THE SHORTEST HISTORY OF INNOVATION – ANDREW LEIGH

The Hon Andrew Leigh is Assistant Minister for Productivity, Competition, Charities and Treasury in the Albanese Government. In his free time, he is also an economist who writes books – his latest being The Shortest History of Innovation – Black Inc 2026. In an address to The Sydney Institute on Tuesday 4 August, Andrew Leigh explained how innovation shapes almost every corner of our lives, yet we rarely pause to notice it. Leigh opined that three forces drive innovation: tinkering, teams and trade. As wel,l he discussed hotbeds of creativity, the forces that suppress them and the surprising ways ideas travel across borders and disciplines. The paper which follows is an extract from the first chapter of Andrew Leigh’s book.

THE SHORTEST HISTORY OF INNOVATION

ANDREW LEIGH

In the autumn of 1928, Alexander Fleming returned to his cluttered London lab after a long summer holiday. On a plate streaked with golden staphylococcus bacteria, he noticed something odd: a fuzzy, blue-green mould had drifted in, and around it, the bacteria had dissolved. Fleming soon realised that he had created a substance that could kill bacteria without hurting animals. After toying with the name “mould juice”, he dubbed the new substance “penicillin”. A brilliant visionary had discovered the world’s first antibiotic. Millions could now benefit from this miracle cure.

That’s the myth we’re told: the lone scientist; the accidental breakthrough; the flash of intelligence that reshapes human history. But the real story involves more tinkering, more teamwork, more trade in ideas. The real story is also far more compelling. Yes, Fleming saw the bacteria-killing power of Penicillium mould. And yes, the year after his discovery he published a short paper describing it. But in his own lab, penicillin led nowhere. Fleming wasn’t a chemist – he couldn’t isolate or purify the active compound, nor could he figure out how to scale it into anything useful. Throughout the 1930s, his discovery sat in the scientific archives, a biological curiosity rather than a medical revolution.

The real breakthrough came more than a decade later, when a team at Oxford – Howard Florey, Ernst Chain and Norman Heatley – dug out Fleming’s paper and took up the challenge. They painstakingly worked out how to extract, stabilise and test penicillin, first in mice, then in humans. The team drew on European bacteriological research on natural moulds and antibacterial substances. To scale penicillin production, they turned to US chemical engineers and government agencies, using deep-tank fermentation methods to dramatically improve yields beyond what the Oxford lab could achieve with surface cultures. Initially, production was so limited that doctors had to recover the drug from patients’ urine for reuse. Only when wartime urgency drew in American pharmaceutical companies did penicillin leap from laboratory to battlefield, becoming the mass-produced wonder drug we now celebrate. Fleming’s spark was real, but it didn’t light the fire alone.

The myth endures because we crave stories of singular genius – the brilliant figure who sees what no one else can. But penicillin, like most great inventions, wasn’t one man’s lucky accident. It was the patient, collective endeavour of many minds, many hands and many years, turning mould into medicine, observation into cure.

We like to imagine that innovation comes from sudden sparks – a mouldy dish, an overflowing bath, an apple falling onto a head. But in truth, most of humanity’s great breakthroughs arise from something far less glamorous: hard work, frustration, necessity. They are perfected by trial and error, developed by several people and emerge in environments that encourage the free exchange of ideas. These features characterised one of history’s most transformative inventions.

Six thousand years ago, in what is now Ukraine’s Carpathian Mountains, a group of copper miners hit upon an ingenious new idea. Exhausted from dragging copper ore out of underground tunnels, they devised a cart that would roll on four circular wooden discs, with each pair connected by axles. Miners from the Carpathians had invented the wheel.

This was the Copper Age – a period when the metal was prized for tools, cookware and jewellery. Its value drove people to dig deep underground, and its weight drove them to innovate. The wheel, like many inventions, began as a solution to a simple problem: in this case, how to move something heavy.

The first wheels were “wheelsets”, meaning that two wheels were attached to a single axle. This reduced the risk of the wheels falling off, but made the carts tricky to steer (which is why trains use wheelsets, but cars do not). It was a few hundred years before independently rotating wheels were developed. This innovation occurred only a little south of the Carpathian Mountains, suggesting that it was an adaptation rather than an unrelated invention.

The inventors of independently rotating wheels put them to use on wagons that could carry their owners’ possessions. Just as mining had spurred the invention of fixed-axle wheels, a mobile lifestyle spurred the invention of independently rotating wheels. As historian Richard Bulliet observes, wheeled wagons were so important to the people of the time that many asked to be buried with them.

In Mesopotamia (modern-day Iraq), wheels were initially used for creating ceramics. Shaping clay pots with a rotating platform made production faster and pots more uniform. Stronger, more uniform ceramics meant food could be stored, shared and traded, helping villages grow into bustling towns and, eventually, cities.

The transition to transportation in Mesopotamia probably happened over several generations, as people began to see the varied potential of the wheel. The first wheeled vehicles in Mesopotamia used solid disks of wood attached to a fixed axle. Each wheel and axle had to be made from a single piece of wood to ensure they were attached firmly and would turn together. This design required a lot of wood and was quite heavy, making these vehicles the ancient equivalent of shopping trolleys – stubbornly determined to head everywhere except where you want them to go.

Nonetheless, the advent of wheeled carts revolutionised transport. Carts could be pulled by humans or oxen and meant heavy loads could be moved over longer distances. This boosted trade and agriculture, allowing goods to flow across the growing urban centres of ancient Mesopotamia.

The wheel changed how people lived. Nomadic people across the Black Sea plain occupied wagons covered with rounded bark canopies. Wagons provided a place to sleep and a way to carry children and the sick. Oxen pulled the homes of wagoners from one place to another. Before the wheel, nomads could only own as much as they and their animals could carry. Now, for the first time in history, they could acquire more possessions while still enjoying the benefits of mobility.

By around 2000 BCE, the spoked wheel began to appear. Lighter and faster, these allowed for the construction of chariots, which were used for ceremonies, racing, hunting and war, becoming a symbol of prestige and power. The invention of the wheel set off a wave of further innovation.

Some remarkable things were achieved without wheels. Egypt’s great pyramids (which we’ll see in a moment) were built without them. Wheels seem to have appeared in Egypt around 1600 BCE, thousands of years after they were used in Mesopotamia. The Egyptians initially adopted the wheel for military chariots, rather than using wheeled vehicles for transporting goods. This was largely because of Egypt’s geography, which was dominated by the Nile River and its floodplain, where water transportation was more practical. To be fair to the pharaohs, wheels don’t perform well in the sand, and camels never went on strike demanding smoother roads. The wheel was slow to emerge in other places too. This was partly due to practical constraints, including challenging terrain and a lack of large draught animals.

In the Americas, the Incas, Maya and Aztecs knew of the wheel but only used it in toys and small objects. Inhabitants of the Pacific Islands, including the Polynesians, developed advanced navigation skills and built sophisticated ocean-going canoes but did not use the wheel. Similarly, for many Sub-Saharan cultures, the dense environments, paucity of draught animals and the prevalence of human porters and riverine transport made the wheel less necessary. Unsuitable topography, unsuitable animals – no wheel. Westerners are also inclined to overstate the value of the wheel as an invention: wheels are much more useful in the flat plains of Mesopotamia than in the hilly communities of Papua New Guinea.

As well as spurring innovation, wheels themselves were made more useful because of other innovations. Wheels were more valuable in societies that built extensive road networks, such as Ancient Rome. After the fall of the Roman Empire, the roads fell into disrepair, making wheeled transport less viable. Even centuries later, lousy roads meant that many people opted to ride a horse rather than travel in a horse- drawn carriage. In the 1700s, Mile End Road in London was described as “a stagnant lake of deep mud from Whitechapel to Stratford”. Much the same was true of Washington, DC. At the time, the track from the White House to the Capitol was said to be so poor that “every turn of your wagon wheel . . . is attended with danger”. To succeed, wheels needed roads. The tendency of technological advances to build on one another will be a recurring idea in this book.

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What is innovation? When the OECD, an organisation of advanced nations, set out to collect data on the topic, it realised that the term had to be defined before it could be measured. The organisation’s Oslo Manual states, “An innovation is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process).”

The earnest boffins who met in Norway to draft that sentence used too many words and parentheses, so let’s break it down a bit. To meet the Oslo Manual definition, innovation must be new, and it must be available to others. It can be a product or a process. Innovation isn’t copying, nor is it that brilliant idea you’ve never told anyone about. If it’s your personal secret, it’s not an innovation – at least not yet.

Innovation requires that your dreams become our reality. Innovation is inherently exciting. From antibiotics to zippers, aircraft to zoom lenses, many inventions have changed our lives for the better. You may be reading this book on a tablet while flying above the clouds, or listening to it on Bluetooth earbuds while running on a treadmill – activities that would have been unimaginable to our ancestors.

But while enjoying the hype, we should not be swept away by it. Leaded petrol, DDT and chlorofluorocarbons were touted as breakthroughs until their damaging side effects were recognised.

Among the mysteries that my book explores is why some technologies have failed, while others have failed to materialise. Zeppelin airships, steam-powered cars, pneumatic message tubes, monorails, Betamax video recorders, the Concorde, Mini Disc players, Google spectacles, the Juicero and 3D television are just some of the products that have crashed and burned (in some cases, literally).

On the flipside, we’re still waiting for some much-heralded breakthroughs. Commercially viable nuclear fusion, hoverboards, flying cars, nitrogen-fixing cereal crops, hyperloop travel, carbon capture and space elevators remain more promise than reality. Even where progress hasn’t stalled, it has often crawled. By my calculations, if aircraft technology had improved at the same pace as solar panel technology since 1975, a flight across the United States would now take an hour and cost US$25.

Innovation catches fire in eras and societies that prioritise the production and sharing of knowledge. One economist calls these eras “novelty-rich revolutions”. They include fifth-century Athens, the Islamic golden age spanning the eighth to the tenth centuries, twelfth-century Song China, fifteenth-century Italy, seventeenth-century Mughal India, seventeenth and eighteenth century Enlightenment Europe, and eighteenth century England as the industrial revolution commenced. Research based on a textual analysis of 9 million patents filed in the past two centuries found evidence of innovation waves in specific sectors. These included electricity in the late 1800s and early 1900s, agriculture in the early 1900s, chemistry in the 1920s and 1930s, computers since the 1990s and genetic modification since the early 2000s. These novelty-rich revolutions will feature disproportionately in the story of how innovation made the modern world.

Scholars have distinguished between sustaining innovations and disruptive innovations. Sustaining innovations represent incremental improvements, such as screw-cap wine bottles, carbon-fibre tennis rackets, three-bladed wind turbines and electric bicycles. By contrast, disruptive innovations upend the market. The printing press transformed the spread of ideas. Photography reshaped art. Cars redefined cities. Antibiotics revolutionised medicine. Microwave ovens altered cooking. Word processors modernised office work. Aircraft changed travel. The internet destabilised communication, retail, music and media.

This process is what Austrian economist Joseph Schumpeter dubbed “creative destruction”. To Schumpeter, creative destruction is a relentless cycle at the heart of capitalism, where the old must make way for the new. He imagined innovation as a wave crashing through established industries, sweeping away outdated technologies and practices. But instead of causing chaos, this destruction drives renewal – it’s how economies evolve. Much like a forest fire clears the way for new growth, creative destruction ensures that the marketplace never stagnates.

A cynic might say that Schumpeter’s view of innovation would have been less rosy if technology had destroyed his job. That doesn’t make his analysis wrong. The movement of money and people from sluggish old companies to successful startups is a key source of growth in the modern economy.

Although economists disagree on the precise proportion, there is a consensus that innovation drives between one-third and two-thirds of growth, with the remainder attributed to factors such as education, capital investment and strong institutions. Innovation raises productivity – allowing us to produce more with fewer resources – and creates entirely new goods and services that expand economic possibilities. Countries that were more technologically advanced in 1500 are substantially richer today. This means innovation has underpinned many of the improvements in our lives.

Consider the case of health. Treating scurvy with citrus, malaria with quinine and bacterial infections with penicillin saved millions of lives. Vitamin A supplements prevented many children going blind.

Insulin turned diabetes from a fatal disease into a manageable one. Vaccines wiped out smallpox. The use of randomised trials helped to end the age of occult medicine and usher in the era of scientific medicine. As one expert observed, “Ignorance, not hunger, is the villain of mortality history.”

Yet innovation isn’t an unalloyed good. Innovation can cost jobs in particular sectors, although predictions that new technologies would cause mass unemployment have so far proven false. Over time, there have been moments where innovation has caused dissent and some people have opposed change.

Alongside the benefits of technological innovation, societies have been improved by innovation in art, architecture, literature and music. Wellbeing means much more than money. Looking at the gadgets and gizmos that have made the modern world, we can see how creative breakthroughs have brought joy, connection and inspiration.

Some of my heroes are dead white males. Eventually, I will be one myself. But past histories of innovation have overemphasised the achievements of dead white males. My short history seeks to balance the scales by including more innovation from women, minorities and people who don’t speak English. Balance scales, incidentally, were invented by the Ancient Egyptians.