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Gillian Tett on the limits of innovation

And the magic word is …

By Gillian Tett

Published (Financial Times): October 29 2010 23:30 | Last updated: October 29 2010 23:30

What could “reboot” America these days? More stimulus spending? A dose of austerity? Increased quantitative easing (QE2)? Or is innovation the solution, coupled with passion and love?

That is a question I have been mulling since I flew down to New Orleans last weekend to attend a jazz-filled meeting called “Reboot America!”, organised by the glamorous Brit-turned-American journalist Tina Brown.

Brown has had a long and dazzling career: she used to edit Tatler and Vanity Fair, but now runs a hip American website, The Daily Beast. She also has an equally impressive list of friends. The participants in “Reboot America!” were like a fantasy dinner party: General Stanley McChrystal (former head of the US forces in Afghanistan) showed up; so did Diane von Furstenberg (the fashion designer), Sheila Bair (one of America’s top regulators), Vinod Khosla (the great venture capitalist), Joseph Stiglitz (the Nobel prize-winning economist) and Peter Orszag (until recently, Obama’s budget czar). Spike Lee and Richard Branson were also slated to appear but never made it.

While the attendees were eclectic, they shared at least two things. First, most agreed that America is in a mess, due to long-term structural problems as much as short-term banking woes. Indeed, as I listened to the debates in New Orleans I had a sense of déjà vu: the last time that I heard quite so much wailing about the future of a nation was in Japan, where I worked as a reporter in the late 1990s.

The second common thread was reverence for the idea of innovation. While Brown’s friends disagreed with each other over the merits of QE2 or nuclear power, almost everyone took it for granted that innovation was not just a Good Thing, but could help fix America’s troubles – particularly if combined with passionate energy. Or, as Beth Galante, an environmental activist from New Orleans declared, what was really needed was innovation and luurve.

On one level, this felt wildly exhilarating. I, for one, think innovation can be a wonderful thing if handled wisely. In other respects, it was also a trifle curious. These days, policymakers and politicians often like to sprinkle the “I” word around, mindful that innovation is not just a popular idea, but almost a quasi noble concept in America. It is baked into the American myth, like apple pie and motherhood; a near-sacred intellectual totem pole which almost everyone can rally around, be they fashion designer, bank regulator, army general or businessman.

But, as anthropologists have loved to point out, since the days of Claude Lévi-Strauss onwards, totems tend to be most potent when they are ambiguous enough to conceal contradictions. That innovation totem is no exception. If you were to ask the average person on the street to define innovation, they would probably talk about gadgets or cutting-edge science: Google, iPads, Viagra and so on. However, if you ask business people, they will often point to processes that are deceptively simple. David Neeleman, the founder of US airline JetBlue, for example, told the conference that his best innovations were putting televisions on planes and telling his staff to work at home, not in the office. In its most crude, dictionary sense, innovation is really just about embracing the new, or, for that matter, accepting change.

But while Americans might love their iPhones, many ordinary voters currently appear terrified of other forms of radical change. They don’t want their lives or communities to be turned upside down, or to lose their jobs to computers. They are wary of radical policy shifts such as Obama’s healthcare plans. And in practical terms, many innovations have had a dark side. Innovations in oil exploration have cut the price of oil; but they have also polluted the Gulf. Meanwhile financial creativity has fuelled the credit crisis – and left Paul Volcker, the former Fed chairman, woefully suggesting that the “only truly useful innovation” in finance in recent decades has been the invention of the ATM.

These contradictions, for the most part, are largely glossed over. Everyone continues to rally around the innovation idea. And in a world where politicians are beset by seemingly intractable problems, it seems a magical cure for ills.

Don’t get me wrong: I am not against innovation. And down in New Orleans there were plenty of inspiring stories being bandied around among the jazz, involving clever new business ideas and social processes in places ranging from Finland to Colombia. But let nobody be fooled: innovation can be a powerful totem pole but it is not a magic wand. The spirit of Google alone cannot “Reboot America!” overnight. That will require a long, hard slog from politicians and voters alike; it won’t be glamorous.

gillian.tett@ft.com

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

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