Today’s cities are hotbeds of innovation. Looking at growth in innovation across sectors, authors Ian Goldin and Chris Kutama see new versions of Florence in the age of the Medici.

In our era of exploration, technology and global integration bring with them new perils as well as new prosperity, but here’s what entrepreneurs can learn from the Renaissance.

Lesson 1: Don’t just employ genius; become its patron

Like the Medici in Renaissance Florence, be a patron, not just an employer or recruiter.

Recognise the qualities and actions you wish to see from your employees which can’t be taught or drawn out by management, such as initiative, passion, creativity. These qualities should be seen as gifts employees choose to give to your company.

Businesses that differentiate themselves on inclusion, community and meaningfulness will be rewarded with more of these gifts.

Geniuses roam. You can’t retain them; you can only inspire them to take on tests they deem worthy. Therefore put a big challenge in front of the world, attach a prize to the best solution, and see who steps forward to contest it.

Lesson 2: Diversify systemically

“Too big to fail” isn’t just a worry for regulators. Flourishing systemic risks mean it’s a worry for all businesses with any concentration, whether in management, production, or sales, in one place.

Rethink the idea of being “headquartered” in one place. It’s a 20th century concept borrowed from the military when the study of “business” was just beginning. Today a single node of leadership is dangerously passé.

Lesson 3: Dare to fail

The risk/reward formula has completely changed, but our decision-making may not have changed with it.

Rewards are higher because the market is suddenly so much healthier, wealthier, educated and connected. In fact, by 2020, the global middle class will be made up of 3 billion people.

The complexity of our personal and professional networks magnify the value of a single good idea and means we consistently underestimate the value we can create.

At the same time, the cost of failure is plummeting because of falling upfront investment costs. For example, digital prototyping and 3D manufacturing now eliminates the need for expensive dyes and moulds. Additionally, big asset investments such as distribution chain, and mainframe computers are now fractional services like Amazon Web Services and other cloud computing solutions.

With the falling cost of failure, reputation costs are also fleeting now. Public attention moves on more quickly in our time than it may have a few decades ago.

General upheaval has likely made competitors over-cautious, so now is a perfect moment to pass them by.

Lesson 4: Take risks

Successful businesses will be those that override the instinct to “play it safe” and instead figure out that to navigate a time of upheaval. The most prudent course can be to take bigger risks and make bolder moves.

Machiavelli famously said “It is better to be impetuous than cautious.” General upheaval means that established operating habits, assumptions and paradigms lose validity quicker, and can become downright dangerous when invalidated by rapid change in the business environment.

Contrary to popular belief, impetuous choice-making and action is needed to shock businesses out of these habits and patterns and force people to keep pace with a rapidly changing world.

Retain employee confidence by proving that management is actively guiding the ship rather than huddling below decks.

About the book
Age of Discovery: Navigating the Risks and Rewards of our New Renaissance
Ian Goldin and Chris Kutarna
Bloomsbury, Hardback, £18.99, 272 pages
Published in the UK on May 19th 2016

About the authors
Ian Goldin is Director of the Oxford Martin School and Professor of Globalisation and Development at the University of Oxford. He was Vice President of the World Bank and prior to that the Bank’s Director of Development Policy. From 1996 to 2001 he was Chief Executive and Managing Director of the Development Bank of Southern Africa, and also served as an advisor to President Nelson Mandela. He has been knighted by the French government and is an acclaimed author of 20 books including Pursuit of Development (Oxford University Press May 19th 2016).

Dr. Chris Kutarna is a two-time Governor General’s Medallist, a Sauvé Fellow and Commonwealth Scholar, and a Fellow of the Oxford Martin School with a doctorate in politics from the University of Oxford. A former consultant with the Boston Consulting Group, then entrepreneur, Chris lived in China for several years, speaks Mandarin, and remains a regular op-ed contributor to one of China’s top-ranked news magazines. He resides in Oxford, Beijing and Regina.