Archive for April, 2013

Innovation Infrastructure as a Basis for a New Political Framework

April 5, 2013

The central innovation issue is this:  innovation suffers because we cannot efficiently tap the network (wisdom of crowds) effects of our collective decisions and behaviors in education, health care, social services, the work force, and environmental resource management.

Big-picture innovation hinges on the truth in the maxim “You manage what you measure,” and get this: we don’t have a metric system for 90% of the capital under management. That capital is the human, social, and natural capital that makes manufactured capital and property economically viable in the first place. Without an intangible assets metric system, we cannot align and coordinate value decisions in the most important areas of our lives.

So, as I’ve said ad nauseum here, what we need to do is focus on designing, implementing, and managing a human, social, and natural capital intangible assets metric system, with the cooperation of local firms, nonprofits and state/federal grants.

Society as a whole has to invest in an intangible assets metric system. Such systems benefit everyone and are so expensive that no individual, firm, or industry has the resources needed to do the job.

And quite apart from the expense, providing this infrastructure fits squarely with the mission of democratic government for, by, and of the people. The fairness of our measures is something we take for granted as evidence of our socially just relations: they show what we value.

I am convinced that a huge proportion of our human, social, and environmental problems today stem from the complete absence of a meaningful, scientific, and universally uniform system for measuring genuine wealth on the ground at the individual level in classrooms, clinics, offices, social services agencies, watersheds, fisheries, forests, etc. And here is where we get to something really interesting in the way of consequences.

Conservative political forces have long sought to reduce the size of government, to run government like a business, and to allow market forces to provide for the general social welfare. The proposals, of course, do not tend to include any specific means for addressing human suffering, social inequities, and environmental degradation. And on those occasions when the vision is implemented, market forces fail spectacularly to provide what’s needed.

Those failures are inevitable as long as we do not have scientific and meaningful ways of measuring and managing human, social, and environmental impacts. But when we do finally create an intangible assets metric system—and I am convinced we inevitably will—a foundation will be laid for a resolution of today’s political logjams. Universally uniform and comparable impact metrics are a key element in efficient markets. Efficient markets for human, social, and natural capital will relieve government of the burden it experiences in managing these assets directly.

In this scenario, both sides win. Liberals see how to make profits contingent on the growth of intangible, genuine wealth, and conservatives see how to reduce the size of government and run it more like a business. I am convinced this is how we will cut the Gordian knot of our current debacle.

An intangible assets metric system has been technically feasible for decades and is, of course, only one element in the larger context that will be needed to promote and realize new heights in sustainability innovations. For more on my thoughts in this area, see my 2011 World Standards Day prize paper, or my NIST and NSF White Papers.