Genesis of the birth of The WAVES:
1.Realization of the Power of Ideas: We need a series of jobs done, whether washing hands, going to someplace, or having a good night’s sleep. Our standard of living depends on the quality and cost of tools we use to get these jobs done. To have tools to get our job done, we need natural resources, and labor as well as ideas to mix them. In order to have tools to get our jobs done better at less cost, we have been extracting more natural resources, increasing the quality and quantity of labor, and most importantly, enhancing the supply of ideas. Often, these three factors of production can partially substitute one another. By increasing the supply of ideas we can reduce the role of natural resources as well as labor to get our job done, even better as well as at less cost. For example, with the idea of cellular communication, we have increased the quality and reduced the cost of getting the job of communicating with others done, often by consuming less labor and natural resources. As a result, the role of ideas in getting jobs done has been increasing. In this competitive market, income and jobs depend on the ability to supply natural resources, labor, and most importantly ideas. Often we begin the journey from the extraction and trading of natural resources, which is followed by labor. But the growth of income and jobs out of natural resource extraction and labor is limited. On the other hand, often ideas erode as well as grow the market value of natural resources as well as labor. For example, a gasoline engine based automobile created the market value of gasoline, creating jobs, firms, and industries for oil exploration, extraction, and trading. As a result, some people like Mr. Rockefeller of the USA became very wealthy, and even poor countries like the ones of the middle east became very rich. But the idea of powering automobiles with electric batteries and charging them with the electricity produced by solar cells or windmills is posing the threat of eroding the market value of oil and weakening oil economies, and also reducing the demand for labor in the automobile making. Some of the ideas are so powerful that each of them seeded the journey of growing large industries, and making several countries highly prosperous. For example, the idea of the automobile, the idea of a solid-state switch, and the idea of telecommunication, among others have been immensely contributing. The journey of developing successive better versions of tools out of ideas for getting our job done better is at the core in high-income job creation, formation as well as the growth of highly profitable firms, generating growing tax revenue, and driving prosperity.
2. Knowledge Economy is not Synonym of Idea Economy: Through the sharing of knowledge and operation of technology&knowledge-intensive operation economic outputs are created, giving birth to the knowledge economy. This is basically a knowledge-intensive service economy. For example, the education system is primarily involved in producing service using knowledge as input. Similarly, healthcare, financial, and consulting service production and consumption are among the examples of the knowledge economy. The output of the knowledge economy is traded as a service having rivalry characteristics. The revenue model of production of outputs of such economic activities is often termed as linear. To earn more, we have to increase the number of production units proportionately, whether human, machine or facility. On the other hand, the idea economy is about adding features to products, whether goods and services, or improving existing creatures, or improving the underlying production process, or offering new products. The revenue depends not on how many people are producing ideas, rather on how many units of products benefiting from the idea are being sold, generating additional revenue from each unit. Moreover, with the increase of sale, the marginal cost keeps falling resulting in non-linear revenue as well as profitability characteristics. In this age of the fourth industrial revolution, the knowledge economy is under threat of automation with the growth of the idea of intelligent machines, whether in the form of software or software-intensive cyber-physical system. The zero cost of coping ideas in the form of software and externality effect in the demand side of consumption of network&software centric ideas are making idea economy far more powerful than the rest: 1. Natural Resources, 2. Labor, and 3. Knowledge.
3. Challenges in Generating and Trading Ideas: Ideas are non-rivalry. That means many people can simultaneously use the same idea, without suffering from the declining utility. As a result, the role of the idea in creating economic value in getting a job done better is virtually unlimited. The ability to generate and trade ideas appear to be the most powerful means of creating jobs, increasing income, and driving economic growth. But how to generate ideas and trade them in a profitable manner is an issue. We often need a flow of ideas to succeed in profitably trading them. Moreover, existing ideas could also be substituted with next-generation better ideas, creating dynamics in the idea trade. Apparently, though it is quite easy to generate ideas, the challenge is to trade them at a profit in this globally connected competitive market economy. For example, patent offices across the world are receiving more than 3 million ideas each year. By the way, customers are not going to by them until and unless they offer the means to get the target jobs done better at less cost. And there is uncertainty and also cost even to test it. Moreover, if an idea shows the potential of producing profitable revenue, the competition will respond to take away a share of it. How to reduce uncertainty and deal with the competition in trading ideas into profit is quite a complicated endeavor.
4. Science and Technology for Fueling Ideas: Idea generation is often an act of spontaneous sparks of curious, creative minds. We are often also inundated with ideas. For example, the Innovation Foundation in India has recorded more than 300,000 grass root level ideas. Unfortunately, most of these ideas are failing to create profitable revenue and enhance our ability to get the target job done better. Such ideas need help from science and technology for implementation, further advancement, and, most importantly, a flow of complementary ideas. Science and Technology (S&T) progression empower creative minds in generating implementable ideas in one hand. On the other hand, the continued progress of S&T is a must for creating a flow of knowledge leading to ideas for adding new features, and/or improving existing features of incumbent products, or innovating new ones. Moreover, S&T plays a vital role in developing processes and improving them further for supporting the production of higher quality products at less cost. Science and technology knowledge is also highly important to generate service level ideas such as how to administer particular drugs in the given state of disease and the health condition of the patients. This often falls in the category of the knowledge economy, which has limited wealth generation capacity and is also subject to automation.
5. Role of Market: The role of the market is vital in benefiting from ideas. For profit-making purposes through the offering of better products at a lower cost, competing firms keep investing in generating and fine-tuning high potential ideas. More or less all great ideas starting from automobile, airplane, computer, and telecommunication emerged in primitive form. Competition of making more profit by improving underling technologies, even changing the technology core, and adding additional ideas is the underlying success factor. In the absence of profit-making competition out of ideas, society is deprived of the supply of increasingly better products at a lower cost. On the other hand, the competitive market limits the opportunity of idea originators to profit from it. Due to the increasing role of ideas of increasing quality and reducing cost, the competitive market is also reducing the profit-making capability out of the capability of making or replicating. Moreover, the profit-making competition also encourages to pursue new generation ideas around new technology core for offering substitution to existing products, often causing disruption. As a result, there has been significant dynamics in competition and innovation space, leading to a chaotic transformation of society. Although the role of the market is vital in nurturing competition for fine tunning ideas, such competition invariably ends up in the emergence of dominant firms with monopolistic market power. Often antitrust regulation is cited as a preferred solution to deal with innovation monopolies. But unlike conventional monopolies, innovation monopolies are often in a race of offering better products at lower cost by investing in R&D, as opposed to manipulating public incentives, price-fixing or colluding. The better alternative could be financing basic research for nurturing next of wave innovation through startups to cause disruption to incumbent monopolies while offering better as well as less costly substitute.
6. Why Economists Fail to Interpret and Guide: So far Economists have not succeeded in theorizing the explicit role of ideas in a competitive market. Despite the work of Prof. Romer in articulating the role of ideas as an endogenous factor, what is the role of ideas in determining the successes or failures of competing firms in a market economy is still opaque to us. Articulation of science, technology, and human capital in neoclassical theories of economics presents that there appears to be a natural correlation between conventional indicators like R&D investment, publications, patents, and STEM graduates and the ability of a firm or a country to profit from ideas. Such an assumption does not take into consideration of the role of competition affecting the capability of turning S&T assets into profitable revenue, job creation, and economic growth. As a result, their understanding of S&T powering ideas is often the estimation of the aftermath, estimating as residual effects. Therefore, economists are neither in a position to interpret the success as well as the failure of firms competing to profit from ideas in a market economy nor are they in a position to predict the unfolding technology innovation dynamics transforming the society. As a result, in the absence of interpretation and prediction capability of technology innovation dynamics, they are clueless in chalking out the development plan and guiding society to leverage ideas out of S&T, as opposed to giving generic suggestions like producing more graduates, increasing investment in education and R&D, producing more STEM graduates, improving infrastructure, and offering tax incentives. They are also failing to understand underlying causes of growing monopolistic market power, and how to nurture the competition force so that wealth gets distributed, as opposed to getting accumulated in the hands of a few monopolies, often created by the exploitation by the power of S&T ideas. Particularly, they appear to be clueless to figure out ways in empowering developing countries to succeed in idea trade as the relative market value of labor and natural resource has been falling, which is vital for the more equitable and inclusive distribution of global wealth through the market.
7. Why Scientists, Technologists, and Engineers Fail: Scientists, Technologists, and Engineers are in the belief that there is a natural correlation between conventional S&T indicators, jobs, income, and economic growth. But the reality of growing unemployment and plummeting salaries of fresh STEM graduates in developing countries is raising a serious question to such a belief. This community often overlooks the role of public policy related to technology import. Often they think that acquiring the capability of knowing the state-of-art-technologies and making existing products is good enough. But in the absence of having the capability of managing the underlying technology for creating the flow of ideas of the redesign, they find their making ability no longer sufficient for creating jobs, and increasing profitability in a competitive market. Moreover, they often fail to interpret the dynamics of competition on the profitable revenue generation out of ideas, as such topics are not coved in their conventional study of S&T. Particularly in developing countries, they often fail to understand that the competence of existing science and technology has no market value, unless we capitalize them to generate new knowledge, advance technologies, and produce ideas, and succeed in trading those ideas in the market at profit. As a result, they fail to guide our journey in leveraging S&T for creating better tomorrow.
8. Why Entrepreneurs, Business Professionals, and Innovators Fail: Despite the importance of ideas, invariably all great products around high caliber ideas emerged in primitives forms, generating loss-making revenue. Such reality creates a predicament for entrepreneurs as well as innovators. To address this challenge, the underlying technology core should be amenable to rapid growth opening ideas of redesigns for making successive versions of innovations increasingly better as well as cheaper. Moreover, business professionals, often in charge of competition strategy and product life cycle management, fail to detect the latent potential of the flow of knowledge and ideas around them to meet the challenge of offering successive better versions at a lower price, while keep reducing loss or increasing profit. On the other hand, they also often fail to understand the uprising of next-generation technologies and products around them, which often emerge in primitive form. Failing to meet such a challenge runs the risk of making high performing firms caught off guard. Moreover, the recent move of practicing predatory pricing to monopolize the market as opposed to focusing on creating increasing value has been eroding the core culture of the craftsmanship of pursuing a relentless journey of perfection in taking ideas to market at a profit.
9. How Society Suffers and Benefits from Ideas: In a market economy, technology innovation dynamics opens opportunities in one area, while causing erosion in other segments. Failing to predict and adapting to this transformation causes pains. As a result, despite the blessing which technology innovation unfolds, the process is not pain-free. Moreover, technology progression doesn’t create equal opportunities for all. For example, job division and specialization took away jobs from high-skill artisans, while opening opportunities for the low-skill workforce. In contrary to it, modern intelligent machines and robotics are creating high paying jobs for innovators, while posing a threat to low-skill labor-intensive jobs. Such polarised effect of technology implications on jobs demands prediction and analysis for appropriate realignment–at the individual, family, firm, and also national levels. Failing to do so risk investment, career, family well being, quality of life, and economic growth. But such technology progression led transformation is vital for our ability to get jobs done better at less cost, driving the living standard.
10. How Policymakers Fail to Develop Idea Economy: The process of idea generation and their exploration in generating profitable revenue in a competitive market is quite complex. This complexity often challenges conventional wisdom, such as increasing the budget for education, and R&D will lead to higher revenue from ideas. The challenge gets more daunting because by following successful leaders often followers get caught into an inescapable loss traps. Some other commonly practiced policies like liberalizing technology import or facilitating technology transfer often leads to creating barriers to acquire the capacity of idea generation and profitable trading. Such realities limit the scope of adopting policies from forerunners and benefiting from conventional wisdom. Moreover, the efficacy of policy implications on succeeding with idea trade is also a function of time, as both technology and competition rapidly keep changing the opportunity landscape. The fact that the policy of providing incentives for attaining the capability of making does not naturally lead to succeeding with idea trading also challenges for policymakers to overcome.
11. Demands a Unique Perspective, Giving birth to The WAVES: On one hand, attaining the ability to generate ideas and integrating them into products and processes for generating profitable revenue is a critical requirement for creating jobs, increasing income, improving living standards, and driving economic growth. Moreover, the role of the competitive market to nurture and distill benefits from ideas is quite imperative. On the other hand, the competition dynamics to profit from ideas make the journey of taking ideas to market quite unpredictable, often creating the impression of chaos and acts of genius. Due to multidimensional challenges, a single discipline is not sufficient to comprehend the complexity and to offer solutions for exploiting the potential ideas, consequentially opening endless frontier of growth inclusively and equitably. This reality has given birth to The WAVES. This is a platform for sharing insights to empower humanity for increasingly benefits from ideas in addressing development challenges so that there will be better sustainable growth in quality of living for fellow human beings in an inclusive and equitable manner, as opposed to the accumulation of wealth in the hands of a few and suffering of the rest due to scarcity of resources. Due to the growing power of ideas, the economic reservoir of the world is getting monopolized in the hands of a few firms of a few countries. It’s time to reverse it by detecting the underlying patterns for finding a more predictable as well as manageable path of idea exploitation so that we succeed in widening the access of global idea trade to developing countries.