Do not close borders to Innovation and Growth

do-not-close-borders-to-innovation-and-growth

Do not close borders to Innovation and Growth. It’s the greatest mistake that political leadership is doing against progress and young talent. They risk to keep us all in stagnant economies, non-sustainable commerce and decreased productivity.

Do not close borders to Innovation and Growth

Sun Tzu, in “The Art of War” teaches diversity and collaboration coming together: “There are not more than five musical notes, yet the combinations of these five give rise to more melodies than can ever be heard. There are not more than five primary colors, yet in combination, they produce more hues than can ever be seen.”

The symbolism is there. We will not bring global/local growth, sustainability, social inclusion through innovative solutions if we don’t combine forces in the open, globalized, partnering economy. No matter where you live, what you do, you need to bridge talent, fresh perspectives and scale to succeed.

Whatever you are (PR agency, website owner, service company, product exporter, farmer, engineer, politician) you need knowledge-sharing, cooperation platforms, best-cases, talented partners to share costs, models, and innovation (improving and fixing what you do).

You live in Italy and you host your e-shop in Korea. You live in Bucharest and you do business in Greece. You have an e-learning platform in the UK and you take your kids to school in Madrid. You buy cheese from Tuscany delivered in 2 days at your place. Crazy, creative world, right?

Innovation for Growth

Innovation is important at all stages of learning and economic development. It diffuses technologies, practices, and shared investments for growth and welfare. Opportunities for successful innovation are now everywhere, cost less, and are empowered by the rise of ICT, the global value of companies, and the growth of service-based models/apps/platforms.

The openness to trade and foreign direct investments is a positive force to business, social, and citizen’s challenges. Innovation is the throbbing heart of our century, pumping revitalizing activity. The opposing force is commoditization, the most powerful force in business and government today, which takes what is distinctive and profitable and rapidly makes it commonplace.

Innovative countries do it with diverse talent

Switzerland, Sweden, the Netherlands, the USA and the UK are the world’s most innovative countries, while a group of nations including India, Kenya, and Vietnam are outperforming their development-level peers, according to the Global Innovation Index 2017 (Cornell University, INSEAD, and the World Intellectual Property Organization).

If you mine into statistics these countries have a great deal of knowledge-sharing, hard-working, great-contributors’ non-national communities inside their economy. London and Stockholm wouldn’t be innovation and growth winners if they weren’t scaling globally ideas through a huge workforce of non-national citizens.

The political rhetoric of economic nationalism

The political rhetoric of economic nationalism has grown in recent years. It speaks for more restrictive trade or immigration policies that supporters believe will bring growth and employment at home. But this is not the reality.

Brexit, D. Trump, Russia and far-right voices (of fear) in Central Europe preach protectionism, closed borders, and selective trade agreements. But this is a populistic agenda. It compliments fears, lack of competence, and older-ages. It forgets to address young talent, the “jobs’ machine” (as Economist calls them), and the non-sustainable models we have for 30 years now.

Economic nationalism has an unanticipated consequence: as many politicians and policymakers look inward, the realm of market innovation (=investments) is thrown into uncertainty.

If economic nationalism wins, more jobs will be lost

The global innovation model long embraced by multinationals, based on the free flow of information, money, and talent across borders, is at risk. The policies of economic nationalism may prove self-defeating, disrupting R&D for new products and services that will generate jobs, growth, and wealth.

Multinational companies are uncertain whether the current political rhetoric will turn into policies that will disrupt their global networks. If economic nationalism wins, companies are likely to lose efficiency, cut costs, and create redundancies.

According to Global Trade Alert data, the U.S., India, Russia, and Argentina implemented the most protectionist measures from November 2008 to June 2017. The Information Technology and Innovation Foundation reported in early 2017 on “mercantilist innovation policies” from the previous year, citing local data storage and technology transfer measures in China, Russia, Indonesia, and Vietnam, among others.

Stimuli of global co-creation to discuss and share

Lego

Lego has always been a toy company at the forefront of innovation. One of their greatest resources for innovation? Their customers. LEGO’s online community allows fans to submit their own ideas for new sets and vote on the suggestions that they like the most. If a project gets 10,000 votes, LEGO reviews the idea, picks a winner, and creates a new LEGO set that is sold worldwide. In return for the great idea, the creator gives final product approval, earns a percentage of the sales, and is recognized as the creator on all packaging and marketing.

That might seem overly generous, but LEGO has recognized that its customers are its greatest source for new ideas and innovations. Not only has this approach helped LEGO to keep releasing new product ranges that its fans love, but it has also helped to maintain their close relationship with LEGO customers around the world.

(source: Ideaconnection)

Food & Agriculture

The Global Innovation Index 2017 (GII) focuses on innovation in agriculture and food systems connected as one. In the coming decades, the agriculture and food sector will face an enormous rise in global demand, increased competition for limited natural resources, and the effects of climate change.

Cross-border, cross-companies’ collaboration and innovation is key to sustaining the productivity growth required to meet this rising demand and to help create and enhance the new global networks (“food systems”) that integrate sustainable food production, vertical line processing, global distribution, secure and safe consumption, and waste management policies.

Can you imagine such a global effort, based on the 2030’s global sustainable goals, to be stopped due to economic nationalism and protectionist governments? What will be the alternative?

(source: GII)

Sweden openness

In the battle of ideas, Sweden climbed to No. 2 into the top five of the 2017 Bloomberg Innovation Index, which scores economies using factors including research and development spending and the concentration of high-tech public companies. Sweden owes most of its rise to the improvement in the manufacturing value-added metric.

Fresh ideas tend to pay off big in Sweden, even as the current government is less business-friendly and has imposed labour taxes that could crimp business investment. The Swedes themselves promote an atmosphere of great personal ambition — unlike some European neighbours that emphasize the collective — and that’s a boon to innovation. Magnus Henrekson, director of the Research Institute of Industrial Economics in Stockholm says: “In the culture, people are super individualistic — this means that people have ideas and are very interested in pursuing them in this way in order to become wealthy. The incentives are there and the tax system favours them.”

Government financing, particularly for small firms, has made the difference in a country traditionally dominated by multi-national companies, said Asa Lindholm Dahlstrand, professor in innovation studies at Lund University. The emphasis on research and development — the country stayed at No. 5 for the R&D spending sub-category — has helped Sweden weather the continent’s economic storms of the past several years. Now, picture this: every year 40.000 immigrants of know-how and jobs connect, go, and partner with Sweden.

(source: Bloomberg, Swedish government portal)

DHL

DHL is the world’s largest mail and logistics services company but knows that its customers can always suggest new ways to improve their delivery methods. DHL hosts workshops with customers in Germany and Singapore where they help them to create solutions and improve the experience for customers around the world.

DHL’s customers are helping them to design the logistics services of the future. Co-creation saw the development and testing of a delivery drone that would reduce standard mail-delivery drop from half an hour to just 8 minutes. You can imagine, that these solutions are deployed worldwide.

DHL has held more than 6,000 co-creation engagements. According to Forbes, their co-creation initiatives have seen customer satisfaction scores increase by over 80%, on-time delivery performance improve to 97% or higher, and see an improvement in their customer loyalty.

(source: Forbes, blog.braineet.com)

“He who is different from me does not impoverish me – he enriches me. Our unity is constituted in something higher than ourselves – in Man… For no man seeks to hear his own echo, or to find his reflection in the glass.”

adidas-smart-basketball

Smart-basketball, Ericsson Studio

Strength lies in uniting differences, not our similarities

The Global Innovation 1000 study reports (1,000 largest publicly traded companies in the world) that more and more companies look for talent outside their headquarters country and set up R&D centers to their target markets (Germany, Romania, Israel, Spain). They have grown skilled at managing these distributed hubs, and connect them to a strong central R&D organization.

Companies that deployed 60% or more of their R&D spending outside their headquarters country earned a premium of 30% on operating margin and return on assets, and 20% on growth in operating income over their more domestically focused competitors.

Accept diversity, multi-cultural, and co-creation

Diversity is critical for any organization’s (more for States) ability to innovate and adapt to a fast-changing environment. Some of the most successful entrepreneurs and most admired leaders will tell you that diversity is essential to growth and prosperity: diverse perspectives, experiences, cultures, genders, and age. Why? Because diversity breeds innovation. And innovation breeds business success.

In 2006 I was at the Marketing Directors’ Forum in Athens, Greece. One creative academic from Nordics presented his global study findings on innovation and urged strongly the audience to bring in talent from India and the Far East. The Marketing Directors at lunch were laughing at this argument. Few years after Indian talented people grew up to the most distinct executive leadership positions in global companies. Read:

U.S., best-case or bad example?

The U.S. is particularly vulnerable to disruptions inflows of talent. Immigrants in the U.S. make up only 16.9% of the overall workforce, but they hold an outsized share of jobs in the high-tech, science, and engineering sectors. They account for 32% of workers in computer- and mathematics-related positions and 24% in other sciences and engineering, according to the Migration Policy Institute.

Among graduate students in the U.S., the 81% of graduate students in U.S. electrical engineering are from other countries, as are 79% of those in computer science, according to the National Foundation for American Policy (pdf).

I think it is time for all parents to teach young people early on, that in diversity there is beauty and strength. We can’t grow if we put hurdles and ‘closed’ borders on our agenda.

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