Business analysis: "We must accelerate the transition to an idea-driven economy"

The coming years are going to be as tough for business as for individuals with the new Government seeking to deal with the huge national debt it has inherited. If that were not bad enough, there is a growing belief that we are not in the grip of the usual cyclical downturn but are in the middle of a “great reset”, to use a term that is suddenly becoming more common. If – as the author Richard Florida and others contend – we are in the middle of the sort of change that followed the Long Depression, which lasted from the early 1870s until the mid-1890s, and the Great Depression of the 1930s, then the usual measures to deal with economic downturns are unlikely to work.

Indeed, Florida, who has previously explored how a “creative class” has grown up in certain locations around the world, writes in his new book, The Great Reset (Random House Canada), that in circumstances such as those at present, government can “patch up some holes to keep the economy afloat for a short time [but it lacks] both the means and the resources to generate the enormous level of demand needed to power sustained growth”. In other words, we are going through a huge structural change and policymakers need to beware of any attempts to return things to how they were before the crisis struck in 2008.

Rather, we must seek to build the economy of the future. “Instead of infusing scarce capital into the very banks and financial system that brought us to the brink in the first place, or trying to reinvigorate the housing and mortgage markets that pushed us over the edge, and instead of bailing out mismanaged old-economy companies, we must use whatever resources are available to accelerate the transition to an idea-driven economy, while improving the jobs that have survived or are now being created.”

The good news is many in the business world – particularly in small and growing companies – are already moving in this direction. For example, the Basingstoke company 2 Save Energy has grown from almost nothing to a turnover of £5m by supplying the monitors that enable householders and other energy users to check instantly on the amount of power they are using. Under the leadership of the brand developer Belinda Gooding, the company has seen its original OWL monitor become commonplace in homes and businesses and has developed a range of related products including a USB that enables information to be transmitted from an OWL monitor to a PC, so that accurate computer records of energy use can be kept.

Avoiding waste is also behind the development of WhipCar. The founders, Tom Wright and Vinay Gupta, saw the opportunity to make use of the cars that typically spend more time parked outside their owners’ homes than being used. Building on the idea of the car pool and shared- ride schemes, they are using the internet to link car owners with would-be renters. They do all the administration and have agreed a deal with a major insurer. The business was launched in the same week that Zipcar of the US acquired its UK equivalent Streetcar. With lower overheads than these companies through not having to operate a fleet, Wright and Gupta are confident they can expand rapidly.

The fact there are different approaches – and that big carmakers are experimenting with the mobile phone-type pay-as-you-go model – offers hope that entrepreneurial vision will help find solutions in other areas. All the Government needs to do is create a benign environment.

Arts and Entertainment
Banksy's 'The Girl with the Pierced Eardrum' in Bristol
art'Girl with the Pierced Eardrum' followed hoax reports artist had been arrested and unveiled
Life and Style
tech

Board creates magnetic field to achieve lift

News
peopleJust weeks after he created dress for Alamuddin-Clooney wedding
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

PROMOTED VIDEO
Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
Arts and Entertainment
Leonardo DiCaprio talks during the press conference for the film
films

Film follows park rangers in the Congo

Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Adel Taraabt in action for QPR against West Ham earlier this month
footballQPR boss says midfielder is 'not fit to play football'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
News
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)
news

Parties threaten resort's image as a family destination

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album