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Posts Tagged ‘GDP

The Hole in the Soul and the Legitimacy of Capitalism

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In a January 13, 2010 post entitled The Hole in the Soul of Business, Gary Hamel offers the following perspective on success, happiness and business:

I believe that long-lasting success, both personal and corporate, stems from an allegiance to the sublime and the majestic… Viktor Frankl, the Austrian neurologist, held a similar view, which he expressed forcefully in “Man’s Search for Meaning:” “For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended consequence of one’s personal dedication to a cause greater than oneself . . ..”
 
Which brings me back to my worry. Given all this, why is the language of business so sterile, so uninspiring and so relentlessly banal? Is it because business is the province of engineers and economists rather than artists and theologians? Is it because the emphasis on rationality and pragmatism squashes idealism? I’m not sure. But I know this—customers, investors, taxpayers and policymakers believe there’s a hole in the soul of business. The only way for managers to change this fact, and regain the moral high ground, is to embrace what Socrates called the good, the just and the beautiful.

So, dear reader, a couple of questions for you: Why do you believe the language of beauty, love, justice and service is so notably absent in the corporate realm? And what would you do to remedy that fact?

Hamel’s call for action is echoed in the analysis of the double bubble at the turn of the century by Carlota Perez:

The current generation of political and business leaders has to face the task of reconstituting finance and bringing the world out of recession. It is crucial that they widen their lens and include in their focus a much greater and loftier task: bringing about the structural shift within nations and in the world economy. Civil society through its many new organisations and communications networks is likely to have a much greater role to play in the outcome on this occasion. Creating favourable conditions for a sustainable global knowledge society is a task waiting to be realized. When – or if – it is done we should no longer measure growth and prosperity by stock market indices but by real GDP, employment and well being, and by the rate of global growth and reduction of poverty (and violence) across and within countries.

As if these words were not arousing enough, Perez adds one final piercing observation:

 The legitimacy of capitalism rests upon its capacity to turn individual quest for profit into collective benefit.

IMHO Hamel and Perez identified the very same phenomenon (“hole in the soul”). The only difference is at the level they discuss the phenomenon. Hamel makes his observation at the business/corporate level; Perez at the socio-economic level.

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The Changing Nature of Innovation: Part II — National Policy

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Michael Porter makes two interesting observations about innovation in the US in his BusinessWeek interview entitled Why America Needs an Economic Strategy:

… U.S. entrepreneurship has been fed by a science, technology, and innovation machine that remains by far the best in the world. While other countries increase their spending on research and development, the U.S. remains uniquely good at coaxing innovation out of its research and translating those innovations into commercial products. In 2007, American inventors registered about 80,000 patents in the U.S. patent system, where virtually all important technologies developed in any nation are patented. That’s more than the rest of the world combined

In contrast to the effectiveness of utilizing research and technology for entrepreneurial purposes, Porter notes a worrisome trend:

An inadequate rate of reinvestment in science and technology is hampering America’s feeder system for entrepreneurship. Research and development as a share of GDP has actually declined, while it has risen in many other countries. Federal policymakers recognize this problem but have failed to act.

Viewed in light of Part I of this mini-series on innovation, a natural question posts itself:

Do the new forms of experimentation, which enable the US entrepreneurial system to be so very effective in coaxing innovation out of research that has already been done, mask a fundamental decline for which there will be hell to pay?!

Written by israelgat

November 24, 2009 at 5:30 am