Welcome back to the Creative Life Adventure.
We’ve probably all seen examples of vicious cycles and virtuous circles. If one business in a small town fails, it can force people to move in search of jobs, leading to a decline in tax revenues, public services diminish, and a vicious cycle can cause the entire town to decline. Conversely, if one family buys a vacant house in a rundown neighborhood, renovates the house and increases its value, that can attract more buyers who bring more renovations, and a virtuous circle raises the entire neighborhood (ignoring, for now, the complicated subject of gentrification).
These are both examples of spillover effects, where the actions of one person/organization/government can impact a larger community, leading to an accumulation of positive or negative results, like a single disturbance that sends waves rippling across an entire body of water. Creativity spillover is too large a topic to cover fairly in one post, but it affects all of us, so this is a good time to begin the discussion.
From an organizational standpoint, there are generally considered to be three categories of spillover related to creativity or innovation:
Knowledge spillover: When new ideas from one organization benefit other organizations – for example, the development of the computer mouse from the Stanford Research Institute to the Xerox Palo Alto Research Center to Apple is a fascinating story.
Product spillover: When new products from one organization benefit other organizations – for example, an organic food grower might benefit local restaurants, groceries, and consumers via availability of new products.
Network spillover: When multiple organizations benefit by working together – for example, in Hollywood, studios, agents, production companies, etc., all work in close proximity.
Spillover isn’t always positive. The classic argument of creative destruction indicates that new, innovative businesses tend to displace older, established firms. The long-term impact, under this argument, is sometimes a net loss.
The counter argument is that no company can fully utilize all the knowledge it generates, so knowledge spillover can be an effective means of capturing ideas and inventions that might otherwise have been ignored. It’s possible to somewhat manage this process if an organization focuses on developing the knowledge best suited to its culture and abilities, and spinning off or licensing knowledge better suited for other cultures. This can benefit multiple organizations and, eventually, the overall community and economy. As this New Yorker article quotes former Microsoft executive Nathan Myhrvold, “The game is what you catch, not what you spill.”
That’s one reason we need entrepreneurs, to catch what others spill. We’re not talking about patent/trademark infringement or theft. But if another organization is not pursuing a good idea, there’s no reason you or another entrepreneur shouldn’t make use of that opportunity. A good idea shouldn’t go to waste.