Financial innovation can be an important contributor to economic growth, inclusion, and prosperity. This HBR article discusses how to spot potentially viable financial innovations and a setting that encourages companies and investors to use financial products responsibly.

U.S. faces no challenge more urgent than reviving its economic dynamism. Nobel Laureate Edmund Phelps and Leo Tilman argue in HBR that business innovation should be declared a public policy objective. Deficiencies of the current financial system warrant the creation of a new institution that would invest in and lend to innovative projects.

Response to competitive and earnings pressures speaks volumes about a company’s financial and cultural DNA. Some firms respond to pressures by blindly taking on more risk. Others embark on business model transformations that leverage their brand and core competencies to deliver sustainable performance. AllianceBernsetein seems to be on the right path.

Many believe that in response to the financial crisis, we need better regulation – and more of it. Unfortunately, regulation is unlikely to address a fundamental behavioral dynamic at play that leads to bad decisions and value destruction. A fundamental reform of how corporate executives shape strategic vision and use risk management is needed.

Multiple rounds of job cuts at UBS and its exit from important businesses pose sharp contract to actions of Blackstone and others. The concept of a static business model helps interpret these behaviors and their potential impact on future profitability.