In every election politicians will say we need to invest in technology which as member of the general populace we all say that is a good thing. Then the government gives grants to companies in addition to corporate tax cuts if the companies do invest in research and development. Somehow we believe giving government money will make companies in our living area better and richer in the future.  It may happen, no one really knows. In the book Cathedral, Forge, and Waterwheel – Technology and Invention in the Middle Ages Frances and Joseph Gies, Harper Perennnial, 1994 examine the middle ages and the Renaissance in terms of invention. Part of the legacy of the Middle Ages is the black plaque where millions of people died and when people are only interested in living, not a lot of invention is going on. In the Renaissance prosperity and forward looking leaders brought great talent in one geographic area, invention burst forth. But much of what burst forth was based on gradual progress over thousands of years and humanist way of thinking.

A simple example is the horse collar – if you have seen plowing matches, now most things are done by tractors, but there was a time when horses pulled plows, carriages, stagecoaches, etc. The early inventions was straps around their belly and around their chests, however the straps choked the horse – when someone invented the horse collar the pressure was moved to the sternum which tripled the weight a horse could pull. It sounds simple but it took hundreds of years to figure out.

If you think about a plow – in order to break up the ground to plant a field you need to plow the field. The horse or oxen were used to pull the plow. However at the end of the line, it was difficult to turn and until an easier method to turn the plow was invented, fields were long and narrow. The technology of the day dictated what was available and what people generally did with it.

Technology of many industries such as building, cloth making, steel is discussed in the book and new technology is rarely neutral. The is an affect which is usually unattended, for example as industry goes there is more demand on resources – many years ago the demand was on trees. The tree supplied lumber, but was also used for charcoal to supply fuel for the expanded industry. Soon what looked to be an inexhaustible supply of trees was looking like a shortage – either discover new lands or new things to burn – coal, oil, etc.

Linking to dividend paying stocks, it is generally these types of companies that can pay for their research and development into new technology. It is exciting but it is also has to pay for itself. Many technologies invented in the Middle Ages took years before someone made money for them. Some were better – more productive, but there tends to be a lag time before successful adoption. As a shareholder, that is what you need to watch out for. It is great the company is engaged in research and technology, but to make money from should be the reason for the invention, which is the reason for gradual inventions.

There are more questions than answers, till the next time – to raising questions