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Thursday, July 28, 2016

Jeff Bezos Beautifully Explains Innovation and Consumer Sovereignty

People think that "innovation" is shallow. It is not.

Jeff Bezos was recently interviewed by the Italian newspaper La Repubblica. Asked by digital editor Massimo Russo “what is the recipe for innovation,” he gave a phenomenal answer:

Easy: to improve our customers’ experience. To be genuinely innovative, innovation needs to adopted by consumers. If they do not choose it, if they prefer the old-fashioned way to do things, it is not innovation. We love inventing and we are willing to fail. Real winners, such as Kindle and AWS, make up for any losses. Failure is costly, embarrassing, unpleasant. In a number of cultures it can be a reason for being dismissed, for being fired. To invent and to fail are one and the same, you cannot have one without the other.

I find this to be a magnificent answer because Bezos is stating very clearly something that most people who prattle about “innovation” miss. Innovation is not about technological progress per se, it is not even about “new stuff” per se: it is about what Deirdre McCloskey calls “market-tested progress,” and the market-tested part is not trivial. Making new technology a means to better answer Innovation is about serving people.consumers’ demands is not trivial, is not a mere “last mile” of innovation. It is its essence. Innovation is about “products,” and “products” are about serving people’s needs and wishes, not just about doing something which was never done before.

The whole interview is well worth reading. Bezos speaks on colonizing space, his cameo in Star Trek Beyond, his marriage, and Donald Trump. Alas, it is in Italian.

This first appeared at the Library of Economics and Liberty.

  • Alberto Mingardi is Director General of Istituto Bruno Leoni, Italy’s free-market think tank.