Rather than deep recession, the real global economy is still enjoying a major upswing, which is likely to continue for some time.

The current problems of slowing growth and limits on credit, although painful, are basically superficial, the result of a period of excessive financial gambling. Genuine recessions occur when nations run out of ideas as well as financing. Our stock of existing ideas is still very strong, and there’s every likelihood that the growing emphasis on innovation will only add to the pool.

New ideas in areas like IT, genetics and microbiology have enormous scope for further exploitation and this is the key to long-term economic growth and the current cycle.

Think about an innovation, like the ability to decode DNA to predict future health issues. This is leading to whole new industries of related products and ventures, meaning new jobs and opportunities for investment.
What will make the difference for a smooth re-adjustment back into the overarching trend of growth and a basically healthy infrastructure for businesses out there, is good management.

Management as a set of skills and tools is underestimated as a solution to problems other than those linked to basic organisational performance ­ balancing the books, getting people to perform, increasing sales.

This limited outlook excludes the simple fact that thoughtful, effective management is a solution to many of the major economic and social issues currently facing the world. Better management of how the financial services industry dealt with risk, for example, would have avoided the credit crunch. This will be increasingly important for the future as investment in innovation will be needed to underpin the revival.

The accountancy industry can help ensure new ideas prosper by re-building the confidence of senior managers in the value of innovation and stressing the importance of R&D. Bill Gates’ call for a new ‘creative capitalism’ at the last Davos summit is particularly relevant here.

We need to develop new tools for adequately capturing the broad range of benefits that innovations typically bring and usher in new values that we are not yet fully equipped to deal with?
Professor James Fleck is dean of the Open University Business School