By Laura Callanan and Bonny Moellenbrock
THE CREATIVITY IMPERATIVE
The challenges of the 21st century are large, complex, and dynamic. Incremental improvements are not enough. We need new ways to identify opportunities and generate innovative, effective solutions. Responding to these challenges requires resources and scale and, perhaps most of all, creativity.
The creative sector — including the art, culture, design, and innovation industries — already plays an active, vigorous, and impactful role in society. We must extend creativity’s capacity to deliver new solutions across all sectors. We must have a more creative economy. To maximize the financial, social, and environmental value of a more creative economy, we must engage people from diverse backgrounds, expertise, and perspectives. We must have a more inclusive and creative economy.
In 2018 and 2019, Upstart Co-Lab worked with a diverse group of stakeholders to identify key characteristics of the creative sector that can be applied at the enterprise level to make the whole economy more innovative and effective. Developing a set of values and metrics that can be applied to public and private companies is intended to make it easier for impact investors to consider the creative economy throughout their asset allocation. This is part of Upstart Co-Lab’s overall commitment to connecting impact investing to the creative economy. (Learn more at www.UpstartCo-Lab.org.)
Our effort centered on three core values that are fundamental to creative work: Openness & Experimentation, Diversity & Inclusion, and Tradition & Innovation. These values align with metrics already in use for socially-responsible investing and add new concepts that can benefit all successful and socially-responsible businesses. By integrating these values into their approach, companies of all sizes and in all sectors can maximize their capacity for opportunity identification and creative problem-solving.
INCLUSIVE CREATIVE ECONOMY VALUES AND METRICS
Openness & Experimentation
Keeping pace in a dynamic and rapidly changing world requires both continuous improvement and radical new approaches. A culture of openness and experimentation allows the visioning and testing that give birth to new, workable solutions, especially when significant challenges render incremental improvements inadequate. Curiosity and a learning orientation create an environment where new products, services, and operating models emerge, and generate creative marketing approaches that attract customers to these solutions.
Indicators assess if a company’s culture and work environment are conducive to and encouraging of new ideas. Companies excelling in this value exhibit the following practices:
· Use of creativity drivers, including enabling infrastructure that promotes collaboration and cross pollination, and resources, incentives and rewards for creativity, including venture funds or impact investing initiatives that finance new innovations in their field, and incentives for internal experimentation, rapid prototyping and fail fast initiatives.
· A learning orientation through training and career development opportunities for all levels of employees, and intentional learning initiatives, such as cross-training and volunteering, that enable new perspectives.
· A commitment to quality jobs with safe and dignified workplaces, fair and living wages, strong benefits, and flexibility that provide employees with a solid base of support that allows for maximum innovation.
Diversity & Inclusion
Diverse teams solve problems better and faster. There is not just a moral imperative; there is a strategic advantage. Diversity comes from personal background, experience, skills and cognition. An inclusive environment is necessary to allow all voices to be heard and engaged, and for their contributions to be harnessed. Creativity cannot be optimized without both diversity and inclusion.
Indicators assess how well a company embraces diversity and empowers all voices. Companies strong in this value exhibit:
· A commitment to diversity, evident in proactive diversity programs, board diversity and supplier diversity that ensure a range of perspectives and broad opportunity.
· A culture of inclusion, evident in leadership and advancement trends that reflect the company’s overall diversity.
· Inclusive design initiatives, including inclusive continuous improvement programs that incorporate multi-stakeholder feedback, and inclusive design initiatives that systematically consider social needs at the design stage of products or services, and address industry-specific access and opportunity issues.
Tradition & Innovation
Communities have the knowledge and wisdom to address present and future challenges and opportunities. Creativity links the past to the present and the future; the next insightful innovation builds off what has come before it. Understanding and respecting the environment and our community heritage are necessary to develop something new that is effective and sustainable.
Indicators assess how a company understands and values its environmental and community context, minimizing harm, recognizing their contributions, and generating broad benefits. Companies strong in this value exhibit:
· A commitment to community engagement, with proactive community development programs, a good community impact record, and local and small-scale supplier programs providing benefits to broader communities.
· A commitment to environmental sustainability, with strong and proactive environmental management systems and eco-design programs that systematically consider environmental aspects at the design stage of products or services.
· A commitment to data ethics, proactively addressing current and emerging customer data and privacy issues.
A TOOL TO GROW AN INCLUSIVE CREATIVE ECONOMY
We encourage all company leaders, portfolio managers and investors to consider the values and metrics of the inclusive creative economy, and use them to strengthen their business and investment practices. We hope demonstrating how the insights and practices of the creative sector are broadly applicable throughout the economy will garner greater appreciation of creative people and more resources for the creative sector overall.
Tactically, Upstart Co-Lab would like to see this concept of the inclusive creative economy applied as a tilt in actively managed portfolios, as a screen for public equities in a new exchange-traded fund, and as the basis for private impact investment funds. Please contact Laura Callanan (LauraCallanan@UpstartCo-Lab.org) to explore partnering on impact investment vehicles built on the inclusive creative economy.
This work began in 2018 with support from the Rockefeller Brothers Fund. That August, Upstart Co-Lab convened thought leaders at a kickoff discussion on the Inclusive Creative Economy. Coming out of that meeting, a dedicated working group developed a Statement for the Inclusive Creative Economy over a five-month period. A larger group of representatives from impact investing firms, academic institutions, arts and culture organizations, and Community Development Financial Institutions met at the Pocantico Center of the Rockefeller Brothers Fund for two days in January 2019 to discuss and provide feedback on the draft statement.
With additional support from the Rockefeller Foundation, we refined the group’s feedback into a set of three Inclusive Creative Economy Values and determined the components of each of these Values. We then worked with Impact Shares, a nonprofit broker-dealer that helps organizations translate their social values into investable, tradable ETFs, to identify specific indicators and metrics that are applicable to public companies.
This study was authored by Bonny Moellenbrock, Millbrook Impact.
Special thanks to Ethan Powell, Founder of Impact Shares, for his vision and encouragement.
Additional thanks to the following for their contributions of time and expertise to this work:
Lucy Bernholz, Jorge Cruz, Kent Devereaux, Anders Ferguson, Cate Fox, Jessica Feingold, Amy Fredeen, Alan Gershenfeld, Matthew Grande, Lisa Green Hall, Samuel Hoi, Jill Isenbarger, Dana Johnson, Robert Karimi, Sam Marks, Michelle Meyercord, Matthew Moore, Kristina Newman-Scott, Deborah Obalil, Sheri Parks, Janet Rodriguez, Ben Rodriguez-Cubenas, Liz Sessler, Julia Shin, Gary Steuer, Mark Stern, Steven Tiell, Chris van Bergen, Eric Verkerke, Dennis Whittle, and Lee Wellington.
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