged in the 1930s. Power was brought to farms. Electricity turned from luxury to a necessity.
• Electricity became a servant to washing machines, vacuum cleaners, and refrigerators, freeing up hours of household labor.
• The first supermarket opened in 1930.
• Productivity growth in the 1930s took place in utilities, farming, wholesale trade, retail, transportation, mining, and communication.
• More young people stayed in school because they had nothing else to do, resulting in a surge in high school graduation and college graduates.

The big technical leap of the 1930s could not have happened without the devastation of the depression. However, there is a limit to stress-induced innovation: The foundations of the economy itself should remain intact to support new ideas and innovations.

This balance between a disturbance in the economy, while the foundations of the economy remain intact, has only happened a few times in modern history: the period from 1930 to 1945 and in 2020.

Innovations usually begin with an attempt to solve a specific problem, but they end up triggering other changes that would have been very difficult to predict. An innovation in one field ends up encouraging changes in different domains.

• Right now, many biotech companies are focused on finding a solution to one virus. It could create a fertile ground for new medical discoveries, new manufacturing and distribution methods, a newfound respect for science and medicine.
• A shift to remote work could make cities more livable and rural areas more prosperous.
• The value, price, and product of education have fundamentally shifted, creating new opportunities in delivering affordable education.