The importance of creativity is indispensable as it generates ideas for improving products in helping customers to get their jobs done better. Due to ideas, the quality of products improves, and the cost is reduced. Hence, it drives productivity, diffusion of product and market expansion, and consequentially fosters growth. But how to fuel creativity is an issue. The urgency of making a profit through quality improvement and cost reduction and the flow of knowledge are two essential fuels for creativity to function consistently and systematically.
Creativity refers to the spontaneous response of minds to generate ideas, alternatives, or possibilities to improve products or processes so that quality improves and/or cost is reduced in Getting jobs done better. This is an innate ability. By birth, every human being is creative. Despite this, not every individual or group as a firm or nation equally benefits from creativity in creating economic value. Hence, an issue is how to fuel the creative process to create a Flow of Ideas and systematically transfer them into economic value.
A society that fails to leverage creativity ends up building an economy out of the extraction of natural resources and labor. After having a bit of initial growth, they end up in stagnation. On the other hand, firms and nations that systematically pursue creativity in producing a flow of ideas succeed in sustained growth through Incremental Innovation and Reinvention. Hence, the importance of creativity in driving prosperity is immense. Besides, ideas driving reinvention waves are powerful for unleashing Creative Destruction on monopolies and driving growth from the bottom up. Hence, Market Economy principles have been formed to leverage creativity to develop an idea economy.
Outline of Contents
- Importance of Creativity in Innovation, Entrepreneurship and Startups
- Importance of Creativity in Design Thinking
- Creativity Thinking for Invention, Innovation and Evolution
- Importance of Creativity in the Rise and Fall of Innovations and Firms
- Fueling Creativity for Sustaining Growth
- Creativity for Idea Economy
- Succeeding in Profiting from Ideas Demands Systematic Creativity
Importance of Creativity in Innovation, Entrepreneurship and Startups
As explained, the benefit of creativity in generating ideas is immense as ideas drive growth through innovation, making products better and cheaper. Hence, the importance of creativity in generating ideas is crucial to entrepreneurship and business success.
Ideas are innovations’ primary ingredients, as innovators aspire to improve products’ quality and reduce costs through ideas. If suitable ideas are systematically pursued, innovators may succeed in offering higher-quality products at lower prices. For example, due to ideas, LCD TVs are a better and cheaper alternative to CRT TVs. Similarly, current mobile handsets are far better and more affordable than what Motorola introduced in the 1980s. Therefore, succeeding in innovation and entrepreneurship finds creativity immensely important. Besides, ideas like the reinvention of matured products by changing the technology core open the opportunity for startups to pursue Disruptive innovation.
Importance of Creativity in Design Thinking
Design thinking refers to a systematic approach to detecting customers’ pain points in getting their jobs done with existing products and generating ideas for addressing them. Such exercise leads to innovative solutions in addressing latent problems. Hence, the success rate to profit from innovation increases due to the flow of ideas. Therefore, the importance of creativity in Design Thinking is central. However, it’s not just a one-time activity. To keep improving products for expanding the market and sustaining in the competition space, a flow of ideas is to be created to have directional progress.
Creativity Thinking for Invention, Innovation and Evolution
The role of invention and innovation and their evolution in driving growth and prosperity is crucial. However, to make it happen, idea flow is essential. Hence, we should focus on creative thinking. Instead of cutting costs or giving discounts to increase sales, we should foster creative thinking so that through ideas, we simultaneously succeed in reducing costs and improving quality. Furthermore, as we need a flow of ideas to profit from invention and innovation through evolution, we need creative thinking instead of sudden creative sparks.
Importance of Creativity in the Rise and Fall of Innovation and Firms
Film camera innovation was behind the rise of Kodak. Similarly, due to ideas, many firms rose from tiny startups to large ones, like Sony, Apple, Microsoft, DEC, RCA, GE, and many more. Hence, the role of creativity in the rise of firms is vital.
But why do such firms fall? Do these firms fall due to a lack of creativity? Does it mean that upon attaining the top, they lose creativity? Perhaps the fall does not occur due to absence or loss of creativity. Instead, it happens due to decision-making failure to pursue loss-making reinvention waves to cause destruction to profit-making ones.
Fueling Creativity for Sustaining Growth
Irrespective of greatness, all innovations appear in primitive form. They must grow to cross the threshold level to create economic value as a better alternative. Hence, we need a flow of ideas for incrementally advancing them. Furthermore, irrespective of market performance, all innovative products suffer from eroding willingness to pay due to competition forces. On the other hand, unfolding externalities like infrastructure and standards keep opening the opportunity to add ideas. Hence, innovators need a systematic flow of ideas to sustain innovation by overcoming competition and leveraging externalities. Therefore, persistent exploitation of creativity underpins sustained growth.
Creativity for Idea Economy
A review of economic growth history indicates that ideas form a robust economic growth driver. Due to idea flow, inventions of the pre industrial age started to scale up, unleashing the first industrial revolution. As profit-making competition has been sustaining it, we have been experiencing steady economic growth over the last 300 years. According to Economists like Paul Romer, Clayton, Schumpeter, and many others, the competition of profiting from idea production and commercialization is an economic driver. Hence, there has been growing attention to creating an idea economy. In retrospect, the success of the Western world in pursuing market economy principles has been due to the success of developing an idea economy. Idea economy has been the underpinning of the rise of UK-led Europe, followed by the USA, Japan, Taiwan, and South Korea. However, the idea economy demands systematic idea flow from the creative engine.
Succeeding in Profiting from Ideas Demands Systematic Creativity Exercise
Irrespective of greatness, no single idea succeeds in generating profitable revenue. From light bulbs to image sensors, there have been numerous examples. Hence, the creativity of generating random sparks, like a popcorn machine, runs the risk of creating any economic value.
To profit from innovation and drive growth, we need a systematic flow of ideas for driving evolution. And the evolution of invention is not good enough. We must win the innovation race to profit from ideas. Hence, we need to fuel our creative engine with a flow of knowledge and systematic urgency to create a flow of ideas that could be commercialized at a profit. Therefore, we need to pay attention to Wealth creation dynamics out of technology possibilities in a competitive market and accordingly dig science for knowledge to keep profit-making ideas flowing from our creativity.
Due to the role of creativity in producing ideas to make solutions better and cheaper, the demand for it has been increasing in many industries. However, to leverage it, we should be careful in following common advice like (i) don’t be afraid to take risks, (ii) don’t punish failure, and (iii) Encourage Diversity. Instead of treating creativity as a popcorn machine, we should focus on systematic idea creation to win the innovation race. Otherwise, it would be challenging to justify resource allocation.
Furthermore, don’t measure results too quickly, maintain an open mind, and foster collaboration should be interpreted within the context of winning the innovation race through incremental advancement and reinvention. Such urgency requires a systematic flow of ideas from creativity in creating a snowball effect through profit-making cumulative consequences.
