Innovation/Global Risk 

Audacious Social Innovations for 2012: The View from HBR      

By Shlomo Maital

                               

 Bob Shiller  

Harvard Business Review’s January-February 2012 issue has a dozen audacious ideas for reinventing society.  Some of them are really great. Here are a few of them. Innovation is not just about gadgets. It is mainly about how we live, work, and love, and get along and cooperate with one another. 

   Bob Shiller, the most creative mind in finance, suggests:  Countries should replace much of their existing national debt with shares of the ‘earnings’ of their economies, i.e. replace debt with equity, the way troubled companies reduce leverage.  “This would allow them to better manage their financial obligations”, he notes.  These national shares “trills” would function much like corporate shares traded on stock exchanges, and would pay dividends regularly.

   ●  Bruno Frey and Margit Osterloh suggest, simply, “quit tying pay to performance” (especially, for CEO’s).  The evidence is overwhelming, they note.  It doesn’t work. It doesn’t elicit the behavior that is desired. So, if we are really evidence-based: Why not stop!?

   ●  Bruce Gibney and Ken Howrey say, totally change the way Venture Capital funds invest.  They HAVE to change. In the past decade, 75 per cent of VC funds made no money! So much for that legend!   “It’s time for VCs to return to boldness. …to find and help build the revolutionary startups that generate transformational change. That is where the returns lie!”  Bravo!

  ●  Ellen Gustafson says, “regionalize the food supply”.  Eliminate the dominance of Big Food. We can no longer afford it.  90% of world coffee exports are controlled by 3 companies.  81% of beef packing in the US is handled by 4 companies.  82% of US corn exports are made by 3 companies!  By regionalizing food, we reduce monopolies and create competition. Also, cut corn production, move to more fruits and vegetables.  It’s healthier. 

●  Arun Majumdar says, “electrify the bottom of the pyramid”.  Bring electricity to the 1.5 b. people of the world who live without it.  Do it with affordable, self-contained power generation and storage systems.  Why? Evidence shows, when energy consumption per capita reaches 2,500 kwh, countries move near the top of the human development index. 

●  Gregg Easterbrook says, “send people to Mars!”.   Give NASA a new mission, he says, one that is inspirational. Find an economical way to send people to Mars.  Colonize Mars. Just as JFK’s Rice Univ. speech in 1963 energized a generation of young Americans to study engineering and science, so will “put a Man on Mars” project for NASA. 

   ●  Linda Hill and Kent Lineback say, “crowdsource management reviews”.  Use a widely available website, SpeakTruthtoBosses.com, to enable any employee to evaluate his or her boss.

   ●  Wayne Porter says, “partner with China to build Afghanistan”.  China sees countries as markets (make money).  American sees them through political eyes (build democracy).  China’s approach is what Afghanistan needs. Partner with them, because what America is doing now isn’t working.  And China has an interest in Afghanistan’s stability – it’s right on their doorstep.

●  Parag Khanna and Karan Khemka says, “enroll the world in for-profit universities”.  Why?  We need a massive increase in investment in human capital, at the higher education level. It won’t come from governments.  They are too strapped. Enlist the private sector.  For-profit universities will supply a quality product and thus attract large numbers of students.  It will bring an inflow of resources, badly needed, just as occurred in ICT and other industries. 

  ●  former Google CEO Eric Schmidt says, “pay businesses to keep people out of prisons”.  America’s prison system is badly broken.  Some 2.3 m. Americans (!), or one person in every 100 adults, are behind bars!  This costs $68 b. a year!  The government is not succeeding. Why not incentivize private industry, paying them based on reductions in recidivism, to keep people from coming back again and again to jail?  (Three-year recidivism rates are now around 6 8%! Two in three jailbirds return within three years!).  California spends more on prisons than on education!  Is this madness?

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