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Talent is the bedrock of a creative society. Encouraging and developing talent involves mobilizing culture and tradition, building institutions to increase the stock of human capital, enhancing its quality, and instilling values that favor achievements and initiative. The productivity that emerges from this talent, in the form of ideas, can be increased by nurturing wikicapital—the capital arising from networks. Translating creativity into innovation is a function of multiple incentives, and sustaining innovation is inseparable from heavy investment in research. Ultimately, the transition from innovation to commercially viable products requires the midwifery of many service providers and the entrepreneurial skills of firms small and large. © 2007 Elsevier Ltd. All rights reserved.

Commercially viable innovations are becoming the linchpin of success in global markets by helping to raise total productivity, and they account for a major portion of the growth in advanced and industrializing economies.1 and 2 Innovation can take many forms, among which product innovation is but one. Design and incremental process innovations are more common, and in recent years myriad innovations have been introduced by providers of services.3 Innovation is changing the structure and enhancing the capabilities of organizations.4 Moreover, institutional innovations are sharpening market incentives for entrepreneurial activity and technology trading, which take new ideas, products, and practices into the commercial domain. In areas such as genetics, climatology, and the social sciences, innovative uses of computing power are making research more productive by automating the framing of multiple hypotheses, and their testing, using advances in data processing and evaluative algorithms [5]. The importance of innovations that improve economic performance and living conditions cannot be over-emphasized in the face of the opportunities offered by globalization and the multiple challenges arising from scarce resources, dire predictions of accelerating climate change, and the threat of pandemics caused by new and resistant organisms. Innovation springs from the creative application of knowledge. Thus, it has two essential ingredients: creativity—artistic, scientific or other5 —and a stock of knowledge. Knowledge and the functionalities it supplies are the essential raw materials, but it is the creative act that is the basis of an innovation. Often an initial invention or deep insight6 is the first of several stages before an innovation is fully realized, a process that often requires the accumulation of new knowledge. Many innovations, however ingenious, have no market potential.7 Those that appear promising must be refined, tested, and modified before they are commercially ready. This can sometimes be a protracted process requiring additional innovations along the way, but it is almost as critical as the initial creative act itself. Repeated commercial success is a function of organizational capability and the coordinated use of multiple skills—managerial, financial, marketing, and legal—which themselves draw support from a variety of institutions. What, then, makes a society creative? How does this translate from innovation to superior economic performance? A vast and multi-stranded literature, grounded in several disciplines, yields many clues. But the conditions that induce innovation are complex, many are not easily altered by policy, and some are the result of historical and cultural evolution that is beyond the influence of policy. What follows (sketched in Fig. 1), opens an inevitably partial and highly synthetic window onto this literature. This paper is divided into three parts. The first presents some of the conditions that are correlated with creativity. The second part defines factors that can lead from creativity to innovation. The third part summarizes those conditions that contribute to the commercialization of innovations.

This analysis of a creative society highlights the many pieces that need to be knit together to bring into existence a system that will be a fertile source of new knowledge, that can decant a steady stream of innovations from an accumulating stock of knowledge, and that has the business capabi1ities to take innovations to the marketplace and achieve the success that is the key to economic growth. As indicated earlier, human talent is a precondition. Augmenting it is a function of how culture and tradition are mobilized by public and private agencies acting in concert to build a stable society, furnish it with institutions that increase the stock of human capital, enhance its quality, and instill values that favor achievement and initiative. This human capital can be made more creative through the emergence of what I call wikicapital, i.e., the capital arising from networks. The creativity that feeds knowledge in turn needs to be translated into innovation, which is linked to incentives and the attributes of urban environments (e.g. amenities, services, and labor markets). Sustaining innovation at a high level calls for heavy investment in R&D. But the new ideas, findings, and technological leads that emerge are only the first step. A prolonged and expensive process of development and eventual commercialization is required before products and services that pass the market test can emerge on a routine basis. Development and commercialization calls for expertise, ingenuity, and entrepreneurial creativity in order to achieve success. Often breakthroughs are made by small firms but it is the large companies that are responsible for the bulk of commercialization. It is their developmental efforts, organizational capabilities, and resources that ultimately ensure that the innovations generated by a creative society lead to economic growth. Romer predicts that the country that will lead in the 21st century will be one that implements innovations—meta ideas—supporting the production of new ideas in the private sector [55].