Innovation Economics

I read an article the other day that talked about the concept of Innovation Economics.  The description being the conscious practice of investing in innovation as a method for driving economic prosperity.  I love how the author stated clearly that this is the one way that the US can change the current glide path of our economy.  At the risk of flying in the face of all the talking heads in the media that want us to believe that the country is falling off a cliff into a modern Depression, I want to acknowledge that our economy is still the number one in the world, and our lifestyle is far above the vast majority of people on this planet.  With that said, we are headed in the wrong direction on a trend basis in that others are catching up and if the current pace continues, will pass us (China being the first to have a larger GNP.)  I do not think it is necessary for us to be the largest economy in the world because we do not have the population to keep up, but I do want us to have a powerful economy for generations to come.  Hence, the reason for this article.

Since our readers are primarily business oriented, this is a shout out to three major points that have to be dealt with if we are going to migrate our economy towards an Innovation Economy basis.  Before getting into those, I hope you will all stipulate that when you cannot be the largest economy in the world, it might be a good idea to be the smartest.  In terms of generating new wealth, smartest often relates to the most innovative.  Put simply, we do not have to have the most people, do the best manufacturing, or actually even purchase the most goods.  We simply have to be the ones that invent the new products and services that the rest of the world wants to use.   In order to get there, I submit the following formula…

One: NEW means not copying what others are doing.  NEW means new and that means that we have to have completely original thoughts as far as products and services.  That means spending resources on research and development.  That means making conscious efforts to invent new products and services instead of just copying other new things.  I know that sounds simple, but I see more energy in the US going to emulating ideas already in the marketplace than developing new.  One company comes up with something new, and ten more try to improve it.  It is time for all to companies that putt the word innovation in their mission statements to actually mean it and do it.

Two: NEW does not happen by magic.  It takes effort to actually have an original thought.  You must first steep yourself in a skill or marketplace, see something that has not been done before, and then research like crazy to make sure you are the first.  Like the paragraph above, I am tired of organizations that say they want to innovative, yet devote zero time and attention to really being innovative.  In fact, they often will squash the one or two innovative people on staff for not staying on message.  Whereupon they leave and start their own company to do the things they were suggesting to their bosses, and once they prove the market, sell their company back industry for lots of money.  I guess this works OK, but I would much rather have seen the original organization take the ideas and run with a larger pool of resources to exploit the ideas.

Three: NEW takes risk.  You know, risk, where you actually take a chance, gamble, not a sure bet.  More new ideas die on the vine of fear and trepidation than anything else.  In this day and age, if you are not able to cannibalize your current products with new, improved, ideas, you will eventually lose to someone that will.  Organizations need to be more entrepreneurial.  They need to be able to look past the known to the unknown and devote a set amount to resources constantly to NEW.  Only in this way will innovation flourish.  Risk also means being willing to take a loss.  Not every new idea will be a winner – sorry, that is just the price of admission to the Innovation Economy.  You must be willing to take a chance and lose every once in a while.

I simply do not see any other way that the US is going to find a powerful place in the worlds economic future without moving in this direction.  It starts with you, and it starts with me.  Don’t look to the next person to take the chance – let’s take it together…