Economy Innovation Quotes

In this global economy of rapid change, innovation is not a nice-to-have anymore - it's a necessity. Every employee in the business needs to be innovation capable or innovation adaptive.

Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society - and especially in the economy - as doing something different rather than doing better what is already being done. That is basically what Say, two hundred years ago, meant when he coined the term entrepreneur. It was intended as a manifesto and as a declaration of dissent: the entrepreneur upsets and disorganizes. As Joseph Schumpeter formulated it, his task is "creative destruction.

I am an investor. And as an investor, I have the pleasure of being involved in a variety of industries and innovations. But being an investor, I get to stay focused on the big picture instead of the little details.

The paramount doctrine of the economic and technological euphoria of recent decades has been that everything depends on innovation. It was understood as desirable, and even necessary, that we should go on and on from one technological innovation to the next, which would cause the economy to "grow" and make everything better and better. This of course implied at every point a hatred of the past, of all things inherited and free. All things superceded in our progress of innovations, whatever their value might have been, were discounted as of no value at all.

The aspirations of democracy are based on the notion of an informed citizenry, capable of making wise decisions. The choices we are asked to make become increasingly complex. They require the longer-term thinking and greater tolerance for ambiguity that science fosters. The new economy is predicated on a continuous pipeline of scientific and technological innovation. It can not exist without workers and consumers who are mathematically and scientifically literate.

When we're able to communicate in nature's language; when we're able to transcend the view that nature is a boundless entity; even transcending the building as the kernel of the architectural project; when we invite scientific inquiry and technological innovation, fusing atoms with bits and bits with genes - only then will the art of building enable new forms of interaction between humans and their environment. Only then will we be able to design, construct and evolve as equals.

A major intent is to show that underlying the extraordinary complexity, diversity, and apparent messiness of the world we live in lies a surprising unity and simplicity when viewed through the lens of scale.

The pride of the digital age is not just in the possession of innovative tools but the ability to skillfully connect with humans behind them

While exponential growth is a remarkable manifestation of our extraordinary accomplishments as a species, built into it are the potential seeds of our demise and the portent of big troubles just around the next corner.

One way to assess the viability of a business idea is to consider it's ability to be monetized. If something can't be monetized, it ain't a business. And if there's no path to profitability, then it has no worth.

When we're able to communicate in nature's language; when we're able to transcend the view that nature is a boundless entity; even transcending the building as the kernel of the architectural project; when we invite scientific inquiry and technological innovation, fusing atoms with bits and bits with genes - only then will the art of building enable new forms of interaction between humans and their environment.

Putting food under lock and key was one of the great innovations of your culture. No other culture in history has ever put food under lock and key - and putting it there is the cornerstone of your economy.[...] Because if the food wasn't under lock and key, Julie, who would work?

The two dominant components that constitute a city, its physical infrastructure and its socioeconomic activity, can both be conceptualized as approximately self-similar fractal-like network structures.

The late maverick economist Kenneth Boulding perhaps best summed it up when testifying before the U.S. Congress, declaring that “anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.

It is all too often forgotten that the whole point of a city is to bring people together, to facilitate interaction, and thereby to create ideas and wealth, to enhance innovative thinking and encourage entrepreneurship and cultural activity by taking advantage of the extraordinary opportunities that the diversity of a great city offers.

According to the pioneering work of Nobel Prize winner Robert Solow, technological innovation is the ultimate source of productivity and growth.22 It’s the only proven way for economies to consistently get ahead—especially innovation born by start-up companies.

Making food a commodity to be owned was one of the great innovations of our culture. No other culture in history has ever put food under lock and key—and putting it there is the cornerstone of our economy, for if the food wasn't under lock and key, who would work?

[Walmart]s largest innovation consists in getting rid of the central Fordist principle of paying the workers enough so that they can afford to buy what they manufacture. Instead, WalMart has pioneered the inverse principle: paying the workers so little that they cannot afford to shop anywhere other than at WalMart. It might even be said, not too hyperbolically, that WalMart has singlehandedly preserved the American economy from total collapse, in that their lowered prices are the only thing that has allowed millions of the “working poor” to retain the status of consumers at all, rather than falling into the “black hole” of total immiseration. WalMart is part and parcel of how the “new economy” has largely been founded upon transferring wealth from the less wealthy to the already-extremely-rich.

Nature's cycles of renewal and regeneration inspire innovation and continuous improvement in business.

Nature's beauty inspires creative innovation, driving regenerative entrepreneurship.

Data for data’s sake, or the mindless gathering of big data, without any conceptual framework for organizing and understanding it, may actually be bad or even dangerous.

Innovation, creativity and an ability to solve real life problems remain the most prized skills in today’s economy

The Profit function: Individual profits cause collective growth and prosperity. It is necessary for individual people and businesses to profit in a Permaculture Economy where justice is maintained and fairly applied. Profits are earned when efficiency is mastered. With profits, individuals invest in (a) new and innovative means of production which will allow more profits, or (b) buying products and services from other individuals who are also seeking profit by providing value. Profits also incentivize individuals to be productive participants in society to begin with. If there will be no profit in an activity, business or industry, then individuals will decline participation in that activity, business or industry. Since profits are only possible when buyers are satisfied with the productivity of sellers, then it is also true that an individuals willingness to participate in an activity, business or industry is preceded by the buyers satisfaction which allows the seller to profit. But when buyers are dissatisfied and decline participation, it forces sellers to decline participation. Inversely, if profits are eradicated through the force of price-controls by the government, then sellers will decline participation which then causes buyers to decline participation. And when both sellers and buyers decline participation, then whole industries and economies collapse.

Individual profits cause collective growth and prosperity. It is necessary for individual people, businesses, and companies to profit, in a Permaculture Economy where justice is maintained and fairly applied. Profits are earned when efficiency is mastered. With profits, individuals invest in (a) new and innovative means of production which will allow more profits, or (b) they use profits to buy products or services from other individuals who are also seeking profit by providing value. Profits also incentivize individuals to be productive to begin with. If there will be no profit in an activity, business or industry, then individuals will decline participation. Since profits are only possible when buyers are satisfied with the productivity of sellers, then it is also true that an individual's willingness to participate in an activity, business or industry is preceded by the buyers satisfaction which allows them to profit. So, when buyers decline participation it forces sellers to decline participation. Inversely, if profits are removed through force of price controls by the government, then sellers will decline participation which then causes buyers to decline participation.

Cities are sustained by similar network systems such as roads, railways, and electrical lines that transport people, energy, and resources and whose flow is therefore a manifestation of the metabolism of the city.

As long as nuclear engineering can strive for new innovations and learn from its history of accidents and mistakes, the benefits that nuclear power can yield for our economy, society, and yes, environment, will come.

So in marked contrast to infrastructure, which scales sublinearly with population size, socioeconomic quantities—the very essence of a city—scale superlinearly, thereby manifesting systematic increasing returns to scale.

Knowing and being cognizant of the underlying principles and dynamics, seeing the problem in a broad systemic context, thinking quantitatively and analytically, all need to be integrated with the necessarily dominant focus on detail relevant to the specific problem in order to optimize design and minimize unintended consequences.

Where was innovation to come from? We have argued that innovation comes from new people with new ideas, developing new solutions to old problems. In Rome the people doing the producing were slaves and, later, semi-servile coloni with few incentives to innovate, since it was their masters, not they, who stood to benefit from any innovation. As we will see many times in this book, economies based on the repression of labor and systems such as slavery and serfdom are notoriously noninnovative. This is true from the ancient world to the modern era. In the United States, for example, the northern states took part in the Industrial Revolution, not the South. Of course slavery and serfdom created huge wealth for those who owned the slaves and controlled the serfs, but it did not create technological innovation or prosperity for society. N

From a scientific perspective the truly revolutionary character of the Industrial Revolution was the dramatic change from an open system where energy is supplied externally by the sun to a closed system where energy is supplied internally by fossil fuel.

In the past decade, we have transitioned from an innovation economy to an exploitation economy. Innovation is dangerous and unpredictable. It changes market dynamics and creates opportunities for nimble new players to steal share from established players.

Many of the most interesting phenomena that we have touched upon fall into this category, including the occurrence of disasters such as earthquakes, financial market crashes, and forest fires. All of these have fat-tail distributions with many more rare events, such as enormous earthquakes, large market crashes, and raging forest fires, than would have been predicted by assuming that they were random events following a classic Gaussian distribution.

If the economy doesn’t grow, and the pie therefore remains the same size, you can give more to the poor only by taking something from the rich. That will force you to make some very hard choices, and will probably cause a lot of resentment and even violence. If you wish to avoid hard choices, resentment and violence, you need a bigger pie. […] Economic growth has thus become the crucial juncture where almost all modern religions, ideologies and movements meet.

Innovation—the heart of the knowledge economy—is fundamentally social,” writes the prominent journalist Malcolm Gladwell.

The key is simply to uncover value in waste.

So why do almost all cities remain viable, whereas the vast majority of companies and organisms die?

But like all excellent, fulfilling and meaningful relationships, it has also occasionally been frustrating and challenging.

Companies that are disciplined in their approach to innovation get a much better payoff than the ones that are eager to “just try something.

Using a well-worn metaphor, culture can be viewed as the software that runs the hardware of human society.

The possibilities of migrating from an economy based on owning to one based on sharing are limitless.

Engage the whole community with a common purpose to build an innovative and sustainable enterprise.

States is seeking ways to sustain its innovative edge, and when societies around the world are trying to build creative digital-age economies, Jobs

The economic benefits arise not from innovation itself, but from the entrepreneurs who eventually discover ways to put innovations to practical use—and

Regulations in an "Idea Economy" are restraints on innovation.

This is also, I hope, a book about innovation. At a time when the United States is seeking ways to sustain its innovative edge, and when societies around the world are trying to build creative digital-age economies, Jobs stands as the ultimate icon of inventiveness, imagination, and sustained innovation. He knew that the best way to create value in the twenty-first century was to connect creativity with technology, so he built a company where leaps of the imagination were combined with remarkable feats of engineering. He and his colleagues at Apple were able to think differently: They developed not merely modest product advances based on focus groups, but whole new devices and services that consumers did not yet know they needed.

An economy built on slave labor is vulnerable in two ways. One, availability of forced labor discourages technical innovation. The very wealthy [Roman]empire experienced no industrial revolutions. Two -- even more crucial -- slaves do not reproduce their own numbers. As Rome's wars of conquest ended, the slave population began to shrink, leading to a shortage of agricultural laborers by 200 A.D.

The mechanisms that have traditionally been suggested for understanding companies can be divided into three broad categories: transaction costs, organizational structure, and competition in the marketplace.

In 2006 the planet crossed a remarkable historical threshold, with more than half of the world’s population residing in urban centers, compared with just 15 percent a hundred years ago and still only 30 percent by 1950.

We need to understand how the dynamics of innovation, technological advances, urbanization, financial markets, social networks, and population dynamics are interconnected and how their evolving interrelationships fuel growth and societal change—and, as manifestations of human endeavors, how they are all integrated into a holistic interacting systemic framework . . . and whether such a dynamically evolving system is ultimately sustainable.

Innovation and the commercialization of ideas do not happen because you want them to: they happen along the way to solving bigger problems. Apollo was an example of what can be done if the ambition is inspiring and concrete

The zero-sum nature of the medieval economy was reinforced by a Christian ideology that was hostile to any commercial practice or technological innovation that might eke more wealth out of a given stock of physical resources.

The German economic historian Fanz Oertel in the 1950s points to another drastic consequence of a slave economy. A slave economy initially allowed an increase of productivity through the invention and use of new machinery. Roman products remained at a simple level and could be reproduced by handicraft. By the fourth century, for example, the robust pottery industry of Greece was in sharp decline because other parts of the empire also learned to make pottery. "The decline in international trade in the Mediterranean in the fourth century was partly due to increasing piracy, but it was also due to lack of industrial innovation and of need for exchange of manufactured goods.

I consider myself a “social ecologist,” concerned with man’s man-made environment the way the natural ecologist studies the biological environment.....the discipline itself boasts an old and distinguished lineage. Its greatest document is Alexis de Tocqueville’s Democracy in America. But no one is as close to me in temperament, concepts, and approach as the mid-Victorian Englishman Walter Bagehot. Living (as I have) in an age of great social change, Bagehot first saw the emergence of new institutions: civil service and cabinet government, as cores of a functioning democracy, and banking as the center of a functioning economy. A hundred years after Bagehot, I was first to identify management as the new social institution of the emerging society of organizations and, a little later, to spot the emergence of knowledge as the new central resource, and knowledge workers as the new ruling class of a society that is not only “postindustrial” but postsocialist and, increasingly, post-capitalist. As it had been for Bagehot, for me too the tension between the need for continuity and the need for innovation and change was central to society and civilization.

We must create more effective interfaces with innovations across the whole of society; rethink how policies are designed; change how intellectual property regimes are governed; and use R& D to distribute intelligence across academia, government, business and civil society. This means restoring public purpose in policies so that they are aimed at creating tangible benefits for citizens and setting goals that matter to people–driven by public-interest considerations rather than profit.

In a sense, scattered dots are exactly what one would expect to see in a pre-Enlightenment, pre-mechanized world. There were disbelievers in Greek antiquity just as there were everywhere, but there was no obvious role for mass-movement atheism in a culture where ensuring the stability of the state—which depended on the favor of the gods—was prized above all else. Atheism has prospered in the West since the eighteenth century because society has a role for it: in an advanced capitalist economy based on technological innovation, it has been necessary to claw intellectual and moral authority away from the clergy and reallocate it to the secular specialists in science and engineering. It is this social function that has allowed atheism to emerge as a movement composed of individual atheists.

Indifference to growth is heresy among Western capitalists. Yet no-growth business makes up a large part of the economy already. No one expects their local family-run restaurant to endlessly enlarge. That same model is common among the longest-lived businesses, said Tetsuya O'Hara, a product innovation consultant who has worked with Gap Inc. and Patagonia....Japan is a hotbed for them (long lived-businesses) with nearly thirty-five thousand companies that are more than a century old, and dozens that have endured for more than five hundred years.

There is always a price to pay when energy is processed; there is no free lunch. Because energy underlies the transformation and operation of literally everything, no system operates without consequences. Indeed, there is a fundamental law of nature that cannot be transgressed, called the Second Law of Thermodynamics, which says that whenever energy is transformed into a useful form, it also produces “useless” energy as a degraded by-product: “unintended consequences” in the form of inaccessible disorganized heat or unusable products are inevitable. There

A 2013 study by the National Center on Education and the Economy found that “the mathematics that most enables students to be successful in college courses is not high school mathematics, but middle school mathematics, especially arithmetic, ratio, proportion, expressions and simple equations.

The creativity that can occur when a feel for both the humanities and the sciences combine in one strong personality was the topic that most interested me in my biographies of Franklin and Einstein, and I believe that it will be a key to creating innovative economies in the twenty-first century.

Is it weird that when I see a cool t shirt or pick up a toothbrush or see a new car I don't think about the product itself? I think about the thousands of people and dollars to make it. I think about how the retailer that took the risk to buy and resell it. Then I work backwards to the store costs, the distributer who got it there, the shipping company that brought it over from China, the factory workers that made it, the people that sourced the materials and the people that harvested the raw materials, and on and on.. . The global economy is amazing. Your $20 t-shirt is a freaking miracle.

Now, many Americans fear that China might grow too strong. I must confess that I’m not too worried about China getting too strong. I’m more worried that America might be getting too weak. It’s not bad for the United States if other nations have a strong economy. One fewer hungry-mouthed country wanting us to take care of it and its people is great news. If they have money, maybe they will buy the things we innovate and make. Instead, we need to fear that we will quit innovating and making things because excess taxation, regulation, and litigation will drive the jobs and the money away from American working men and women.

The existence of these remarkable regularities strongly suggests that there is a common conceptual framework underlying all of these very different highly complex phenomena and that the dynamics, growth, and organization of animals, plants, human social behavior, cities, and companies are, in fact, subject to similar generic “laws.

To maintain order and structure in an evolving system requires the continual supply and use of energy whose by-product is disorder. That’s why to stay alive we need to continually eat so as to combat the inevitable, destructive forces of entropy production. Entropy kills. Ultimately, we are all subject to the forces of “wear and tear” in its multiple forms. The battle to combat entropy by continually having to supply more energy for growth, innovation, maintenance, and repair, which becomes increasingly more challenging as the system ages, underlies any serious discussion of aging, mortality, resilience, and sustainability, whether for organisms, companies, or societies.

A society that values order above all else will seek to suppress curiosity. But a society that believes in progress, innovation and creativity will cultivate it, recognising that the enquiring minds of its people constitute its most valuable asset. In medieval Europe, the enquiring mind – especially if it enquired too closely into the edicts of Church or state – was stigmatised. During the Renaissance and Reformation, received wisdoms began to be interrogated, and by the time of the Enlightenment, European societies started to see that their future lay with the curious, and encouraged probing questions rather than stamping on them. The result was the biggest explosion of new ideas and scientific advances in history. The great unlocking of curiosity translated into a cascade of prosperity for the nations that precipitated it. Today, we cannot know for sure if we are in the middle of this golden period or at the end of it. But we are, at the very least, in a lull. With the important exception of the internet, the innovations that catapulted Western societies ahead of the global pack are thin on the ground, while the rapid growth of Asian and South American economies has not yet been accompanied by a comparable run of indigenous innovation. Tyler Cowen, a professor of economics at George Mason University in Virginia, has termed the current period ‘the great stagnation’.

The strengths of social interaction and the flows of information exchange are greatest between terminal units (that is, between individuals) and systematically decrease up the hierarchy of group structures from families and other groups to increasingly larger clusters, leading to superlinear scaling, increasing returns, and an accelerating pace of life.

Just as reproductive sex amplifies genes and their expressed traits, perpetuating the iterative cycle of life, shopping and purchasing are the acts required for innovations to capture resources and reproduce the flow of an innovation’s expressed capability. This economic process of selective value informational feedback amplifies successful innovations.

What is the purpose of education? Is it to impart knowledge and facts or is it to nurture curiosity, effortful problem solving, and the capacity for lifelong learning? Educational historians have repeatedly shown that today’s schools were designed during the first half of the twentieth century to meet the demands of the industrial era, not an innovative knowledge economy. “Very few schools teach students how to create knowledge,” says Professor Keith Sawyer of Washington University, a leading education and innovation researcher. “Instead, students are taught that knowledge is static and complete, and they become experts at consuming knowledge rather than producing knowledge.” This is unacceptable. Change

The integration of these two kinds of networks, namely, the requirement that socioeconomic interaction represented by space-filling fractal-like social networks must be anchored to the physicality of a city as represented by space-filling fractal-like infrastructural networks, determines the number of interactions an average urban dweller can sustain in a city.

... schools in many industrialized nations were not, for the most part, designed to produce innovative thinkers or questioners -- their primary purpose was to produce workers. The author Seth Godin writes, "Our grandfathers and great grandfathers built schools to train people to have a lifetime of productive labor as part of the industrialized economy. And it worked." To create good workers, educations systems put a premium on compliancy and rote memorization of basic knowledge -- excellent qualities in an industrial worker. (Or, as the cartoonist and Simpsons creator Matt Groening puts it, "it seems the main rule that traditional schools teach is how to sit in rows quietly, which is perfect training for grown-up work in a dull office or factory, but not so good for education.") And not so good for questioning: To the extent a school is like a factory, students who inquire about "the way things are" could be seen as insubordinate. It raises, at least in my mind, a question that may seem extreme: If schools were build on a factory model, were they actually designed to squelch questions?

With the invention of the city and its powerful combination of economies of scale coupled to innovation and wealth creation came the great divisions of society. Our present social network structures barely existed in their present form until urban communities evolved. Hunter-gatherers were significantly less hierarchical, more egalitarian and community oriented than we are. The struggle and tension between unbridled individual self-enhancement and the care and concern for the less fortunate has been a major thread running throughout human history, especially over the past two hundred years. Nevertheless, it seems that without the motive of self-interest our entrepreneurial free market economy would collapse. The system we have evolved critically relies on people continually wanting new cars and new cell phones, new widgets and gadgets, new clothes and new washing machines, new thrills, new entertainment, and pretty much new everything, even when they already have enough of “everything.” It may not be a pretty picture and it doesn’t work for everyone, but so far, it’s worked remarkably well for most of us, and apparently most of us seem to want it to continue. Whether it can is a topic I’ll return to in the last chapter.

The typical factory-centric organization places a premium on not-wrong, and spends no time at all weeding out those who don’t start. In the networked economy, the innovation-focused organization has no choice but to obsess about those who don’t start. Today, not starting is far, far worse than being wrong. If you start, you’ve got a shot at evolving and adjusting to turn your wrong into a right. But if you don’t start, you never get a chance.

Today’s computer technology exists in some measure because millions of middle-class taxpayers supported federal funding for basic research in the decades following World War II. We can be reasonably certain that those taxpayers offered their support in the expectation that the fruits of that research would create a more prosperous future for their children and grandchildren. Yet, the trends we looked at in the last chapter suggest we are headed toward a very different outcome. BEYOND THE BASIC MORAL QUESTION of whether a tiny elite should be able to, in effect, capture ownership of society’s accumulated technological capital, there are also practical issues regarding the overall health of an economy in which income inequality becomes too extreme. Continued progress depends on a vibrant market for future innovations—and that, in turn, requires a reasonable distribution of purchasing power.

The pity is that many Americans outside the elite bubbles know exactly what’s wrong, but our leaders seem determined to do nothing about it. Any attempt to cut the government chains and anchors off businesses so they can get back to growing, innovating, and creating jobs is demagogued as “tax breaks for the rich” or “favors for the one-percenters.” Never mind that many of those who would benefit are small-business owners who’ve been decimated over the past few years, first by the economic meltdown, then by government policies put in place to “fix” it. The money printed by the Fed to keep the economy pumped up flows to Wall Street, not Main Street, so small businesses aren’t borrowing it to pay for expansion. Even if they wanted to expand, about a third of all U.S. workers are employed by businesses with fifty or fewer employees, and Obamacare insures that if they hire a fifty-first, they’ll face crippling new costs for mandated health care.

certainly influence the future course of cryptocurrencies, which we take up in chapter 14; governments everywhere are facing the question of how to balance regulation with fostering innovation in this space. Nevertheless, one should have little doubt that governments have all the tools necessary to prevent any alternative transaction media from deeply infiltrating the legal economy on a sustained basis, thereby greatly undermining their value relative to the present-day status of cash.

Technological innovation is not what is hammering down working peoples’ share of what the country earns; technological innovation is the excuse for this development. Inno is a fable that persuades us to accept economic arrangements we would otherwise regard as unpleasant or intolerable—that convinces us that the very particular configuration of economic power we inhabit is in fact a neutral matter of science, of nature, of the way God wants things to be. Every time we describe the economy as an “ecosystem” we accept this point of view. Every time we write off the situation of workers as a matter of unalterable “reality” we resign ourselves to it. In truth, we have been hearing some version of all this inno-talk since the 1970s—a snarling Republican iteration, which demands our submission before the almighty entrepreneur; and a friendly and caring Democratic one, which promises to patch us up with job training and student loans. What each version brushes under the rug is that it doesn’t have to be this way. Economies aren’t ecosystems. They aren’t naturally occurring phenomena to which we must learn to acclimate. Their rules are made by humans. They are, in a word, political. In a democracy we can set the economic table however we choose. “Amazon is not happening to bookselling,” Jeff Bezos of Amazon likes to say. “The future is happening to bookselling.” And what the future wants just happens to be exactly what Amazon wants. What an amazing coincidence.

If you ask people what is characteristic of the best groups they have ever been members of, the same traits keep being mentioned: small, informal, egalitarian, inspired by shared goals, the knowledge that what they do is recognized and valued. They report that the group does its work in a spirit of energized sharing, with much constructive self-examination. … Groups fail in organizations mainly because they are in organizations. They reflect the surrounding cultures—rigid, formal, and highly political in many cases.

Schumpeter chose the term "creative destruction" to describe the introduction of new innovations into the economy for a reason—as the case of PayPal shows, it's a strife-filled process. A half-dozen startup competitors were quick to follow PayPal's lea before eBay got in on the act. And that's just representatives of the so-called new economy. The fact that many banks either entered the online payments market directly or lobbied for regulations against it showed that the old guard was not prepared to go silently into the night.

Thought Leadership “The new economics for industry, government, education” Book by W. Edwards Deming “In God we trust. All others must bring data.” William Edwards Deming, Statistician, Professor and Author #smitanairjain #leadership #womenintech #thoughtleaders #tedxspeaker #technology #tech #success #strategy #startuplife #startupbusiness #startup #mentor #leaders #itmanagement #itleaders #innovation #informationtechnology #influencers #Influencer #hightech #fintechinfluencer #fintech #entrepreneurship #entrepreneurs #economy #economics #development #businessintelligence #business

possibility is that the crisis happened partly because the economic models of the mainstream rendered that outcome ostensibly so unlikely in theory that they ended up making it far more likely in practice. The insouciance encouraged by the rational-expectations and efficient-market hypotheses made regulators and investors careless. As Minsky argued, stability destabilizes. This is an aspect of what George Soros, the successful speculator and innovative economic thinker, calls ‘reflexivity’: the way human beings think determines the reality in which they live.5 Naive economics helps cause unstable economies. Meanwhile,

Even though individualism may be historically contingent, it has become so deeply part of the way that modern people understand themselves that it is hard to see how it gets walked back. Modern market economies depend heavily on flexibility, labor mobility, and innovation. If transactions need to take place within limited cultural boundaries, the size of markets and the kind of innovation that comes from cultural diversity will necessarily be limited. Individualism is not a fixed cultural characteristic of Western culture as alleged by certain versions of critical theory. It is a by-product of socioeconomic modernization that gradually takes place across different societies.

The Swiss are rich but like to hide it, reserved yet determined to introduce themselves to everyone, innovative but resistant to change, liberal enough to sanction gay partnerships but conservative enough to ban new minarets. And they invented a breakfast cereal that they eat for supper. Privacy is treasured but intrusive state control is tolerated; democracy is king, yet the majority don’t usually vote; honesty is a way of life but a difficult past is reluctantly talked about; and conformity is the norm, yet red shoes are bizarrely popular. It is perhaps no surprise that the Swiss are contradictory, given how divided their country is. Since its earliest days Switzerland has faced geographic, linguistic, religious and political divisions that would have destroyed other countries at birth. Those divisions have been bridged, though not without bloodshed, but Switzerland remains as paradoxical as its people. While modern technology drives the economy, some fields are still harvested with scythes (all the hilly landscape’s fault); it’s a neutral nation yet it exports weapons to many other countries; it has no coastline but won sailing’s America’s Cup and has a merchant shipping fleet equal in size to Saudi Arabia’s. As for those national stereotypes, well, not all the cheese has holes, cuckoo clocks aren’t Swiss and the trains don’t always run exactly on time.

People learn best and fastest from making their own mistakes and fixing them. It’s painful to watch a child flounder, but in the long run children become more resilient and resourceful if they have to deal with failure once in a while. One of the biggest fears of today’s business strategists is that we are producing a coddled workforce of straight “A” students who are afraid to go out on a limb for fear they’ll fall. American innovation was born out of metaphorical scraped knees and bloody noses. A generation that’s been told they shouldn’t even touch a doorknob without applying antibacterial hand sanitizer may not have the rough and tumble qualities needed to compete in a global dog-eat-dog economy.

I always thought of myself as a humanities person as a kid, but I liked electronics,” he said. “Then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do.” It was as if he were suggesting themes for his biography (and in this instance, at least, the theme turned out to be valid). The creativity that can occur when a feel for both the humanities and the sciences combine in one strong personality was the topic that most interested me in my biographies of Franklin and Einstein, and I believe that it will be a key to creating innovative economies in the twenty-first century.

So, if you are predominantly a producer of intangible assets (writing software, doing design, producing research) you probably want to build an organization that allows information to flow, help serendipitous interactions, and keeps the key talent. That probably means allowing more autonomy, fewer targets, and more access to the boss, even if that is at the cost of influence activities. This seems to describe the types of autonomous organizations that the earlier writers, like Charles Leadbeater, had in mind. And it also seems to describe the increasing importance of systemic innovators. Such innovators are not inventors of single, isolated inventions. Rather, their role is to coordinate the synergies that successfully bring such an innovation to market.

In addition to social and ethical reforms, Christianity was responsible for important economic and technological innovations. The Catholic Church established medieval Europe’s most sophisticated administrative system, and pioneered the use of archives, catalogues, timetables and other techniques of data processing. The Vatican was the closest thing twelfth-century Europe had to Silicon Valley. The Church established Europe’s first economic corporations – the monasteries – which for 1,000 years spearheaded the European economy and introduced advanced agricultural and administrative methods. Monasteries were the first institutions to use clocks, and for centuries they and the cathedral schools were the most important learning centres of Europe, helping to found many of Europe’s first universities, such as Bologna, Oxford and Salamanca.

The same thing, notes Brynjolfsson, happened 120 years ago, in the Second Industrial Revolution, when electrification—the supernova of its day—was introduced. Old factories did not just have to be electrified to achieve the productivity boosts; they had to be redesigned, along with all business processes. It took thirty years for one generation of managers and workers to retire and for a new generation to emerge to get the full productivity benefits of that new power source. A December 2015 study by the McKinsey Global Institute on American industry found a “considerable gap between the most digitized sectors and the rest of the economy over time and [found] that despite a massive rush of adoption, most sectors have barely closed that gap over the past decade … Because the less digitized sectors are some of the largest in terms of GDP contribution and employment, we [found] that the US economy as a whole is only reaching 18 percent of its digital potential … The United States will need to adapt its institutions and training pathways to help workers acquire relevant skills and navigate this period of transition and churn.” The supernova is a new power source, and it will take some time for society to reconfigure itself to absorb its full potential. As that happens, I believe that Brynjolfsson will be proved right and we will start to see the benefits—a broad range of new discoveries around health, learning, urban planning, transportation, innovation, and commerce—that will drive growth. That debate is for economists, though, and beyond the scope of this book, but I will be eager to see how it plays out. What is absolutely clear right now is that while the supernova may not have made our economies measurably more productive yet, it is clearly making all forms of technology, and therefore individuals, companies, ideas, machines, and groups, more powerful—more able to shape the world around them in unprecedented ways with less effort than ever before. If you want to be a maker, a starter-upper, an inventor, or an innovator, this is your time. By leveraging the supernova you can do so much more now with so little. As Tom Goodwin, senior vice president of strategy and innovation at Havas Media, observed in a March 3, 2015, essay on TechCrunch.com: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.

Sustainability is today’s freedom crusade, because the next generation will not live free—will not have the freedom to pursue its economic dreams or to delight in all that nature has to offer—if our approach to the financial world and the natural are not grounded in sustainable values. That lack of sustainability will constrict everything in our lives. It will limit everything we might want to do. Unless we become less dependent on hydrocarbons, and unless we find a balance between the need for markets to be free enough to reward innovation and risk-taking but not so free as to reward recklessness that can destabilize the whole global economy, our lives will be reduced, redacted, and restricted. We will be overwhelmed by all the toxic assets we will produce in the Market and in Mother Nature. It will feel worse than had the Soviet Union won the Cold War, because we and our children will be enslaved by our financial debts and constricted by our ecological debts.

Sri Lankan Socioeconomics 101 If people stopped chasing after power and connections and realized that they have all the power they need within themselves, to create whatever they want with their lives: there will be more friendships than contacts, less gold-diggers, more marriages based on love, better family lives, stable and enriched childhoods leading to a well endowed, disciplined and better educated workforce. There will be loyalty and ingenuity and better standards of education. Abundance of well educated individuals => pressure to innovate =>increased entrepreneurship, improved economy.High functioning economy attracting more foreign capital => export surplus. Educated workforce + increased involvement in international business => pressure to improve foreign allies and foreign policy => pressure to improve transparency => decrease in corruption. So stop sitting around complaining about corruption and (with all due respect,) get off your ass and do something for yourself. Stop chasing after other people's power and chase after your own dreams and you will have all the power you need.

Ibn Khaldun wanted to discover the underlying causes of this change. He was probably the last great Spanish Faylasuf; his great innovation was to apply the principles of philosophic rationalism to he study of history, hitherto considered to be beneath the notice of a philosopher, because it dealt only with transient, fleeting events instead of eternal truths. But Ibn Khaldun believed that, beneath the flux of historical incidents, universal laws governed the fortunes of society. He decided that it was a strong sense of group solidarity (asibiyyah) that enabled a people to survive and, if conditions were right, to subjugate others. This conquest meant that the dominant group could absorb the resources of the subject peoples, develop a culture and a complex urban life. But as the ruling class became accustomed to a luxurious lifestyle, complacency set in and they began to lose their vigour. They no longer took sufficient heed of their subjects, there was jealousy and infighting and the economy would begin to decline. Thus the state became vulnerable to a new tribal or nomadic group, which was in the first flush of its own asibiyyah, and the whole cycle began again.

Perhaps the most remarkable elder-care innovation developed in Japan so far is the Hybrid Assistive Limb (HAL)—a powered exoskeleton suit straight out of science fiction. Developed by Professor Yoshiyuki Sankai of the University of Tsukuba, the HAL suit is the result of twenty years of research and development. Sensors in the suit are able to detect and interpret signals from the brain. When the person wearing the battery-powered suit thinks about standing up or walking, powerful motors instantly spring into action, providing mechanical assistance. A version is also available for the upper body and could assist caretakers in lifting the elderly. Wheelchair-bound seniors have been able to stand up and walk with the help of HAL. Sankai’s company, Cyberdyne, has also designed a more robust version of the exoskeleton for use by workers cleaning up the Fukushima Daiichi nuclear plant in the wake of the 2011 disaster. The company says the suit will almost completely offset the burden of over 130 pounds of tungsten radiation shielding worn by workers.* HAL is the first elder-care robotic device to be certified by Japan’s Ministry of Economy, Trade, and Industry. The suits lease for just under $2,000 per year and are already in use at over three hundred Japanese hospitals and nursing homes.21

Pull approaches differ significantly from push approaches in terms of how they organize and manage resources. Push approaches are typified by "programs" - tightly scripted specifications of activities designed to be invoked by known parties in pre-determined contexts. Of course, we don't mean that all push approaches are software programs - we are using this as a broader metaphor to describe one way of organizing activities and resources. Think of thick process manuals in most enterprises or standardized curricula in most primary and secondary educational institutions, not to mention the programming of network television, and you will see that institutions heavily rely on programs of many types to deliver resources in pre-determined contexts. Pull approaches, in contrast, tend to be implemented on "platforms" designed to flexibly accommodate diverse providers and consumers of resources. These platforms are much more open-ended and designed to evolve based on the learning and changing needs of the participants. Once again, we do not mean to use platforms in the literal sense of a tangible foundation, but in a broader, metaphorical sense to describe frameworks for orchestrating a set of resources that can be configured quickly and easily to serve a broad range of needs. Think of Expedia's travel service or the emergency ward of a hospital and you will see the contrast with the hard-wired push programs.

If this is true—if solitude is an important key to creativity—then we might all want to develop a taste for it. We’d want to teach our kids to work independently. We’d want to give employees plenty of privacy and autonomy. Yet increasingly we do just the opposite. We like to believe that we live in a grand age of creative individualism. We look back at the midcentury era in which the Berkeley researchers conducted their creativity studies, and feel superior. Unlike the starched-shirted conformists of the 1950s, we hang posters of Einstein on our walls, his tongue stuck out iconoclastically. We consume indie music and films, and generate our own online content. We “think different” (even if we got the idea from Apple Computer’s famous ad campaign). But the way we organize many of our most important institutions—our schools and our workplaces—tells a very different story. It’s the story of a contemporary phenomenon that I call the New Groupthink—a phenomenon that has the potential to stifle productivity at work and to deprive schoolchildren of the skills they’ll need to achieve excellence in an increasingly competitive world. The New Groupthink elevates teamwork above all else. It insists that creativity and intellectual achievement come from a gregarious place. It has many powerful advocates. “Innovation—the heart of the knowledge economy—is fundamentally social,” writes the prominent journalist Malcolm Gladwell. “None of us is as smart as all of us,” declares the organizational consultant Warren Bennis,

Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned

Managerial abilities, bureaucratic skills, technical expertise, and political talent are all necessary, but they can be applied only to goals that have already been defined by military policies, broad and narrow. And those policies can be only as good as strategy, operational art of war, tactical thought, and plain military craft that have gone into their making. At present, the defects of structure submerge or distort strategy and operational art, they out rightly suppress tactical ingenuity, and they displace the traditional insights and rules of military craft in favor of bureaucratic preferences, administrative convenience, and abstract notions of efficiency derived from the world of business management. First there is the defective structure for making of military decisions under the futile supervision of the civilian Defense Department; then come the deeply flawed defense policies and military choices, replete with unnecessary costs and hidden risks; finally there come the undoubted managerial abilities, bureaucratic skills, technical expertise, and political talents, all applied to achieve those flawed policies and to implement those flawed choices. By this same sequence was the fatally incomplete Maginot Line built, as were all the Maginot Lines of history, each made no better by good government, technical talent, careful accounting, or sheer hard work. Hence the futility of all the managerial innovations tried in the Pentagon over the years. In the purchasing of weapons, for example, “total package” procurement, cost plus incentive contracting, “firm fixed price” purchasing have all been introduced with much fanfare, only to be abandoned, retried, and repudiated once again. And each time a new Secretary of Defense arrives, with him come the latest batch of managerial innovations, many of them aimed at reducing fraud, waste, and mismanagement-the classic trio endlessly denounced in Congress, even though they account for mere percentage points in the total budget, and have no relevance at all to the failures of combat. The persistence of the Administrator’s Delusion has long kept the Pentagon on a treadmill of futile procedural “reforms” that have no impact at all on the military substance of our defense. It is through strategy, operational art, tactical ingenuity, and military craft that the large savings can be made, and the nation’s military strength greatly increased, but achieving long-overdue structural innovations, from the central headquarters to the combat forces, from the overhead of bases and installations to the current purchase of new weapons. Then, and only then, will it be useful to pursue fraud, waste, and mismanagement, if only to save a few dollars more after the billions have already been saved. At present, by contrast, the Defense Department administers ineffectively, while the public, Congress, and the media apply their energies to such petty matters as overpriced spare parts for a given device in a given weapon of a given ship, overlooking at the same time the multibillion dollar question of money spent for the Navy as a whole instead of the Army – whose weakness diminishes our diplomatic weight in peacetime, and which could one day cause us to resort to nuclear weapons in the face of imminent debacle. If we had a central military authority and a Defense Department capable of strategy, we should cheerfully tolerate much fraud, waste, and mismanagement; but so long as there are competing military bureaucracies organically incapable of strategic combat, neither safety nor economy will be ensured, even if we could totally eliminate every last cent of fraud, waste, and mismanagement.

Almost all official statistics and policy documents on wages, income, gross domestic product (GDP), crime, unemployment rates, innovation rates, cost of living indices, morbidity and mortality rates, and poverty rates are compiled by governmental agencies and international bodies worldwide in terms of both total aggregate and per capita metrics. Furthermore, well-known composite indices of urban performance and the quality of life, such as those assembled by the World Economic Forum and magazines like Fortune, Forbes, and The Economist, primarily rely on naive linear combinations of such measures.6 Because we have quantitative scaling curves for many of these urban characteristics and a theoretical framework for their underlying dynamics we can do much better in devising a scientific basis for assessing performance and ranking cities. The ubiquitous use of per capita indicators for ranking and comparing cities is particularly egregious because it implicitly assumes that the baseline, or null hypothesis, for any urban characteristic is that it scales linearly with population size. In other words, it presumes that an idealized city is just the linear sum of the activities of all of its citizens, thereby ignoring its most essential feature and the very point of its existence, namely, that it is a collective emergent agglomeration resulting from nonlinear social and organizational interactions. Cities are quintessentially complex adaptive systems and, as such, are significantly more than just the simple linear sum of their individual components and constituents, whether buildings, roads, people, or money. This is expressed by the superlinear scaling laws whose exponents are 1.15 rather than 1.00. This approximately 15 percent increase in all socioeconomic activity with every doubling of the population size happens almost independently of administrators, politicians, planners, history, geographical location, and culture.

Most obviously, they agreed, an autocatalytic set was a web of transformations among molecules in precisely the same way that an economy is a web of transformations among goods and services. In a very real sense, in fact, an autocatalytic set was an economy-a submicroscopic economy that extracted raw materials (the primordial "food" molecules) and converted them into useful products (more molecules in the set). Moreover an autocatalytic set can bootstrap its own evolution in precisely the same way that an economy can, by growing more and more complex over time. This was a point that fascinated Kauffman. If innovations result from new combinations of old technologies, then the number of possible innovations would go up very rapidly as more and more technologies became available. In fact, he argued, once you get beyond a certain threshold of complexity you can expect a kind of phase transition analogous to the ones he had found in his autocatalytic sets. Below that level of complexity you would find countries dependent upon just a few major industries, and their economies would tend to be fragile and stagnant. In that case, it wouldn't matter how much investment got poured into the country. "If all you do is produce bananas, nothing will happen except that you produce more bananas." But if a country ever managed to diversify and increase its complexity above the critical point, then you would expect it to undergo an explosive increase in growth and innovation-what some economists have called an "economic takeoff." The existence of that phase transition would also help explain why trade is so important to prosperity, Kauffman told Arthur. Suppose you have two different countries, each one of which is subcritical by itself. Their economies are going nowhere. But now suppose they start trading, so that their economies become interlinked into one large economy with a higher complexity. "I expect that trade between such systems will allow the joint system to become supercritical and explode outward." Finally, an autocatalytic set can undergo exactly the same kinds of evolutionary booms and crashes that an economy does. Injecting one new kind of molecule into the soup could often transform the set utterly, in much the same way that the economy transformed when the horse was replaced by the automobile. This was part of autocatalysis that really captivated Arthur. It had the same qualities that had so fascinated him when he first read about molecular biology: upheaval and change and enormous consequences flowing from trivial-seeming events-and yet with deep law hidden beneath.

her that when he had first raised the idea, I hadn’t known he was sick. Almost nobody knew, she said. He had called me right before he was going to be operated on for cancer, and he was still keeping it a secret, she explained. I decided then to write this book. Jobs surprised me by readily acknowledging that he would have no control over it or even the right to see it in advance. “It’s your book,” he said. “I won’t even read it.” But later that fall he seemed to have second thoughts about cooperating and, though I didn’t know it, was hit by another round of cancer complications. He stopped returning my calls, and I put the project aside for a while. Then, unexpectedly, he phoned me late on the afternoon of New Year’s Eve 2009. He was at home in Palo Alto with only his sister, the writer Mona Simpson. His wife and their three children had taken a quick trip to go skiing, but he was not healthy enough to join them. He was in a reflective mood, and we talked for more than an hour. He began by recalling that he had wanted to build a frequency counter when he was twelve, and he was able to look up Bill Hewlett, the founder of HP, in the phone book and call him to get parts. Jobs said that the past twelve years of his life, since his return to Apple, had been his most productive in terms of creating new products. But his more important goal, he said, was to do what Hewlett and his friend David Packard had done, which was create a company that was so imbued with innovative creativity that it would outlive them. “I always thought of myself as a humanities person as a kid, but I liked electronics,” he said. “Then I read something that one of my heroes, Edwin Land of Polaroid, said about the importance of people who could stand at the intersection of humanities and sciences, and I decided that’s what I wanted to do.” It was as if he were suggesting themes for his biography (and in this instance, at least, the theme turned out to be valid). The creativity that can occur when a feel for both the humanities and the sciences combine in one strong personality was the topic that most interested me in my biographies of Franklin and Einstein, and I believe that it will be a key to creating innovative economies in the twenty-first century. I asked Jobs why he wanted me to be the one to write his biography. “I think you’re good at getting people to talk,” he replied. That was an unexpected answer. I knew that I would have to interview scores of people he had fired, abused, abandoned, or otherwise infuriated, and I feared he would not be comfortable with my getting them to talk. And indeed he did turn out to be skittish when word trickled back to him of people that I was interviewing. But after a couple of months,

gave up on the idea of creating “socialist men and women” who would work without monetary incentives. In a famous speech he criticized “equality mongering,” and thereafter not only did different jobs get paid different wages but also a bonus system was introduced. It is instructive to understand how this worked. Typically a firm under central planning had to meet an output target set under the plan, though such plans were often renegotiated and changed. From the 1930s, workers were paid bonuses if the output levels were attained. These could be quite high—for instance, as much as 37 percent of the wage for management or senior engineers. But paying such bonuses created all sorts of disincentives to technological change. For one thing, innovation, which took resources away from current production, risked the output targets not being met and the bonuses not being paid. For another, output targets were usually based on previous production levels. This created a huge incentive never to expand output, since this only meant having to produce more in the future, since future targets would be “ratcheted up.” Underachievement was always the best way to meet targets and get the bonus. The fact that bonuses were paid monthly also kept everyone focused on the present, while innovation is about making sacrifices today in order to have more tomorrow. Even when bonuses and incentives were effective in changing behavior, they often created other problems. Central planning was just not good at replacing what the great eighteenth-century economist Adam Smith called the “invisible hand” of the market. When the plan was formulated in tons of steel sheet, the sheet was made too heavy. When it was formulated in terms of area of steel sheet, the sheet was made too thin. When the plan for chandeliers was made in tons, they were so heavy, they could hardly hang from ceilings. By the 1940s, the leaders of the Soviet Union, even if not their admirers in the West, were well aware of these perverse incentives. The Soviet leaders acted as if they were due to technical problems, which could be fixed. For example, they moved away from paying bonuses based on output targets to allowing firms to set aside portions of profits to pay bonuses. But a “profit motive” was no more encouraging to innovation than one based on output targets. The system of prices used to calculate profits was almost completely unconnected to the value of new innovations or technology. Unlike in a market economy, prices in the Soviet Union were set by the government, and thus bore little relation to value. To more specifically create incentives for innovation, the Soviet Union introduced explicit innovation bonuses in 1946. As early as 1918, the principle had been recognized that an innovator should receive monetary rewards for his innovation, but the rewards set were small and unrelated to the value of the new technology. This changed only in 1956, when it was stipulated that the bonus should be proportional to the productivity of the innovation. However, since productivity was calculated in terms of economic benefits measured using the existing system of prices, this was again not much of an incentive to innovate. One could fill many pages with examples of the perverse incentives these schemes generated. For example, because the size of the innovation bonus fund was limited by the wage bill of a firm, this immediately reduced the incentive to produce or adopt any innovation that might have economized on labor.

Growth was so rapid that it took in generations of Westerners, not just Lincoln Steffens. It took in the Central Intelligence Agency of the United States. It even took in the Soviet Union’s own leaders, such as Nikita Khrushchev, who famously boasted in a speech to Western diplomats in 1956 that “we will bury you [the West].” As late as 1977, a leading academic textbook by an English economist argued that Soviet-style economies were superior to capitalist ones in terms of economic growth, providing full employment and price stability and even in producing people with altruistic motivation. Poor old Western capitalism did better only at providing political freedom. Indeed, the most widely used university textbook in economics, written by Nobel Prize–winner Paul Samuelson, repeatedly predicted the coming economic dominance of the Soviet Union. In the 1961 edition, Samuelson predicted that Soviet national income would overtake that of the United States possibly by 1984, but probably by 1997. In the 1980 edition there was little change in the analysis, though the two dates were delayed to 2002 and 2012. Though the policies of Stalin and subsequent Soviet leaders could produce rapid economic growth, they could not do so in a sustained way. By the 1970s, economic growth had all but stopped. The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further progress. The only area in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies. Gosplan was the supposedly all-powerful planning agency in charge of the central planning of the Soviet economy. One of the benefits of the sequence of five-year plans written and administered by Gosplan was supposed to have been the long time horizon necessary for rational investment and innovation. In reality, what got implemented in Soviet industry had little to do with the five-year plans, which were frequently revised and rewritten or simply ignored. The development of industry took place on the basis of commands by Stalin and the Politburo, who changed their minds frequently and often completely revised their previous decisions. All plans were labeled “draft” or “preliminary.” Only one copy of a plan labeled “final”—that for light industry in 1939—has ever come to light. Stalin himself said in 1937 that “only bureaucrats can think that planning work ends with the creation of the plan. The creation of the plan is just the beginning. The real direction of the plan develops only after the putting together of the plan.” Stalin wanted to maximize his discretion to reward people or groups who were politically loyal, and punish those who were not. As for Gosplan, its main role was to provide Stalin with information so he could better monitor his friends and enemies. It actually tried to avoid making decisions. If you made a decision that turned out badly, you might get shot. Better to avoid all responsibility. An example of what could happen

MT: Mimetic desire can only produce evil? RG: No, it can become bad if it stirs up rivalries but it isn't bad in itself, in fact it's very good, and, fortunately, people can no more give it up than they can give up food or sleep. It is to imitation that we owe not only our traditions, without which we would be helpless, but also, paradoxically, all the innovations about which so much is made today. Modern technology and science show this admirably. Study the history of the world economy and you'll see that since the nineteenth century all the countries that, at a given moment, seemed destined never to play anything but a subordinate role, for lack of “creativity,” because of their imitative or, as Montaigne would have said, their “apish” nature, always turned out later on to be more creative than their models. It began with Germany, which, in the nineteenth century, was thought to be at most capable of imitating the English, and this at the precise moment it surpassed them. It continued with the Americans in whom, for a long time, the Europeans saw mediocre gadget-makers who weren't theoretical or cerebral enough to take on a world leadership role. And it happened once more with the Japanese who, after World War II, were still seen as pathetic imitators of Western superiority. It's starting up again, it seems, with Korea, and soon, perhaps, it'll be the Chinese. All of these consecutive mistakes about the creative potential of imitation cannot be due to chance. To make an effective imitator, you have to openly admire the model you're imitating, you have to acknowledge your imitation. You have to explicitly recognize the superiority of those who succeed better than you and set about learning from them. If a businessman sees his competitor making money while he's losing money, he doesn't have time to reinvent his whole production process. He imitates his more fortunate rivals. In business, imitation remains possible today because mimetic vanity is less involved than in the arts, in literature, and in philosophy. In the most spiritual domains, the modern world rejects imitation in favor of originality at all costs. You should never say what others are saying, never paint what others are painting, never think what others are thinking, and so on. Since this is absolutely impossible, there soon emerges a negative imitation that sterilizes everything. Mimetic rivalry cannot flare up without becoming destructive in a great many ways. We can see it today in the so-called soft sciences (which fully deserve the name). More and more often they're obliged to turn their coats inside out and, with great fanfare, announce some new “epistemological rupture” that is supposed to revolutionize the field from top to bottom. This rage for originality has produced a few rare masterpieces and quite a few rather bizarre things in the style of Jacques Lacan's Écrits. Just a few years ago the mimetic escalation had become so insane that it drove everyone to make himself more incomprehensible than his peers. In American universities the imitation of those models has since produced some pretty comical results. But today that lemon has been squeezed completely dry. The principle of originality at all costs leads to paralysis. The more we celebrate “creative and enriching” innovations, the fewer of them there are. So-called postmodernism is even more sterile than modernism, and, as its name suggests, also totally dependent on it. For two thousand years the arts have been imitative, and it's only in the nineteenth and twentieth centuries that people started refusing to be mimetic. Why? Because we're more mimetic than ever. Rivalry plays a role such that we strive vainly to exorcise imitation. MT