Thursday, November 20, 2014

Are we in a Knowledge Economy, Creativity Economy or still in the economy of scarcity

Knowledge and creativity are the two faces of same coin innovation

Digital is the age of Big Data, information is the abstracted data, and knowledge is the abstracted information. Are we moving to the knowledge economy from the economy of scarcity? Digital is also the era of options, and options are built through creativity, so are we really witnessing a SHIFT from the 'knowledge economy' to a 'creativity economy' as well, or are we simply talking about the role that creativity plays in the creation of new knowledge & the things that flow from it more than before?

To quote Peter Drucker, knowledge is the most valuable commodity. It couldn’t be truer in the digital era. On one hand, the fresh knowledge can be captured from the abundance of information; on the other hand, it doesn’t take long for that knowledge to become a commodity once the market is exposed to it. The only sustainable competitive advantage is the ability to think different (from creative destruction to incremental innovation). Organizations are complex adaptive living systems, which are comprised, in part, of people (sub-systems) who are also complex adaptive living systems, all such systems function, grow and prosper by continually: LEARNING, INNOVATING, ADAPTING & EVOLVING.

At present days, we cannot separate knowledge and creativity if we want to stay competitive on the market. Creativity has just become indispensable. ‘Creativity’ is a precursor to knowledge in many ways. Through creativity (imagining, testing the hypothesis, failing, entreating, improving) new knowledge is developed. If we do both these things well, then people and the organizations we inhabit ADAPT to the ever-changing environment and evolve in an ideal world to improved levels of form, function, and prosperity.

Corporations need to adapt and evolve by focusing on their core competency. Knowledge (or the application of knowledge) is commoditized and can, and increasingly will be purchased via an efficient, frictionless, global talent marketplace. However, creativity itself is not that easily purchased this way - or at least - companies shouldn’t try to, as this may commoditize creativity too. Instead, companies must compete by creating corporate cultures and ‘labs’ with fertile ground for new ideas to sprout. The point is that corporations need to adapt and evolve by focusing on their core competency, which given all factors that are commoditized, boils down to creativity.

The silo minds and culture are lagging behind in the digital era we are in. For many traditional organizations, they aren´t yet in the knowledge economy, they continue to act as expected in the economy of scarcity, presenting difficulties to share the insight and wisdom, and today in order to innovate, to take advantage of all information available, you need to trust and share diversified views and create new knowledge. Knowledge and creativity are the two faces of same coin innovation. We are in the knowledge economy, but most of the people in the companies have behaviors of the scarcity economy, they try to close the information, don´t share it as they have difficulties to share ideas, different thoughts & opinions, also because many people are paranoid about sharing their ideas and they are fearful that others will steal or take credit for them or steal & corner the market without sharing the proceeds, and most organizations fail to achieve top results from their innovation endeavors. Hence, you need to change mindsets, culture to fully exploit the knowledge economy and elevate to the creative economy.

Creativity is a function of knowledge, imagination, and evaluation. However, besides those ingredients, the most important element is the attitude put to increase the chance of generating creative ideas. In the case of organizations, the spirit comes from the top, the leadership plays a big role in shaping the culture of innovation, going beyond the typical discourse that "we need to be more innovative," but walk the talk, be the creative leader yourself.

It does not matter really in which "era" we are supposed to be. The key point is that more and more creativity and innovation is a matter of survival in the long term for any organization. And the trend is that executives increasingly are being hired for the ability to deliver creative, innovative solutions. Not just technical know how. It's a great move - one that has the potential to not only transform business, build much higher levels of satisfaction among professionals at all levels, but also lead into the creative economy at the macro level.


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