|Launch El Celler de Can Roca|
What these new chefs have done is to restart something that we view as basic: food. They have taken the proverbial white canvas and splattered it, Jason Pollock style, with all sorts of innovative ideas. Food is no longer just about tacos.
|Launch Gehry Technologies|
Why could we not execute with the same degree of creativity in business? The two innovation examples illustrated above demonstrate that new thinking can transform even industries where ideas are so old and so set in stone that one would think it impossible to erase preconceptions.
While trade has been around for a long time, our business institutions are very young. Many of the principles behind our corporate institutions are not older than 250 years old. The industrial revolution launched an alternative way for wealth creation. It was no longer necessary to win a war to become wealthy. Business promised to bring long lasting wealth to its owners. To see how things used to be, follow the history of descendants of British and French army generals. The long lasting nature of wealth creation through successful soldiering should be readily clear.
Through an innovative perspective, there surely are new ways businesses could be structured; ways that could bring added value to all stake holders: citizens, employees, owners and the environment alike. I am referring to innovative methods of wealth creation for all. I am not referring to superficial responses to regulations, unions or environmentalists pressures.
|Launch New Orleans / Katrina|
Businesses can create value without government pressure. This is important because property protection, an essential element of wealth creation, is in fact performed by government. If elected officials decided to confiscate property, they could. In fact, they already confiscate property. Taxes are the most obvious way that governments take from us to fund their projects. But if governments somehow decided to confiscate all of what we own, it would be very difficult to stop it. I have heard countless stories of Venezuelan business people who heard a knock at their door one morning, only to open and be informed by the soldier standing outside that a destitute family will now live in their house with them. Not a nice way to start the day. Such orders continue to be enforced by the army.
|Launch The Economist|
Note that President Obama has explicit desires to continue to conduct wealth redistribution programs. So we, in the US, are also exposed to the risk or confiscation. Perhaps the most important long term threat to property will be in the form of a change in job ownership. Let me explain.
Today, jobs are created by companies. Companies hold title to these jobs. If an employer wishes, it makes jobs available. If she so likes, the employer can refuse to hire someone who is not qualified to fulfill the business' needs. But what if government was to confiscate job ownership. What if employees held ownership of jobs. This is not far fetched. Have you heard of employment entitlement; as in holding title? Unions exercise it. If you operate within a unionized industry, unions will determine whether a business can add or remove jobs. Unions can also determine who can hold such jobs. In these cases, businesses no longer own title to the jobs; making the threats of job confiscation much more real than one would think at fist glance.
So there are strong incentives for businesses to innovate in ways that creates value for all. At the one side there is the threat of job confiscation by government. At the other, there is the possibility to create a civil environment where we can all thrive and be happy. I therefore do not see environmental and social responsibilities as anti-business. They are essential for business instead. Businesses are where the brightest and most innovative humans practice. Why could we not deploy their great outputs to invent the business of the future? Why could we not eliminate sacred cows to give rise to a better future for all? Let's build a future free from unions and threats of confiscation by government.
Yes, today I took the very poetic and deeply philosophical route. But my conviction of a strong need to innovate is nonetheless present every day.