ABCtech #92 25-MAY-17 The Creative Revolution & SPECIAL OFFER

ABCtech #92 25-MAY-17 The Creative Revolution & SPECIAL OFFER

If you’ve followed the evolution of the Alberta Council of Technologies over the last few years you have seen our growing interest and insight into innovation as an economic asset – aided by the merging of arts and technologies.  Contributing to our insight have been an array of forces. Steve Jobs personifying the power of the arts in product development. The recurrent demonstration that knowledge without relationships has no value. The role of arts and the humanities in vision and leadership – fundamental to stirring innovation. The much heralded transition of Austin, Texas. Our alliance with the national creativity network has been illuinating as have the various insights of our conferences on Convergence & Creativity in 2015 and Creating the New Alberta! in 2016. And now … Robert McGarvey’s editorial adding a supportive economic perspective.

Robert is a well-published, very influential economist.  A graduate of the London School of Economics, he is serving as an advisor on our study of the merit of an Alberta Credit Union of Technologies and associated investment fund.  His pre-recorded presentation and the results of the study will be featured at The Festival of Big Ideas on June 9th. – Editor

The Creative Revolution by Robert McGarvey

The world’s economic system is being rocked by deep changes in global capitalism. In the last few decades, the economy has been radically transformed (externally) by the meteoric rise of China and other emerging economies and (internally) by an unobserved asset revolution.

According to the OEDC, investment in intangible assets is growing rapidly HERE ” In some cases this investment matches or exceeds investment in traditional capital such as machinery, equipment and buildings. Intensified global competition, ICTs, new business models, and the growing importance of the services sector have all amplified the importance of intangible assets to firms, industries and national economies. “

However, beyond these observable facts a larger and more deeply rooted pattern is emerging. The global economy is in the midst of a historic change, transforming from an industrial economy, underpinned by tangible assets, to a creative knowledge economy, underpinned by intangibles.

The scale of the internal changes is clearly demonstrated in the numbers. Since the late 1950s, in the U.S. and other western economies, intangibles (services and intellectual forms of property, such as patents, copyright materials, software and network applications) have increased in economic importance. Today, intangibles have displaced the more familiar tangible assets as the primary engine of growth in all developed economies.

Studies conducted by the World Bank and others suggest that these new sources of value now contribute more than eighty percent of GDP in many developed economies. While this newer intangible economy is growing, industrial-type manufacturing is in decline. Consider that between 1995 and 2002 developed economies in the West lost 22 million industrial jobs. In the last decade, the United States economy alone lost close to 25 per cent (four million) of its domestic manufacturing jobs. Yet, despite the shrinking of their industrial work forces, the output in these countries as a measure of GDP increased by half.

Why is this important? It’s important because the economy sits at the core of our world. It affects almost everything else. When the world first industrialized, more than the economy changed; entire new social classes were created and old ones died away. After industrialism became established, it altered our governing institutions, triggered the development of new educational systems, new family structures, and gave us new kinds of cities to live in. These institutions defined the developed world for ages, and are now experiencing massive systemic change.

Why are the arts and creativity so critical in this era of reform? The industrial world was linear, mechanical and focused on material goods. The emerging creative economy has fractoral set complexity, creates value out of collaborative networks of people and ethereal like forces and defines value in ways that our grandparents never dreamt possible. All this requires a new mindset and a much more intuitive way of thinking. In other words it needs the sensibilities and creative power of artists rather than engineers.

It’s a brave new, and much more creative world emerging.

For a more complete description of the creative asset revolution and asset revolutions past see Futuromics: A Guide to Thriving in Capitalism’s Third Wave, available in e-book form HERE

For an appreciation of how these new assets might accelerate diversification of the Alberta economy see the following white papers:

Capitalizing Intangible Assets – Troy Media  HERE

   Capital Markets Reform – Troy Media  HERE

   The Integrated Pathway Model – Troy Media  HERE