21ST CENTURY PRINCIPLES FOR SMART GROWTH

Short term growth where the objective is to quickly extract resources or capital is a short sighted dead-end. Let's hope the conjunction of utility computing, the social network, and the rapid conversion to Cloud flatten out the relationships between consumer and business; fostering new efficiencies and tighter collaboration.  A long view of business relationships goes beyond quarterly gains, and monthly quotas, what Rick Schaefer and Rick Cummings teach - It is always a business of people, and not parts.

http://blogs.harvardbusiness.org/haque/2009/01/davos_discussing_a_depression.html

1. Outcomes, not income. Dumb growth is about incomes - are we richer today than we were yesterday? Smart growth is about people, and how much better or worse off they are - not merely how much junk an economy can churn out. Smart growth measures people's outcomes - not just their incomes. Are people healthier, fitter, smarter, happier? Economics that measure financial numbers, we've learned the hard way, often fail to be meaningful, except to the quants among us. It is tangible human outcomes that are the arbiters of authentic value creation.

2. Connections, not transactions. Dumb growth looks at what's flowing through the pipes of the global economy: the volume of trade. Smart growth looks at how pipes are formed, and why some pipes matter more than others: the quality of connections. It doesn't just look at transactions at the global, regional, or national level -- how much world trade has grown, for example -- but looks at how local and global relationships power invention and innovation. Without Silicon Valley's relationships powering the development of personal computing and the internet, for example, the volume of trade between Taiwan, Japan, and China, would be a fraction of what it is. Smart growth seeks to amplify connection and community -- because the goal isn't just to trade, but to co-create and collaborate.

3. People, not product. The next time you hear an old dude talking about "product", let him know the 20th century ended a decade ago. Smart growth isn't driven by pushing product, but by the skill, dedication, and creativity of people. What's the difference? Everything. Globalization driven by McJobs deskilling the world, versus globalization driven by entrepreneurship, venture economies, and radical innovation. People not product means a renewed focus on labour mobility, human capital investment, labour market standards, and labour market efficiency. Smart growth isn't powered by capital dully seeking the lowest-cost labour -- but by giving labour the power to seek the capital with they can create, invent, and innovate the most.

4. Creativity, not productivity. Uh-oh: Creativity is an economic four-letter word. Why? Because it's hard to measure, manage, and model. So economists focus on productivity instead -- and the result is dumb growth. Smart growth focuses on economic creativity - because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create. Think China's gonna save the world? Think again: it's economically productive, but it's far from economically creative. Smart growth is creative -- not merely productive.

End of US Monetary Hegemony?

What we are experiencing is the end of the bretton woods agreement and capital structure implemented following WW2.
Global financial underpinnings and monetary policy were established to setup predictable currency values, pegged to gold and ultimately the US $. How much is 1 franc, 1 Mark, or 1 pound? Compare it to the $. How do we know how much a $ is? Because 1$ is backed by x amount of gold.

Fast forward through 3 energy shocks, delinking from the gold standard in 1972, the $ now competes with all currency values in free float. 4 wars, a shrinking mft and textile base, the rise of trade imbalances, the following budget deficits, the insatiable spending and military appetite and you find yourself 60 plus years later nearing the end game of the bretton woods financial structure.

The US once centered as the base denominator and reserve currency in global monetary, once devalued, the seeds of the end began.

We now spend far more than we produce, or save. Our economic growth is largely based upon consumption. We borrow to consume, we finance to drive growth, and this economic engine - the engine of US consumption is now reaching its limits. The system has toppled, top heavy with debt, built on an economic foundation parted and parsed, scattered throughout the world.

What is the next engine?

What shape the next gobal economic structure? Soros says energy - the green kind.

The beauty and the power of market principles is that it rewards innovation, function, and value; the development of new markets. To be sure entrpreneurial risks are now required ... as that is the only authentic sustaining growth principle.

The rest is a financial rentier economy where innovation is wasted on developing legal structures, military, and power to enforce the profits of the status quo.

power thunderwhores don't lead, they protect.

New investment, research and design, new economy: develop where we need to go, not where we have been... develop for the future and not the past.

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