Episode Overview

Podcast: New Books Network
Host: Leo Bader
Guest: Carl Benedikt Frey, Dieter Schwartz Associate Professor of AI and Work, Oxford Internet Institute
Book: How Progress Ends: Technology, Innovation, and the Fate of Nations (Princeton UP, 2025)
Date: October 17, 2025

In this episode, host Leo Bader interviews economist and historian of technology Carl Benedikt Frey about his new book, How Progress Ends. The discussion traces the historical dynamics between technological innovation and economic growth, with a particular focus on the interplay between decentralization and centralization, the role of the state, competition policy, political systems, and the transformative potential (and limitations) of artificial intelligence. Through historical and contemporary examples, Frey explores how nations have successfully—or unsuccessfully—translated technological breakthroughs into lasting societal progress.

Main Themes & Key Discussion Points

1. The Dual Modes of Technological Progress: Decentralization vs. Centralization

• Exploration vs. Exploitation: Frey outlines the need for both decentralized, exploratory innovation and centralized, top-down execution.

  • "There is this tension between exploration and exploration, between innovation and execution, if you like." (Carl Benedikt Frey, 03:10)
  • Examples: Manhattan Project (centralized), ARPANET (decentralized).

• Dynamic Phases: Societies must transition between these modes:

  • "So we have to start with decentralization, but once we land upon an idea that we know is worth exploiting, it needs to be more centralized. We can't keep questioning." (Leo Bader, 04:33)
  • "And then we do decentralization again to go on to the next thing." (Carl Benedikt Frey, 04:44)

2. State Involvement in Innovation

• Flexible State Role: The state's role changes depending on context—sometimes leading (execution), sometimes enabling (exploration).

  • "The state needs to take on very different roles when it comes to supporting innovation and technological development, depending on what it is it's trying to achieve." (Carl Benedikt Frey, 06:48)

• Historical Examples:

  • 19th-century competition between states spurred reforms (Prussia post-1806, Russia post-Crimean War).
  • Antitrust initiatives fostered competition and new entrants (e.g., Sherman Antitrust Act, AT&T breakup).

3. Competition, Market Structures, and Growth

• The Role of Large Corporations: They can be enablers and inhibitors of innovation.

  • "There's nothing inherently bad with large corporations... But consolidation can inhibit innovation." (Carl Benedikt Frey, 10:42)
  • Success requires a balance; post-antitrust actions often led to more patenting and job creation, but also risks lowering incentives for first movers.

• Current Concerns:

  • Rising market concentration, "killer acquisitions" (buying and closing competitors), and regulatory revolving doors raise barriers for new innovators.

4. Institutional Design: Balancing Exploration and Exploitation

• Creating Space for Both:

  • "It's about creating that space... leaving it to local authorities and firms to figure out what's the best path forward." (Carl Benedikt Frey, 18:22)
  • Contrast between the USSR (centralized, little room for exploration) and China (post-1978 local autonomy facilitated growth).

• Developing Economies and Industrial Policy:

  • Success hinges on state capacity, meritocracy, and ability to enforce discipline.
  • "If this was easy to achieve, most places would have done it." (Carl Benedikt Frey, 21:34)

5. Public vs. Private Sector Collaboration

• Benefits and Tensions: Productive collaboration can exist, but risks include corruption, collusion, and stifling competition.

  • "The more you support one firm, the more invested you are in one company, the stronger the incentive there is to undermine competitive forces that might displace that firm." (Carl Benedikt Frey, 22:18)

• Historical Cases: US reliance on private initiative (railroads), Italy's inclusive procurement practices, and China's focus on competition even among favored firms.

6. Political Systems and Growth

• Democracy vs. Autocracy:

  • Democracies generally experience faster growth, but institutionalized autocracies (vs. personalist ones) can also spur rapid change.
  • "A meritocratic autocracy or institutionalized autocracy can roll out often infrastructure more quickly... But in an autocracy, priorities can change quite quickly." (Carl Benedikt Frey, 26:19)

• Core Tradeoffs: Autocracies risk creating incentives for rent-seeking and political gamesmanship. Democracies provide more stability for innovative activity.

7. Artificial Intelligence and Frontier Innovation

• Transformative Potential vs. Hype:

  • AI is useful, but currently not as transformative as the Internet or the personal computer in driving discovery and economic growth.
  • "I struggle to see how it's currently at least anywhere near as transformative as the Internet and the personal computer." (Carl Benedikt Frey, 30:11)

• Still Need Exploration:

  • Today's AI mainly augments productivity. It does not replace the need for decentralized exploration and human ingenuity.
  • "We still need exploration, we still need human ingenuity, at least for now." (Carl Benedikt Frey, 32:14)

• Limits of Prediction:

  • Reference: An AI trained on pre-1900 data would not predict human flight before the Wright brothers (32:40).

Notable Quotes & Memorable Moments

• On the Tension Between Innovation and Execution:

  • "No factory could function if every worker questioned every procedure. Right. But very few new ideas would emerge without questioning."
    — Carl Benedikt Frey [03:05]

• On the Role of Antitrust:

  • "We've seen with various antitrust initiatives that subsequently you tend to see an upsurge in patenting, you tend to see an upsurge in new job creation... But on the downside, you may also jeopardize the return to being a first mover."
    — Carl Benedikt Frey [11:27]

• On State Capacity and Industrial Policy:

  • "...those places have a long history of having meritocratic states and relatively strong states that can enforce, for example, export discipline and make sure that firms that only firms that are actually competitive in global markets are allowed continued support."
    — Carl Benedikt Frey [20:43]

• On Innovation and Political Systems:

  • "It's fair to say that democracies, for the most part, have some pretty strong advantages. We can sometimes look to some autocracies... and fool ourselves into thinking that we will soon be overtaken. But, you know, the task of the frontier is quite different to the task of catching up."
    — Carl Benedikt Frey [28:33]

• On AI's Current Limitations:

  • "AI right now is more like a productivity tool. And it may eventually change. It may eventually create new industries and more sustained growth as a result of that, but we'll have to wait and see."
    — Carl Benedikt Frey [34:24]

Key Segment Timestamps

• Decentralization vs. Centralization: [02:18]–[04:49]
• State Roles in Innovation: [04:49]–[06:58]
• Historical Role of Competition: [07:16]–[10:19]
• Market Concentration and Antitrust: [10:19]–[14:47]
• Timing the Shift from Exploration to Exploitation: [14:22]–[14:47]
• Institutional Structures and Local Autonomy: [17:58]–[19:42]
• Developing Economies & Industrial Policy: [19:42]–[22:02]
• Public/Private Sector Relations: [22:02]–[25:45]
• Political Systems and Growth Implications: [25:45]–[29:31]
• AI and the Future of Progress: [29:31]–[34:38]

Conclusion

Carl Benedikt Frey's How Progress Ends provides a sweeping yet nuanced examination of the factors behind technological and economic growth, cautioning against one-size-fits-all prescriptions for how societies should structure innovation. Historical cases and current technological disruptions show that the right balance between exploration and execution, as well as flexibility in institutional and political arrangements, is key to translating innovation into prosperity. While AI presents new possibilities, Frey argues that the fundamentals of progress—competition, openness, and state capacity—remain as vital as ever.