Innovation: it’s the ultimate source of advantage, the undisputed heavyweight champion of the economic ring. Innovation is what every organization should be ruthlessly pursuing, right? Wrong.

I’d like to advance a hypothesis: awesomeness is the new innovation.

Let’s face it. “Innovation” feels like a relic of the industrial era. And it just might be the case that instead of chasing innovation, we should be innovating innovation — that innovation needs innovation. Why? When we examine the economics of innovation, three reasons emerge.

Innovation relies on obsolescence. Innovation was a concept pioneered by the great Joseph Schumpeter. And to subscribe to it requires us to accept his theory of creative destruction. Gales of innovation make yesterday’s goods and services obsolete. Yet, that, in turn, means that the price of innovation is recession and depression. The business cycle might never be vanquished — but it is getting more vicious with every decade. In an interdependent world, obsolescence is what’s obsolete.

Innovation dries up our seedcorn. Innovation in its purest Schumpeterian sense is undertaken by entrepreneurs. And so today, we’ve got an economy where everything’s for sale. Yet, little fundamentally new is being created. Businesses focus obsessively on the entrepreneurial aspects of commerce: we are focused still on selling the same old toxic, industrial era junk in slightly better ways. Yet, the challenge of the 21st century isn’t entrepreneurial as much as it is creative: learning to create fundamentally better stuff in the first place.

Innovation often isn’t. Innovation means, naively, what is commercially novel. Yet, as the financial crisis proves, what is “innovative” is often value destructive and socially harmful. Financial “innovation” turned out to be unnovative: it has destroyed trillions in value – here are some staggering estimates from the IMF.

It’s time to ask: have the costs of innovation exceeded the benefits?

A better concept, one built for a radically interdependent 21st century, is awesomeness. Here are the four pillars of awesomeness:

Ethical production. Innovation turns a blind eye to ethics — or, worse, actively denies ethics. That’s a natural result of putting entrepreneurship above all. Buy low, sell high, create value. That’s so 20th century. Awesome stuff is produced ethically — in fact, without an ethical component, awesomeness isn’t possible. Starbucks is shifting to Fair Trade coffee beans, for example. Why? Starbucks isn’t just trying to innovate yet another flavour of sugar-water: it’s trying to gain awesomeness.

Insanely great stuff. What is innovative often fails to delight, inspire, and enlighten — because, as we’ve discussed, innovation is less concerned with raw creativity. Awesomeness puts creativity front and center. Awesome stuff evokes an emotive reaction because it’s fundamentally new, unexpected, and 1000x better. Just ask Steve Jobs. The iPhone and iPod were pooh-poohed by analysts, who questioned how innovative they really were — but the Steve has turned multiple industries upside down through the power of awesomeness.

Love. You know what’s funny about walking into an Apple Store? The people working there care. They don’t just “work at the Apple store” — they love Apple. Contrast that with the alienating, soul-crushing experience of trying to buy something at Best Buy — where salespeople attack you out of greed. (Or, as editor extraordinaire Sarah Green put it, “where you wander around for a full half-hour unable to find anyone to help you before you finally get the attention of some blue-shirted 12-year old who turns out to know nothing about the products she sells and ultimately end up committing hara-kiri with a Wii controller”). Their goal is to sell; the goal of Apple Store employees is simply to show off their awesomeness, and let you share it. Love for what we do is the basis of all real value creation.

Thick value. It’s the most hackneyed phrase in the corporate lexicon: adding value. Let’s face it: most value is an illusion. Nokia, Motorola, and Sony tried for a decade to “add value” to their phones — yet not a single feature did. Food producers and pharmaceutical companies claim they’re “adding value,” but mostly they’re just mega-marketing.

The vast majority of companies — in my research, greater than 95% — can only create what I have termed thin value. Thick value is real, meaningful, and sustainable. It happens by making people authentically better off — not merely by adding more bells and whistles that your boss might like, but that cause customers to roll their eyes.

Let’s summarize. What is awesomeness? Awesomeness happens when thick — real, meaningful — value is created by people who love what they do, added to insanely great stuff, and multiplied by communities who are delighted and inspired because they are authentically better off. That’s a better kind of innovation, built for 21st century economics.

I’ve talked to many boardrooms about awesomeness. Beancounters feel challenged and threatened by it, because it feels fuzzy and imprecise. Yet, it’s anything but. Gen M knows “awesomeness” when we see it — that’s why its part of our vernacular. It’s a precise concept, with meaning, depth, and resonance.

What makes some stuff awesome and other stuff merely (yawn) innovative? I’ve outlined my answers, but they’re far from the best, or even the only ones — so add your own thoughts in the comments.

You might be innovative — but are you awesome? For most, the answer is: no. Game over: in the 21st century, if you’re merely innovative, prepare to be disrupted by awesomeness.

Want to help kickstart awesomeness? The Manifesto is now a collaborative, open-source project, to which anyone can contribute. Please see this post for details. The Awesomeness Manifesto (