Institute of Economic Affairs > Publications > Policies > Energy and Environment
- Innovation is a very important source of economic growth.
- In pre-modern societies, institutions and practices worked against innovation.
- Innovation is the natural and inevitable result of trade and exchange.
- Technological innovation is a bottom-up phenomenon that emerges by trial and error among the ideas of ordinary people, not a deus ex machina that descends upon a few brilliant minds.
- Picking winners is a mistake. Government attempts to champion new technologies have a long record of failure.
- Big companies and state bureaucracies often attempt to stifle innovation in order to prevent competition and maintain their privileged positions.
- Patents and copyrights have become ways of defending monopolies against disruption, hampering innovation that takes place through the copying and improvement of existing technology.
- While it is sensible to be concerned about the unintended consequences of innovation, the ‘precautionary principle’ is used by activists to prevent new technologies getting started, even when these are demonstrably safer and better than existing technologies.
- EU regulation has hampered innovation by introducing excessive precaution, legal uncertainty, inconsistency with other regulations, technology prescriptive rules, burdensome packaging requirements and high compliance costs.
- The harmonisation of regulation through ‘trade deals’ and by transnational regimes such as the EU threatens to undermine innovation by stifling policy competition.
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