Ed Mayo, secretary general of Co-operatives UK, explores how people measure innovation and economic success
IF I ask you to think of innovation, what comes to mind?
For some the answer is technology, so perhaps new smart watches or 3D printing. For others, it is about: business, and new ways of working together; or new environmental industries; or society and new ways to meet needs.
I think all of these are good answers, and all are relevant if we want to look at the future Scottish economy.
Innovation is a driver for dramatic coming social and economic change – it may feel as if few can shape it, but certainly, few can escape it.
Just as the ‘future’ is already here, but unevenly spread, so too, often, are innovations that over time will drive fundamental changes in economic opportunity.
Innovation is a driver for dramatic coming social and economic change – it may feel as if few can shape it, but certainly, few can escape it. Economists estimate that innovation accounts for around 70 per cent of long-term economic growth.
Over the last three years, I and colleagues have been looking at innovation trends as they involve co-operative enterprises – businesses that are owned by members, i.e. the people involved in the business, rather than external investors.
In a project published under the title of Co-operative Advantage , we looked at 15 sectors of the economy, covering two thirds of all employment – from agriculture to tourism and from energy to housing.
What we found was that co-operation can boost innovation. If you want to get something done quickly, do it alone. But if you want to get something new underway, do it together.
The most common sources of ideas for innovation are from employees and from customers, so businesses that are customer or employee-owned can be first to benefit.
We also found that co-operation can boost productivity in businesses. The boost from co-operation to the Scottish economy of higher employee engagement, for example, is likely to be around PS5bn.
The most common sources of ideas for innovation are from employees and from customers, so businesses that are customer or employee-owned can be first to benefit.
Now, if I ask you to think of another set of words, the common good, what comes to mind? For me, if we get it right, this is one and the same as innovation.
I want to see an approach to economic policy that enables innovation, supports people to pool resources, sustains common wealth creation and builds mutual resilience between economic actors.
After working through 50 innovations in the co-operative sphere, from ways to bring small businesses together to get better finance from banks or freelance workers together to market their services and support each other, through to new online communities, which are co-operatives without walls, I and others have put together the key themes for an economy for the common good, in the form of six propositions.
These are that:
1. The widening of voice, wealth and ownership should be a fundamental aim of economic policy.
2. Corporations are not persons and are therefore subject to appropriate regulation and social control.
3. The social and environmental costs of enterprise or economic activity should be borne by those who create them.
4. The public interest is not absolute; it serves personal liberty and the pursuit of happiness.
5. Personal liberty is not absolute; it entails social responsibility.
6. The foundation of an economy for the common good is co-operation and not just competition.
The idea of the common good has always been part of the story of innovation and economic change, but not one told so often compared to stories of heroic entrepreneurs and far-seeing investors.
Back in 1917, for example, US Congress forced the formation of the Manufacturers Aircraft Association on grounds that this served the common good. They were right – the Wright brothers and Glenn Curtis were willing to see the airplane industry grounded than to see the other win out in terms of setting the standards that were needed for airplanes to succeed.
If competition ends up as being a fight to the finish, then yes, we need a new way of thinking about economic success.
Co-operative Advantage is available as an e-book published by New Internationalist.
Picture courtesy of GotCredit