The economics of creativity

Our economies produce goods, but it seems clear to everybody that countries will excel economically on the long run if they have the ability to produce ideas, not just physical goods. We are not used of thinking about ideas as economic goods, but they are surely the most significant ones that we produce.

An idea is not like other goods, let’s say machines, oil, etc. which deplete or wear out with use. An idea can be used over and over again and in fact grows in value the more it is used. And an idea can be built upon. It can be combined with other ideas to create new forms, and this is especially true in science and healthcare. Today we clearly value creativity as a source of economic value.

Some countries have already understood that the ultimate intellectual property, the one that will replace land, labor and capital as the most valuable economic resource, is the human creative faculty. Again, western economies are missing the point. While we fight cheaper labor and goods production overseas, some emerging economies invest in creativity. I learned yesterday about several china initiatives in the biotech and the medical devices sector. And I was deeply impressed. In a world where creativity matters, we better invest in biotech or we will end producing their t-shirts ourselves.