The following is excerpted from Tim Harford's new book Adapt: Why Success Always Starts With Failure.
In 1931, the British Air Ministry sent out a demanding new specification for a fighter aircraft. It was a remarkable document for two reasons. The first was that throughout its existence the Royal Air Force had been dismissive of fighters. The conventional wisdom was that bombers could not be stopped. Instead, foreshadowing the nuclear doctrine of mutually assured destruction, the correct use of air power was widely presumed to be to build the largest possible fleet of bombers and strike any enemy with overwhelming force. The second reason was that the specification's demands seemed almost impossible to meet. Rather than rely on known technology, the bureaucrats wanted aviation engineers to abandon their orthodoxies and produce something completely new.
The immediate response was disappointing: three designs were selected for prototyping, and none of them proved to be much use. The Air Ministry briefly went so far as to consider ordering aircraft from Poland.
Even more remarkable than the initial specification was the response of the ministry to this awkward failure. One of the competing firms, Supermarine, had delivered its prototype late and well below specification. But when Supermarine approached the ministry with a radical new design, an enterprising civil servant by the name of Air Commodore Henry Cave-Browne-Cave decided to bypass the regular commissioning process and order the new plane as "a most interesting experiment." The plane was the Supermarine Spitfire.
It's not hard to make the case that the Spitfire was one of the most significant new technologies in history. A brilliant, manoeuvrable, and superfast fighter, the Spitfire—and its pin-up pilots, brave to the point of insouciance—became the symbol of British resistance to the bombers of the Nazi air force, the Luftwaffe. The plane, with its distinctive elliptical wings, was a miraculous piece of engineering.
"She really was a perfect flying machine," said one pilot. A Californian who traveled to Britain to sign up for the Royal Air Force agreed: "I often marvelled at how this plane could be so easy and civilized to fly and yet how it could be such an effective fighter."
"I have no words capable of describing the Spitfire," testified a third pilot. "It was an aircraft quite out of this world." (The source of these quotes is Leo McKinstry's excellent history, Spitfire: Portrait of a Legend.)
It wasn't just the Spitfire pilots who rated the plane. The top German ace, Adolf Galland, was asked by Hermann Göring, head of the Luftwaffe, what he required in order to break down the stubborn British resistance. "I should like an outfit of Spitfires" was the terse reply. Another German ace complained, "The bastards can make such infernally tight turns. There seems to be no way of nailing them."
Thanks to the Spitfire, Britain's tiny Royal Air Force defied overwhelming odds to fight off the Luftwaffe's onslaught in the Battle of Britain. It was a dismal mismatch: Hitler had been single-mindedly building up his forces in the 1930s, while British defense spending was at historical lows. The Luftwaffe entered the Battle of Britain with 2,600 operational planes, but the RAF boasted fewer than 300 Spitfires and 500 Hurricane fighters. The wartime Prime Minister himself, Winston Churchill, predicted that the Luftwaffe's first week of intensive bombing would kill 40,000 Londoners. But thanks in large part to the Spitfire's speed and agility, the Germans were unable to neutralize the RAF.
This meant the Germans were unable to launch an invasion that could quickly have overwhelmed the British Isles. Such an invasion would have made D-Day impossible, denying the United States its platform to liberate France. It would likely have cost the lives of 430,000 British Jews. It might even have given Germany the lead in the race for the atomic bomb, as many of the scientists who moved to the United States to work on the Manhattan Project were living in Britain when the Spitfires turned back the Luftwaffe. Winston Churchill was right to say of the pilots who flew the Spitfires and the Hurricanes, "Never in the field of human conflict has so much been owed by so many to so few."'
It is only a small exaggeration to say that the Spitfire was the plane that saved the free world. The prototype cost the government roughly the price of a nice house in London: 10,000 pounds.
When we invest money now in the hope of payoffs later, we think in terms of a return on our investment—a few percent in a savings account, perhaps, or a higher but riskier reward from the stock market. What was the return on Henry Cave-Browne-Cave's investment of 10,000 pounds? Four hundred and thirty thousand people saved from the gas chambers, and denying Adolf Hitler the atomic bomb. The most calculating economist would hesitate to put a price on that.
Return on investment is simply not a useful way of thinking about new ideas and new technologies. It is impossible to estimate a percentage return on blue-sky research, and it is delusional even to try. Most new technologies fail completely. Most original ideas turn out either to be not original after all, or original for the very good reason that they are useless. And when an original idea does work, the returns can be too high to be sensibly measured.