The Creativity Economy

Business Week sounds the warning: Get Creative!:

Listen closely. There’s a new conversation under way across America that may well change your future. If you work for Procter & Gamble Co. (PG ) or General Electric Co. (GE ), you already know what’s going on. If you don’t, you might want to stop what you’re doing and consider this:
The Knowledge Economy as we know it is being eclipsed by something new — call it the Creativity Economy. Even as policymakers and pundits wring their hands over the outsourcing of engineering, software writing, accounting, and myriad other high-tech, high-end service jobs — not to mention the move of manufacturing to Asia — U.S. companies are evolving to the next level of economic activity.
What was once central to corporations — price, quality, and much of the left-brain, digitized analytical work associated with knowledge — is fast being shipped off to lower-paid, highly trained Chinese and Indians, as well as Hungarians, Czechs, and Russians. Increasingly, the new core competence is creativity — the right-brain stuff that smart companies are now harnessing to generate top-line growth. The game is changing. It isn’t just about math and science anymore. It’s about creativity, imagination, and, above all, innovation.
What is unfolding is the commoditization of knowledge. We have seen global forces undermine autos, electronics, and other manufacturing, but the Knowledge Economy was expected to last forever and play to America’s strengths: great universities, terrific labs, smart immigrants, an entrepreneurial business culture.
Oops. It turns out there are a growing number of really smart engineers and scientists “out there,” too. They’ve learned to make assembly lines run efficiently, whether they turn out cars or code, refrigerators or legal briefs. So U.S. companies are moving on to creating consumer experiences, not just products; reconceiving entire brand categories, not merely adding a few more colors; and, above all, innovating in new and surprising arenas.
The U.S. has a lead in this unfolding Creativity Economy — for the moment. The new forms of innovation driving it forward are based on an intimate understanding of consumer culture — the ability to determine what people want even before they can articulate it. Working in what is still the largest consumer market in the world gives U.S. companies a huge edge. So does being able to think outside the box — something Americans still do better than most. But Toyota Motor Corp. (TM ) has a feel for U.S. consumers, and Samsung Group can be pretty creative, too. Competition will surely be intense.

While many companies get it, Washington doesn’t. Unfortunately, our public policy has taken a step backwards – and our leaders are fighting a rear guard action to simply restore the gains that were made in the 1980s. Take, for example, the recent Wall Street Journal op-ed by Vinton Cerf (the man who really did invent the Internet) and Harris Miller, “America Gasps For Breath In the R&D Marathon”:

America will soon find its grip on the levers of international commerce slipping as we turn our backs on a proud tradition of technology innovation. The stewards of our national destiny are busily tightening the tap on the federal R&D budget, the most important source of funding for programs that seek to answer fundamental questions of science and technology.
. . .
In a very real sense, today’s R&D agenda determines where America will find itself in the future. The benefits of vigorous, federally funded academic R&D programs reaped by American society at large have been enormous. Our domestic and global economies thrive on the results of such work. Private sector programs alone cannot produce comparable results, in part owing to an ethical obligation to deliver bottom-line business results for their stockholders. The U.S. government needs a long-term strategy for continued economic growth. A strong and thriving academic R&D program is critical to that strategy. To choose otherwise is a recipe leading to irrelevance and decline.

No wonder we can’t move public policy to the Creativity Economy (as Business Week calls it) or the I-Cubed Economy (as we call it). We are too busy still trying to convince certain Washington policymakers that technology matters!

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