Innovate or Stagnate

Mohammed bin Rashid Al Maktoum at Project Syndicate: “Companies, like people, grow old. They start life small and eager to survive, fueled by youthful energy and fresh ideas. They compete, expand, mature, and eventually, with few exceptions, fade into obscurity. The same is true of governments: they, too, can lose the hunger and ambition of youth and allow themselves to become complacent….

The key to corporations’ rejuvenation, civilizations’ evolution, and human development in general is simple: innovation. I am always amazed when governments think they are an exception to this rule. Innovation in government is not an intellectual luxury, a topic confined to seminars and panel discussions, or a matter only of administrative reforms. It is the recipe for human survival and development, the fuel for constant progress, and the blueprint for a country’s rise.

The first key to business-like innovation in government is a focus on skills. Top-tier companies continuously invest in their employees to provide them with the right skills for the marketplace. Governments must do the same, by constantly upgrading skills and nurturing innovation – among their own employees, across key sectors of the economy, and at the foundations of the education system. Governments that fail to equip new generations with the skills needed to become leaders for their time are condemning them to be led by other, more innovative societies….

The second key to transforming governments into engines of innovation is to shift the balance of investment toward intangibles, as in the private sector. Whereas more than 80% of the value of the Standard & Poor’s 500 consisted of tangible assets 40 years ago, today that ratio is reversed: more than 80% of the largest companies’ value is intangible – the knowledge and skills of their employees and the intellectual property embedded in their products.

Governments, too, should think strategically about shifting their spending away from tangible infrastructure like roads and buildings, and toward intangibles like education and research and development…. (More)”.