The ladder of innovation means ever more low-hanging fruit

Hardnosed business sense can improve charitable outcomes. That should be obvious enough, but it is a story that doesn’t always get the attention it deserves.

How cheering then to read this week of the difference Toyota made to the efficiency of New York’s food banks by sharing its commitment to kaizen, or continuous improvement.

By re-engineering the group’s procedures, Toyota cut waiting times at one soup kitchen by a third. After the intervention, the time to fill aid packages in a warehouse went from three minutes to just 11 seconds, according to the New York Times.

Too often, philanthropic work is seen as somehow a world apart from the discipline of market forces. The truth is we need quality and efficiency in our charities too, especially in times of economic weakness, and business thinking has much to offer anyone attempting to achieve more with less.

Thankfully, America doesn’t have a monopoly on that understanding. In the UK, the charity Pilotlight is a great example of a group that sees private enterprise as an intellectual resource, not just as a piggybank to be raided by politicians. Pilotlight arranges for senior businesspeople to coach small charities with a turnover under £3m in ways to become more efficient and economically sustainable. From literacy and youth charities to MS and cancer support, these are invaluable small groups made better with the hard-won insights of big business.

But there’s a wider lesson in those numbers out of New York as well, a reminder to anyone, not just the charitable sector, of the productivity improvements still waiting to be made in the most everyday corners of our lives. There’s a tendency today towards gloom on productivity: to imagine that all the low-hanging fruit has already been picked. We used to dream of jetpacks. All we seem to get these days are updates for our smartphone apps.

Worse still, others fear that the technological growth we do see is destroying economic opportunities, not opening the door for new ones. As the internet picks off high street bookstores and robots move from vacuuming our floors to driving our cars, to some the future looks worse, not better, than the old days.

This is to miss the big picture. The economic historian Joel Mokyr has just written an excellent rebuttal of both strains of technopessimism for PBS. He suggests that just as in the past, “new types of work will emerge that we cannot foresee. A hundred years ago, people were wondering what would happen to the workers who would no longer be able to find work farming. Nobody at the time would have been able to imagine the jobs of today, such as video game programmer or transportation security employee.”

Talk of low-hanging fruit misses, Mokyr explains, the way innovation creates ever-taller ladders. And even the problems it generates create opportunities for new generations of entrepreneurs to solve.

Our lives are vastly better than anyone could have expected at the start of the twentieth century but there is still so much left to improve. The future retains its potential to be more productive, richer and more humane. Cheap energy from shale and nascent technologies like 3D printing will help return some of the manufacturing jobs developed nations recently lost to emerging markets. Same-day delivery services like the pioneering eBay Now will run on real-life couriers, supported by robots like the ones driving efficiency up in Amazon’s warehouses. Unexpected new business models, like City A.M. and the flowering free newspaper sector, will combine the best of the new with the old.

None of this is guaranteed. All innovation relies on a human passion for solving human problems. Building a better future demands business and charity both keep that in mind – and teach one another how to do more with less.

First published, City A.M., 1/8/13

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Filed under Business, Economics, Innovation

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