A friend of mine just called to tell me she is going to be a panelist on a PBS show about the decline of American innovation.  I said, “What?”  As my pulse jumped I said, “We live in a tornado of innovation.”  We do.  If we define innovation as improvement that creates value, innovation is swirling at wind speed that is knocking our socks off.

She protested, “But IPOs are down, venture capital investing is down, our worldwide lead in new patents has shrunk and we aren’t producing science and math graduates.”

I said all that is true, but all those old indicators of innovation are out dated.

When we aren’t measuring the right things,
all we see is a distorted picture.

I just got back from a blitz tour over America where in Phoenix I worked with a new vocational training business that is bent on re-inventing how blue-collar skills are transformed into green-collar value.  In Washington D.C. I learned how Campbell’s Soup is inventing tasty ways of taking salt out of soup and in Portland how Nike is using sport in developing countries to create new confidence and even literacy in young girls.  And that’s not even ten percent of what I learned.  There are many ways to create value.  Sometimes it’s a new product, but often it’s a new way of offering service or even a new way of making money that didn’t exist before.

Today, innovation is everywhere.  It’s the water fish swim in, so maybe it is hard to see.  But consider this.

• In the past two years over 200,000 apps have been created for iPhones that didn’t even exist four years ago.  Many of these apps offer ingenious ways of making our lives easier or more enjoyable.  Millionaires have been launched within months.

• Zappos, the crazy online shoe seller, boomed and sold itself to Amazon for nearly $1 billion by turning their quirky customer service reps into heroes by letting them solve real customer problems and tweet and text about it.

• Facebook didn’t exist five years ago and today it has more members than all but two countries (India and China).

• Every carmaker has or is about to have hybrid vehicles for sale.

• Internet commerce, advertising, information research, and education didn’t really exist 10 years ago.

• Grameen Bank invented a way to loan money to the poorest people in the world to achieve self-sufficiency and get 98 percent of their loans paid back.

• Revolution Foods is bringing affordable healthy lunches into our schools.

• We can now rent cars by the hour in most cities.

• The cost of solar electricity has dropped from almost $100 per watt in 1975 to $2 per watt in 2010.

• ING online bank became the fastest growing consumer bank in the world by incenting Americans to save instead of borrow.

• Charter schools have become the driving force of education reform.

• Chrysalis Foundation contracts their trained workforce of homeless people to local businesses.

• Threadless.com has turned a perpetual graphic arts competition into a $25 million tee-shirt business.

• Epico is combining online education with social networks to create learning communities to learn stuff faster than classroom learning.

• Our recent wars have forced us to re-invent our strategies to include economic and social factors as well as military objectives to create the possibility of actually winning the future rather than just conquering dirt.

The truth is innovation is raging, so while people tied to the status quo are all wringing their hands, those with active and open minds are doing handsprings.  It’s never been so easy to try out new ideas.  The Internet and social networks enable us to research difficult questions at no cost.  In virtually no time, we can find experts and collaborators everywhere in the world and we can do it on our laptops or even our phones!  A husband and wife team in my neighborhood last year generated over $1 million in sales selling Nintendo Wii players and products over the web.  Their innovation was not low cost; it was teaching people how to use the Wii to have more fun.  They are not alone.  Last year the number of unemployed workers who started their own business soared nearly 70 percent (See Entrepreneurs Create Their Own Jobs).

Today innovation is as much knowing what to cut out as to add in.  Saving time, effort and waste creates huge value.  And what do we all want?  We want to be smarter, healthier, financially secure, have happy relationships and an enduring sense of confidence and satisfaction.  The ways we are creating to meet those needs are unlimited and the tools never more powerful.

The big frontiers of innovation are government and religion.  Both seem stuck in dated operating models that cost way too much to create the value we value.  But it’s time to re-invent both.  We need to re-think government to provide everyone, everywhere the chance for a decent life while we promote individual responsibility.  Religion must become communities of faith that bring us closer to the divine and inspire morality rather than clans of fanatics that justify prejudice and hide immorality.

Flying home I read a brief article outlining the origin of America’s “Puritan Ethic” which it turns out is about something far more innovative than hard work and discipline.  Puritans believed it was their divine duty to improve on their opportunities.  The key is to understand that Puritans believed that our lives were pre-mapped to give us exactly the opportunities we needed.  Hence they didn’t waste a lot of time waiting for their opportunities to improve on their own.  They didn’t have much use for undeserved luck but focused on improving their luck by looking for ways to improve their current “opportunities” no matter how humble.  That’s pretty liberating.  What can we do right here, right now?  If we embrace our current circumstances what can we improve?  How?

So what’s the best thing we can do? Constantly create new value in our lives.  We need to prune and eliminate all that creates no value or creates unnecessary stress and suffering.  Get out of financial bondage and stay out.  The difference between living on 90 percent of our income and 110 percent of it is inner peace and outer happiness.  Over-invest in honest and supportive relationships and cut out time consuming trivial communication.  We need to decide what difference we want to make and become an extreme expert in making that difference.  If we are wise we will turn that into our livelihood.  And above all we need to keep our minds open to see new opportunities and ways to improve our existing ones.  We are all CEOs of our own start-ups.  It’s time to innovate.

So how has your life changed for the better in the past five years?  What do you do to increase the value of your job or your life?