In 1966, in an era when the science of management was undergoing unprecedented scrutiny, and when the economy of western countries was in the final stage of a shift from manual slog to knowledge-based ingenuity, a man named Peter Drucker wrote a book called The Effective Executive.

It became for many a management bible, a way to make something as nebulous as “knowledge” quantifiable, and to turn what is potential energy (pure knowledge, unapplied) into kinetic energy. In other words, Drucker found a way for management to become more scientific; he had effectively found a way to measure the output of knowledge from the brains of those whose job it was to think.

Seven years before this seminal text, in another of his important management bibles, Drucker coined the term “knowledge worker”. In a later text, The Age of Discontinuity, Drucker took that term further, and coined (or, at least, the coinage is attributed to him) what has become a catch-all neologism some forty years later: knowledge economy.

One experiences a strange disconnect when reading a sixties era Drucker opus. There is a rather charming puritan streak running through his work: “Few things [are] less pleasing to the Lord,” he writes, “and less productive, than an engineering department that rapidly turns out beautiful blue prints for the wrong product.”

Business has, to put it mildly, changed since Drucker’s day; one senses a different pace, a different ethos, indeed, a different world. So it is unsurprising that one of his ideas – this notion of a knowledge economy – should have undergone so drastic a makeover.

But what, exactly, has knowledge economy come to mean? Does knowledge economy still refer to an economy based on and buttressed by knowledge – an economy that develops software and cellular phone technology and advanced weapons systems? Or does it, as a recent government report issued in Britain would suggest, mean the economy generated by the creative arts – film, television, theatre, museums? This is not the first time knowledge economy has swept up the arts with the likes of Sun Microsystems, Google and Nokia; this new interpretation of knowledge economy is a resolute attempt to hammer artistic creativity into the greater economic framework.

The report, issued by the Work Foundation, claims that the knowledge economy, in this case a synonym for the entertainment industry, is growing at twice the rate of the general economy. So far, so good. But the document is a means of jamming the square peg of the creative industry into the round hole of the general financial sector, at the same time as justifying the following status quo in Britain (and many western nations): art is heavily subsidised by the government, a fact that the report tries to recast as “investment”. In this, the report seems to open up a cavernous paradox: by viewing creativity in purely industrial terms, one removes its hallowed links to culture and local identity, and turns it into just another business, and one not necessarily deserving of government support.

Can one really measure the output of creativity or, put another way, can the knowledge economy really be quantified?

In Hollywood, this is almost possible. An idea is pitched to a studio; that studio must come up with a budget, and that movie must make up its budget by being released on a number of media platforms. If the film grosses more than its budget, it’s successful. In this, the spark of an idea (or, more often, the lack of one) can often generate hundreds of millions of dollars. But, if movies were really akin to iPods or cars or handbags, then it would make sense to churn out as many of those successful movies as possible to satiate demand.

There’s two ways to do this: rip-off a great idea, or churn out a succession of sequels. Yet audiences hate a rip-off, and as this Hollywood summer season of “three-quels” has proved, a rehash routinely under-performs its predecessor at the box office. Hollywood has been working under this model for years, and arguably damaged its brand irrevocably in the process. It must rely on independent American cinema to generate new talent and new ideas. That’s where this new interpretation of knowledge economy fails: art is never a widget.

Management science, more than most, loathes the idea of chance and unpredictability, and that’s what makes an environment like Hollywood so fraught. But in removing the sense of play and the sense of chance from creativity, in trying to plug arts into a strict financial paradigm governed in the same way, and by the same principles, as communications technology or the automotive sector, the scribes of the Work Foundation and those who think like them are denying the real knowledge economy – that is, an economy driven by ideas-madegood rather than mere goods – of its edge.

And its edge is the diversity of thinking. By homogenising creativity – by casting it as a quantifiable resource – we run the risk of tapping it. The point is to let creativity run free, to run rampant, which is not a terribly pleasing notion to those accustomed to working within strict economic matrices.

If Drucker’s The Effective Executive had a central thesis, it was that in a knowledge economy in the true sense of the term, action, or some form of quantifiable result, needs to come from thought. “The greatest wisdom not applied to action and behaviour is meaningless data,” wrote Drucker, and this is equally applicable to an aeronautics engineer and a painter. But we must continue to expect different things from different “knowledge workers”; we must continue to allow the artist to work outside the bounds of a narrowly applied economics. Apply market economics to artistic creativity and it ceases to be the arts – it becomes a Rosebank flea market stall selling sad approximations of African “painting”. We must beware never to force the artist into the pinching suit of the effective executive.

By Richard Poplak

The Decoder was a regular feature in the now-defunct Maverick magazine. It is republished here for the first time. Richard Poplak is a Canadian freelance writer and author who wrote his first book, Ja, No, Man: Growing Up White In Apartheid-Era South Africa about his childhood in this country. His latest book is The Sheikh’s Batmobile: In Pursuit of American Pop Culture in the Muslim World, and he is working on a couple of interesting new projects.

Photo: Peter Drucker