“You voted so that you wouldn’t have to obey these EU laws that you can’t name?”, James O’Brien wheezes down the line at some hapless Brexiteer who forgot to do his homework. Fortunately for the hapless Brexiteer, a sufficient retort has now arrived in Matt Ridley’s new book, “How Innovation Works.”

Ridley’s book is not really about Brexit, mercifully. But he does, in the space of just a few pages, reveal the extent to which the EU suffocates the innovative process through its application of the precautionary principle, essentially a reversal of the principle of innocence until proven guilty. Through the precautionary principle, the European Union assumes an innovation or invention is dangerous until proven otherwise. And the result is damning: “Of Europe’s 100 most valuable companies, none was formed in the past forty years.”

Why is this important? Well, as Ridley explains, “innovation is the most important fact about the modern world, but one of the least well understood.” Innovation happens when people are “free to think, experiment and speculate” and prospers in an environment with investment, free trade, and relatively prosperous citizens. Innovation is unpredictable and gradual, based on a trial-and-error process with serendipity and luck usually playing a key role. And innovation is the “mother of science as often as it is the daughter”, with Ridley noting that “none of the pioneers of vaccination had the foggiest idea of how or why it worked.”

Critically, innovation is different to mere invention in that it refers to the development of an invention “to the point where it catches on because it is sufficiently practical, affordable, reliable and ubiquitous to be worth using.”

Ridley covers a huge amount of ground in the book: from innovation in public health, food and transport, to low-technology and pre-historic innovation and even the fakes, frauds, fads and failures in innovation. There are inevitably examples missing, and glaring omissions will vary by the reader.

How, for example, did Pret a Manger – based on the hardly novel idea of a sandwich and coffee shop for office workers – transform the “very grim” eating options which co-founder Julian Metcalfe confronted in 1980s London? Or why have we thus far failed to turn the enormous medical promise of stem cells into reality (hint: government regulation plays a leading role here)?

Ever the optimist, Ridley’s tale is an at times exhilarating depiction of the enormous strides the world has taken over the centuries. But he is no Dr Pangloss, for whom this is the best of all possible worlds. The best of all possible worlds is a long way off in Ridley’s estimation, yet eminently reachable if we cultivate and nurture the innovative process.

His clarity about our potential is matched, however, by the depth of his concern. Because while the ability of Western economies to generate innovation has become weaker, due to excessive red tape, entrenched interests, stagnating investment and even overzealous property rights, in China innovation is blossoming.

As has become ever more manifest in recent months, “if the world is to rely on China to do its innovation, it will become an uncomfortable place.” The world will become increasingly dominated by an authoritarian country with a blatant disregard of human rights, and a country in which innovation will eventually be stifled to retain the monopoly power of the communist party.

If you’re a techno-optimist, this brilliant book will give you the ammunition needed to argue the case for innovation. If you’re a techno-pessimist, it will surely make you think again. Because if there was ever a time for unshackling from the bureaucratic strangulation which Ridley so cogently describes, that time is now.