Governments Take Note: Innovation & Diversity Go Hand in Hand

Harry_headshot-150x150If you haven’t seen the film The Imitation Game with Benedict Cumberbatch and Keira Knightley, go watch it this week.

The film is about Alan Turing, the mastermind behind the “Turing Machine,” the device which was able to decode secret German messages during World War II.

The German communication system, “Enigma,” was seen as impenetrable before Turing and his team tackled it. For months, nobody understood what Turing was doing — let alone his colleagues. He simply asked them to trust him.

But he wasn’t what you’d call “normal.” Turing was a highly eccentric man who didn’t understand basic social cues. That made trusting him with such an enormous task difficult… but his genius prevailed.

It’s estimated that Turing’s invention ended the war two to four years earlier than it otherwise would have, saving about 14 million lives. And how did they thank him for it? (Spoiler alert ahead)

They drove him to suicide.

Turing was a homosexual. Back in 1952 when he was found “guilty” of committing homosexual acts, homosexuality was still criminalized. So they gave him a choice: Prison or two years on hormone therapy. Not much of a choice at all, really. Ultimately the “treatment” completely unraveled his personality and his mind.

How messed up is that?

The man who quite literally saved the world didn’t receive any thanks (although the Queen posthumously pardoned him in 2013). Instead, he was ostracized! That’s not only short-sighted, but devastating to the innovative process.

Innovation can only come from diverse and eccentric views and diverse and eccentric people — those who reject the status quo and press mankind forward!

This has almost always been the case. Just look at Steve Jobs and Einstein and Galileo and Jesus. Each of these men challenged the mainstream views of their times. And what happened to them?

Steve Jobs was fired.

Galileo was damn near burned at the stake for daring to suggest the world revolved around the Sun and not vice versa.

Jesus was crucified at age 33 for his radical views.

But just look at how much each of these men shaped the world just by being in it!

We all want to be liked and associated with people around us. It’s natural and it’s human. But it’s diversity — those random mutations from the norm — that spawns innovations in evolution and history, just like Darwin proved… and by the way, he wasn’t normal, either!

You see this on a larger scale, too. The countries that tend to be the most innovative are the ones that attract immigrants and tolerate diversity. It’s no coincidence that those countries, such as ours, tend to be the richest!

The United States was essentially an immigrant country since it was largely virgin territory before it was “discovered” (with great apologies to the Native Americans who got run over by European immigration). The same goes for Canada, Australia, New Zealand, Singapore, and a few others.

What about Japan?” you may wonder. They only became rich by imitating the U.S. and Europe, such as by creating more affordable cars and appliances. They didn’t leapfrog us with new innovations. Now, those insular people are dying as a culture.

There’s also the fact that Japan doesn’t welcome immigrants or support women as much. The Imitation Game shows this same sort of prejudice when the men in Turing’s company reject Keira Knightley’s character, who was actually the second smartest right behind Turing himself!

Today, Japan has the worst demographics in the world, followed by Germany, Italy, Portugal, and Greece… which don’t support women, either!

Those countries have low birth rates, which is in part due to natural trends that come with urbanization and favor fewer kids so parents can raise and educate them better. Countries like Scandinavia, however, support their women more with such things as maternal benefits so they can work and have kids. As a result, their birth rate is higher.

Then just look at a country like South Africa! Right now that country is dealing with xenophobia that started over a labor dispute between citizens and foreign workers. How can a country like that ever advance if they’re completely intolerant of diversity?

The point is that progress only comes from embracing change and diversity. We’ve only seen greater affluence from history with less top-down royalty, autocracy, and elitism. Just watch Game of Thrones on HBO to see what that kind of system looks like!

It was the marriage of free-market capitalism and democracy — two opposites — that ignited the greatest productivity revolution and boom in modern history, starting with the Industrial Revolution in the late 1700s. To get an idea of how that appears on paper, just look at what’s happened to the stock market since then:

stock prices since 1700

If that doesn’t look crazy enough as is, bear in mind that this logarithmic chart has already been adjusted for natural exponential growth that comes with progress… and it’s still exponential. It’s so exponential our human minds can’t even comprehend it. Good God!

We would never have achieved this innovation without investment and risk-taking (i.e. capitalism), coupled with tolerance for diversity and new ideas (i.e. democracy).

We fought the slavery battle in the 1860s, the women’s rights issue in the early 1900s, then the civil rights war in the 1960s… each of which led to greater inclusion of people into the economy and innovation process. How has that worked out? Incredibly to say the least!

As I’ve said recently, the Innovation Cycle is winding down, or at least plateauing for many years to come. That’s important to think about as we need to spend the next several years deciding how we want to move forward as a nation when the cycle revs back up.

Right now, one of the biggest political issues is whether or not gay couples should be allowed to buy a wedding cake. What does that tell you about our still imbedded lack of tolerance?

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Harry

P.S. Want to know what the Turing Machine eventually evolved into? The computer. Enough said.

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About Author

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.