The Power of Innovation

Innovation is the driving force of economic growth. The innovation of manned space flight drove the economic boom of the 1960’s. The innovation of computer technology drove the boom of the 1980’s. The innovation of the Internet drove the boom of the 1990’s. However, we must ask the question, where is the innovation of the 2000’s? Is this lack of innovation a reason for the economic recession we are currently experiencing? What is the cause of this lack of innovation?

Adam Bernhard has discovered success in retailing in the middle of the worst recession since the Great Depression. In a recent interview for Entrepreneur Magazine, the interviewer asked for his advice about going into the retail business. His response was surprising. He said not to do it. His reason is that he credits his success with innovation and not a booming retail market (Moore, 2010). The success experienced by Mr. Bernhard demonstrates the power of innovation even in tough economic times.

One potential reason for a lack of innovation is failure of leaders of organizations to foster an organizational atmospheres that encourages innovative thinking ("Innovation and leadership," 2008). One way to begin fostering this atmosphere is for leaders of organizations to hire entrepreneurial-type employees. They should seek out employees who have been entrepreneurial in the past (Peters, 1991). In the fast changing world of the twenty-first century, leaders of organizations must tap into and use the entrepreneurial skills of their employees to develop innovative ideas. It is out of this think tank of knowledge that the next great innovation driving economic growth will come from.

However, there are also external threats to innovation. In our current recession, the main source of these threats is uncertainty caused by the rapidly changing economic policies of the current administration. The potential tax increases that will result from the grandfathering of the tax cuts of 2003 threaten the profitability of organizations that are already struggling to remain profitable. Intel CEO Otellini stated, “Unless government policies are altered …, the next big thing will not be invented here. Jobs will not be created here” (Faughnan, 2010, para 2).

To grow, organizations like Intel must plan but planning is difficult when there is uncertainty about economic policies (i.e. taxation, healthcare, energy costs) coming out of Washington D.C. If our current leaders are unable, or unwilling, to provide pro-innovation policies, they need to be replaced by leaders that will. The first decade of the twenty-first century is almost over without any significant innovation. We cannot afford to go much longer without some innovation to fuel economic growth. When voting in the November 2010 and November 2012 elections, we must elect leaders who will enact policies favoring innovation. Then it is up to the owners of organizations to hire employees and CEO’s that will foster an organizational atmosphere of innovation.

References:

Faughnan, B. (August 24, 2010). Intel CEO Otellini: The democrats are destroying our economy. Retrieved from http://www.redstate.com/brianfaughnan/2010/08/24/intel-ceo-otellini-the-democrats-are-destroying-our-economy/

Innovation and leadership. (2008). Strategic Direction, 24(5), 36. doi:1464052911 ProQuest Database

Moore, B. (2010, September). Who says no one is shopping. Entrepreneur, 38(9), 26-30.

Peters, T. (1991). Part two: Get innovative or get dead. California Management Review, 33(2), 9. Retrieved from http://proquest.umi.com/pqdweb?did=288717&Fmt=7&clientld=13118&RQT=309&VName=PQD