Here I will recap the discussion and add commentary of my own to trigger your thinking about the bigger picture impacts of innovation and consumer behaviour on the global economy.
According to Leadbeater, the concept of a successful economy is more subject to question and doubt than ever before, because success is no longer defined by traditional growth measures. There is a broad narrative of “we’re getting screwed” in Western society, that is drowning out the more upbeat reality.
Leadbeater attributes the resonance of this narrative to the fact that many in “middle America” feel that their jobs are insecure or poorly paid, and that the recovery from the global financial crisis is fragile. At the same time, the European economies grind along in a low growth gear, with market and labour regulation limiting enterprise, debt weighing heavily on sentiment, and society privileging the employed, baby boomers (and older), over the many, particularly younger, jobless.
My assessment is that successful economies are necessarily diverse and dynamic, as they are driven along by and adapt to the disruptive forces of innovation and enterprise. From this dynamism comes growth and resilience. The challenge for successful economies is not to attempt to protect citizens, consumers and current and potential employees from change, but rather better enable and prepare, and perhaps most importantly create time for citizens to adapt to incessant change. In a new form of capitalism, strong and dynamic corporates will play a role in this by searching for and investing in innovation, while making tangible contributions to the communities in which they operate.
Successful economies cannot be static. Successful enterprises assume dynamism. We must prepare and enable society’s members to live and work in a changing world.
Leadbeater touched on the role of consumer choice in influencing change in the economy and society. He discussed the simple dilemmas we encounter everyday: our choice to deplete natural resources and how we might play a role in remedying that; and our choice to say goodbye to culturally iconic services in favour of automated processes. These are manifestations of the dilemma of economic dynamism on an every-day basis.
As I noted at the start, we would be wrong to negate this dynamism out of fear as it would hamstring economies and push us backwards. What we can do is better enable transitions and preparation for these future economies. We know that innovation leads to improved products and services that are generally delivered with a different composition of resources, including labour. Future economies need future oriented workers, and human beings often need direction and support to become future oriented.
Leadbeater used a fabulously simple model to highlight, in a Schumpterian sense, that most of business life is lived somewhere in the mid zone of simultaneous growth and decline. He defines the future by the range of possibility that lies in this space, and the “existential doubt” that drives momentum in organisations regardless of their current position.
Source: Charles Leadbeater, 2016.
Leadbeater’s diagram captures very elegantly the tasks of business leadership, which are intrinsically uncertain and dynamic. Enabling your people to operate successfully in the mid zone is the stuff of modern leadership.
Leadbeater argues that to achieve a ‘good economy’ we must do away with instability and inequality, and focus on the environment and democracy. His overarching ideology is aimed at achieving growth through cumulative social problem solving, which is in line with my recent thinking around innovating for increased value.
I celebrate dynamism, which I frame as constant change in a system which incentivises action; whereas instability creates fear, stasis and collapse. I suspect that we will always have inequality, and so our challenge is not to do away with it, but rather to enable individuals, families and communities to move on from it.
Societies, corporations, communities and individuals need constantly to reinvent their many forms of capital to create a good economy: financial capital, human capital, natural capital and social capital. We short change our investment in any of them at our own risk.