Innovationary spiral

(I suspect economists have a nice, concise term for all of this. Perhaps one of our better informed readers could supply it)

The scary thing about deflation is the way it takes stalled economies and slows them down even further by encouraging people to wait to make purchases under the assumption that prices will go down further.

Though we don't often discuss it in these terms, technological innovation can create something like a deflationary spiral. Technological advances tend to make things cheaper and people often put off purchases assuming that prices will go lower, particularly with products like personal electronics.

This deflationary effect can cause serious problems. Most technological advances come burdened with steep development costs and depend on economies of scale to manage a competitive price. The situation is even worse for technologies that are dependent on a large network of other users (i.e. telephones) or a large number of outside vendors (i.e. DVD players).

The saviour of many new technologies is that most benevolent of creatures, the early adopter. (Q: Who buys the first telephone?; A: Someone who wants to say he had the first telephone.) Early adopters buy the new technologies while they are still overpriced and often useless. The rest of us reap the benefits.

There is a more dangerous form of the innovationary spiral that shows up when the the technology has an unpleasant cost or consequence. Under these circumstance, the spiral can be the mother of all excuses for procrastination. Serious problems can be allowed to fester for years even though practical solutions are available because a cheaper, less painful solution may emerge in the future.

Consider obesity. We have seen and continue to see significant advances in the field -- it's fair to say that for the vast majority of people this is a treatable condition -- but all of the treatments (including bariatric surgery) use some combination or exercise and portion control. Hundreds of thousands if not millions of people put off doing anything about a life-threatening condition in part out of the belief that something around the corner will allow them to lose weight without limiting their consumption or increasing their activity level.

Possibly worse yet is the way the promise of new technology is often held up as a reason not to take action on climate change despite the fact that:

1. We already have more than enough mature, cost-effective technology to cut carbon emission and its effects beneath any of the proposed goals. Dozens of solutions ranging from plug-in hybrids, ground-source heating and painting black roofs white to building nuclear plants. Even if you take a handful of the most controversial items off of the table, we still have more than enough left to solve the problem.

2. (and here's the real kicker, folks) The implementation costs/consequences of many of the just-around-the-corner technologies are actually greater than those that come with what we already have sitting on the shelf. Consider hydrogen fuel cells. Contrary to popular opinion, hydrogen is not particularly dangerous to work with. It is, however, a bitch to handle. Forget turning over the fleet. The time and expense required to set up just the infrastructure to produce, transport, store and transfer the hydrogen would be enough to make us energy independent using nothing but the technology on hand.

Don't get me wrong. I'm a huge fan of research, but when it's being used as an excuse not to take action, it's not such a good investment.