I was delighted to be invited onto a panel with GE at their R&D centre in Munich this week. Dubbed “Innovation Breakthroughs – Igniting Europe’s Growth” They were celebrating 10 years of theopening of the centre and as you arrived, you saw the cranes at work to double the facility as well as further deepen their commitments within the surrounding community even further.
I gaze through unbelieving eyes at the continued rise of unemployed in Europe. Unemployment in the Eurozone has reached another record high with the seasonally-adjusted rate for April 2013 going to 12.2%, up from 12.1% the month before according to the European Commission’s statistics office, Eurostat:An extra 95,000 people were out of work in the 17 countries that use the Euro, taking the total to 19.38 million. Both Greece and Spain have jobless rates above 25%. The lowest unemployment rate is in Austria at 4.9%.
It seems never-ending.
Youth unemployment remains a particular concern; you simply have to wonder what we are storing up in the longer term with this situation. Can the youth ever catch up, can our society as it is positioned give them the opportunities to turn today’s grim world into a world of optimism and contentment, or is it a lost generation? In April, 3.6 million people under the age of 25 were out of work in the Eurozone, which translated to an unemployment rate of 24.4%.
Why does this issue of growing unemployment seem to be drowned out by events that seem important on the day but realistically pale in their significance against something as damaging as this present crisis?
Examples of persistent economic and social challenges
We are facing significant society challenges. These include declining Economic competitiveness, deepening Social inequalities, rising Mental ill-health, increasing Crime and social disorder and we see growing Alcohol and drug abuse, to name some of the issues being increasingly tackled as part of the consequences of these tough economic and social times.
We must increasingly recognise that the cost of deferring concerted action to confront these growing set of social challenges is beginning to rise – and could easily outpace our ability to respond.
Can we afford to wait? There are so many pressing questions.
The cost of lock in
More fundamentally, our existing approaches and institutions are also inadequate because, in the main, they lack the capacity to develop the new approaches we need through innovation.
We are faced increasingly with the ‘innovator’s dilemma’, identified by Professor Clayton Christensen, where a company or in this case whole nations can’t seem to address the changes (rapidly) going on around them.
Their existing models become obstacles in the face of changing conditions, deepening issues, new threats from emerging nations, rapidly changing technologies and a growing inability to overcome rapidly changing circumstances wrought by deteriorating economics, (infra) structures and upheavals.
Any organisation or system or even nation is susceptible to ‘lock-in’, whereby it loses the ability to develop novel ways to serve its customers or clients or markets because it has invested so heavily in its existing processes and technologies. This is part of one of the fiercest debates on the future of the European Union we have yet to have.
Our understanding of innovation has broadened
Today innovation is increasingly being understood in a broader perspective than just products alone. We are in a period of major transformation in what we mean by ‘innovation’. We need to push innovation across its broader understanding to explore new business models, unique services, greater collaborative techniques and community engagement.
Traditional innovation is insufficient for the challenges we face, this will not resolve climate change, an ageing society or reinvent public/ private services that match demand and need. We need greater connections across society.
There is a growing buzz around the Quadruple Helix of Innovation, where Government, Institutions (Academia, Foundations and NGO’s), Industry and Citizens need to collaborate together to drive structural changes far beyond the scope of one organizations and what it can achieve on its own. These will be increasingly through innovation engagement platforms where people use the designed structures to purposefully intensify exchanges to co-create value to solve our growing bigger problems.
Seeking out unconventional solutions through more radical innovation
These are times when we need some visionary leadership and thinkers out there. Those that dare to breach present accepted boundaries of rigid beliefs and conventions. Those that push beyond the normal practices and can depart from the commonly held goals of establishment, by looking for non-conventional novel solutions that can draw in more of the disenfranchised, we are seeing today.
Facing New Challenges: Promoting active inclusion through social innovation
Social inclusion is a pre-requisite for the creation of a just and cohesive society in which each individual can fully participate and realise his or her potential. Active inclusion, as one strand of the broader social inclusion concept is looking to draw in and deal with inclusion into society of people furthest away from the labour market.
We need to make new markets full of engaged young people.
There is clearly a latent demand building in our societies and we need to turn this into a more ‘effective’ demand, to forge the links between supply and demand that will generate new value and opportunity. For example, who can invest in effective supply by supporting promising projects and collecting evidence of what works that shows promise of broader societal impact?
Then who can we involve who can invest in effectively ramping this up. Perhaps focusing the different Foundations already set up can turn this latent demand into effective demand. This might mean shifting resources from other parts of the world, back into Europe to get the economic engine kick started again.
Applying innovation intensity to what we do.
We need to rapidly accelerate a rigorous experimentation mentality by focusing far more on major societal challenges that need addressing, before it is too late. Ones that can encourage and embraces local solutions needed and engagement within communities but the learning can be rapidly absorbed and the winning concepts can be scaled up to benefit more communities or areas of need and resolution.
Different type of economic statecraft are needed to position ourselves
How can we encourage and accelerate more of our companies to pro-actively integrate environmental and social impact into their business models? To put into place better measures of investment performance over the long-term that ties into greater social good?
There is also a real challenge today to lay out a different position for government. One that is more the facilitator, setting out the conditions for the impact economy ecosystem and supporting in ways that invest in the longer-term infrastructure and platforms that can scale the innovations and partnerships needed to achieve sustainable, long-term growth.
Government cannot ‘play’ in all three horizon investment areas, it does not have the capacity, experience, capital and resources. We need leaders who not just make tough decisions but set about putting in place the different conditions, incentives and clarification of who does what and why. The more the short-term crisis extends, the harder it becomes for Governments to participate in mid-term future innovation activities. They simply can’t easily.
A time and place where we are converging to make social innovation a critical element
We are in a current battle to address both short and long-term economic and growing social challenges. We are faced with growing unemployment still, especially here in Europe. The youth of today need to engage, otherwise we are in a great danger of losing a whole generation and that has such significant impact on or nearly everything we have in place today.
How are we going to draw upon the imagination and expertise of a broader set of innovators and tap into the entrepreneurs that are out there, to tackle some of these significant societal challenges?
Are we at the early stages of a new economic order with even more disruption?
Of course we might be in the beginning of a very different set of economic factors. We might actually be heading to a completely different type of economy that melds features which are very different from economies previously based on the production and consumption of commodities. Today we are already seeing blurred boundaries between production and consumption.
We need to think about repeated interactions, care and maintenance and not one-off consumption; and a strong role for values and missions that are far more inclusive for society and less focused on individuals; otherwise we end up with a divided society that clash in ways reminiscent of past revolutions where the majority finally rebel.
Are we facing even more instability in the coming years?
The present value equation in our societies is rapidly getting unstable; we need some fairly radical solutions to reverse the existing trends. I think the challenges will only get harder in the months ahead.
We do need to positively disrupt before we get more unexpected disruption occurring. Innovation needs to play an ever increasing part in this to explore alternatives and allow those lost from current economic activities to begin to participate and make a contribution where they see there is a future for them.
“Social innovation is about new ideas that work to address pressing unmet society needs”
The shifts taking place in Europe
The competitiveness and challenges that Europe faces in the next ten years are significant. Innovation has been placed at the heart of Europe’s 2020 strategy. It is this clear recognition that innovation is the best means of tackling issues that will affect our future living standards is not new in itself, but it is this real political recognition of its place and importance, now that is.
Innovation is also our best means of successfully tackling major societal challenges, such as climate change, energy and resource scarcity, health and aging and becoming more urgent each day to address in more systematic ways.
European funding of innovation in recent years has perhaps placed far too much emphasis on research and development to deliver the growth and jobs it requires.