Infostructure and the Barriers to Innovation

Or, Why the United States Never Built High-Speed Connecting Railways

Disruption is never simple, and what is often logically more efficient rarely wins out in the game of adoption.

This process has a storied history in consumer tech: Betamax and VHS, DVD and Blue-Ray – but its roots go back even further. For example, as a developed country, the US railroad networks compare poorly against its European and Asian counterparts. The question of why this is the case posits an interesting framework for how we think about the next wave of technology adoption.

The US railroad’s lack of adoption can be surmised in a few areas:

• Population density, or lack thereof: The US population is unevenly distributed between cities and rural communities. While its urban ratio according to the World Bank is 82% urban vs rural (the same as Norway, and just below the United Kington), the country is considerably larger by landmass, meaning a lower population density than European or Asian counterparts. This creates a chicken-egg problem in the incentives for creating infrastructure, whereby more people might move to a town if it was served by a high-speed commuter rail, yet until those railroads are built then there is low incentive for people to move and create the demand required for new rail networks.

• An existing rail network geared towards long-haul commercial freight traffic: US rail networks were built primarily for freight transportation, something that still persists to this day. If freight transport demand on the rail was alleviated by other innovations in supply chains (drones, pop-up warehousing etc), then this would make way for commercial passengers which in turn may increase demand for rail networks. As it stands, these networks remain saturated by logistics demand – could self-driving trucks and/or drones change this?

• Car culture, or America's continued obsession with the automobile: If politics flows downstream from culture, then this may be the most difficult to unseat. The US still retains a culture around the car, one influenced by the large corporations whose cache among American culture was highlighted by the 2008 bailouts. Changing culture takes longer than most engineering projects, and this again contributes to certain hurdles for new technologies. 

• The strength of US property rights: Railways need to run in straight lines, meaning that to build one requires securing land in a straight path (you can't run trains at high speeds along too sharp a curve).  The US has a culture of strong property rights which makes securing land exceedingly expensive. Contrast this to when land was cheap to secure, and the U.S. had no problem building train networks across the country. In this climate the growth of the rail network was explosive – this is no longer the case. Compare this to China, where land is still largely controlled by the state making it much easier to secure.

How does this impact content commerce, a world increasingly defined by ‘infostructure’? New technologies still often rest on older infrastructures (the internet being a classic example), and the politics and limitations around those infrastructures tend to have far-reaching consequences for those with an objectively ‘better’ solution. The internet’s open nature once allowed websites to be built with minimal permissions required from governments for the use of digital real estate, meaning a start-up at the time such as Amazon or Google could quickly build a product and begin finding customers. Emerging technologies today may logically have better solutions than the existing dominant ones, but unless they have a strategy for upending an existing order – which often requires building a customer base away from this competitor, as Amazon did rather than directly compete with Walmart, they will continue to meet the same innovation struggles experienced by the US railroad.