Chris Dillow reckons we are facing a crisis of creativity. “What might be the most important question in economics,” he says, is “how to encourage creativity.”
I say this is the most important question because it is the main cause of economic growth. Classical economists from Smith to Mill saw growth as a contest between the law of diminishing returns, which led to stagnation, and innovation, which tended to prolong growth. Even Keynes took a similar view (pdf). He predicted in 1931 that “a point may soon be reached” when consumers would be largely satiated and so a 15-hour working week would be the norm.
When creativity and innovation slow, therefore, growth stops. And we might be at or near this point. The slowdown in productivity growth and capital spending in recent years are both consistent with a slowdown in technical progress. This is not just afflicting old, sclerotic firms; even Apple, the greatest innovator of recent years, is returning cash to shareholders rather than investing it in new ventures.
The reluctance to invest, says Chris, may not only be due to lack of confidence; it could also be because there is a lack of new and interesting ideas to back. Unless we can generate sufficient creativity and technical progress, he says, the under-employment which is becoming a feature of our economy will be with us for some time to come.
But are companies any less creative and innovative now than they were in the past? I joined the corporate world at the fag-end of the 80s boom and I have seen both growth and recession at least twice. Firms tend to retrench and become more cautious during economic slowdowns. At just the point where they are in need of new ideas, they stick to what they know and sideline their mavericks or push them out altogether. That said, most large organisations are not that good at dealing with creative people and wacky ideas anyway.
I wrote about this some time ago after Stefan Stern had reported on some research from Kingston University. The study found that, despite saying they wanted off-the-wall entrepreneurial types, when they got them firms found they didn’t know what to do with them. Mavericks can be awkward, disruptive and sometimes downright intimidating. And that makes people uncomfortable.
For this reason, corporate cultures often spit such people out. It’s a bit like a body rejecting a transplant. The innovators are so different that the corporate body can’t assimilate them. After going to great lengths to attract and recruit them, the corporation either finds it can’t retain the mavericks or it gives them the boot.
A few years ago a friend of mine did some research at a large blue-chip company. The firm had some creative characters who came up with new and profitable products and it was keen to understand what made these people tick. My friend’s research was revealing. All the mavericks said they would probably have left the company years ago but had stayed because something else that had happened in their lives. It might have been the illness of a child or the need to support a partner through university. For one person, playing in a band was his passion and leaving the company would probably have meant relocating which would have meant finding another band. So he stayed.
The point is that all of them had stayed with the company despite its culture, its management and its reward structures not because of them. External factors had kept the creative mavericks from leaving. It was nothing to do with the firm’s retention strategies or anything its managers had done. The awkward truth was that the company alienated its creative types and most of them left. The ones that were still there were there by pure chance.
The same is true of those organisations that, rather than hiring mavericks, try to unlock the creative potential of the people they already have. This too can lead to instability and discomfort. When people already have their places in the hierarchy it upsets everyone else if they suddenly start coming up with ideas and expecting to be heard. I worked in a company years ago which decided to train first line supervisors in creative problem solving techniques. It really spooked the middle managers. Supervisors were running brainstorming sessions and using all sorts of highfalutin’ language. It just wouldn’t do! However hard you try to break out of your box, there will always be some people who want to put you back into it.
There is a certain inevitability about all this. As Vijay Govindarajan and Chris Trimble say, innovation is unnatural. Businesses are built for efficiency, which depends on predictability and repeatability. Innovation is unpredictable and uncertain. Whatever they say about innovation, bosses tend to favour the known over the unknown.
It is true that some smaller organisations can be more creative if they are made up of people willing to think radically and take risks but, even then, they need resources to develop their ideas which usually means pitching them to bigger more conservative players. Or else being acquired by them which can then lead to the same problems of discomfort and rejection by the host culture. Wherever they come from, creative ideas have an uphill struggle to make it from spark to implementation.
Creativity has always been a long hard slog, slowed down by corporate obstacles, spiked by saboteurs and smothered by indifference. But I’m not sure this is any worse now than it has ever been. Is there, as Chris says, a creativity crisis in Britain, or is developing and implementing creative ideas just as difficult as it ever was?