Is the link economy the key to innovation in business ? Definitely yes!

Very interesting post found on The Restless Mind, the blog of Mark Ury, architect and occasionaly entrepreneur. He reminds us of a few succesful companies, like Procter & Gamble, which have build their growth on a new innovation approach. Here is an excerpt.

BusinessWeek’s Chief Economist Mike Mandel recently penned “Can America Invent Its Way Back?” and highlighted that while the US spends on R&D, it doesn’t get its bang for its buck:

“Since 2000, the nation’s public and private sectors have poured almost $5 trillion into research and development and higher education, the key contributors to innovation. Nevertheless, employment in most technologically advanced industries has stagnated or even fallen. The number of domestic jobs in the computer and electronics sector continues to plunge while pharmaceutical and biotech companies lay off as many workers as they hire. And even the industry category that includes Google (GOOG)—Internet publishing and Web search portals—has added only 15,000 jobs since 2003.”

Mandel’s piece goes on to suggest that “innovation economics” are an important part of the road forward, stressing that idea management, culture, and “creation economics” are the antidote to traditional economic thinking that emphasize taxes, inflation, and cost-control.

He’s right, of course. Corporations (and the infrastructure that supports them like public labs, universities, and policy makers) are still in an industrial-age hangover, too blurry-eyed to notice that their organizational DNA—a military blueprint that favors information asymmetry and strict vertical hierarchies—is counterproductive to the post-grid era, a network model that encourages edge-competencies and group coordination.

Today, companies that act porously—enabling and encouraging the flow of IP and talent in and out of their sphere of influence—are winning. Google is an obvious example, an organization that thrives largely by coordinating—rather than suppressing—the flow of information between people and markets.

So remarkable is their success that the “link economy” has become an increasingly recognizable phenomena, a pattern that spotlights value wherever it resides and manages abundance rather than controls scarcity.

The rest of this very interesting post on the economy of innovation is to be found here.