There are some interesting answers to this question in Why the West Rules, For Now by Ian Morris. As part of his research, Morris has developed a Social Development Index, which he uses to track the progress of civilizations from 14000 BC to present. The index tracks improvements in areas such as energy capture (both as food and as fuel), organizational capability, technology development, and information sharing capacity.

Here is what the graph shows (taken from this .pdf that summarizes the research):

The first big jump happened between 2000 and 1000 BC, indicated by the very crude arrow that I’ve added. What was the innovation that caused that jump?

The invention of Bureaucracy.

Morris (and many other historians) argue that it was the invention of bureaucracy that actually triggered the development of agriculture, written communication, and other tools that are necessary for people to undertake complex tasks.

Bureaucracy is one of the most important innovations in human history – without it, we’d still be in caves. So why does it get such a bad rap whenever we talk about innovation? It’s nearly impossible to discuss innovation within organisations without hearing complaints about bureaucracy and bureaucrats.

The problem isn’t actually with bureaucracy. Bureaucracy makes systems, supports the development of routines, and gives us some constraints – which are actually essential to innovation (see here and here for examples). We need all of these things to innovate.

The problem with bureaucracy is when we follow rules simply for the sake of following rules. This is another form of path dependence, which leads to lock-in on sub-optimal systems. The problem is with bureaucratic systems that don’t support strategy – these stifle innovation.

Bureaucracy is actually a neutral term, like aerodynamics. To call a car “aerodynamically designed” is a nonsense – all cars have aerodynamics. It’s just that Teslas and Porsches have excellent aerodynamics, while minivans and SUVs have terrible aerodynamics.

In the same way we can have excellent bureaucracy, which supports innovation, and terrible bureaucracy, which obstructs innovation.

Bureaucracy isn’t actually an innovation obstacle, but bad bureaucracy is.