Coffee in hand, soapbox set up, let me begin.

Today, we are all struggling to transform ourselves in our businesses, even just within ourselves, to adjust to the current economic difficulties we all seem presently to be facing.

We are not only confronted with the toughest downturn in modern times but with all the pressures with the speed of decision-making, and technological advances that seem to just simply ‘suck up’ more of our daily lives instead of helping to resolve it.

We have the pressures of global competitiveness and calls that constantly are urging us to never stand still because others aren’t.

We often become overwhelmed by the merging, acquiring, and rethinking that is going on constantly around us, the changes in processes, new alliances and the sudden emergence of a ‘new kid on the block’ who sees a weakness and rapidly fills that gap overnight.

Oh yes, and we still are not very good at being more innovative!

Lots more hotfixes or a more radical redesign?
These pressures compel us to focus on a host of ‘quick fixes’ but what we are failing to recognize is where all these changes fit within our long term plans.

Just finding the opportunity to take out precious ‘thinking’ time to synthesise and reorganize ourselves seems impossible, we are just getting caught up in the flotsam of life, just bobbing along.
We need to not only re-imagine but we need actually breakthroughs in our thinking, some of that bunker-busting stuff to give us all a ‘concentrated’ focus on what is important to our business, to our lives and what is important to us as individuals.

Where do we grow, where do we go and how do we achieve this? We can’t continue down towards the rapids that lie ahead of us, just around the next ‘economic crisis’ corner.

Where innovation and invention need to combine

Innovation has an important part to play in this future, far more than in the past. We must try to reflect on the effect of too much cost-cutting that is going on at the very fabric of our lives, the communities we live in.

Nothing is replacing it, we just seem intent on knocking down what we have presently got and not offering alternative solutions, accepting more ‘self-sufficiency’.

This will eventually have the very opposite effect of destroying more than creating, it will extract more out of it than we will be able to replace.

Today the rush to cut budgets, and to have ‘fiscal consolidation will not give a more flexible environment, actually, it will be the very opposite. The expediency of the measures to slash and burn is not healthy.

Our world has been turned upside down on us, but we must strike the balance between cutting back and building up.

Who is going to allow us the necessary time for rebalancing this mood for cost-cutting and provide the leadership and eventually the stimulus for the necessary innovative thinking, so as to enable us to think about how we can rebuild, regroup? We need to seek out new opportunities, we need growth but I think it needs to be from a very different type of economic model.

Politicians and mainstream economists all advocate a return to ‘normal’, which I certainly feel is doomed as ‘normal’ can’t be based on the past economic approaches or ways we have organized ourselves.

The task ahead is to do the opposite of what we used to do: we do need to save resources, improve the environment, create jobs, shift to another model for consumption, and restore confidence in the economic system – all at the same time.

Use innovation for resource-saving.

Now the time has come for resource-saving innovation. to extend what we already have. We need a clear political shift to the new courses that will gear us to do that. Instead of market economy pricing favouring individuals and corporations we have to shift to ones based more on society.

As painful as it is for some, we need to increase the premium on those short-sighted people who are still insisting and managing our economies and businesses for the short-term extracting costs.

They simply cannot ignore the need to invest, build and promote more onto the longer-term potential for containing consumption as we know it today, and finding new ways of adding different lasting value. We need to invest in the future, we just can’t keep cutting and reducing.

We do need to shift our thinking onto a new type of consumption model; we must practice a more frugal type of innovation that still offers plenty of opportunities if we can break the ‘throw away’ attitudes of society and business design.

We need to go back to repairing not just throwing stuff away. To do this the redundancy is deliberately built to our products so one part that always seems to break before others and you can’t obtain a replacement, or you find it far more expensive to have repaired than replacing it has to be designed out from the existing product design.

Current material consumption actually is not fulfilling

Did you know that the current material consumption actually is not as fulfilling as we expected, according to work that has been undertaken by researchers, psychologists, and anthropologists?

They conclude that less materialistic consumption gives a better and longer-lasting feeling of ‘happiness’ than material consumption.

They also are suggesting that we have hard-wired into us, that basically human beings still are inclined to want to work together, help each other, and do something for others and with others.

So the good news is that this nagging fear I’ve had that we are just shifting to islands of individuals just connected through our computers remotely seems like we really don’t want that, I do hope so.

If we don’t think society really wants this then it can’t afford these billions of islands of individuals, it needs to find new ways to deepen the emerging global connecting model that works more for society’s good, than the individual as it seems at present.

We lose far too much of that deeper happiness factor it might seem, we become increasingly disconnected, inward and remote and that surely is not healthy for us as human beings that thrive on ‘human’ interactions.

Interestingly this is where the emergence of newly connected communities gets exciting. What we have to do, is redesign these dispersed ‘connected’ societies into better economic blocks and find different ways to work together that will give us back a new economic value plus lasting pleasure, satisfaction and identification.

We need to reverse where we are seemingly heading and that requires some radical redesign of how we want to collaborate for economic value within these new communities.

Collecting money and taxes becomes a growing problem
I’m just not sure where it leaves national boundaries or who will pay for the entire infrastructure if there is no attribution and way to make sure this happens.

Presently we learnt from a recent report that the major banks and the financial global elite, as well as a number of developing nations, are now confirmed to have as much as $20 plus trillion in hidden assets stashed away in offshore accounts that are subject to little or no taxation.

As a result, around $280 billion is estimated to be lost in tax revenues.
In other words, the multi-trillion-dollar banks and wealthy elites are combining in novel ways for avoiding any taxation, while forcing the vast majority of tax paying citizens to foot their tax avoidance bill.

Amazingly, the $20-odd trillion stashed away it is suggested represents the overall GDP of the United States and Japan combined. The “scale” of the numbers is staggering and are these huge sums actually being employed for different innovations or just accumulating more from the present model of consumptive. So much offshore wealth and financial mischief is ‘killing us’ all off.

I also wrote a blog on this destructive creation http://paul4innovating.com/2012/03/01/the-innovating-era-creative-destruction-or-destructive-creation/ and along with this latest report on hidden assets that is actually putting some hard numbers on this tax avoidance just adds more to this growing concern of a really messed up world that is losing its moral compass.

The time has come to restructure and rebalance production, consumption, and corporate governance and how they work together, in short in a more connected global world is the overwhelming need to invent a new economic model.

So where does innovation fit in any new model?

It sounds actually a little bit of “more of the same but better” as our starting point. We understand that innovation grows our businesses, it can certainly grow our equity, and it shows it does grow our economies.

It is one of the best platforms around that can provide you greater economic returns (growth, utilization, new activity) if you set about doing this thoughtfully and right.

Innovation should always replace something we have with something better (often today that is not the case) but in different ways than encouraging us to not throw away what we have but to utilize it in better, lasting ways. We can begin to change that right away with some ‘groundswell of pushback if we wanted to.

Of course, the complexity we are facing today does need far greater recognition of its ‘multiple’ parts that must somehow fit together in new innovative and novel ways. We still need to offer and entice people to change their existing ways and habits.

We need to find better models that will give real new returns that provide more lasting value and identification than what is the present as offered.

Innovation has to be central to our future, it needs a more systematic and integrated approach that has a ‘heart’ that beats on a continuous repeating basis. One that scales accordingly to the challenges we are facing and these are growing in challenges, not declining at present.

It needs a ‘fitness’ that knows where it has to focus and why so you can meet these constant challenges in a flexible, coordinated, well-balanced way with speed and combined strength…..the art of building increasing agility into your innovative thinking and approaches.

We all need to work on the answers to fixing our current problems; otherwise, we face a protracted, maybe bleak future. We certainly do have to turn everything upside down.

Innovation and invention need to combine in new powerful ways and we need to search for different business and economic models that put together human ingenuity for changing the consumptive model and perhaps put to use some of the trillions stashed away needing to be put to better use than just sitting in offshore funds.

I wish I had some decent answers but my first need was to write about my increasing concerns here. I hope this ‘rant’ prompts your thinking to stop and think a little more.

There are answers; we just need to find them faster than you think, I feel. There are enough burning platforms already around us.

Well let me get off my soapbox, my coffee is cold and I need to warm it up, certainly, I’m not going to throw it away!

The post Are we all upside down? first appeared on Building Your Innovation & Ecosystem Intelligence.

We do have real problems in the world and we need to find solutions but something strange is happening and I was not sure I understood it. So I’ve been on a little investigative journey that is beginning to make some good sense, well at least to me.

A host of financial contagions has been heaped upon us progressively in recent years.

We have gone through a host of speculative bubbles, rising debts, global recessions in the recent years and we are still standing. Our real financial assets seem to have been refinanced a few times to enter into our jargon the use of ‘toxic assets’ that we are still working through.

Many of the developed world’s economies are far too weak to create jobs or achieve the economic growth spoken about by our politicians. Increased government backed spending is heading us to another bubble based on imported price inflation, rising commodity prices and steps that might take us back to increased taxes, higher inflation and lower public services.

Even if some form of deal is made at the eleventh hour to raise the debt ceiling in the US, it will only be a short term stop gap. We seem to be in deep trouble.

Yet we still seemingly function, in some parts extremely well, others badly- why?

Where I do puzzle though, is why do our economies still function?  We seem to be still standing, well hopefully, as I write this blog with the US debt deadline fast approaching of August 2^nd.

There is a set of arguments that build on the thinking that we are measuring the wrong activities. We are still caught up in the economic theories of the 20^th century of models and doctrine.

According to some, a new theory is emerging in the last decade, the one called “innovation economics”. It is based on knowledge, technology, entrepreneurship and innovation and these take a more centre stage and are combined forces that are mutually dependent.

The issue is that the ‘force’ of innovation has not yet been fully grasped in economic models or government policies. It is ‘lagging’ partly as many of the dominant advisors advocate older models of measures that ignore or simply have not been adequately captured enough to influence or change the economic thinking around the importance of innovation.

The present older economic thinking is still based on allocating efficiently, searching for equilibrium, trying to ‘force’ rationality into markets, thinking individuals are constantly searching for this but are they?

Innovation economics works in different ways according to what I’m still trying to fully understand (if I ever will). Firstly there are constant ‘disruptive’ forces that keep the markets constantly out of equilibrium or disturb it simply to knock it out of this ‘even’ state.

Resources are invested not according to ‘edict’ or just policy levers alone but seek to go where there is a natural ‘intersection’ where the convergence of those factors that meet the ‘need’ just simply combines.

These respect no borders, they go where they seem to work, and these are where innovative activities thrive.

Nothing is as predictable as we have come to expect in the past, it is this seeking out extraordinary changes in new ideas, concepts and connections that has a powerful new force behind it for this new economic force.

We live in simply ‘chaotic’ times and we need to manage this accordingly, to ‘grab’ the breaking opportunites and to ‘anchor them’ onto our shores, by providing the innovation factors that are needed and attractive; to commit and grow them around mutual partnerships and dependencies.

Recognizing this quantum change

If we accept or get a ‘sense’ that “innovation economics” are driving economies, often in hidden ways, then the quicker we identify the critical levers of innovation the better.

The old school of capital accumulation and its value (to stockholders), budget management thinking of surplus or deficit, social spending all get challenged in very different, perhaps unique ways.

Governments and the different sectors (business, non profit, communities) need to work out the building blocks of innovation in far more smarter ways than today.

We need to value agility, flexibility, knowledge adoption and rapid diffusion; we need to view productivity in different ways.

People, skilled in different appealing ways, using the new value drivers have increasing value that needs greater premium recognition.

The new innovation productivity need

The measurement of how each organization is improving its productivity needs some rethinking. It is the ‘relentless’ focus on technology, on knowledge acquisition, absorption and diffusion. It is opening up the ‘black box’ of actual innovation activities going on in organizations and valuing these.

We need to focus on the adaptive efficiency that constantly takes place within organizations to spot trends, react to them and absorb the learning to adjust and innovate through these, to provide the new innovation coming from this set of activities.

This calls for investments in knowledge, in infrastructure that focus on activities that spur new productivity approaches that lead to innovation.

These are not just the traditional ones based of lower costs, still judged today, as the winning value but on the new innovation value scale of ‘new generation activity that is occurring’.

We need a deeper innovation grounding of internal workings
It calls for a deeper grounding in what is actually going on inside organizations within their innovation activities.

It is combining of these four emerging forces of knowledge, technology, entrepreneurship and innovation that make the growth models of tomorrow and innovations ‘black box’ as our need to really get into to understand.

What are your thoughts?
We need to find a new economic order that reflects the changes that have beeb going over in the last thirty years, know we have to learn there real value points.

We unleashed a series of events in pursuit of opening up across global markets which are destroying much of the past in whole communities, shifting jobs and wealth creation, complex trading policies, chronic imbalances in tax and managing through national vested value-generating stimulus packages.

The world is simply different, our need is to find the economic levers of this new world.

We are seeing speculative investments that are always seeking constant new ‘feeding grounds’, erratic monetary policies  along with the quest for low interest rates and increased monetary supply leading to speculative asset investments.

Some past lax oversight, forced consolidations for organizations to continue in existence when they should be closed, and changing capital reserve requirements are all adding even further to uncertainly and draining financial reserves.

They are equally draining our personal reserves of respecting the institutions charged with managing these. These need understanding better.

So we do need some very different economic thinking, one that reflects the change in the economy.

Are the new denominators of value, based on creation through innovation?

It alternatively, does the concept of ‘innovation economics’ based on knowledge, technology, entrepreneurship and innovation hold something important within its emerging theories to consider?

Do you see this also?

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