Wolf Lotter, business journalist and book author, has been writing essays for Aareal Bank's Annual Report for many years, and makes us look at things from a different angle.

Essay: Building blocks of the good kind

Sure, ancient soothsayers made a living out of it. Modern fortune- tellers still do. But quite often their secret to success lies in the merciful memory of those who surround them, rather than in the accuracy of their prophecies. The mists of forgetting are merciful, putting even the highest expectations into perspective. Mark Twain warned about the perils of prediction: ”It is difficult to make predictions, especially about the future.”

All this may be true, but it is not what we mean, when we speak of the future and innovation. Perhaps we should take one step back and look at what future and innovation actually mean.

The old notion of future was that of a time in which everything is possible – yet still predictable. Just take a look at the word itself, derived from Old French futur ”to come”. What was to come – what people were waiting for – was God himself, and with Him, Judgement Day. The present was a mere waiting hall for the apocalypse, with people behaving accordingly, i.e. humbly, submissively, abjectly. They avoided the experiment of formation and invention. No shaping of the future, since the future was predestined. There was nothing you could do about it. Trying to take destiny into your hands by having ideas of your own with which to make life on earth more beautiful, more comfortable – or simply better – did not make any sense. What could be better than Paradise – which was, after all, to come? Hence, the Middle Ages was not a time for innovation. Classical knowledge was locked away, often deliberately because it could have tackled the predominating world view of a godly plan that was not to be messed with. In this world, those who strived for renewal were seen as challenging God.

But the times were changing – bit by bit. Even before the Middle Ages drew to a close, a more self-confident class of city-dwelling citizens began to build cathedrals, at that time the highest buildings known to men. These cathedrals were more than places of worship. On weekdays, they were a place for citizens to meet and discuss, for example what you could improve in the city and its institutions. Building these cathedrals, however, took a long time. It is an example of emergence into the modern age; the start of a long path leading to the Enlightenment. Nowadays, the future is no destiny, but a place to be shaped by (and for) everyone. Everyone willing and able to participate is welcome to do so.

According to the teachings of the Enlightenment and modernity, future is not only not predestined, but a journey to a final destination with many a staging post – and we do have our say in navigating. We have a choice. We have to decide. These staging posts may be to eradicate poverty and hunger, achieve educational standards, improve housing and living conditions or public health, or provide high-quality consumer goods.

These utopias, as positive visions of the future are called, are filled with the endless endeavour of advancement, never settling, never content, but always striving for improvement. Where im provement is not enough, re-think from scratch. Hannah Arendt, a German-American author, said that true revolutions were always characterised by the will to begin anew. This means that everything has to be re-thought – not just the details.

With this, we arrive at true innovation.

Renewals, the English word for innovations, arise from productive, creative knowledge and curiosity. They demand the basic virtues of this knowledge society. Today’s society is no longer about the same old songs – improved, but still the same – but about creating new tunes, opening up new ways, through research, development and a culture of change.

Innovations are the building blocks of the future. The future is made from them. These building blocks – innovations – are far more than inventions or new ideas, methods or processes that never existed before. As the great economist Joseph A. Schumpeter taught us, they have the power to spark far-reaching change, to trigger ”creative destruction”, as he phrased it in 1911 – a process that is all natural in arts.

Newer science has adopted this term as ”disruption”, but both mean the same thing: innovations are more than improvements, more than the simple optimisation of habits. They are gamechangers, with the power to change a whole culture. Innovations are a brand-new house. It’s a lot more than just changing the wallpaper.

Sometimes, however, the Middle Ages come knocking, and the future is again seen as predestined, innovation as immoral. In the early years of affluent society, words such as future, innovation and progress had a positive connotation to them. Futurists such as the mighty Herman Kahn, one of the founders of the US-based Hudson Institute, were consultants to the most powerful men of their times. But with affluence came doubts – and concerns that manoeuvres perceived as too bold might put that newly found prosperity at risk. In a place where everybody has (and gets) more and more, future loses its allure, innovation becomes an empty word. 30 years ago, German sociologist Ulrich Beck wrote about a ”risk society” in which positive utopias are replaced by dystopias, negative visions of the future. Of course, unlimited faith in the future – as displayed after WWII, coupled with an ”anything goes” mentality – disregarded many problems. Unwanted side effects were pushed away, into tomorrow. The future became a lumber room for everything you did not want to be bothered with today. Today was all that mattered. But what that meant, again, was: no future.

There is nothing wrong with living in the present, but it is naïve to believe that that would be enough. If we want to maintain prosperity, we need to develop. No one put it better than Italian author Giuseppe Tomasi di Lampedusa, when he wrote that ”everything needs to change, so everything can stay the same“.

That’s the big challenge for all societies and companies in this current transformation – think an optimistic, shapeable future, recognise true innovation and foster a culture based on the core virtues of the knowledge society. No fear, no satiety, with zest for shaping a world in which there may be endless problems, but even more solutions and chances. Computer pioneer Alan Kay put it simply: ”The best way to predict the future is to invent it.” And Joseph Schumpeter had a simple but clear name for such people: entrepreneurs.