If you read business literature you would have come across the quintessential business thinker: charismatic, articulate, and endowed with a keen sense of positioning for ever greater fame and reach. But, as is the case with many other industries, the ones who make it to global fame status are often not the most inspired. Politics permeates even the highest of intellectual echelons. I for one have always pursued substance at the expense of politics and fame. And so, it is natural that I get frustrated when I see initiatives of substance corrupted by mediocrities with titles.

The latest such initiative is Innovation for Jobs (I4J). It represents a lone alternative to the growing consensus that technological innovation is killing jobs and hence is increasingly disruptive to society (see http://raceagainstthemachine.com/).

I4J recently held their annual summit, and invited a number of business thinkers of “global caliber”. One of these was Nilofer Merchant. At this particular event Merchant represented the Martin Prosperity Institute, where she has recently been named a fellow. After the event, Merchant wrote for MPI a brief take-away document (http://martinprosperity.org/media/Merchant_Innovation%20for%20Jobs%20Summit_15-03-23.pdf).

I actually did take the time to read Mrs. Merchant’s takeaways in close detail. The document is laden with an amalgam of logical dubious statements, which together, form a less-than-crisp argument akin to the future is bleak, but it might be great. The sum of the points is less than the points indeed.

On page 2 of this brief document, Mrs. Merchant contends the participants agreed that:

The innovation economy creates value in the form of products or services, but it is not necessarily tied to jobs. Many of the efficiency advancements the Internet provides do not create new jobs

To bring the full absurdity of this statement to light, let’s pursue its logical implications. Since efficiency kills jobs, inefficiency must create jobs! Let’s state the same thing in a catchier phrase:

Jobs are a measure of global economic inefficiency

So by extension, progress is the enemy of jobs. If we got rid of technological advancements that boost efficiency, boy would unemployment go down! Go back to medieval technology and we’d get everyone employed. But why stop there? Let’s go back to the stone age, and we can make unemployment obsolete. We could have a whole industry centered just around delivering water to homes in buckets.

The piece goes on to list several “profound” epiphanies, such as the notion that work is not necessarily synonymous with jobs.

Work being different than jobs is logically equivalent to jobs being a measure of economic inefficiency. If work is about creating value, and if jobs don’t drive value, than we are left with “artificial” jobs that create no value. Value should be the common denominator for work and jobs. Yes we could have jobs that add no value for the sake of lowering unemployment as we did in communism. But as communism eventually proved, while everybody had a job they were – and in some countries still are – also collectively (no punt intended) starving.

The one valid point Nilofer Merchant makes in in reference to a very interesting statistic. Between 1950 and 2010 the percentage of the workforce that utilizes independent judgement has been left flat (source not quoted). Mrs. Merchant intrepidly asserts that a shift in that percentage, say from the current 33% to 50%, would make a significant difference in prosperity. The idea that we could use people for what makes them special – creativity and enterprise – rather than mindless work that should be left to machines is precisely what I4J stands for! It makes for a much better economic argument for prosperity.

In a conclusion with visible political undertones, the author presents the familiar charges against modern capitalism: unaffordable education, lack of universal healthcare, lack of affordable childcare.

My advice for some of the self-promoting business thinkers out there

Innovation can indeed be tied to economics. Its incarnation in the form of technological advancement is the very engine of prosperity. As you make the link between business and economics, it showcases your understanding of (or lack thereof) the very principles underlying innovation: human creativity and enterprise! Finally, it isn’t helpful when political biases also tend to get in the way. More on this in a future post…