Does the UK face a wider creativity problem?


by Chris Dillow    
10:50 am - April 20th 2012

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What do the following have in common: Peter’s question: “Just where are those institutions that harness talent and foster creativity?”; Paul’s complaint that the media and other creative industries prefer nepotism and short-termism to financing creativity; Philip Delves Broughton’s point that management is about dealing with mediocrity rather than talent; and the growing challenge to the racket (pdf) that is academic publishing?

The answer is that all pose what might be the most important question in economics – of how to encourage creativity.

I say this is the most important question because it is the main cause of economic growth.

Classical economists from Smith to Mill saw growth as a contest between the law of diminishing returns, which led to stagnation, and innovation, which tended to prolong growth. Even Keynes took a similar view (pdf). He predicted in 1931 that “a point may soon be reached” when consumers would be largely satiated and so a 15-hour working week would be the norm.

When creativity and innovation slow, therefore, growth stops. And we might be at or near this point. The slowdown in productivity growth  and capital spending in recent years are both consistent with a slowdown in technical progress. This is not just afflicting old, sclerotic firms; even Apple, the greatest innovator of recent years, is returning cash to shareholders rather than investing it in new ventures.

There’s another fact consistent with this – the massive under-employment that Keynes envisaged is upon us. Not only are there 2.65m unemployed, but there are also 1.4 million part-time employees who’d like to work full-time and 2.32m economically inactive who’d like a job. That gives us 6.37 million who aren’t working as much as they’d like.

That’s 15.9% of the working age population. On top of this, I suspect there are lots of self-employed who spend time waiting for the phone to ring; 1.16 million of these are working part-time. And then there are countless full-time employees who are doing routine maintenance, chatting to each other or playing Angry Birds  whilst waiting for customers.

So there are two questions that should be more important than they are.

1. How do we generate creativity and technical progress? The “leave it to the market” school is inadequate on (at least) two counts. First, it ignores the fact that innovation has positive externalities which mean it will be under-supplied by the market. And second, rests upon an optimism about human ingenuity which might not be fully justified and which is certainly not a necessary feature of free market thinking.

2. If we cannot generate sufficient creativity and growth, what should be done to ensure that the costs of under-employment are more equitably borne? Keynes assumed that such under-employment would be the happy work of a semi-leisured people who were rich enough to meet their basic needs and more. With a new food bank opening every week, this seems too optimistic.

A political class that ignores them and obsesses instead about the price of pasties and the charitable donations of a few hundred people is not fit to govern.

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Reader comments


1. John Hancock

And we are suppressing creativity in Universities, always a major source of long-term innovation, by trying to tie them too closely to short term business needs.

Answering this accurately is going to be nigh on impossible ;-)

The music fan in me can only come up with one answer; hallucinogenic drugs

3. Paul Newman

One thing I read recently in a history of technology was that the Soviet Union had a vast budget to fund Industrial R and D and yet contributed almost nothing to manufacturing processes in the whole of the 20th century. I am unable to think of any product or innovation whatsoever off the top of my head .
So state funded R and D aint the answer

What is? …Rewarding creativity with lower taxes and fewer regulations on small firms, especially at the cliff edge wherere so many stall. Otherwise changing our economy from one where Public Sector sinecures offer security pension and no risk for the same reward as risk taking and creative entrepreuerialism.

I find it really difficult to know where to start with this.
Ignoring the ‘smoke and mirrors’ of the City financiers, presumably our economy stands or falls on the ability to manufacture things that people convince themselves that they ‘simply’ must have.
For some it may be a means of cooking food or keeping warm, for others a private jet, their third ocean going yacht or a TV 2cms thinner than the last one.
My son has five watches – they all tell him the time.
(By the way those same City financiers would be absolutely delighted if substantial debt was incurred in satisfying those demands)
Creativity and innovation is needed to dream up the products, that we ‘simply’ cannot live without.
And as long as there are enough rich people to buy them,the oil keeps flowing and the earth keeps providing a seemingly infinite source of minerals all will be well.
With mass consumerism and built in obsolescence on one side of the scales and sustainabilty on the other…………………………………………………………………………….

Planeshift @2 after you with the Fly Agaric……………

5. Chaise Guevara

@ Paul Newman

“One thing I read recently in a history of technology was that the Soviet Union had a vast budget to fund Industrial R and D and yet contributed almost nothing to manufacturing processes in the whole of the 20th century. I am unable to think of any product or innovation whatsoever off the top of my head .
So state funded R and D aint the answer ”

Hang on, that’s a huge leap. This could just as easily be down to a poor innovation culture in the Soviet Union (this being the place that thought it was clever to produce super-cheap cars out of balsa wood or something). Plus R&D is ripe for embezzlement by people in hugely corrupt states like the USSR.

If anything the state ought to be better placed than private firms to push innovation through R&D as it can budget for blue-sky research without having to justify this to a financial manager. And what about the military, for goodness sake? No useful GPS in your car without tax dollars to develop the technology.

6. Man on Clapham Omnibus

Money. Give me loads and I can get creative.

7. Man on Clapham Omnibus

@4 creativity could also involve inventing a car battery allowing you to drive a 1000 miles or maybe ultra effective wafer thin insulation which you can paste on to solid brick walls. What about a house you can blow up like a bouncy castle,add water and leave to set. A quick way of growing a forest. Quatum laptop? Fusion?

There’s a million things out there that could make life better for all.

“What is? …Rewarding creativity with lower taxes and fewer regulations on small firms,”

Disproved by the fact Norway has the highest number of start ups in europe.

My answer; you have to create an entreprenieurial and risk taking culture. This needs many things, but a decent social safety net is essential. People are more likely to take the risk of leaving a decent job and setting up on their own if they know the consequences are not becoming homeless and losing their families. One of the findings of the OECD report on labour markets that worstall cited a while back was that workers are very risk averse when it comes to changing jobs. Make the conseuqences of failure less and people take more risks.

But by no means is that going to be enough.

@8: “What is? …Rewarding creativity with lower taxes and fewer regulations on small firms,”

Disproved by the fact Norway has the highest number of start ups in europe.

What does that disprove? Norway has high overall taxation (particularly VAT 25%), but ar the taxes for small firms particularly high there?

And is there a lot of regulation? Not that I know of. As far as I can see, Scandinavian societies actually have somewhat less red tape and a more consistent and predictable (and generally more sane) bureaucracy than the UK.

UK generally seems to stick to traditions, down to the obscure practise of having a tax year different from calendar year. That surely costs some money (to the state, to businesses). But then you also drive on the wrong side of the road, too.

10. DisgustedOfTunbridgeWells

I am unable to think of any product or innovation whatsoever off the top of my head .

Says more about you than them because there are some fairly major ones, you might be looking at a few hundred of them right now.

A lot of stuff that turned out be quite important later on wasn’t supported by the state, much like in the UK with the computer industry, maglev, etc. Innovations like solid state amplifiers and superheterodyne receivers were made by Soviets long before RCA.

So state funded R and D aint the answer

I always love it when loonies say that on the internet without a hint of irony.

11. Planeshift

“What does that disprove?”

it disproves the idea that a high tax economy discourages entreoprenuership. And yes, there is a lot of regulation and taxation on businesses in Norway. If Luis enrique doesn’t get here first, I’ll post the link (stored elsewhere) tomorrow morning once my hangover clears.

12. Teddy Groves

Paul Newman, Planeshift

Risk-taking and entrepreneurship are not the same as innovation. Historically, many of the people responsible for the best innovations have had low-risk public sinecures. In the other direction, successful entrepreneurs and risk-takers are often not at all innovative.

On a more general country-by-country level I don’t think it is obvious that entrepreneurship and risk-taking levels are causally related to amounts of innovation, and even if they were related I think it would more likely be the innovation doing the causing.

13. Paul Newman

Disproved by the fact Norway has the highest number of start ups in europe.

Norway is a rather unsual country ( it floats on oil and I daresay the servicing of it begets beaucoup de krone ) and you would have dig into this a bit . New Labour constantly claimed that there were more start ups under them than ever before whereas in fact their onerous Employment laws and high taxes made most of the building trade go from Employee to BFSC status which is technically a start up but not exactly a sign of a thrusting entrepreneurial culture
Who knows what the Norway story is but if the suggestion is tha higher taxes and more obstacles will encourage risk taking then the suggestion is clearly nuts and can be discarded. ..and yet you people will no doubt continue …
Most people that start up viable concerns do so because their parents did or they knew people who did as children .Its something ,in my experience , that you have to do pretty young and springs from a culture that has been denigrated and despised most of my life.
Asking the state to pick up dreamy failures with their revolutionary boucing toilet in space idea is ..well its a childs idea and the fatuous RDAs give you some idea what state winner-picking looks like.
We need is to get back to the way it was ;when a man who ran a succesful heating and ventilating company Company was respected, and his brother who became a Public Sector Proffessional was pitied at best…well despised frankly

That is the real problem

14. Margin4error

I don’t really buy into the fundemental premise of the article.

By that, I mean I don’t really see any evidence of a lack of innovation across the UK.

Indeed the UK remains remarkably creative for a nation of its size, with a disproportionately large marketing sector, pharmaceuticals sector, structural engineering sector, programming sector, theatre industry and music industry.

Just taking one of those, there have been a huge array of innovations in structural engineering in the last couple of years that continue to take place. Advances in energy technologies and materials technology are often led from within the UK and implemented around the world by UK firms.

So what makes people think we are lacking innovation and creativity all of a sudden?

Surely a more likely cause of our relative economic malaise is that our infrastructure is ranked 28th in the world, while near neighbour France is ranked 3rd.

15. Planeshift

“Who knows what the Norway story is”

Right, we can safely discard what the norway story is because you can’t provide an explanation of how it happened beyond oil, and can’t be bothered to do the research.

Usual right wing crap – proud to be ignorant and telling us not to bother looking at how things in other countries are succesful.

tell me – how many succesful businesses have you ever run?

Education has a lot to do with it. League tables etc encourage “failsafe” teaching. Pupils have to get grades, schools have to meet targets, The teaching of Design and Technology should foster innovation but the mark schemes of exam boards encourage work which meets narrow definitions of success.

“A political class that ignores them and obsesses instead about the price of pasties and the charitable donations of a few hundred people is not fit to govern.”

Couldn’t have put it better myself.

In the field of geophysics:

There’d be no Sonar without the military wanting to map the seabed to find places submarines could hide. That’s how we discovered mid ocean ridges

Magnetometry was invented to detect submarines. We found that old rocks have reverse polarity, and theres a symemetrical pattern from mid ocean ridges. So we discovered the earth’s magnetic field reverses, proved continental drift

The global seismic network was set up to detect Soviet nuclear tests. That we can accurately pinpoint earthquakes around the world, learn about the subsurface was a useful was a useful secondary benefit.

Rocket technology was originally for missiles, satellites originally for military use and cold war space race rivalry. From that we map the earth’s surface, detect ground movements like earthquakes and rising magma in volcanoes with radar (developed for detecting planes, then spying).

State funded R&D? Geophysics would barely exist without it.

Our homes are to small to foster creativity, creativity is messy, chaotic.

No storage space, garages, garden sheds, cellars, attics, back yards all often too costly.

Try going out and putting a rope swing up outside somewhere, see how long it takes before someone comes along spouting health and safety, this law that law.

20. Just Visiting

James

yes military spending has had beneficial spinoffs.
But given the slow pace that the military moves at, th typical 7-10 years between start of a project and delivering a product – it is often true that consumer technology runs ahead of it!

21. Just Visiting

I;m just back from holiday in Germany – that is country that in many ways does technology better than we do.

The reason I think is culture -as someone said above.

We pay our brightest grads £40K straight out of Uni to be what – lawyers…. and to develop software for the City that can make investment decisions on microseconds not milliseconds..

The Germans instead respect engineers and properly qualified technologists.

Right now – German unemployment is already back below 2008 levels.

The have state funded bodies that actually make a difference, because of their culture, such as their county-based technology transfer organisations and trade export bodies – I suspect ours are staffed not by technologists but by humanity grads…

10,000 German school kids will be taken to the huge Hannover Trade Fair – that ironically we founded in the 40′s !

But interestingly the germans can be rather slow in their thoroughness!
Maybe their culture fits better to be just behind the bleeding edge, and to turn it into real business and quality products.

Right now, the Chinese buying up German companies with world leading products. And German companies are opening more factories and research centres in China and the least.

And so looking forward 5 years – maybe Germany too has a tough time coming, ss the Chinese take German jobs/

22. Chaise Guevara

@ Mefly

“Try going out and putting a rope swing up outside somewhere, see how long it takes before someone comes along spouting health and safety, this law that law.”

Did the event you describe ever actually happen to you? I only ask because I’ve played on any number of ersatz rope swings, and never once got told off by a bureaucrat.

23. Chaise Guevara

@ 20 JV

“yes military spending has had beneficial spinoffs.
But given the slow pace that the military moves at, th typical 7-10 years between start of a project and delivering a product – it is often true that consumer technology runs ahead of it!”

I don’t think anyone’s saying that consumer technology doesn’t achieve breakthroughs, because that would be dumb. This whole defence-of-state-funded-R&D thing was triggered by someone earlier on this thread claiming that state-funded R&D was a waste of time, which it pretty bloody obviously isn’t. Said person used the USSR as the definitive anecdote, because as we all know Soviet society was perfect at everything apart from than the way it distributed tech funding…

Oh, and the military, or at least the US military, are not “slow” when it comes to tech. To be honest, they’re pretty scary.

24. Charlieman

@5. Chaise Guevara: “No useful GPS in your car without tax dollars to develop the technology.”

You do realise, Chaise, that the US government can turn your free GPS off whenever they like? If you were living in Russia or China, perhaps you could use their governments’ location services. Those governments would be more likely to turn it off arbitrarily.

That free GPS service from the sky? You don’t own it nor do you control it.

The EU alternative, Galileo, doesn’t exist yet. Allegedly it is a cross government and cross company service. Please do not test the terms and conditions of service because they do not exist.

Galileo was ~78 years old when he died. Treat that as the time scale for the EU project.

25. Charlieman

@23. Chaise Guevara: “This whole defence-of-state-funded-R&D thing was triggered by someone earlier on this thread claiming that state-funded R&D was a waste of time, which it pretty bloody obviously isn’t.”

What we know about state funded R&D that provides useful information is what those organisations tell us. We have a sample. We have a sample of data that they release to us. We do not have a sample of what failed or what is bloody interesting but is classified.

cf Ben Goldacre about data disclosure.

“…as we all know Soviet society was perfect at everything apart from than the way it distributed tech funding…”

There was some remarkable technology in USSR aircraft. And they used simple tech to solve problems in simple ways.

26. So Much For Subtlety

18. James

In the field of geophysics:

There’d be no Sonar without the military wanting to map the seabed to find places submarines could hide. That’s how we discovered mid ocean ridges

Well that is not true. At least Wikipedia does not agree with you:

“The Canadian engineer Reginald Fessenden, while working for the Submarine Signal Company in Boston, built an experimental system beginning in 1912, a system later tested in Boston Harbor, and finally in 1914 from the U.S. Revenue (now Coast Guard) Cutter Miami on the Grand Banks off Newfoundland Canada.[2][3] In that test, Fessenden demonstrated depth sounding, underwater communications (Morse Code) and echo ranging (detecting an iceberg at two miles (3 km) range).”

Submarine Signal Company sounds like a private business to me. There were patents for sonar even before this.

Magnetometry was invented to detect submarines. We found that old rocks have reverse polarity, and theres a symemetrical pattern from mid ocean ridges. So we discovered the earth’s magnetic field reverses, proved continental drift

No it was not. Magnetometry was invented by Gulf Oil to find minerals. Oil you might expect. It happened that they figured out they could use it for submarines once the war had started.

The global seismic network was set up to detect Soviet nuclear tests. That we can accurately pinpoint earthquakes around the world, learn about the subsurface was a useful was a useful secondary benefit.

That is putting the cart before the horse. Seisometres were invented, mainly but not entirely by private individuals, to study earthquakes. When nuclear weapons came along, people realised they could be used to detect nuclear tests. Then the global seismic network was set up.

Rocket technology was originally for missiles, satellites originally for military use and cold war space race rivalry. From that we map the earth’s surface, detect ground movements like earthquakes and rising magma in volcanoes with radar (developed for detecting planes, then spying).

Rockets were originally entirely private. And small scale. Government support gave us the V-2 but by then private individuals had done all the theory and a large part of the engineering. The only remaining issues were scaling up.

State funded R&D? Geophysics would barely exist without it.

Bollocks.

27. Margin4error

@26

are you refuting the role of the state in developing those technologies because you believe what James was refuting – ie that state funded r&d is a waste of time?

Or are you just splitting hairs?

If it’s just splitting hairs, well done, you split those hairs rather well – though ultimately with no purpose achieved.

If it is because you think state funded r&d is a waste of time – might I direct ou to meteorology as a better counter-point than the one James offered.

Almost all advancements of the last 100 years in meteorology have been led by the state. Not only have Met Offices around the world been owned by the state throughout that period, but in most cases run as an aspect to their nation’s defence departments.

Be it basic forecasting or atmospheric monitoring for long term trends, these state institutions have driven technological and scientific advances across the world – with their own researchers and through the commissioning of research at universities (also, often, owned by the state).

Indeed the rare attempts of private companies to usurp the role of these state institutions have generally floundered because of market forces. While state institutions are insulated from market forces, companies seeking to make money are not. Hence some high profile (in the field at least) weak research against climate change. There is a lot of money in “disproving” climate change – and private research has often grasped that dollar at the expense of real research work. The data-mining that follows, and the ludicrously poor research work done as a result, actually serves as a warning against profit-led scientific advancement.

28. So Much For Subtlety

27. Margin4error

are you refuting the role of the state in developing those technologies because you believe what James was refuting – ie that state funded r&d is a waste of time?

I think the situation is complex but that over time government involvement leads, as with everything else the government does, to collapse, incompetence, political interference and the death of whatever the state controls.

Not that it is relevant.

Or are you just splitting hairs? If it’s just splitting hairs, well done, you split those hairs rather well – though ultimately with no purpose achieved.

James made several claims. Pointing out that they are factually wrong is not splitting hairs.

Almost all advancements of the last 100 years in meteorology have been led by the state. Not only have Met Offices around the world been owned by the state throughout that period, but in most cases run as an aspect to their nation’s defence departments.

That is interesting. Irrelevant, but interesting.

Be it basic forecasting or atmospheric monitoring for long term trends, these state institutions have driven technological and scientific advances across the world – with their own researchers and through the commissioning of research at universities (also, often, owned by the state).

It would be difficult for me to think of any technological or scientific advances driven by the Met office or their offshoots, but don’t let reality stop you. I am rather enjoying this.

Indeed the rare attempts of private companies to usurp the role of these state institutions have generally floundered because of market forces.

Because it is hard to make something pay when the government provides it for free. Not because the government is inherently good at this.

Hence some high profile (in the field at least) weak research against climate change. There is a lot of money in “disproving” climate change – and private research has often grasped that dollar at the expense of real research work. The data-mining that follows, and the ludicrously poor research work done as a result, actually serves as a warning against profit-led scientific advancement.

Umm, the big money is in Global Warming hysteria. And this too shows in the corruption of the science as charlatans use the endless supply of government money to further their careers on the basis, as you say, of weak science. If that.

Not that it matters. As it is irrelevant to the discussion at hand.

Creativity can only happen in an environment that nurtures it. In our society, some people get that environment, others don’t. I hate to think of the amount of talent currently wasted, or about to go to waste, because of social policies – cutting the EMA, cutting money to SureStart, university tuition fees, ditching of child trust funds, cuts to music education even (which I read about very recently).

This ‘human ingenuity’ that you speak of requires a comfortable environment and a good education for it to grow and flourish. It involves treating every human being like they may have something important to contribute in the future, and helping them fulfil their potential. It means investing in people from birth onwards, and giving extra help to those who are disadvantaged (for example by a disability) – and the current government have made it very clear that they don’t want to do this.

I would expect less innovation in the years to come, as the pool of people who could be creative in this way shrinks. Thanks to the Coalition.

30. margin4error

smfs

how is pointing out that innovation and advancement has happened under state control irrelevent to refuting the assertion that state research and development is a waste of time?

31. Chaise Guevara

@ 30 M4E

SMFS’s understanding of “valid evidence” is “anything that suits my prejudices”; such data points will be treated as compelling even if they are pure conjecture, whereas anything to the contrary will be dismissed out of hand. And SMFS only likes the state if it’s beating people up, which tends not to happen in R&D departments.

Not worth the candle, seriously.

32. margin4error

chaise

it’s odd – I had already grasped from other conversations with smfs that he/she wasn’t a very bright individual – but one wonders why some one so keen to object to rational discussion of so many subjects wastes time on a deliberately left-leaning website. I often read Conservative Home and other right wing blogs because, frankly, it is always good to open one’s mind to different ways of thinking. Sometimes there is a different outlook that, once considered, adds to my understanding of a subject, even if it is not instinctively an outlook that I would tend towards. But to deliberately avoid learning while doing so would utterly defeat any purpose in me visiting those sites – which makes it seem a rather stupid passtime that SMFS has decided to engage in.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Does the UK face a wider creativity problem? http://t.co/xVVsQ56H

  2. Jason Brickley

    Does the UK face a wider creativity problem? http://t.co/NKuDOzS8

  3. leftlinks

    Liberal Conspiracy – Does the UK face a wider creativity problem? http://t.co/lYUEgtPi

  4. BevR

    Does the UK face a wider creativity problem? http://t.co/xVVsQ56H

  5. SystemsThinking

    Why surprised?

    Creativity deficit consequence of command & control. Targets, League tables, inspection…

    http://t.co/0dhJ0Ubz @CJFDillow

  6. kt innovator

    Why surprised?

    Creativity deficit consequence of command & control. Targets, League tables, inspection…

    http://t.co/0dhJ0Ubz @CJFDillow

  7. Alex Godoy Faundez

    “@SysThinkReview: Why surprised?
    Creativity deficit consequence of command & control.
    http://t.co/9FK17921”

  8. Richard Bernato

    Why surprised?

    Creativity deficit consequence of command & control. Targets, League tables, inspection…

    http://t.co/0dhJ0Ubz @CJFDillow

  9. SyzygySyzygysue

    Does the UK face a wider creativity problem? http://t.co/xVVsQ56H

  10. Peter Johnson

    Why surprised?

    Creativity deficit consequence of command & control. Targets, League tables, inspection…

    http://t.co/0dhJ0Ubz @CJFDillow

  11. Jamie

    Does the UK, the land of X-Factor, Britain Hasn't Got Talent and The Voice (No Face), face a wider creativity problem? http://t.co/3qHBHdkR

  12. DumbAgent

    Does the UK face a wider creativity problem? http://t.co/nciQUV1D

  13. Creative Author

    Does the UK face a wider creativity problem? | Liberal Conspiracy: When creativity and innovation slow, therefor… http://t.co/RKaNOVWX

  14. Corpus Optima

    Why surprised?

    Creativity deficit consequence of command & control. Targets, League tables, inspection…

    http://t.co/0dhJ0Ubz @CJFDillow

  15. Andy Hicks

    RT @libcon: Does the UK face a wider creativity problem? http://t.co/X3qNryHs Employment and how it is created.





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