Innovation: it’s the ultimate source of advantage, the undisputed heavyweight champion of the economic ring. Innovation is what every organization should be ruthlessly pursuing, right? Wrong.
I’d like to advance a hypothesis: awesomeness is the new innovation.
Let’s face it. “Innovation” feels like a relic of the industrial era. And it just might be the case that instead of chasing innovation, we should be innovating innovation — that innovation needs innovation. Why? When we examine the economics of innovation, three reasons emerge.
Innovation relies on obsolescence. Innovation was a concept pioneered by the great Joseph Schumpeter. And to subscribe to it requires us to accept his theory of creative destruction. Gales of innovation make yesterday’s goods and services obsolete. Yet, that, in turn, means that the price of innovation is recession and depression. The business cycle might never be vanquished — but it is getting more vicious with every decade. In an interdependent world, obsolescence is what’s obsolete.
Innovation dries up our seedcorn. Innovation in its purest Schumpeterian sense is undertaken by entrepreneurs. And so today, we’ve got an economy where everything’s for sale. Yet, little fundamentally new is being created. Businesses focus obsessively on the entrepreneurial aspects of commerce: we are focused still on selling the same old toxic, industrial era junk in slightly better ways. Yet, the challenge of the 21st century isn’t entrepreneurial as much as it is creative: learning to create fundamentally better stuff in the first place.
Innovation often isn’t. Innovation means, naively, what is commercially novel. Yet, as the financial crisis proves, what is “innovative” is often value destructive and socially harmful. Financial “innovation” turned out to be unnovative: it has destroyed trillions in value – here are some staggering estimates from the IMF.
It’s time to ask: have the costs of innovation exceeded the benefits?
A better concept, one built for a radically interdependent 21st century, is awesomeness.
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