The knowledge economy is dead! Long live the design economy!

As large parts of the world economy lurch from the slings and arrows of outrageous financial and fiscal crises, the inevitable question is what is to be done.

The pamphlet of the same name, written by Lenin in 1902, called for the formation of a revolutionary vanguardist party.

Well, it is claimed that we live in revolutionary times as these crises have turned our economic complacency on its head, as all that was formerly solid seems to have melted into air.

Creative Commons Image [Anosmia under CC-BY licence]
Lenin meets the design economy: Busts in Lenin's Mating Call, a Moscow restuarant [Image: Anosmia under CC-BY licence]

Let’s dispense with the forces of reaction who proclaim the knowledge economy as the entity that will lead us to some glorious future based on the knowledge industries. All economies are knowledge economies, whether their industries are at primary, secondary or tertiary stages in their development.

And what are the knowledge industries?

• Business and financial services?
• Software and digital media?
• But what about street cleaning or mining or sandwich making?

They all require knowledge to be undertaken efficiently, so then are the denizens of the knowledge economy talking of weightless goods and services?

Well, services that provide on-line airline tickets are part of a supply chain that feeds passengers onto heavier-than-air planes.

Moreover, the commodities boom associated with the rise of the emerging economies suggests that economic heaviness still counts. Is the point that there are differences in outputs and inputs in the form of value-added? Maybe so, but this has always been the case.

One of the myths of the UK economy is that it is dominated by financial services. The mistake is to equate the fall in employment in manufacturing with its contribution to value-added of the economy.

The data shows that the financial sector in total accounts for about 9% of Gross National Product in the United Kingdom and manufacturing nearly 13%.

But wholesale financial services (City of London-type activities) accounts for about for 2.5% of GDP of which half was exposed to the financial crisis. So we seem to have designed a knowledge economy in the form of an upside-down pyramid in which a fortieth of a £1.5 trillion economy appears to drive the rest.

The opportunity for a fully- and colourfully- plumed creative phoenix to come to the rescue is very apparent.

It is clear that manufacturing still matters. And, more importantly, how design is central to our socio-economic purpose, whether it be fashion, or buildings or turbines or social networking sites.

We are both designed for living, as Noel Coward, the English actor and dramatist, may have noted in a different context, but live for design.

But this appears to be one of the most overlooked atavistic aspects of our existence. The ubiquity of the mobile phone rests on its aesthetic, technological and functional design, whether it is part of Grameen Bank’s Village Phone project in Bangladesh or in adapting it to local entrepreneurial uses in Burkina Faso.

The internet may be a thing of beauty but its design is abstracted from our everyday experience, in a way the touch and feel of our mobile phones are not.

In large parts of the world the problem of Internet access and the digital divide is being overcome by creative individuals using their entrepreneurial flair to create new business and social opportunities.

Given that creativity and innovation are central to the human condition, why do creative individuals still provoke suspicion in many businesses and organisations?

Why do so many companies view themselves as Kafkaquese castles in which employees are dragooned into a bureaucratic mindset?

One answer would be that in certain sectors and industries this is a necessary condition of business. But, if you take the mining industry, it has to be populated by creative employees - given the natural and technological challenges it faces.

The problem goes back to the German sociologist Max Weber and his distinction between traditional authority (bestowed by custom and tradition) and charismatic authority (bestowed by the distinctive personal qualities which inspire devotion).

In a business context this translates into traditional and charismatic leadership. In the face of the former, creatives will experience and display anomie and alienation, they need charismatic leadership.

Traditional structures of authority are redolent of organisations like broadcasters and universities, yet they are comprised of creative individuals who only respond to charismatic processes of leadership.

In the United Kingdom, our museums and art galleries are emporia of design, whether old or new, and are major attractions for millions of visitors from all over the world. They are the first port of call in the gestation of childrens’ design education, whether the young go onto to be scientists and engineers or choreographers and make-up artists.

In the rest of the globe the genie of design, unlocking economic development and sustainability, is everywhere to be seen. This genie also opens up a gamut of political spaces as creatives challenge the status quo of authoritarian regimes.

The bottom line is whether you are Stephen Hawking or Phillipe Starck - or Richard Buckminister Fuller or Max Planck - creative individuals are essential and central to the development of a design economy. Unlike the knowledge economy, whose conceptual and practical foundations and robustness are built on an intellectual pinhead, this economic trajectory can go a long way in challenging the current reactionary orthodoxies that brought us to crisis in the first place.

Find out more

The impact of the mobile phone in developing nations

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