Reference no: EM131832832

In Facts and Tools question, we saw that big markets create a big demand for inventions. This is an example of what Adam Smith meant when he said that "the division of labor is limited by the extent of the market." Now let's look at how big markets impact the supply side of inventions. The big idea is quite simple: More people means more ideas.

a. In order to create new ideas, you need to have people trying to come up with new ideas. In 1800, there were approximately 300 million humans on the planet-roughly equal to today's U.S. population.

If good ideas are "one in a million"-that is, if one person per year out of a million comes up with a world-shaking idea like contact lenses or James Brown's song "The Payback" or the video game Grand Theft Auto-how many great new ideas will occur in the world of 1800? How many will occur in a world of 6 billion people?

b. More realistically, people in the rich countries are most likely to invent earth-shaking ideas and share them with others. There's nothing special about people in rich countries, but they have the education and the laboratories and the Internet connections that will make it practical to invent and spread ideas. If only the top 20% of the earth's population is really in the running to create new ideas, how many new big ideas will come along each year in 1800 and today?

c. If half of the population of India and China become rich enough to create new ideas (to simplify, assume populations of 1 billion each), and start coming up with big ideas at the same rate as the top 20%, how many big ideas will India and China alone create for the planet every year?

d. Many people think there are too many people on the planet. (As P. J. O'Rourke once wrote, many people's attitude toward global population is "Just enough of me, way too much of you.") Look at your answer from part b. If the world's population now gets cut in half from the current 6 billion, how many big ideas will come along each year?