Creativity: Not Just for Artists
Most people think of creativity as a quality associated with art, allowing certain talented individuals to make beautiful things, unfettered by competitiveness or a need for efficiency. In his recent Show-Me Daily post, David Stokes points out that allowing private utility companies to make bids for the opportunity to serve an area tends to save the community money, as well as spurring new, less expensive, and more original methods for delivering services.
Stokes links to several insightful articles demonstrating that “the way it has always been done” is not always the best way. Not only does competition among companies help develop less expensive technology and more efficient methods, but it also allows for creating different solutions to serve different people’s diverse needs. In this Reason Foundation article (which was linked by Stokes), Geoffrey Segal discusses some of the benefits and goals of using competition to encourage creative solutions:
But cost savings aren’t the only benefit. A review of state practices around the country found that a need for greater flexibility, access to skills not available in-house, and private sector innovation are all important factors in a state government’s decision to outsource or institute competitive sourcing of services. […]
Regardless, competition is about finding new ways of doing business and buying something different from what you already have.
When a number of parties compete for people’s business, a variety of services become available, better satisfying the many different consumers who are looking for different products. A competitive market allows smaller companies to cater to the specific preferences of consumers who are in the minority, without forcing these less-popular solutions on the majority.
Not only that, but when one company does invent a new product, other companies compete by imitating the new product, creating less-expensive knockoffs and making products more affordable. In his 1991 article “Innovation, Imitation, and Economic Growth,” published in the Journal of Political Economy, economist Paul S. Segerstrom pointed out that “the benefits to society from an innovation last forever,” while the benefit to the developer of the new product only lasts until a competitor can produce a cheaper imitation. In order for producers to keep making money in a competitive atmosphere, they must constantly develop newer and better products, or else make someone else’s ideas more affordable. Either way, the general public benefits from better, less expensive products.