A recent event brought back to mind a blog I posted in January 2017 on the innovation economy.  A news agency reporting on a candidate running for governor referenced that blog post.  The candidate‘s platform is the innovation economy. It seems to be gaining traction this political season.  There is a drive for economic rebirth of urban areas or to reestablish the growth engine for states. This has turned eyes on the innovation economy.  

Some term it the “creative economy.”  Gary Hamel calls it the “new economy.”  I refer to it as the “innovation economy.”  But what exactly is it? The ability of people to create, innovate, and develop ideas, products, and services that generate value.  The value people place above the bill of materials is the innovation value. Done well that value elicits a margin premium, the growth engine of an innovation economy.

Turning the Downturn Around

Like the steel industry, which tanked in the 70s, a number of states in the U.S. have been facing economic downturn.  Their economies relied on industries that have slowed, shrunk or halted. Politicians are seeking economic growth engines to re-energize their state and local economies.  Places like Detroit are establishing programs, activities, and systems to attract creative people to relocate. They are seeking creative minds who will jump start the innovation economy with their ideas, products, and services.  

There are success stories – Boulder, CO; Portland, OR; Austin, TX and Boston’s Route 128.  These places built an innovation economy that flourishes, creating jobs and economic growth.  But it’s not a quick fix. Establishing a thriving innovation economy takes long-term commitment.  

Humble Beginnings to World Stage

From its beginning in a garage in Palo Alto, CA, HP became the match that started the flame.  Silicon Valley became a thriving innovation economy. This sparked highly creative, rapid growth and expansion in the tech industry.  Today, I can’t go anywhere without seeing the effects of that, even in name. University of Illinois Urbana-Champaign has become known as the “Silicon Prairie.”  

The innovation economy is changing the world.  Disruptions have spread across a variety of industries.   Crowd sharing technologies have allowed unexpected disruption.  Airbnb, the largest provider of overnight accommodation, does not own a hotel.  Uber, the largest provider of passenger transport, does not own a fleet of vehicles.  Brick and mortar retailers are closing as online retailers take over. The impact of the innovation economy is undeniable.  Don’t think any job is above that impact. One company uses chatbots and artificial agents to process and negotiate traffic tickets in court.  X-rays are sent overseas for diagnostics. Like it or not, the innovation economy is here to stay. Don’t let your sphere of influence sink. Get started building an innovation economy where you are.

Building the Innovation Economy in Your Sphere

So, what’s a politician or anyone who cares about their livelihood, their business, the place they call home to do? Start by asking the questions:

What are the rules by which an industry operates?

What would totally disrupt that industry?

What would happen if it turned on its head and completely changed?

What is that impact?  What is its unintended consequence?  Or its intended consequences?

Perhaps this has already happened in your area and you are left to deal with...