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A changing tide

by Morris Mthombeni: Executive Director at the Gordon Institute of Business Science.
Over the past three decades, digitisation, technology and innovation, which sprung from this global revolution, have fundamentally changed the world. Without many of these technological firsts, such as the digital learning platforms business schools like GIBS have been able to harness for remote learning, it would have been almost impossible to navigate a global pandemic in a complex and connected world.

Many of these innovations – from cell phone connectivity to broadband and data analytics – were born during a time of relative global peace. Using mathematical techniques to measure global deaths from war, researchers from the University of York in the UK determined that the world today is a far less dangerous place than it was 30 years ago in part “due to peace-keeping work by global organisations like the UN and increased collaboration and cooperation between nations”.

From a business perspective, this era of partnerships and idea-sharing has been critical to driving innovation. However, this picture recently began to change. From the ‘America First’ presidency of Donald Trump in the United States to the nationalist policies of leaders like Russia’s Vladimir Putin, Narendra Modi of India and Tayyip Erdogan in Turkey, the Brexit vote in the UK, and the rise of far-right parties in Poland, France and Italy, we are seeing a clear global move towards protectionism, xenophobia, isolationism and populism. South Africa and greater Africa are by no means immune from these troubling trends.

As the world devolves into a more nationalistic reality, it behoves us as business leaders and thinkers to ponder the connection between the rate and pace of innovation in recent decades and the enabling role of a relatively more peaceful and globally connected world. As politics and societies transform and become more inward-looking, what impact might this have on the pace and depth of innovation?

Certainly, more militaristic and closed societies can and do innovate, be it a modern-day Israel or a South Africa of old. They have to. But is this the sort of innovation that advances humanity as a whole? For instance, does the increasingly fractious tone in geo-politics turn the focus away from solving for humanity’s collective good and from important long-term ambition to solve for the Sustainable Development Goals? In all likelihood, it will, in the process, derail the critically important advances made at the bottom of the pyramid in recent decades. This will, of course, have widespread implications across society and business.

African institutions and business schools have an important role to play amidst these global shifts to facilitate an openness to innovation, even while borders are hardening. Without a strategic and tempered view, the result of moving blindly down an alley of nationalism and deglobalisation will inevitably be increased inequality and exclusion. Without leaders capable of seeing the unfolding bigger picture and the implications of policy and strategic approach, business stands to be shaped by narrow-focused external pressures.

As America under Trump showed us, it is certainly possible to harness policy to reinforce a national and anti-global identity of innovation and economic nationalism. In this instance, the US patent policy drove a protectionism import strategy and the use of trade sanctions against countries like China. It relied on unilateral mechanisms and turned its back on collaboration and cooperation with other countries. Over and above these diplomatic implications, the approach also impacted consumer choice and pricing as domestic industries were subsidised to give them a competitive edge. This is not, however, conducive to meaningful and long-term innovative thinking.

Yes, innovation will still emerge in concentrated pockets in such an environment, as it will under authoritarian regimes, but high-velocity innovation has a far greater chance of flourishing in a democratic, open and inclusive setting.

While democratisation might not be statistically proven to result in higher rates of innovation, society is undoubtedly better off in a democratic setting. As Professor Leizhen Zang of the Chinese Academy of Sciences puts it: “While there is no direct link between democracy itself and innovation, this does not change the fact that democratic regimes have consistently proven to be more capable of acquiring the features that lead to the creation of patentable innovation than other types of regimes.”

In an era of high and firm borders, increased nationalism, growing national self-interest and the militarisation of society, it can be expected that geographically concentrated innovation will be the global reality in the years to come. This will contrast notably with the more democratic and collaborative sources of innovation we have witnessed during the evaporating era of peace and more porous borders.

There is, however, one potential gamechanger which could still break through these rising borders and encourage the sort of idea-sharing that fuels innovation: social media. While digital communication channels have been used in recent years to drive what research Professor Daniele Conversi calls ‘long-distance nationalism’, they also have the potential to maintain a democracy of ideas capable of cutting through the rising rhetoric.

Useful resources:
Gordon Institute of Business Science
Making an impact to significantly improve the competitive performance of individuals and organisation through business education to build our national competitiveness. GIBS is a leading business school in the heart of Sandton’s business hub, offering a wide range of executive and academic programmes.
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