• Supriya Verma

The Impact Of Innovation On Our Economy

And the dangers of underestimating it

Sustainability, Sustainable Development, SDGs, Innovation, Economy, The SustainabilityX® Magazine

Photo by Bruno Scramgnon from Pexels

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According to the Stanford Center on Philanthropy and Civil Society, “economists estimate that between 50 and 80 percent of economic growth comes from innovation and new knowledge.”

Social innovation is now no longer an option for a successful and prosperous society. Rather, it is now a necessity. With economists attributing the majority of economic growth to innovation, it is quite obvious that the phenomenon has a significantly large role to play not only now, but well into the future.

Let’s face it — the future is all about innovation. From digital health to financial technology, innovation is only going to playing a larger and larger role in the coming years. Needless to say, it can’t be ignored. Innovation is here to stay.

With the world’s financial markets in constant turmoil and turbulence, it’s easy to see why: organizations around the world have not been able to change with time. With the accelerating rate of change in the global business environment, industries and governments have just not been able to keep up. Whether it’s a policy, a product, or a procedure, those who have failed to accept change and adapt with time by embracing innovative practices and scrapping obsolete ones have unfortunately been left behind, struggling to keep charging forward financially.

This can clearly be seen with the global decline in demand for commodities and fossil fuels and the rising demand for sustainable and renewable energy. Oil has been going down the death-spiral for months, and so has steel. These “old technologies” are just not needed in today’s world full of electric vehicles and biodegradable materials. But businesses, however, have failed to adapt to this trend and respond accordingly. With business models relying heavily on these “legacy products”, industries as a whole will all face major financial downfalls (as currently is the case), translating to major overall economic downfall (as currently, again, is the case).

On the other hand, although this positive change in the rising demand for sustainable energy has finally come to be, it has come quite late. Damages to our Earth’s environment are almost at a peak, with some of these damages being irreversible. This goes to show how differences in mindsets regarding the value of innovation can interfere with society’s progress. If everyone adopts the same open forward-driven mindset by valuing innovation equally, the pace of global economic growth would literally be unstoppable.

The impact of innovation on our society as a whole is much more valuable than we think. Not only is it key to propelling our socioeconomic status, for example, but it is also the one thing that can stimulate the global economy and get things back to normal. However, the only way this can be possible is by encouraging change in behaviour and attitude to accept and embrace innovative practices willingly instead of grudgingly. Underestimating the impact of innovation on our economy is a significant danger to global economic health, which will undoubtedly lead to dire consequences (as currently, and quite eerily, again, is the case).