Due to continuous transformation, innovation becomes the key factor for economic growth. Companies can build and generate added value and competitive advantages under a business competitive model of innovation and growth with perfectly defined and established goals.
Therefore, only companies investing on competitive provision of innovations will be able to face economic upheavals and uncertainty periods.
A global picture for innovation
As it can be seen form the “Global Innovation Index” chart, which analyzes incidence over innovation for economic growth and development policies, countries with higher investment in R&D are the ones with a more extended innovative potential.
How to boost innovation?
An ecosystem with six fundamental areas must be created:
–Educational system: A talent oriented system (flipped schools) is the key to success. It should be based on moving from teaching knowledge to foster creativity and all sorts of general studies better than specialized ones.
–Talent mobility: Talent must be able to come and go in a return ticket. It is about Investing in people sending them to the most advanced centers, even abroad, but with the commitment to come back to develop their talent in their communities.
-New, larger and better tax benefits: Companies must invest in research, new developments and projects.
-More technology and services: The trending topic must switch from producing raw materials to producing technology and services. It’s all about adding value to raw materials, because prosperity will not arise by themselves.
-Less Administration burdens: Governments must speed up all procedures to create new enterprises and start-up companies. Reducing time must be a goal
–Public and private collaboration: Investing on innovation must be something that private partners must get involved into, not only public ones. Alliances between them should be created in order to foster their individual powers into creating collective synergies.
From Michael Porter to Richard Florida
The American Scholar Michael Porter developed the five forces analysis framework for analyzing industries and companies’ competitiveness. Analyzing new competitors’ threats, negotiation power with suppliers and buyers, secondary products threat revenue, rivalry among competitors, companies could be able to redefine their strategies in order to improve their revenue and fostering economic growth.
On the other hand, Richard Florida based economic growth in a different model, the 3 T’s model. He claims that key factors for economic growth are Technology, Talent and Tolerance. For him, creative classes are the ones that generate the largest economic growth.
Florida’s framework of study overpassed Porter’s and thus empowering proper conditions for establishing a creative social class, transferring their effects beyond cultural and social classes as a multicultural factor.
Analysis must adapt to new realities and needs and, this is why, new models overpass the previous ones. This is something predictable. And it has been like this since The Wealth of Nations, by Adam Smith, was first published, where work, land and capital acted as production and wealth factors.
Today, facing already 2016, Florida’s analysis framework could be completed with two additional T’s. Territory and Tenacity should be added to Technology, Talent and Tolerance.
Territory, land, must be presented as a main point to produce those given conditions: education system, talent oriented, implementation of conditions to foster investment on research and encouraging the creation of new companies.
On the other hand, besides being able to adapt to continuous changes, a taking risk attitude must be assumed. Tenacity becomes a key issue, as a combination of strength and perseverance to acquire strategic goals.
From this perspective, a new element arises: reducing barriers and inequality trough access to innovation production. If territory is assumed as a key indicator, goals will be set to favor social strata, from the bottom to the top and constantly, capable to lead innovation processes. This should take place throughout a model starting in the educational system and developed avoiding all useless burdens for business development and economic growth.