Umair Haque’s Smart Growth Manifesto

umair-haque

Over the past couple weeks I’ve been pointed several times to check out the perspective of Umair Haque, pictured above, on his blog at (a big thanks to ). Umair is Director of the , as well as founder of , both worth checking out. He’s written several articles that are required reading, but it was his piece, , that was a kick in the head for me. This is because it wraps together so many of the changes we are seeing in our society, culture, economy, and business in ways that relate these changes to each other, and their relevance to our own business and the economy at large. Umair makes the point that the situation we confront today demands a rebooting of capitalism, and a departure from the now irrelevant capitalist growth principles of the post-WWII economy. He calls the post-WWII economy “capitalsim 1.0″, and you know where that’s gotten us.  So, we face a rebooting of capitalism, and this reboot is itself being driven by the reality that interaction, and subsequently community formation, has exploded in exponential ways and fundamentally changed the way we form institutions, and in the ways we exert influence and can inform growth. Despite the efforts of governments, companies, media, and everybody, there will not be a return to situation normal as we knew it before, to capitalism 1.0. Whether we know it or not we’ve just jumped off a cliff together, and some get this and others don’t. This is the chasm that now exists between relevancy and irrelevancy in the global economy today, explained simply as the difference between old ways of thinking and new ways of thinking. New principles have changed capitalism and how we compete, and are themselves formed from this revolution in interaction. Think about your own business, and how the concepts of strategy, competition, and creativity have altered the ways in which you work, compete, and engage. This has happened in a very short period of time. Haque refers to this change, to capitalism 2.0, as , and provides more detail in a talk he gave recently.

It’s from these principles we get Haque’s four pillars for smart growth, concepts that any company desiring relevancy in the modern marketplace should give serious consideration to (I edited down Haque’s explanations for each one, so please refer to his article for full text). Together, these are a paradigmatic shift in how we look at business:

  1. Outcomes, not Income: Dumb growth is about income. Smart growth is about people and how better or worse off they are. Smart growth measures people’s outcomes. Economics that measure financial numbers, we’ve learned the hard way, often fail to be meaningful, except to the quants among us. It is tangible human outcomes that are the arbiters of authentic value creation.
  2. Connections, not Transactions: Dumb growth looks at what’s flowing through the pipes of the global economy: the volume of trade. Smart growth looks at how pipes are formed, and why some pipes matter more than others: the quality of connections. The goal isn’t just to trade, but to co-create and collaborate.
  3. People, not product. Smart growth isn’t driven by pushing product, but by the skill, dedication, and creativity of people. People not product means a renewed focus on labor mobility, human capital investment, labor market standards, and labor market efficiency. Smart growth isn’t powered by capital dully seeking the lowest-cost labor — but by giving labor the power to seek the capital with they can create, invent, and innovate the most.
  4. Creativity, not productivity. Smart growth focuses on economic creativity – because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create. Think China’s gonna save the world? Think again: it’s economically productive, but it’s far from economically creative. Smart growth is creative — not merely productive.

This is all pulled together quite well, touching on so many things we face as we think about the sustainability of our businesses and our relevance to the markets we operate in, by this quote from Haque:

“Smart economies are driven by smart growth. The four pillars of smart growth are design principles for next-generation economies. 20th century economies are limited to unsustainable, unfair, brittle, dumb growth. Smart growth is more sustainable, equitable, and resilient.

Capitalism 2.0 cannot be powered by growth.1.0: that’s why the race for smart growth is inevitable. The economic pressure — the potential for value creation, in a world being ripped apart by value destruction — is simply too great.”

Umair Haque

To Haque’s point, getting smart is indeed a preferred option to staying dumb.

One Response to “Umair Haque’s Smart Growth Manifesto”

  1. Ten Laws of Constructive Capitalism | schneiderism Says:

    [...] the thinking of Haque, it’s been a somewhat immersive exercise. I wrote about Haque’s Smart Growth Manifesto just a few days ago. His presentation on Constructive Capitalism, though, has kept me thinking and [...]

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