(Editor’s note: Dr. Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences.)

RALEIGH, N.C. – As a kid, I had a friend who loved to tinker with engines. He’d get under the hood and be lost for hours making adjustments and changes to get his car to go faster or more smoothly – or sometimes, just louder. I’d just watch, having no clue about what he was doing.

Still, I went home with grease all over my pants and shirt and would be greeted with a lecture about how clothes were expensive and that I needed to take better care of them!

I lost track of my mechanical friend. I like to think he became an engineer, scientist or maybe inventor. Perhaps he had a hand in the computer revolution, or maybe today he’s developing the next generation of robots.

I know my friend’s mom – and my mom, too – thought his tinkering was a waste of time. But if we don’t try to change things, how do we ever make improvements?
Think about the first automobile in the early 20th century. What if once it was developed, we said, “That’s good enough”? Then we’d still be driving cars with a top speed of 20 mph, needing to be hand-cranked for starting, and with no air-conditioning, heat or power-steering.

So innovation allows us to move ahead with new and better ways to improve our lives. Technically, an innovation is an improvement of an existing product or technique, while an invention is the development of a new product or technique for the first time. Here I won’t distinguish between the two and simply use innovation to mean the creation of a new – or the improvement of an existing – product or technique that gives us new capabilities.

Why is innovation important?

For one thing, it gives us both new tools and new toys, and each can better our lives. Think about the creation of the laser. Lasers have many applications, but an important one is in surgery. Laser surgery is less intrusive, less painful and requires much less recovery time. I know: I’ve had the old-fashioned “cut” surgery on one of my shoulders and laser surgery on the other. I was almost back to normal within a week of the laser surgery, while I was confined to bed for several days, took many pain-killing medications and had a six-month recovery period, with the “cut” surgery.

And where would today’s youths – as well as many adults – be today without the creation of games and apps for our smartphones and tablets? As long as you have a smartphone, there’s really no such thing as down-time, because fun and entertainment are just a tap away.

For economists, innovation is a big deal; in fact, it may be “the” deal. Economists argue little improvement in our standard of living occurred until innovation began to take off in the 19th and 20th centuries with the advent of developments like electricity, gas-powered vehicles, air travel, modern medicines and radio communication.

Innovations are important to our personal well-being for two reasons. First, they allow us to do things we could never do before, like traveling faster, beating disease and illness, and talking to someone across the country or around the world.

But perhaps more fundamentally, innovations allow us to do more with less. Farmers can plow many, many more acres in a day using a tractor than hitched to a horse or mule. Gas furnaces keep us warm without the time and mess of loading stoves with coal or wood. Also, academics like me can type and correct manuscripts with blazing speed and efficiency compared to the “old days,” when I was beginning my career – using typewriters, correction fluid (so-called “white-out”) and multiple drafts.

The development of innovations is not without costs

While some people will gain jobs, others will lose them. For example, few people work today manufacturing typewriters. Likewise, big companies making film and film-using cameras no longer exist, as picture-taking has gone digital. Innovation is part of what one economist termed “creative destructionism” – a fancy way of saying “out with the old and in with the new.” But if you’re part of the “old,” it may take you a while to adjust.

Still, as we look around the world and the country, economies that are flourishing are those which are innovating. So innovation will occur, and in the long-run, it should improve our lives.

Can we promote or spur innovation?

That’s the odd – or many would say, challenging – aspect of it. Innovation is hard to create and predict. A person just doesn’t sit down one morning and create the next kind of pollution-free vehicle in the same way they would make breakfast. Innovation requires inspiration, trial and error, and the ability to accept failure – and even then, nothing may occur.

Perhaps the best we can do is create the conditions that seem to be related to innovation, such as supporting those who “think outside the box,” who dream and try, try and then try some more. Much innovation goes on in universities, in the labs of companies, but also – literally – in the garages or basements of typical homes. Innovation is not necessarily something we can teach, but it is something we can encourage.

Some research suggests innovation increases when the economy is confronted with major questions. If accurate, then we may be on the cusp of a new flurry of innovative activity. Will these new products and technology solve all our problems?

It will take us a while to decide!