Thursday, January 22, 2009
The Imagination Recession
Although, the current Recession is very real, it is considerably more than an economic malaise. My view is that the root cause of that Economic Recession is our failure to exercise and implement our imaginations; call it the “Imaginary Recession.” Let me explain. Buyers and sellers make decisions based on quality and price. Businesses go bankrupt when they try to sell goods and services that buyers don’t buy. Over the past few years, entrepreneurs have survived in highly competitive markets, not by offering imaginative new products and services, but by recycling what has already been done. When those old ideas didn’t work, they simply borrowed money to stay afloat. Just look around at the kinds of stores that occupy strip malls. Sometimes over-priced, low quality products and services that compete in saturated markets survive (for a while) with the help of imaginative marketing campaigns, but in the long run the “chickens come home to roost.” The borrowing frenzy worked as long as financial institutions were willing and able to lend money to unimaginative entrepreneurs. The current economic recession began when those chickens showed up. Honestly, if you look objectively at most markets you’ll note a stark lack of imagination at the grass root level. How many franchised fast food restaurants can that market support? How many auto dealers, heartburn medications, gas stations, banks, coffee shops, hospitals, rock bands, sports stadiums, airports, or highways? Health care reform debate doesn’t focus on new ideas, but on whether we should copy health care systems in Canada, Great Britain, France, or Germany. Everyone is trying to “cash in” on old ideas. How long will we continue to burn oil, gas and coal before imaginative engineers come up with a whole new technology? As things stand, we have a long wait! One major reason why we still burn fossil fuels is that our public school systems do not produce imaginative scientists. In fact, I would argue that our educational system punishes creativity and rewards conformity. Why does almost every high school in the United States have a football stadium, but very few have a state-of-the-art science laboratory? Why not expend that same of time, energy, and resources promoting math and science? But in the final analysis, its government that bears most of the responsibility for stifling imagination, thwarting innovation, and upholding the status quo. It does it by stealthily imposing regulations that make it more difficult to compete in markets dominated by old ideas. That’s why it’s a lot easier for a restaurateur to open a Subway franchise than a family restaurant, easier to get a research grant to study heart surgery (or drug treatment) than for stem cell research. My jaded view is that if we expect to survive the Economic Recession we’ll have to minimize the government’s ability to protect the status quo from imagination and innovation.