Do You Think Innovation Creates Productivity?

This is an influencer post by David Sable, Global CEO at Y&R

A, B, C, D, E, F, G….

I need to make a profit for Wall Street to see….

1So begin my thoughts on a hot August day…as I hope to get a discussion going that explores PRODUCTIVITY and INNOVATION…. Mutually exclusive? Mutually beneficial? Not even related?

The hint I gave you in my opening was inspired by the recent news from Google  — the launch of Alphabet – the new holding company of Page and Brin. It allows them to be INNOVATIVE – that is, lose money…without pissing off Wall Street, which will stay obsessively focused on Google’s core – with their usual digibabble blinders…

In short, it allows Google…or Alphabet, as it were…to cure cancer, fly to the moon, create self-driving cars, state-of-the-art robots…all without the restrictions of quarterly earnings, the pressure of institutional investors, the scrutiny of analysts – the need for profit…

All good…smart…protects Wall Street from hypocrisy as it positions them to take advantage of longer-term monetization opportunities…And allows Google to spend what it wants on truly innovative ideas.

But there is a bigger and troubling truth here…one that I believe gets to the heart of our global economy, living standards…the very essence of our social fabric…

With all of our amazing INNOVATION…the APPS, the GAMES, the SERVICES…with all of the astronomic monetization created by outsized valuations, with all of the exits that funded huge bonuses for investors and made rich the founders…with all of that – WITH ALL OF THAT – “PRODUCTIVITY – the goods and services a worker produces in an hour – grew just 0.4% per year over the past five years, one of the slowest stretches in the period since World War II.” (The Wall Street Journal)

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Bottom line? INNOVATION is happening online, sort of, if you really call that innovation. But life, dear reader, is offline…and although we might get a car service to come quicker because of UBER and our online purchases shipped free because of Prime (both of which provide services offline) – it could all be for naught if there are no goods to ship or no place to go….

Read the Wall Street Journal piece “Beyond the Internet, Innovation Struggles”…follow the argument – digital is everything…but not everything is digital….

And frankly I found this troubling and think we need a wake-up call….

One of my summer reading obsessions has been Darwin and I’ve read just about everything I can get my hands on. This line really resonated for me:

Intelligence is based on how efficient a species became at doing the things they need to survive.  Charles Darwin  

So…on a hot August day in New York…what do we need to survive?

INNOVATE…for sure!  Innovation is critical for our present and obviously for our future.

But I’d posit that innovation for its own sake is an empty triumph… Innovation used to be tied inextricably to “survival”… we innovated for life… Getting to the moon was not an empty innovation.  Along the way, many innovations on that journey found their way into our daily lives, not to mention the inspiration of mankind reaching for the stars.

The problem is today we innovate for innovation’s sake…to monetize….

The business challenge…the life challenge…is how do we INNOVATE…MONETIZE and be PRODUCTIVE….

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It’s a matter of survival….

Think of that next time you’re innovative.

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