Innovate or Die: Why Creativity Is Economic Priority Number One

So you’ve met Lou, Jack and Marla, and you can see they’ve experienced a relative change of fortunes in recent years.

Once upon a time Lou, with his MBA and finely-tuned productivity system, was the darling of the corporate world. Meanwhile creative types like Jack and Marla were not taken seriously, at least in the workplace. Now Lou’s one step from the scrapheap and people are falling over themselves to work with Jack and Marla.

Something is happening here, but Lou doesn’t know what it is.

Why is it that creativity and individuality, which used to be anathema to the corporate world, are now in great demand? Did all those hard-nosed business people suddenly decide there was more to life than capitalism and give up chasing dollars so they could express their artistic soul?

Not exactly.

The exciting new land of creative opportunity is actually the tip of a very large economic iceberg. To understand these opportunities, we need to look beneath the surface.

Abundance, Asia, Automation – and America

In his book A Whole New Mind Daniel Pink argues that we’re ‘moving from the Information Age to the Conceptual Age’.  Economic advantage and professional success no longer come from the logical, analytical skills of knowledge workers but from creative, conceptual, and relationship skills. So the lawyers, accountants and MBAs who ruled the roost during the 20th century are now giving way to ‘artists, inventors, designers, storytellers, caregivers, consolers, big picture thinkers’.

Writing for a US audience, Pink identifies three fundamental reasons for this change:

• Abundance – In a rich country like the USA nearly every market is over-supplied with functionally adequate, reasonably priced goods. Faced with such abundance, consumers have become more discerning and demanding. They now expect products to be beautiful – or funky, funny, sexy or otherwise distinctive. And producing distinctive products requires creativity.
• Asia – ‘Made in China’ is old news. Western nations are used to seeing manufacturing jobs crossing the oceans to Asia. Now the same is happening to knowledge work such as computer programming, engineering, accounting, copy-editing and law. ‘The main reason,’ says Pink, ‘is money. In the United States, a typical chip designer earns about $7,000 per month; in India, she earns about $1,000.’ The results ‘are scaring the bejeezus out of software engineers and other left-brain professionals in North America and Europe’.
• Automation – In 1987 chess grand master Garry Kasparov boasted ‘No computer can ever beat me’. In 1997 he was beaten by the IBM computer Deep Blue. More recently Kasparov said ‘I give us only a few years. Then they’ll win every match’. For Pink, Kasparov is symbolic of legions of knowledge workers such as lawyers, programmers, accountants and even doctors who now find at least part of their work taken over by machines and software. Why pay an attorney $200 an hour to produce a standard legal document you can obtain from a website for a fraction of the price? According to Pink ‘Any job that depends on routines – that can be reduced to a set of rules, or broken down into a set of repeatable steps – is at risk. If a $500-a-month Indian chartered accountant doesn’t swipe your comfortable accounting job, Turbo-Tax will’.

To survive in the Conceptual Age, Pink advises us to ask ourselves three questions:

1. Can someone overseas do it cheaper?
2. Can a computer do it for you?
3. Is what I‘m offering in demand in an age of abundance?

If your answer to question 1 or 2 is yes, or if your answer to question 3 is no, you’re in deep trouble.

Hey Lou! What’s up? Why the long face?

From this perspective, creativity isn’t a nice-to-have or a fun-to-do, it’s a matter of economic survival. Complex, challenging creative work is (so far) difficult to automate or outsource cheaply overseas. Creativity is what transforms utilitarian products into distinctive artifacts that are a pleasure to look at and a joy to use. It’s what makes people queue for days to get their hands on an iPhone, ignoring the clever friend who tells them they can get a ‘technically superior’ alternative for half the price.

No wonder those who can deliver creativity have the potential to reap financial rewards. And no wonder the brightest creative talents – people like Marla – are treated like rock stars.

The View from London

Earlier this year I attended the Innovation Edge conference in London, organised by the UK’s National Endowment for Science, Technology and the Arts (NESTA). The theme, common to such diverse speakers as Tim Berners-Lee, Bob Geldof and the Prime Minister Gordon Brown, was that creativity and innovation are critical to the future of the UK economy. Or as the NESTA Total Innovation report puts it in more academic terms:

In an increasingly competitive global economy, innovation – the ‘successful exploitation of new ideas’ – is regarded as the major source of competitive advantage for mature economies like the UK.

Like the US, the UK has seen other nations undermine its traditional strengths in manufacturing. Like the US, we like to see ourselves as a nation of innovators. The Creative Industries and the ‘Cool Britannia’ image have been important features of the New Labour government over the past decade. London is recognised as a leading creative centre, with nearly 20% of its workforce employed in the creative industries, which rival its financial services in economic importance.

One of the conference sessions I attended was called ‘Where the UK leads…but for how long?’ and focused on the challenges of maintaining our tradition of innovative industry in the face of worldwide competition. Like the US, we know we can’t take creative pre-eminence for granted.

Bottom line: if we carry on like Lou, we too will be screwed.

From ‘Made in China’ to ‘Created in China’

On the face of it, the idea of focusing on the sexy creative work while shipping routine production overseas might be appealing to Westerners with a creative bent. Appealing but dangerous. Last year a Fast Company article about China’s New Creative Class challenged the idea that the Chinese will be happy to ‘stamp out a widget, or knock off a DVD’ while the West leads the world in creativity.

China is not content to serve as factory to the globe. Call it economic foresight, or cultural pride, but despite the stratospheric growth of its economy – 10.7% last year – China knows that cheap labor alone can’t sustain the boom. While a flurry of activity (and, yes, a government five-year plan) has stressed scientific and technological innovation, look a little closer and you’ll see that creativity in art and industry – in design, fashion, media, and the like – is fast becoming a driving national mission.

That was certainly the impression I got from the stunning China Design Now exhibition at London’s V&A Museum – a glittering showcase of graphic design, fashion and architecture in the run up to the 2008 Beijing Olympics. Although there was plenty of evidence of Western and Japanese influence, there were also many startling and memorable works stamped with a distinctive Chinese identity.  We’ve heard a lot about China’s unfolding economic potential, but what struck me about the exhibition was the vast cultural wealth China has to draw on as it rediscovers its pre-revolutionary heritage, which should be a rich source of inspiration for its modern creatives.

In a recent book Michael Keane argues that Chinese government and business leaders are now focused on replacing ‘Made in China’ with ‘Created in China’:

A great new leap forward is imminent. The ‘world factory’ is no longer the default setting for development. China aspires to be a serious contender for the spoils of the global cultural and service economies.
(Created in China)

Keane stresses that there are significant barriers to innovation in the Chinese economy and political system. So Western industry currently enjoys a creative head start, reflected in the fact that of the new Olympic buildings on show at China Design Now, only one was designed by Chinese architects. But given that China has signaled its creative ambitions, it might be rash to bet against it realising them long term. And China is not the only ambitious country in Asia.

A New Global Game

Wherever you go in the world, the pieces will be seen from a different angle, but globalisation means we’re all now playing the same game. Whether it’s Chess, Xiangqi, Shogi or a whole new board game depends on your point of view. No single country or culture gets to decide the rules. And collaboration may well be a more effective strategy than naked competition. Jack is coming along nicely as a player. Marla is approaching the status of a Grand Master (or Mistress).

Like it or not, work migrates to where currency and labour markets make it most efficient and profitable. You can only charge a premium for something that cannot be obtained easily and cheaply elsewhere. So if you want to avoid the ‘race to the bottom’ of a price war, it makes sense to develop those skills and qualities that are hardest to commodify – namely creativity and innovation.

Abundance, Asia and Automation are key drivers of change, but they are not the only causes. Others include the development of digital technology, which facilitates quick and easy creation and distribution of ‘virtual’ products, and the internet, which enables collaboration over vast distances. The result is the emergence of a new creative economy – which we’ll look at more closely in the next post.

About the Author: Mark McGuinness is a Coach for Artists, Creatives and Entrepreneurs. For a free 25-week guide to success as a creative professional, sign up for Mark’s course The Creative Pathfinder.