David Barker
Staff Writer
As I sat at my desk trying to come up with something ‘creative’ to write about economics I began to question creativity itself. How does creativity affect the world and how can it affect economics? This reminded me of a study I had read a few weeks earlier and the question it posed about creativity. Why does creativity, and more specifically creative ideas or solutions, make people uncomfortable? The following is an abstract of a recent study by Cornell University:
‘’People often reject creative ideas even when espousing creativity as a desired goal. To explain this paradox, we propose that people can hold a bias against creativity that is not necessarily overt, and which is activated when people experience a motivation to reduce uncertainty. In two studies, we measure and manipulate uncertainty using different methods including: discrete uncertainty feelings, and an uncertainty reduction prime. The results of both studies demonstrated a negative bias toward creativity (relative to practicality) when participants experienced uncertainty. Furthermore, the bias against creativity interfered with participants’ ability to recognize a creative idea. These results reveal a concealed barrier that creative actors may face as they attempt to gain acceptance for their novel ideas.’’
The study shows that people see novelty and practicality as inversely related. However, the question remains: what is novel and what is practical?
The paradox of this study is that, as a society, we’re constantly talking about how much we value creativity. Whether we are talking about politics or industry or even television we hold creativity in the highest regard. Yet, the study implies that our minds are biased against it because of its very nature: its novelty. We generally value practical ideas because they’re familiar and proven. We can be more concerned with the social cost that comes with endorsing unproven, novel ideas than the actual risk of endorsing an unproven idea.
"creativity can replace scarcity as a new central ideal in economics"
Creativity is fast becoming a new factor of production or an ‘x-factor’ of production. Creativity has the ability to improve the inputs of labour and capital and to extend resources. Much like technology saved us from Malthusian apocalypse, creativity can once again allow industry to evolve – by turning what was scarce into what will be abundant. The classic model of economic growth deals largely with making efficient use of the scarcity of industry. Making do with what we have. This does not fit into the modern world, where we have little and not for long. This ‘current’ model is a description of the past, not a path to the future. The hallmark of today’s economic development is technological progress and creativity. The very aim of creativity is to produce abundance. Not to make do with what is available but to make use of it. Instead of trying to split an apple between four people, why not plant the seeds and grow an apple each? We need a new growth theory based on industrial foresight and creativity. This new growth theory shows that creativity can reduce scarcity in order to satisfy demands. It means that creativity can replace scarcity as a new central ideal in economics. Without this model in place, however, we cannot look to examples of economies who have prospered from idealising creativity. But we can look to industries who have benefited from it and from that we can compare economies who have championed creativity with those that have not, or more crucially could not.
For months I’ve been interested in the idea of creativity and the role it plays in the world economy. The Economist, as well as other notable economic publications, continually cites creativity or a lack of it as a key influence in the performance of an economy. They’ve used creativity as an intangible to compare the fortunes of the US and British economies. While Britain’s economy remains far from in a stable state it still teeters on the right side of collapse. The US on the other hand can only hope to remain on the brink for so much longer. Yet, the performance comparison in terms of growth belies the true state of these two economies. Britain remains merely on par with America in terms of growth speed and this certainly contradicts America’s zero growth in employment and rapid decline in GDP. Now obviously the size of America’s economy is far greater than Britain’s but Britain will still question why they are not experiencing faster growth? This is of course the time of America’s great fall from credit grace.
What propels America? What is the ‘x-factor’ it has over the likes of France, Germany and Britain? Many economic commentators think the answer is creativity; innovation, entrepreneurship and a huge measure of luck. Britain cannot conjure a ‘Facebook’ or a Bill Gates out of thin air. The US is leaning on industries to survive that Britain has not yet even comprehended. Last month Hewlett-Packard made the innovative decision to shift its strategy from PC business to software services. Their first step was to purchase British software company Autonomy for $10.3 billion. This marks the largest deal in European I.T. history. This price is over $2 billion less than Mark Zuckerberg’s personal wealth. Autonomy will now be used as a mere patent tool for a much, much larger US firm that still remains on the lower scale of its domestic industry – being dwarfed by companies such as Microsoft, Google and Dell.
So, while we can acknowledge that creativity in industry can be the driving force in aiding an economy stay above water, what does this really tell us? How does this knowledge help the world economy? Can you create creativity? This brings us back to the question of what is novel and what is practical. Should a nation encourage entrepreneurship and economic bravery at the risk of failure? The dilemma exists in that the only way out of economic crisis lies in creative solutions, untested and untried, yet it is in economic crisis that we can least afford to take risks with the untested and untried.
The study compiled by Cornell University seemingly has a solution to this problem in a psychological sense. Perhaps it’s not that we need to get better at manufacturing new and creative ideas, but at learning how to accept them.
‘’Revealing the existence and nature of a bias against creativity can help explain why people might reject creative ideas and stifle scientific advancements, even in the face of strong intentions to the contrary. … The field of creativity may need to shift its current focus from identifying how to generate more creative ideas to identify how to help innovative institutions recognize and accept creativity.’’
Now all we need is an economic solution…
David can be found on Twitter @Barkonomics
