No “Scott Free” for anybody: Why the EU and the World Need Not Just Finance But a Lot More Creativity​, Imaginatio​n & Innovation​: A Picture is Worth a Thousand Words!– Written 06/12/12

Of the EU 27 members only eleven (11) (41%) among twenty seven (27) have a “sustainable for growth” unemployment rate.

 

59 % of the EU members economies are on a path to collapse, bringing the political system down with them…….

 

Do we still think that the USA and China/Asia will be “Scott Free” as Sir Ridley Scott calls his films production company?…….;+)

 

“Creativity refers to the invention or origination of any new thing (a product, solution, artwork, literary work, joke, etc.) that has value. “New” may refer to the individual creator or the society or domain within which novelty occurs. “Valuable”, similarly, may be defined in a variety of ways.

The range of scholarly interest in creativity includes a multitude of definitions and approaches involving several disciplines; psychology, cognitive science, education, philosophy (particularly philosophy of science), technology, theology, sociology, linguistics, business studies and economics, taking in the relationship between creativity and general intelligence, mental and neurological processes associated with creativity, the relationships between personality type and creative ability and between creativity and mental health, the potential for fostering creativity through education and training, especially as augmented by technology, and the application of creative resources to improve the effectiveness of learning and teaching processes.”

 

“Theories of creativity (particularly investigation of why some people are more creative than others) have focused on a variety of aspects. The dominant factors are usually identified as “the four Ps” – process, product, person and place. A focus on process is shown in cognitive approaches that try to describe thought mechanisms and techniques for creative thinking. Theories invoking divergent rather than convergent thinking (such as Guilford), or those describing the staging of the creative process (such as Wallas) are primarily theories of creative process. A focus on creative product usually appears in attempts to measure creativity (psychometrics, see below) and in creative ideas framed as successful memes. The psychometric approach to creativity reveals that it also involves the ability to produce more. A focus on the nature of the creative person considers more general intellectual habits, such as openness, levels of ideation, autonomy, expertise, exploratory behavior and so on. A focus on place considers the circumstances in which creativity flourishes, such as degrees of autonomy, access to resources and the nature of gatekeepers. Creative lifestyles are characterized by nonconforming attitudes and behaviors as well as flexibility.

An article by R.J. Sternberg in the Creativity Research Journal reviewed the “investment” theory of creativity as well as the “propulsion” theory of creative contribution, suggesting that there are eight types of creative contribution; replication – confirming that the given field is in the correct place – redefinition – the attempt to redefine where the field is and how it is viewed – forward incrementation – a creative contribution that moves the field forward in the direction in which it is already moving – advance forward movement – which advances the field past the point where others are ready for it to go – redirection – which moves field in a new, different direction – redirection from a point in the past – which moves the field back to a previous point to advance in a different direction – starting over/ re-initiation – moving the field to a different starting point – and integration – combining two or more diverse ways of thinking about the field into a single way of thinking.”

 

“Ideation is the creative process of generating, developing, and communicating new ideas, where an idea is understood as a basic element of thought that can be either visual, concrete, or abstract. Ideation is all stages of a thought cycle, from innovation, to development, to actualization. As such, it is an essential part of the design process, both in education and practice.”

 

“Methods of innovation include:

Problem solution This is the most simple method of progress, where someone has found a problem and as a result, solves it.

Evolutionary idea Evolutionary ideas derive from somewhere else, taking something that already exists and improving on it.

Symbiotic idea A symbiotic method of idea creation is when multiple ideas are combined, using different elements of each to make a whole.

Revolutionary idea A revolutionary idea breaks away from traditional thought and creates a brand new perspective. For example, Marxism (an evolutionary form of Hegelianism), or the writings of Copernicus (a development of classical Greek thought).

Serendipitous discovery Serendipitous solutions are ideas which have been coincidentally developed without the intention of the inventor. For example, the discovery of penicillin.

Targeted innovation Creating a targeted innovation deals with a direct path of discovery. This is often accompanied by intensive research in order to have a distinct and almost expected resolution. For example, linear programming.

Artistic innovation Artistic innovation disregards the necessity for practicality and holds no constraints.

Philosophical idea The philosophical idea lives in the mind of the creator and can never be proven. This type of idea however can still have vast residual effects. For example, the idea of eternal recurrence.

Computer-assisted discovery This uses a computer in order to widen possibilities of research and numeric possibilities.”

 

“An ideas bank is a website where people post, exchange, discuss, and polish new ideas. Some ideas banks are used for the purpose of developing new inventions or technologies. Many corporations have installed internal ideas banks to gather the input from their employees and improve their ideation process. Some ideas banks employ a voting system to estimate an idea’s value. In some cases, ideas banks can be more humor-oriented than their serious counterparts. The underlying theory of an ideas bank is that if a large group of people collaborate on a project or the development of an idea that eventually said project or idea will reach perfection in the eyes of those who worked on it.

Many ideas banks are provided as free of charge, or set around certain companies in general to work out new inventions. Although ideas are provided by a community of people, problems can arise when people take the ideas of the site and begin developing them. There is no possible way to prove that the idea on the ideas bank was original and not taken from something else.

The front end of innovation is quite distinct from the remainder of the innovation process. When the very best ideas are discovered they can be managed with a stage gate oriented project management system, where the work flow is defined. The front end of innovation is commonly referred to as “fuzzy” because it functions best when a collaborative system nurtures chaos, disruption and the serendipitous discovery of ideas. Most ideas submitted via an electronic suggestion box are limited to incremental innovation (doing things the way we always have but better). There is nothing wrong with incremental innovation, in fact the ideas leading to projects resulting from incremental innovation typically yield rapid revenue gains or cost savings. But most organizations are using collaborative idea management systems to get breakthrough or radical innovation (ideas that can be thought of as “out of the box” thinking”).

The fuzzy front end of innovation benefits by having a collaborative tool serving as a backbone to nurture an organization’s culture of innovation. Everyone can log into this system, post objects of interest to the other users, search for information, comment on information, discover experts in the organization when needed and as a result everyone is more well informed. In this sense the collaborative tool serves as a knowledge management system and is very Facebook-like, except everyone is talking about work. Of course the collaborative tool also accepts the submission of ideas. The idea management software solution manages these ideas by allowing others to comment on them, shaping the idea further, clustering them with similar ideas (utilizing the idea management software’s similarity search capabilities) and accepting some sort of voting scheme in order to score the idea’s worth. Better idea management software systems will use an algorithm to measure the “wisdom of the crowd” gauging social media type activity. In this instance that means the best ideas are automatically promoted when they get a combination of the most votes, the comments, the most votes on comments, the most views, the most “follows”, the most “alerts”, the most bookmarks and the most similar ideas posted…all combined in a mathematical formula to determine which idea is best as measured by the group of collaborators working on ideas.

Unsolicited ideas typically lead to incremental innovation. To get to radical or breakthrough innovation, the idea management system needs to indulge in some strategic guidance by issuing challenges (or campaigns or seeding). In essence the bottom up grown organizational engagement of a collaborative idea management system is managed a little bit by some top down strategic guidance. The company is saying “We’re glad you’re all talking together, now do us a favor and talk about this…”. They ask for ideas to address the big issues of the company, for instance “How do we make the company more ‘green'”. “What should our next new product be in the US”?

By collaborating companies can assemble all the smart people in the company to exchange ideas, enhance each others ideas and have the best ideas be automatically promoted (and you need an automated promotion mechanism in the software because the problem isn’t that you won’t get enough ideas, the problem is you’ll get too many and you don’t want someone to have to manually filter through them all).

The leading software in this space includes CogniStreamer, Brainbank, Imaginatik and BrightIdea.”

 

“A smart mob is a group that, contrary to the usual connotations of a mob, behaves intelligently or efficiently because of its exponentially increasing network links. This network enables people to connect to information and others, allowing a form of social coordination. Parallels are made to, for instance, slime molds. The concept was introduced by Howard Rheingold in his book Smart Mobs: The Next Social Revolution. According to Rheingold, smart mobs are an indication of the evolving communication technologies that will empower the people. In 2002, the “smart mob” concept was highlighted in the New York Times “Year in Ideas.”

These growing technologies include the Internet, computer-mediated communication such as Internet Relay Chat, and wireless devices like mobile phones and personal digital assistants. Methodologies like peer-to-peer networks and pervasive computing are also changing the ways in which people organize and share information.

Smart Mobs sometimes are manipulated by the dispatchers who control the ‘mobbing system’ (i.e., those who own the contact list and the means to forward instant messages to a group) and are induced to cause distress and aggravation to individuals who have been targeted or singled out for whatever reason.

There is a tendency to keep the dynamics of smart mobbing ‘covert’, and not to discuss such incidents on the internet.”

 

“Imagination, also called the faculty of imagining, is the ability of forming images and sensations when they are not perceived through sight, hearing, or other senses. Imagination helps provide meaning to experience and understanding to knowledge; it is a fundamental faculty through which people make sense of the world, and it also plays a key role in the learning process. A basic training for imagination is listening to storytelling (narrative), in which the exactness of the chosen words is the fundamental factor to “evoke worlds”. It is a whole cycle of image formation or any sensation which may be described as “hidden” as it takes place without anyone else’s knowledge. A person may imagine according to his mood, it may be good or bad depending on the situation. Some people imagine in a state of tension or gloominess in order to calm themselves. It is accepted as the innate ability and process of inventing partial or complete personal realms within the mind from elements derived from sense perceptions of the shared world. The term is technically used in psychology for the process of reviving in the mind, percepts of objects formerly given in sense perception. Since this use of the term conflicts with that of ordinary language, some psychologists have preferred to describe this process as “imaging” or “imagery” or to speak of it as “reproductive” as opposed to “productive” or “constructive” imagination. Imagined images are seen with the “mind’s eye”.”

 

“Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society. Innovation differs from invention in that innovation refers to the use of better and , as a result, novel idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation differs from improvement in that innovation refers to the notion of doing something different (Lat. innovare: “to change”) rather than doing the same thing better.”

 

“The word innovation derives from the Latin word innovatus, which is the noun form of innovare “to renew or change,” stemming from in—”into” + novus—”new”. Diffusion of innovation research was first started in 1903 by seminal researcher Gabriel Tarde, who first plotted the S-shaped diffusion curve. Tarde (1903) defined the innovation-decision process as a series of steps that includes:

First knowledge

Forming an attitude

A decision to adopt or reject

Implementation and use

Confirmation of the decision”

 

“Due to its widespread effect, innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. In society, innovation aids in comfort, convenience, and efficiency in everyday life. For instance, the benchmarks in railroad equipment and infrastructure added to greater safety, maintenance, speed, and weight capacity for passenger services. These innovations included wood to steel cars, iron to steel rails, stove-heated to steam-heated cars, gas lighting to electric lighting, diesel-powered to electric-diesel locomotives. By mid-20th century, trains were making longer, more comfortable, and faster trips at lower costs for passengers. Other areas that add to everyday quality of life include: the innovations to the light bulb from incandescent to compact fluorescent and LEDs which offer longer-lasting, less energy-intensive, brighter technology; adoption of modems to cellular phones, paving the way to smartphones which meets anyone’s internet needs at any time or place; cathode-ray tube to flat-screen LCD televisions and others.”

 

“In business and economics, innovation is the catalyst to growth. With rapid advancements in transportation and communications over the past few decades, the old world concepts of factor endowments and comparative advantage which focused on an area’s unique inputs are outmoded for today’s global economy. Economist Joseph Schumpeter, who contributed greatly to the study of innovation, argued that industries must incessantly revolutionize the economic structure from within, that is innovate with better or more effective processes and products, such as the shift from the craft shop to factory. He famously asserted that “creative destruction is the essential fact about capitalism.” In addition, entrepreneurs continuously look for better ways to satisfy their consumer base with improved quality, durability, service, and price which come to fruition in innovation with advanced technologies and organizational strategies.

One prime example is the explosive boom of Silicon startups out of the Stanford Industrial Park. In 1957, dissatisfied employees of Shockley Semiconductor, the company of Nobel laureate and co-inventor of the transistor William Shockley, left to form an independent firm, Fairchild Semiconductor. After several years, Fairchild developed into a formidable presence in the sector. Eventually, these founders left to start their own companies based on their own, unique, latest ideas, and then leading employees started their own firms. Over the next 20 years, this snowball process launched the momentous startup company explosion of information technology firms. Essentially, Silicon Valley began as 65 new enterprises born out of Shockley’s eight former employees.”

 

“There are several sources of innovation. According to the Peter F. Drucker the general sources of innovations are different changes in industry structure, in market structure, in local and global demographics, in human perception, mood and meaning, in the amount of already available scientific knowledge, etc. Also, internet research, developing of people skills, language development, cultural background, skype, facebook, etc. In the simplest linear model of innovation the traditionally recognized source is manufacturer innovation. This is where an agent (person or business) innovates in order to sell the innovation. Another source of innovation, only now becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. MIT economist Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, Sources of Innovation. In addition, the famous robotics engineer Joseph F. Engelberger asserts that innovations require only three things: 1. A recognized need, 2. Competent people with relevant technology, and 3. Financial support. The Kline Chain-linked model of innovation places emphasis on potential market needs as drivers of the innovation process, and describes the complex and often iterative feedback loops between marketing, design, manufacturing, and R&D.

Innovation by businesses is achieved in many ways, with much attention now given to formal research and development (R&D) for “breakthrough innovations.” R&D help spur on patents and other scientific innovations that leads to productive growth in such areas as industry, medicine, engineering, and government. Yet, innovations can be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. The more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice – but there are many exceptions to each of these trends.

An important innovation factor includes customers buying products or using services. As a result, firms may incorporate users in focus groups (user centred approach), work closely with so called lead users (lead user approach) or users might adapt their products themselves. U-STIR, a project to innovate Europe’s surface transportation system, employs such workshops. Regarding this user innovation, a great deal of innovation is done by those actually implementing and using technologies and products as part of their normal activities. In most of the times user innovators have some personal record motivating them. Sometimes user-innovators may become entrepreneurs, selling their product, they may choose to trade their innovation in exchange for other innovations, or they may be adopted by their suppliers. Nowadays, they may also choose to freely reveal their innovations, using methods like open source. In such networks of innovation the users or communities of users can further develop technologies and reinvent their social meaning.”

 

“A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters are considered to increase the productivity with which companies can compete, nationally and globally. In urban studies, the term agglomeration is used. Clusters are also very important aspects of strategic management.”

 

“The term business cluster, also known as an industry cluster, competitive cluster, or Porterian cluster, was introduced and popularized by Michael Porter in The Competitive Advantage of Nations (1990). The importance of economic geography, or more correctly geographical economics, was also brought to attention by Paul Krugman in Geography and Trade (1991). Cluster development has since become a focus for many government programs. The underlying concept, which economists have referred to as agglomeration economies, dates back to 1890, and the work of Alfred Marshall.

Michael Porter claims that clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses in the field. According to Porter, in the modern global economy, comparative advantage, how certain locations have special endowments (i.e., harbor, cheap labor) to overcome heavy input costs, is less relevant. Now, competitive advantage, how companies make productive use of inputs, requiring continual innovation, is more important.

Put in another way, a business cluster is a geographical location where enough resources and competences amass reach a critical threshold, giving it a key position in a given economic branch of activity, and with a decisive sustainable competitive advantage over other places, or even a world supremacy in that field (e.g. Silicon Valley and Hollywood).”

 

“Competitive advantage seeks to address some of the criticisms of comparative advantage. Michael Porter proposed the theory in 1985. Competitive advantage theory suggests that states and businesses should pursue policies that create high-quality goods to sell at high prices in the market. Porter emphasizes productivity growth as the focus of national strategies. Competitive advantage rests on the notion that cheap labor is ubiquitous and natural resources are not necessary for a good economy. The other theory, comparative advantage, can lead countries to specialize in exporting primary goods and raw materials that trap countries in low-wage economies due to terms of trade. Competitive advantage attempts to correct for this issue by stressing maximizing scale economies in goods and services that garner premium prices (Stutz and Warf 2009).

Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources. New technologies such as robotics and information technology either to be included as a part of the product, or to assist making it. ‘ Information technology has become such a prominent part of the modern business world that it can also contribute to competitive advantage by outperforming competitors with regard to internet presence. From the very beginning, i.e. Adam Smith’s Wealth of Nations, the central problem of information transmittal, leading to the rise of middle-men in the marketplace, has been a significant impediment in gaining competitive advantage. By using the internet as the middle-man, the purveyor of information to the final consumer, businesses can gain a competitive advantage through creation of an effective website, which in the past required extensive effort finding the right middle-man and cultivating the relationship.

The term competitive advantage is the ability gained through attributes and resources to perform at a higher level than others in the same industry or market (Christensen and Fahey 1984, Kay 1994, Porter 1980 cited by Chacarbaghi and Lynch 1999, p. 45) . The study of such advantage has attracted profound research interest due to contemporary issues regarding superior performance levels of firms in the present competitive market conditions. “A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential player” (Barney 1991 cited by Clulow et al.2003, p. 221). Successfully implemented strategies will lift a firm to superior performance by facilitating the firm with competitive advantage to outperform current or potential players (Passemard and Calantone 2000, p. 18) . To gain competitive advantage a business strategy of a firm manipulates the various resources over which it has direct control and these resources have the ability to generate competitive advantage (Reed and Fillippi 1990 cited by Rijamampianina 2003, p. 362) . Superior performance outcomes and superiority in production resources reflects competitive advantage (Day and Wesley 1988 cited by Lau 2002, p. 125).

Above writings signify competitive advantage as the ability to stay ahead of present or potential competition, thus superior performance reached through competitive advantage will ensure market leadership. Also it provides the understanding that resources held by a firm and the business strategy will have a profound impact on generating competitive advantage. Powell (2001, p. 132) views business strategy as the tool that manipulates the resources and create competitive advantage, hence, viable business strategy may not be adequate unless it possess control over unique resources that has the ability to create such a unique advantage. Summarizing the view points, competitive advantage is a key determinant of superior performance and it will ensure survival and prominent placing in the market. Superior performance being the ultimate desired goal of a firm, competitive advantage becomes the foundation highlighting the significant importance to develop same.”

 

“Cluster development (or cluster initiative or Economic Clustering) is the economic development of business clusters. The cluster concept has rapidly attracted attention from governments, consultants, and academics since it was first proposed in 1990 by Michael Porter. Many governments and industry organizations across the globe have turned to this concept in recent years as a means to stimulate urban and regional economic growth. As a result, a large number of cluster initiative organizations were started during the 1990s, and the trend continues. The first comprehensive study of cluster initiatives around the world was reported in the “Cluster Initiative Greenbook” published by Örjan Sölvell, Christian Ketels and Göran Lindqvist, with a foreword by Michael Porter. The report was presented at the annual meeting of The Competitiveness Institute, TCI, in Gothenburg in 2003. A follow up study in 2005 covered more than 1400 cluster initiative organizations across the globe.

While the purpose of cluster initiative organizations is to promote economic development within the cluster by improving the competitiveness of one or several specific business sectors, it is important to differentiate these public-private organizations from policy-making organizations at different levels, e.g., national government units such as the UK Department of Trade and Industry (DTI), and supranational bodies such as the OECD and the European Commission and from industry associations comprising firms within one business sector, e.g., biotech, steel.

More specifically, cluster initiatives are organizations or projects that are organized as collaborations between a diverse number of public and private sector actors, such as firms, government agencies, and academic institutions. Whereas lobbying policymakers may be one of the cluster initiative’s activities, cluster initiatives generally are involved in a broad range of activities, e.g. supply-chain development, market intelligence, incubator services, attraction of foreign direct investment, management training, joint R&D projects, marketing of the region, and setting technical standards.

In June 2007, the European Cluster Observatory was launched. Financed by the European Commission (DG Enterprise and Industry), it provides information about clusters, cluster initiatives, and cluster policy throughout 32 European countries.”

 

“The concept of the innovation system stresses that the flow of technology and information among people, enterprises and institutions is key to an innovative process. It contains the interaction between the actors who are needed in order to turn an idea into a process, product or service on the market.”

 

“Systems of Innovation are frameworks for understanding innovation which have become popular particularly among policy makers and innovation researchers first in Europe, but now anywhere in the world as in the 90’s the World Bank and other UN affiliated institutions accepted. The concept of a ‘system of innovation’ was introduced by B.-Å. Lundvall in 1985  “however, as he and his colleagues would be the first to agree (and as Lundvall himself points out), the idea actually goes back at least to the Friedrich List´s conception of “The National System of Political Economy” (1841), which might just as well have been called “The National System of Innovation” (Freeman, 1995). Christopher Freeman coined the expression “National Innovation System” or in his 1988 study of the success of the Japanese economy. The concept, similarly used as “National System of Innovation” or “National Innovation System” was later applied to regions and sectors. According to innovation system theory, innovation and technology development are results of a complex set of relationships among actors in the system, which includes enterprises, universities and research institutes.

Innovation systems have been categorized into national innovation systems, regional innovation systems, local innovation systems, technological innovation systems and sectoral innovation systems.

There is no consensus on the exact definition of an innovation system, and the concept is still emerging. Innovation is often the result of the interaction among an ecology of actors, and the term ‘innovation ecosystem’ is occasionally used to emphasize this. For some, the expression ‘innovation ecosystem’ is a subset or synonym of ‘innovation system’. Others separate between the expressions, using the expression “innovation system” for labeling a planned innovation environment, and “innovation ecosystem” for an ecological innovation environment.

The Innovation Communication System is a subset of an innovation system, focusing on the flows of communication and attention within and around it.”

 

“The balance of economic efficiency and social equity is the ultimate debate in the field of employment relations. By meeting the needs of the employer; generating profits to establish and maintain economic efficiency; whilst maintaining a balance with the employee and creating social equity that benefits the worker so that he/she can fund and enjoy healthy living; proves to be a continuous revolving issue in westernized societies.

Globalization has effected these issues by creating certain economic factors that disallow or allow various employment issues. Economist Edward Lee (1996) studies the effects of globalization and summarizes the four major points of concern that affect employment relations:

International competition, from the newly industrialized countries, will cause unemployment growth and increased wage disparity for unskilled workers in industrialized countries. Imports from low-wage countries exert pressure on the manufacturing sector in industrialized countries and foreign direct investment (FDI) is attracted away from the industrialized nations, towards low-waged countries.

Economic liberalization will result in unemployment and wage inequality in developing countries. This happens as job losses in un-competitive industries outstrip job opportunities in new industries.

Workers will be forced to accept worsening wages and conditions, as a global labour market results in a “race to the bottom”. Increased international competition creates a pressure to reduce the wages and conditions of workers.

Globalization reduces the autonomy of the nation state. Capital is increasingly mobile and the ability of the state to regulate economic activity is reduced.

What also results from Lee’s (1996) findings is that in industrialized countries an average of almost 70 per cent of workers are employed in the service sector, most of which consists of non-tradable activities. As a result, workers are forced to become more skilled and develop sought after trades, or find other means of survival. Ultimately this is a result of changes and trends of employment, an evolving workforce, and globalization that is represented by a more skilled and increasing highly diverse labour force, that are growing in non standard forms of employment (Markey, R. et al. 2006).”

 

“Unemployed individuals are unable to earn money to meet financial obligations. Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction. Across the United States the growing ranks of people made homeless in the foreclosure crisis are generating tent cities. Unemployment increases susceptibility to malnutrition, illness, mental stress, and loss of self-esteem, leading to depression. According to a study published in Social Indicator Research, even those who tend to be optimistic find it difficult to look on the bright side of things when unemployed. Using interviews and data from German participants aged 16 to 94 – including individuals coping with the stresses of real life and not just a volunteering student population – the researchers determined that even optimists struggled with being unemployed.”

 

“Dr. M. Brenner conducted a study in 1979 on the “Influence of the Social Environment on Psychology.” Brenner found that for every 10% increase in the number of unemployed there is an increase of 1.2% in total mortality, a 1.7% increase in cardiovascular disease, 1.3% more cirrhosis cases, 1.7% more suicides, 4.0% more arrests, and 0.8% more assaults reported to the police. A more recent study by Christopher Ruhm on the effect of recessions on health found that several measures of health actually improve during recessions. As for the impact of an economic downturn on crime, during the Great Depression the crime rate did not decrease. The unemployed in the U.S. often use welfare programs such as Food Stamps or accumulating debt because unemployment insurance in the U.S. generally does not replace a majority of the income one received on the job (and one cannot receive such aid indefinitely).

Not everyone suffers equally from unemployment. In a prospective study of 9570 individuals over four years, highly conscientious people suffered more than twice as much if they became unemployed. The authors suggested this may be due to conscientious people making different attributions about why they became unemployed, or through experiencing stronger reactions following failure.

Some hold that many of the low-income jobs are not really a better option than unemployment with a welfare state (with its unemployment insurance benefits). But since it is difficult or impossible to get unemployment insurance benefits without having worked in the past, these jobs and unemployment are more complementary than they are substitutes. (These jobs are often held short-term, either by students or by those trying to gain experience; turnover in most low-paying jobs is high.)

Another cost for the unemployed is that the combination of unemployment, lack of financial resources, and social responsibilities may push unemployed workers to take jobs that do not fit their skills or allow them to use their talents. Unemployment can cause underemployment, and fear of job loss can spur psychological anxiety. As well as anxiety, it can cause depression, lack of confidence, and huge amounts of stress. They will begin to lose social contacts, and good social skills.”

 

“An economy with high unemployment is not using all of the resources, specifically labour, available to it. Since it is operating below its production possibility frontier, it could have higher output if all the workforce were usefully employed. However, there is a trade-off between economic efficiency and unemployment: if the frictionally unemployed accepted the first job they were offered, they would be likely to be operating at below their skill level, reducing the economy’s efficiency.

During a long period of unemployment, workers can lose their skills, causing a loss of human capital. Being unemployed can also reduce the life expectancy of workers by about 7 years.

High unemployment can encourage xenophobia and protectionism as workers fear that foreigners are stealing their jobs. Efforts to preserve existing jobs of domestic and native workers include legal barriers against “outsiders” who want jobs, obstacles to immigration, and/or tariffs and similar trade barriers against foreign competitors.

High unemployment can also cause social problems such as crime; if people have less disposable income than before, it is very likely that crime levels within the economy will increase.”

 

“High levels of unemployment can be causes of civil unrest, in some cases leading to revolution, and particularly totalitarianism. The fall of the Weimar Republic in 1933 and Adolf Hitler’s rise to power, which culminated in World War II and the deaths of tens of millions and the destruction of much of the physical capital of Europe, is attributed to the poor economic conditions in Germany at the time, notably a high unemployment rate of above 20%; see Great Depression in Central Europe for details.

Note that the hyperinflation in the Weimar Republic is not directly blamed for the Nazi rise – the Inflation in the Weimar Republic occurred primarily in the period 1921–23, which was contemporary with Hitler’s Beer Hall Putsch of 1923, and is blamed for damaging the credibility of democratic institutions, but the Nazis did not assume government until 1933, ten years after the hyperinflation but in the midst of high unemployment.

Rising unemployment has traditionally been regarded by the public and media in any country as a key guarantor of electoral defeat for any government which oversees it. This was very much the consensus in the United Kingdom until 1983, when Margaret Thatcher’s Conservative government won a landslide in the general election, despite overseeing a rise in unemployment from 1,500,000 to 3,200,000 since its election four years earlier.”

 

“Critiques of globalization typically look at both the damage to the planet as well as the human costs. They challenge directly traditional metrics, such as GDP, and look to other measures, such as the Gini coefficient or the Happy Planet Index, and point to a “multitude of interconnected fatal consequences–social disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and alienation” which they claim are the unintended consequences of globalization.”

 

“Criticisms have arisen from church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization (e.g., consumption of nearby production) and others. Some have been reformist in nature, (arguing for a more moderate form of capitalism) while others are more revolutionary (power shift from private to public control) or reactionary (public to private).

Some opponents of globalization see the phenomenon as the promotion of corporatist interests.They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries. They advocate global institutions and policies that they believe better address the moral claims of poor and working classes as well as environmental concerns. Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.”

 

“Critics argue that globalization results in:

Poorer countries suffering disadvantages: While it is true that free trade encourages globalization among countries, some countries try to protect their domestic suppliers. The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their farmers (e.g., the EU’s Common Agricultural Policy), which lowers the market price for foreign crops.

The shift to outsourcing: Globalization allowed corporations to move manufacturing and service jobs from high cost locations, creating economic opportunities with the most competitive wages and worker benefits.

Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition weakened labor unions in high-cost areas. Unions lose their effectiveness and workers their enthusiasm for unions when membership begins to decline.

An increase in exploitation of child labor: Countries with weak protections for children are vulnerable to infestation by rogue companies and criminal gangs who exploit them. Examples include quarrying, salvage, and farm work as well as trafficking, bondage, forced labor, prostitution and pornography.

Helena Norberg-Hodge, the director and founder of ISEC criticizes globalization in many ways. In her book “Ancient Futures,” Helena Hodge claimed that “centuries of ecological balance and social harmony are under threat from the pressures of development and globalization.” She also criticizes the standardization and rationalization of globalization, as it does not always yield the expected growth outcomes. Although globalization takes similar steps in most countries, scholars such as Hodge claim that it might not be effective to certain countries, for globalization has actually moved some countries backward instead of developing them.”

 

“Capital markets have to do with raising and investing moneys in various human enterprises. Increasing integration of these financial markets between countries leads to the emergence of a global capital marketplace or a single world market. In the long run, increased movement of capital between countries tends to favor owners of capital more than any other group; in the short run, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased movement of capital. It is not surprising that these conditions lead to political divisions about whether or not to encourage or increase international capital market integration.”

 

“Those opposed to capital market integration on the basis of human rights issues are especially disturbed by the various abuses which they think are perpetuated by global and international institutions that, they say, promote neoliberalism without regard to ethical standards. Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS). In light of the economic gap between rich and poor countries, movement adherents claim “free trade” without measures in place to protect the non-capitalized will contribute only to the strengthening the power of industrialized nations (often termed the “North” in opposition to the developing world’s “South”).”

 

“As with globalization, economic deglobalization can be measured in different ways. These centre around the four main economic flows:

Goods and services, e.g. exports plus imports as a proportion of national income or per head of population.

Labour/people, e.g. net migration rates; inward or outward migration flows, weighted by population (and resultant remittances in per cent of GDP)

Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population

It is generally not thought possible to measure deglobalization through lack of flows of technology, the fourth main flow. Those areas that are measurable do suggest other possible measures, including:

Average tariffs

Border restrictions on labour

Restrictions on foreign direct investment or outward direct investment”

 

“Typically a reduction of the level of international integration of economies (and the world economy at large) are expected to exert second round effects related to four feedback mechanisms

a reduction of (the rate of growth) of international trade will feed negatively into to long-run growth

a loss of interaction, the co-movement of economies,

trade policy feedbacks in the sense that reduced international interaction and lower growth will stimulate protectionism and non-economic issue areas where reduced cooperation among countries and even an increasing risk of international conflict can be expected.”

Resources

http://en.wikipedia.org/wiki/Scott_Free

http://en.wikipedia.org/wiki/Ridley_Scott

http://en.wikipedia.org/wiki/Creativity

http://en.wikipedia.org/wiki/Ideation_(idea_generation)

http://en.wikipedia.org/wiki/Ideas_bank

http://en.wikipedia.org/wiki/Wisdom_of_crowds

http://en.wikipedia.org/wiki/Smart_mobs

http://en.wikipedia.org/wiki/Smart_Mobs:_The_Next_Social_Revolution

http://en.wikipedia.org/wiki/Imagination

http://en.wikipedia.org/wiki/Innovation

http://en.wikipedia.org/wiki/Business_cluster

http://en.wikipedia.org/wiki/Sustainable_competitive_advantage

http://en.wikipedia.org/wiki/Cluster_development

http://en.wikipedia.org/wiki/Innovation_system

http://en.wikipedia.org/wiki/Employment

http://en.wikipedia.org/wiki/Unemployment

http://en.wikipedia.org/wiki/Globalization

http://en.wikipedia.org/wiki/Deglobalization

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