John Howkins is the author of the 2001 best-seller, The Creative Economy: How People Make Money from Ideas. His latest book is Creative Ecologies: Where Thinking is a Proper Job (Creative Economy + Innovation Culture)
By John Howkins
When I was recently asked to write an article about the global financial crisis for Britain’s House of Commons magazine, ‘The House’, I asked several art dealers how they were doing.They said business was terrible and nobody was buying. But they also said that they were used to ups and downs, and they would simply lie low for a year or so.
They have no shareholders, no debt and few employees. They are in the business of thinking for themselves and living off ‘thin air’. They will survive.
Today’s crisis started with the collapse of asset values but goes far beyond economics.
It is not a single moment, like a credit crunch, but a process of change, a discontinuity. The problem is not any particular economic theory but the way we handle knowledge and so therefore the way we live and work.
The continual search for novelty that lies at the heart of the modern economy is both cause and solution of the crisis.
The causes include the value now given to personal expression, networking and collaboration, the predominance of small informal businesses, the move from static, institutional hierarchies to temporary projects, our enthusiasm for ‘creative destruction’ and the premium paid to novelty whether in art, consumerism or financial instruments.
These trends present countries with social, economic and regulatory challenges far in advance of our ability to solve them. This was evident in the 1990s but the current crisis has made it terrifyingly obvious.
The motor of capitalism is capitalising: bringing forward the future value of an asset to today so its owner can use it to finance growth. What’s been happening since the 1990s is that companies have been capitalising practically everything from brands to business methods, from patents to pop songs.
Some large companies have also used equity ownership to sell or lease shares in their assets. Now, if you do this with intangible stuff like ideas then you quickly get rapid and volatile changes in valuation. A company’s balance sheet begins to bear little relationship to its profit-and-loss accounts.
We desperately need to start devising an economics based on ideas.
Where to begin? We need a new index to measure the assets that actually matter. Traditional metrics of GDP, productivity, added value and growth do not measure what we really need to know. I welcome France’s President Sarkozy’s request to Nobel Laureates Joseph Stiglitz and Amartya Sen to develop a new index that will replace GDP with an index that takes account of education and individual well-being.
We also need to press on with the changes already mentioned, including the sensitivity to individual expressions and to other people’s imaginations. These promise a more humanist and a freer way of working.
It seems to me that the only way to resolve this conflict is to take a holistic approach.
My new book, ‘Creative Ecologies’, shows that eco-systems is a useful model. A creative ecology is a network of habitats where people change, learn and adapt (or not, in some cases). If we include resilience and sustainability, which is a system’s capacity to cope with disturbance and still retain its basic function, we have a good base to build on. Balance and mutuality are good guiding principles.
Ecological models have a great advantage over the financial models that preoccupy government. Ecologists speak the same language as do biologists and environmentalists and can share their ideas and theories, whereas economists are tied to rationalist preconceptions and to monetary values .
Whatever emerges in the next few years, people need to make connections between all factors in the eco-system, especially those contained in my E4 model: ecology, energy, ethics and economics. It is important to start with ecology, not economics.
Running throughout the model is what the Indonesian diplomat Soedjatmoko calls the ‘capacity to learn’. It is astonishing how closely a country’s capacity to learn as a whole , rather than any individual genius, affects national levels of creativity and innovation.
The government’s education system is the most obvious contributor to this capacity, but the ways in which each of us develops our own learning skills is even more important. So we should enable people of any age to learn what they want, when they want and how they want; bring think-tanks, research bodies and NGOs into the education process; protect learning-for-the-sake-of-learning from being squeezed out by learning-for-a-job vocational courses.We must re-think ‘knowledge transfer’.
Ecology warns us against attempting too much centralised control. More government intervention is necessary in some sectors in the short-term, but in the long-term I am not so sure, especially if it means government’s traditional forms of centralised monopolies.
Telecoms, software and the Internet, three of the foundations of the creative economy, only took off when government got out of the way.
The main question of our age is how each of us wants to live our lives.
As we struggle with this, we face other questions. How do we handle ideas and knowledge, both our own and other people’s? What relationship to ideas do we want? Whose ideas do we want to be surrounded by? Where do we want to think?
For young people, choosing their first job means choosing where to live: where to work, to meet people, to learn, to make friends. It is the first of many cross-roads as nowadays we change our communities and networks throughout our lives.
Most of us choose or have the choice made for us according to what family, colleagues and friends do and say and what we read about, and a more-or-less rational calculation of the odds. We want to go where we can have fun, meet interesting people and make some money.
Every day, more people gain more freedom to make their own choices about where to live and what to think. These modern-day nomads are so numerous that general principles are emerging, framed by history, sociology, geography, environmental studies, epidemiology, urban studies, ecology and demographics.
We move, cities change their shape, social structures evolve, we adapt. People and companies move to be near each other. Property owners invest in urban regeneration. Governments draw up regional plans. Travel is the world’s biggest industry, generating 10% of the global economy.
Everyone makes a different choice. Our creativity is personal and private, and our ability to use it is variable and unreliable. It helps if you are in the right place at the right time.
The old question, Where do you want to live?, is now, Where do you want to think?
Ecology is the study of organisms and their environment, asking why this, why here? It tells us how organisms relate to each other through mimicry, symbiosis, communities and competition.
It is holistic and radical and provocative, summoning evidence from human behaviour in cities, beetles in the desert and swarming bees to illustrate general rules on diversity, change, learning and adaptation.
Yet though we have Gregory Bateson’s ecology of mind, Arne Naess’s ecology of wisdom and many explorations of urban ecologies and network ecologies, attempts to use ecology to illuminate creativity have hardly begun, beyond using it as a fancy word for context. This is a pity, given the richness of both concepts. Ecology may help us to understand why thinking for oneself is treated as normal in some places but odd and anti-social in others.
The new ecology is part of a shift in thinking summed up in quantum physics and systems theory, from the old view based on reductionism, mechanics and fixed quantities to a new view based on holistic systems where qualities are contingent on the observer and on each other.
This perception changes how people treat ideas and facts, certainties and uncertainties and affects both art and science. Worldwide it is part of the process of understanding the current crisis in the natural environment and the balance of creativity and control required in our response.
We need to escape from old, industrial ways and become more attuned to how we actually borrow, develop and share ideas. The assumption that everyone should be a full-time employee is old-fashioned industrialist ideology. Creative ecologies are emerging where everybody can have a go.
© John Howkins
John Howkins is the author of The Creative Economy, and his latest book is Creative Ecologies: Where Thinking is a Proper Job (Creative Economy + Innovation Culture) which grew out of a research project for the Chinese State Council. Asked to provide a global overview of the creative economy, he took the opportunity to go back to first principles and work out a general theory that identifies three general conditions for a creative ecology: talent, freedom and markets. From this he proposes an evolved concept of the creative ecology.