One of the most often repeated stories about innovation is that of Alexander Fleming who, returning from his summer holiday in 1928, found that his bacterial cultures were contaminated by a strange mold. Yet instead of throwing away his work, he decided to study the mold instead and discovered penicillin.

What’s often left out is that it wasn’t Fleming who developed penicillin into a miracle drug. In fact, it wasn’t until a decade later that a team led by Howard Florey and Ernst Chain rediscovered Fleming’s work and, collaborating with several labs in the United States, ushered in the new era of antibiotics.

For some reason, we tend to assume that great innovators are lone geniuses. However, in researching my book, Mapping Innovation, I found just the opposite to be true. Innovation is, in fact, a highly social activity and great innovators cultivate long standing relationships with trusted thought partners. This was always true, but Covid has pushed it to new heights.

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For the past 50 years, innovation has largely been driven by our ability to cram more transistors onto a silicon wafer. That’s what’s allowed us to double the power of our technology every two years or so and led to the continuous flow of new products and services streaming out of innovative organizations.

Perhaps not surprisingly, over the past few decades agility has become a defining competitive attribute. Because the fundamentals of digital technology have been so well understood, much of the value has shifted to applications and things like design and user experience. Yet that will change in the years ahead.

Over the next few decades we will struggle to adapt to a post-digital age and we will need to rethink old notions about agility. To win in this new era of innovation we will have to do far more than just move fast and break things. Rather, we will have to manage four profound shifts in the basis of competition that will challenge some of our most deeply held notions.

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It’s been clear to me for some time that 2020 would be a pivotal year. Globalization and digitalization, the two major forces of the last generation, have disappointed. The corporate mantra of shareholder value has proven to be bankrupt. The end of the Cold War has led not to a democratic utopia, but a rise in populist authoritarianism.

Much of what we believed turned out to not be true. At the same time, there is great cause for optimism. We are undergoing profound shifts in technology, resources, migration and demographics that will give us the opportunity to drive enormous transformation over the next decade. We are likely entering a new era of innovation.

We need to learn from history. Positive change never happens by itself. We can’t just assume that we can just set up some basic “rules of the road” and technological and market forces will do the rest for us. Any significant change always inspires fierce resistance and we need to overcome that resistance to bring change about. Here are 10 principles that can guide us:

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Every era has its own ideology that creates assumptions and drives actions. At the turn of the century, titans like J.P. Morgan believed that monopolized industries provided stability against the disruptive influence of competition. More recently, the end of the Cold War was supposed to usher in a new era of capitalism and democracy.

It didn’t work out that way. Instead we got oligarchy, authoritarian populism and we lost trust in the institutions that used to govern our society. In America, even competitive capitalism has been greatly weakened. We believed that we could leave everything up to market and technological forces, but they failed us.

Today, we are in the midst of a set of profound generational shifts that will rapidly transform our society over the next decade. As we have throughout history, we will need to own up to our past mistakes and chart a new course. That will mean focusing less on technocratic solutions and more on building a culture rooted in basic dignity and respect.

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In 2018, Steve Blank wrote a piece in Harvard Business Review questioning the viability of the “lean startup” model. Given that Steve had pioneered lean startup techniques, I was intrigued. Why would he, all of a sudden begin, to doubt an idea that had been so successful and, to me at least, still seemed so relevant, even for large enterprises.

As it turned out, what made Steve hesitate was a new venture called “New TV” that was headed up by the dream team of legendary Hollywood producer Jeffrey Katzenberg and star Silicon Valley CEO Meg Whitman. Beyond talent and cache, it had raised almost $2 billion. With that much money, how could it lose?

Now we know. The venture, which eventually came to be known as “Quibi,” recently announced it was shutting down, less than seven months after its product launch. It’s become an all too familiar tale. Multi-billion dollar washouts, including WeWork, Better Place and others, have become all too common. We need to learn from their mistakes.

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Techno-optimism may have reached its zenith in 2011, when Marc Andreessen declared that software was eating the world. Back then, it seemed that anything rooted in the physical world was doomed to decline while geeky engineers banging out endless lines of code would own the future and everything in it.

Yet as Derek Thompson pointed out in The Atlantic, the euphoria of Andreessen and his Silicon Valley brethren seems to have been misplaced. A rash of former unicorns have seen their value plummet, while WeWork saw its IPO self-destruct. Today, even Internet giants like Amazon seem to be investing more in atoms than they do in bits.

We were promised a new economy of increasing returns, but statistics show a very different story. Over the past 30 years wages have stagnated while productivity growth has slowed to a crawl. At the same time, costs for things like education and healthcare have skyrocketed. What is perhaps most disturbing is how many of our most basic problems have gotten worse.

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I still remember the feeling of triumph I felt in the winter of 2005, in the aftermath of the Orange Revolution in Ukraine. During the fall, we readied ourselves for what proved to be a falsified election. In November, when the fraudulent results were announced, we took to the streets and the demonstrations lasted until new elections were called in January.

We had won, or so we thought. Our preferred candidate was elected and it seemed like a new era had dawned. Yet soon it became clear that things were not going well. Planned reforms stalled in a morass of corruption and incompetence. In 2010, Victor Yanukovych, the same man we marched against, rose to the presidency.

The pattern repeats with almost metronomic regularity. Egyptian dictator Hosni Mubarak was ousted in the Arab Spring, only to be replaced by the equally authoritarian Abdel Fattah el-Sisi. George W. Bush gave way to Barack Obama, who set the stage for Donald Trump. Revolutions sow the seeds for their own demise. We need to learn to break the cycle.

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In 2014, when Silicon Valley was still largely seen as purely a force for good, George Packer wrote in The New Yorker how tech entrepreneurs tended to see politics through the lens of an engineering mindset. Their first instinct was to treat every problem as if it could be reduced down to discrete variables and solved like an equation.

Despite its romantic illusions, the digital zeitgeist merely echoed more than a century of failed attempts to generalize engineering approaches, such as scientific management, financial engineering, six sigma and shareholder value. All showed initial promise and then disappointed, in some cases catastrophically.

Proponents of the engineering mindset tend to blame its failures on poor execution. Surely, logic would suggest that as long as a set of principles are internally consistent they should be externally relevant. Yet the problem is that reality is not simple and clear-cut, but complex and nonlinear, which is why we need be ready to adapt to the unexpected and nonsensical.

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There’s no doubt that capitalism in America is in bad shape. Higher market share concentration in industry is leading to higher profits for corporate giants, but also to higher prices and lower wages along with decreased innovation and productivity growth as well as a long-term decline in entrepreneurship.

You would think that the rise of progressive politicians like Bernie Sanders and Alexandria Ocasio-Cortez would be responsible for the decline in the power of capitalism and the demise of free markets. However, a new book by NYU finance professor Thomas Philippon, called The Great Reversal, argues exactly the opposite.

In fact, he shows through meticulous research how capitalists themselves are killing capitalism. Through the charade of “pro-business” policies, industry leaders have been  increasing regulation and limiting competition over the past 20 years. We need to right the ship and return to an embrace of free markets, entrepreneurship and innovation.

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The industrial revolution of the 18th century was a major turning point. Steam power, along with other advances in areas like machine tools and chemistry transformed industry from the work of craftsmen and physical labor to that of managing machines. For the first time in world history, living standards grew consistently.

Yet during the 20th century, all of that technology needed to be rethought. Steam engines gave way to electric motors and internal combustion engines. The green revolution and antibiotics transformed agriculture and medicine. In the latter part of the century digital technology created a new economy based on information.

Today, we are on the brink of a new era of innovation in which we will need to rethink technology once again. Much like a century ago, we are developing new, far more powerful technologies that will change how we organize work, identify problems and collaborate to solve them. We will have to change how we compete and even redefine prosperity itself.

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