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Biggest Invention: The Transistor, the Internet....Or the Air-Conditioner? (Hint) None of the Above
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When Lee Kuan Yew, the late Singaporean patriarch, was asked to name the twentieth century’s most consequential invention, he gave a characteristically counterintuitive answer. Not for him anything so obvious as television, antibiotics, the transistor, or the internet.

His suggestion: the air-conditioner. It is a topical thought as, with the arrival of July, we enter the “furnace” months in China.

Invented in 1902 by Willis Carrier, a young Cornell-educated engineer, the air-conditioner inspired so little excitement among his contemporaries that the first mention of it in the New York Times came more than a decade later. Although his Carrier Corporation is now a major constituent of United Technologies and enjoys strong sales in many parts of East Asia, time has not increased his invention’s prestige. Indeed these days the air conditioner evokes hardly more awe than the electric kettle, the vacuum cleaner, or the washing machine.

Superficially, Lee had a point. Certainly, as air conditioning has spread in East Asia, the region’s productivity has increased. This is apparent not least in Singapore but also, far more momentously, in mainland China, whose mid-summer exports hardly dipped at all last year.

Yet for me, Lee’s answer obscures much more than it reveals. After all China’s furnace season is not that big a part of the year — it runs broadly from mid-June through mid-September. By enabling managers and blue-collar workers to work at peak efficiency in this torrid period, air conditioning has at most boosted annual production by about one-third. If this seems impressive, it is only because you are unaware of the larger picture: on the CIA’s figures, China has boosted total real output more than eight-fold since 1989 and real exports more than 18-fold. In other words, seen in this light, air conditioning’s contribution has actually been minimal.

So what is going on here? It is a fair bet that Lee’s answer was inspired more by politics than economics. Lee was an exceptionally wily politician who, despite the fact that he was a native English speaker, felt little need to be frank with fellow his Anglophones. (It probably didn’t help that he had been treated snobbishly at Cambridge in the 1940s.)


What is clear is that in directing attention to air conditioning, he lessened curiosity about other, more controversial, aspects of East Asia’s rise. Two factors in particular merit mention here: suppressed consumption and technology transfer. Suppressed consumption is a top-down technique, invented by the Japanese military in Manchuria in the 1930s, by which a government boosts the national savings rate, thereby artificially increasing the amount of capital available for industrial investment. The underlying measures, which typically include a mercantilist trade policy, are so indirect that they are invisible to ordinary citizens. The net effect is to speed the rate at which corporations advance to more sophisticated machinery, thereby rapidly boosting their workers’ productivity. Manchuria aside, suppressed consumption has been a key factor in the rise of post-1945 Japan, Korea, and Taiwan, and most recently mainland China.

As for technology transfer, this is hardly new, nor is it limited to East Asia. But leaders of open economies like the United States and the United Kingdom have — for ideological reasons — long been largely blind to how they can be disadvantaged by other nations’ technology-acquisition policies. Yet the evidence is hard to ignore: nations that pursue government-driven efforts to acquire other nations’ technologies tend to improve their ranking in the world economic league table. Meanwhile nations that leave everything to laissez-faire consistently drop down the league table. Singapore is a classic example of the former; Singapore’s former imperial master, the United Kingdom, an example of the latter.

This brings us back to the original question: what was the most consequential invention of the twentieth century? My answer: heavier-than-air flight. As the technology has evolved, it has clearly become the principal driver of globalism. Globalism in turn has been the single most important facilitator of technology transfer. The only thing to add is that, whereas Anglophones tend to think of technology transfer as a two-way street, other nations (Korea, China, Germany and Japan, for instance) are notably parsimonious in allowing their technologies to flow abroad.

(Republished from Forbes by permission of author or representative)
• Category: Economics • Tags: Technology 
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  1. Rdm says:

    If it weren’t for 20th century, I’d say “Paper invention” is the most crucial invention in human history.

    Had it not been for paper, humans will be transferring their knowledge through stone carving or hearsay.
    Had it not been for paper, history of human will be lost and ego-maniac humans will be talking high up about their race.
    Had it not been for paper, any attempt of unification of tribal groups is just hopeless as there won’t be no single language taught and disseminated throughout the entire kingdom.
    Had it not been for paper, human will be exchanging stones.

    Last but not least, had it not been for China invention of paper and toilet paper, we will be using communal brush to wipe our mess just like ancient Europeans used to do.

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