What Einstein meant by following quote?

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n.karthick
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"Everything should be made as simple as possible, but not simpler"
What I understood is we should not improve the old things, instead we should find an entirely new and easier way of doing the same thing.
Does he mean that progress should not be made step by step like improving the age old tradition, but it should be radically new way and achieving the theoretical maximum of simplicity.
 
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russ_watters said:
... if you make something simpler than is possible, then you make it wrong.

I like your version even better.