Ideas are the Currency of the New Economy

Companies have to nurture creativity and motivation — and have to do it by building a compassionate yet performance-driven corporate culture. In the knowledge economy, the traditional “soft” people side of our business has become the new “hard” side.
~Gay Mitchell, Executive VP, HR, Royal Bank.

Organizations that understand the relationship between creativity, innovation and performance, actively promote creativity in their employees and win in the marketplace. The root of invention and innovation is creativity.

Numbers tell the story

Genius level creativity:
Test results amongst 3-5-year-olds: 98%
Test results amongst 8-10-year-olds: 32%
Test results amongst 13-15-year-olds: 10%
Test results amongst 200,000 adults: 2% (same test)

(Source: Based on test results in a creativity study conducted by George Land and Beth Jarman, Breaking Point and Beyond. San Francisco: HarperBusiness, 1993). Read more about the creativity study here.

Creativity Skills Training ROI (Return on Investment)

Many organizations, such as 3M, Frito-Lay, and Texas Instruments, have introduced systematic creativity activities into their training and production processes with outstanding ROI results. Frito-Lay, for instance, reports documented cost savings over a four-year period of almost $600 million due to their creativity training programs (Morrison, 1997 — Cited in 101 Activities for Teaching Creativity and Problem Solving, by Arthur VanGundy, (2005). Examples of creativity skills training ROI include:

  • The Wall Street Journal reported that a two-year in-house creativity course at General Electric resulted in a 60% increase in patentable concepts.
  • Participants in Pittsburgh Plate Glass creativity training showed a 300% increase in viable ideas compared with those who elected not to take the course.
  • At Sylvania, several thousand employees took a 40-hour course in creative problem-solving. ROI: $20 for every $1 spent.
  • Hewlett-Packard invested over $2 billion in R&D in 1999 and generated more than 1,300 patent applications. Net revenue: $42.37 billion. (Source: HP 2000 Annual report)

David Tanner, former Director of the DuPont Center for Creativity and Innovation, gives examples in his book, Igniting Innovation, Through the Power of Creative Thinking, of how to reduce costs through the use of creative thinking techniques:

A lateral thinking creativity tool is escape. You escape from limiting assumptions that you take for granted. A corporate IT department used this tool for original ideas to reduce costs. One of the things they took for granted was: “We reduce costs by spending less money.” They escaped from this with the provocation “Let’s spend more money.” An idea that paid off was, “Why don’t we spend more money, but on fewer vendors? We’ll reduce the number of vendors. We’ll place larger orders to some vendors, and we’ll get better price breaks.” This led to over $1 million dollars a year savings, based upon a one-hour creativity session.

Dupont’s investment in creative skills training and putting the techniques into practice helped save more than $5,000,000 over a ten-year period.

Unlock your creativity with whole bain thinking

ROI on Soft Skills Training

High-Performance Work Practices…

* skills training
* coaching and performance appraisals tightly linked to compensation
* cross-functional teams
* involve employees in corporate decision making & production processes

…and how they pay off

If the average company implements these work practices, within a year it can expect (per employee):
$27,044 more in sales
$3,814 more in profits
$18,641 more in market value

Source: Mark Huselid. “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance.” Academy of Management Journal. July 1995.

Newer Studies on Creativity

Skills in critical thinking, creativity, communication, collaboration and innovation are crucial for achieving success in a global Creative Economy. Here’s how we can help:

Updated Oct 29, 2018

“Ideas are the Currency of the New Economy” was first published in Oct 2000 and has been cited in: Leading and Managing Creators, Inventors, and Innovators: The Art, Science, and Craft of Fostering Creativity, Triggering Invention, and Catalyzing Innovation by Elias G. Carayannis, Jean-Jacques (Chanaron Greenwood Publishing Group, 2007) and Informal Learning: Rediscovering the Natural Pathways That Inspire Innovation and Performance, by Jay Cross (John Wiley & Sons, Jan. 25, 2011)

Richard Florida is quoted as saying “Ideas are the Currency of the New Economy,” and when I discovered  this via Google I was slightly horrified. Did I copy him without giving attribution? I hope not. As far as I can tell he made this statement in his book the The Rise of the Creative Class which was published in 2002.

Creativity Workshops for Business

 

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2018-10-29T20:22:56+00:00

About the Author:

Linda is founder of Creativity at Work and co-author of Orchestrating Collaboration at Work. She helps executives and their teams develop creativity, innovation, and leadership capabilities, through coaching, training and consulting. Linda brings a multi-disciplinary approach to learning and development by leveraging arts-based practices to foster creativity at work, and design thinking as a strategy for innovation.