Monday, August 8, 2011

Time for a New Economic System -- 20 Features of a Creative Economy

It is time for a New Economy. Both conservatism and liberalism have failed us. The financial prospects for the US and in Europe look very grim.

As of last week, the recession in the US took a leap to a new level, to that of a “sovereign recession”, where government itself is in financial crisis, and is a major contributor to the slump in business and industry, and will create negative international effects that will further drive down the US economy (and the world economy as well).

Clearly, we need a new vision because the old ideas no longer work, and if they continue to hold sway, conditions will get worse.

Below are 20 themes of a new economic system – which is Not a deregulated system of greed and profit obsession Nor is it a statist system that substitutes government for industry.

This new idea is based upon these key concepts:

·         Creativity and innovation in industry and in economic thinking

·         Multiple values and measures appending the old system of only money and profit

·         Diverse analysis of issues and problems – thinking in terms of multiple points of view, multiple needs, multiple methods and solutions.

·         Direct democracy – promoting control by the citizen over an economy through various methods such as investing, buying, employee equity, community power, reform of government and more.

This new economy would be a Creative Economy or Genio Economy. It would stress creativity in business. It would demand a creative approach to restructuring an economy. It would reject systems of singular values like profit to drive all behavior, and open up a world of multiple Human values and thus multiple business values.

Here are some features of this new kind of economy:

A Competitive Market.
A market economy provides innovation and competition. It produces individual decision making and action, releasing a lot of energy. It produces difference, individuality, variety and creativity. Key is to stop monopoly, suppression of invention and theft of invention which is the norm today.

Also, it is important to prevent government from substituting itself for business, government has an essential supporting role but is not the star of the show.

Metrics and targets which drive creativity.
Industries voluntarily and collectively set general targets for products making them faster, cheaper, higher quality, safer, green and more. Industries can share ideas and techniques, and set general plans. At the same time, companies will compete on specific products, solutions, methods – and this is already done in the silicon wafer industry. On a national level plans and goals can be established to solve problems as in healthcare and energy. Industries, communities, citizen’s groups and government can together develop national economic priorities.

Metric ratings in general to drive creativity.
Money and profit is only one measure of business performance, there can be many more metrics that examine product quality, environmental impact, diversity of a workforce, relation of a firm to its surrounding community and many more types. Without other values and principles limiting the drive for profit an economy will commoditize and commercial all things and bring suffering to people. By setting metric targets an industry or firm is forced to be creative in achieving a high rating. The higher the performance, the higher will be sales of a product, goodwill from a community, and investment interest. Even measures of creativity and innovation can be created, and conversely metrics for “mis-creativity”.

These are created for investors, communities, social groups, consumers, employees and other people to evaluate firms on the basis of the new measures of creativity and other targets. Leagues invest in companies that adopt and perform well in the new system of measures. Consumers favor products from firms that have high metrics. Communities rate local businesses. In this way all of society is brought into economic decision making, when before only enterprises made these decisions though they had repercussions upon all of society.

Formation of stock exchanges.
These are based upon these new creative metrics. Financial exchanges and institutions can be created that rate firms so that enlightened investors can choose which are the best companies to receive their capital through stock or bond purchases.

New kinds of securities.
Thinking in terms of creativity and new metrics will alter our ideas about stocks and bonds.

Formation of investment banks.
New kinds of banks can gather together capital and help form new companies and fund old companies making a transition to the new creative mode. More radically, we can create “combination banks” that will help put together entire companies – money, real estate, equipment, skilled and unskilled workers, managers and more.

New money.
When we think in terms of money and creativity, we are no longer in the realm of “money”. Valuation is now money plus metrics, profit plus other values. Investment is now money plus metrics, not simply capital for maximum short term profit. And production is now for money plus products and services with higher standards. New money is a highly creative force that ceaselessly pushes for higher targets.

New ownership forms.
To unleash maximum creativity among workers, professionals, researchers and managers, we will need new types of compensation and equity. Creativity democratizes a firm.

New type of power.
What is power? Old power is money and profit. But New Power is the power of creativity, the power of new metric standards, the power of a competitive market, the power of company democracy, the power of a firm and a community working together.

A variety of organization forms for business.
The range of organizational types is great for firms, these run from cooperative and collective forms to those helmed by a creative team or individual.

Education and training in creativity.
Industries and firms will need to educate their employees in the techniques of creativity. No company can survive in an age of Genio Economics without a creative edge.

Culture of creativity in companies.
Creativity produces a different psychology which includes a degree of chaos, high individuality, ignoring timelines and deadlines, competition and much more. The old top-down authoritarian corporation is as obsolete as Pharoah’s Pyramid. The Genio business is dynamic, contradictory and explosive. Its behaviors have more in common with artists, inventors and discoverers.

New MBA’s and economists.
The Academic world will have to redesign its curriculum. A new paradigm of new measures and creativity will force rethinking. The world will need an army of new professionals trained in the new science.

Gross metric product and creativity measure.
A Gross Metric Product is the answer to a GDP (Gross Domestic Product) measure. A GMP measures the quality of an economy, it rates performance in various areas. A National Creativity Measure gives rates of innovation, quality of innovation, synergy of innovations and more.

Government Support.
Government can bring business and citizens groups together in developing plans to creatively meet national and local needs. Government can support new metrics by supporting the formation of leagues, new stock exchanges and public metric reporting by companies. Government contracts could favor firms that are creative and use multiple measure targets. Government can take action against companies that control markets and suppress innovation. In general, government can focus on getting a new market system to evolve, and puts it efforts to the more general issues of fiscal policy, national plan, and major and critical issues of regulation.

The New citizen.
The fundamental form of power lies with the citizen. In a democratic society, power ultimately resides within the individual. In the case of economics, power is knowledge and skill. The modern citizen is now an investor, owner, worker, consumer, community member, environmentalist and more. The modern citizen has a diverse nature with many points of view.

Open-minded Economics.
Genio economy is also open to other ideas and working with many on a variety of forms and strategy. This would include new thinking in non-profits, new ideas on barter, new forms of company ownership and compensation. It would also include exploring new ways of looking at real estate, mortgages and land value. Further, new approaches will be needed to end poverty, create jobs and fix the education system. A Creative Economy is by definition open-minded and comprehensive in its approach to all social issues. Unlike the former system, the Genio economy is socially concerned and active. Obligation and compassion are essential behaviors.

New Human goals.
A Creative economy rethinks the personal values and goals that run the present system. It looks for the creative and discards the “mis-creative”. It looks for the truly important values in life and the true needs that must be fulfilled by an economy. In sum, it has at least 3 concerns:

·         Self growth – personal development in many realms
·         Giving – helping the unfortunate and the suffering
·         Living things – taking care of Nature and loving animals
The new economy is not driven by consumerism, credit systems, greed, profit, status and etc.

Social background and support.
A Genio economy cannot survive if the cultural background is hostile it. To create an environment that encourages creativity in business and finance we need new values and new institutions:

·         Direct Democracy of citizen control, this requires a change in our Constitution.

·         Social Diversity as a commitment in all spheres of society, and most importantly in economics, business, standard of living.

·         Public education that stresses creative mindsets, behaviors and techniques, otherwise you cannot have any system of mass creativity.

·         New Media that propagates the new values and philosophy

These 20 themes outline a new kind of economy that can supersede the dysfunctional institution that we now suffer under. It is a system that takes what is best about the former world and rejects what does not work and what is morally unacceptable. More, it adds fresh new ideas.

“Creativity” is the watchword of the day. We are here in this mess because we are not creative, because we are running down the preformed tracks of worn out ideologies.

Only our creativity will save us. It is our only option now.

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