Connecting Innovation with Our Quality of Life

Governments are mandated to improve the Quality of Life of their Citizens. The Quality of Life of Citizens is built on a foundation of affordable housing, accessible healthcare, good education, satisfying jobs, safe communities, affordable transportation + communication services, access to sustainable energy, and adequate social infrastructure and services. However, improving the Quality of Life of a population requires public and private investments whose sustained affordability depends on a country’s Standard of Living (GDP per capita). The standard of living of a country is, in turn, dependent upon how competitive its economy is in producing goods and services for domestic and global markets. In turn, the long term competitiveness of an economy depends upon the productivity of its workforce. And the growth in its productivity depends upon three activities:

1. Public and private investments in People (education/training – e.g. new digital skills),
2. Public and private investments in Physical Capital (latest machinery, technology and equipment – e.g. disruptive digital technologies) and
3. Public and private investments in Innovation (creating new products, services, business processes, and business/marketing structures).

As a result these three categories of investment in productivity are the primary source of a country’s competitiveness, standard of living and quality of life.

Figure 1: Federal Economic Logic Model

As a result, to grow an economy requires concentrating public and private investments in these three components: People, Physical Capital, and above all in Innovation. This latter capstone activity means experimenting with new combinations of People and Physical Capital in innovative ways to produce:

1. New Products + Services
2. New Business Processes,
3. New Marketing Methods
4. New Organizational Forms

All of these types of business innovation can assist firms to be successful in domestic and global markets. And this success generates the revenues to pay employee salaries, and corporate taxes to governments, in order to support a high quality of life for all citizens.