In one of my first political science lectures at university, I learned about path dependency. If it has been done one way in the past, it is difficult to change. The status quo is always easier to maintain than to change. However, most people have learned that “We have always done it that way!” is not valid reasoning. Then why is it so difficult to change the status quo?

Change has a prerequisite and a consequence. The usual prerequisite is that a majority agrees (e.g. a parliament adopts a law). The consequence is that there are usually winners and losers. The result is that there is usually a coalition of potential losers, who will fight to prevent change. No matter in which direction the change might go, there will always be losers campaigning against it. Thus, the status quo often remains, despite the fact that change is needed.

That leaves us with an important insight. In a society or organization, where losers of change are taken care of (unemployment benefits or retraining on the job), change is much easier to implement, because the losers do not actually lose very much. In this sense, a solid and thorough social safety net does not hinder innovation, but might even strengthen it. Denmark is an example, in which a strong social safety net allows for quick reorganization of organizations and the economy.

As we can see, implementing change isn’t easy, but there is another problem, which starts even earlier in the change process: How do we come up with new ideas?

The human mind is used to working with what we have seen, experienced, or learned. Coming up with brand new ideas is therefore really difficult. How can you come up with something, that you have never seen or heard of?

Additionally, humankind has gotten used to relying on what our ancestors and peers have done so that not every generation had to reinvent the wheel again and again. The Compatibility Gene by Daniel M. Davis is a beautiful description of the teams worldwide discovering the workings of our immune system. If each team had to start from scratch, they would have never reached the insightful results they eventually achieved.

As we can see, taking for granted what we and others have done in the past is essential to humankind’s progress. But have we maybe forgotten how to think creatively and question the status quo then?

Startups are known to do things differently and just “forget” everything that established players do and have done. Square, a mobile payment card reader is a great example of this:

https://hbr.org/podcast/2020/03/squares-cofounder-on-discovering-and-defending-innovations

When all industry veterans from the credit card industry said that it wasn’t possible to build and sell a small and cheap credit card reader, they let the veterans go and just built it with a young and unbiased team.

The challenge is therefore to recognize when true innovation is needed and when we should resort to incremental improvement. Being stuck in a daily routine makes it very difficult to recognize the need for a revolutionary change. This is where “outsiders” often come in and recognize the need for change.

This creates another major problem though: If only the external observer recognizes the need for change, how do you implement change in an environment in which everyone needs to be on board before implementing change? This is where we come back to politics and the challenges with change on a political level. The collective of all insiders, the population, decides (directly or indirectly) which changes should be made. As the insiders often don’t see the objective need for change, we’re stuck with the status quo.

Democratic processes are therefore partially flawed. They do not provide necessary incentives to facilitate necessary change. This is why they are often seen as inefficient and ineffective. It’s up to private players to be at the forefront of change.