The Real Math of Innovation: How Finance Shapes Innovation and Value with Edward Podolski

What really drives innovation, and why has it slowed down since the 20th century began?In this insightful interview, Professor Edward Podolsky and Alena Bennett explore the complex relationship between finance, governance, innovation, and value creation. They discuss how mathematical models, narratives, and organisational structures influence decision-making and the importance of humility and context in understanding economic systems.Edward Podolski is a Professor of Finance and Head of the Finance Department at RMIT’s School of Economics, Finance and Marketing, and an Associate Editor for the Australian Journal of Management. He was Associate Professor at Deakin Business School, where he held leadership roles including Director of Research (Finance) and HDR Director for the Faculty of Business and Law.Edward’s research examines how organisational structures and governance shape a firm’s ability to generate value, with a particular focus on the conditions that enable—or inhibit—corporate innovation. He studies how shareholders influence executive strategic decisions, how managerial behavioural tendencies affect resource allocation, and how organisations can design mechanisms that harness these tendencies to support breakthrough thinking and long-run value creation.His findings have appeared in top journals like The Accounting Review and JFQA, and been featured in many outlets and publications; from Bloomberg, to Harvard Business Review, to ABC Radio National as well as many others.To reach out to Edward:https://www.rmit.edu.au/profiles/p/edward-podolskiFor more information on Alena and the Real Math of Business:https://www.alenabennett.com.au/https://www.linkedin.com/in/alenabennett/Chapters00:00 Thought Provoking Question02:53 Chat with Prof. Edward Podolski04:11 Exploring Corporate Money Mindset05:17 Journey into Academia and Finance08:52 Understanding Money as a Proxy for Value14:04 The Complexity of Metrics and Tools15:44 Engagement in Economics Education24:22 Governance Structures and Value Creation25:46 The Balance of People and Math in Business32:29 Narratives vs. Numbers in Investment Decisions39:09 The Decline of Productivity Growth41:46 The Role of Finance in Innovation45:47 Quantifying Innovation and Its Challenges50:12 Designing Structures for Innovation53:59 The Unintended Consequences of Policy58:16 The Complexity of Innovation and Finance01:05:09 Building Trust in Leadership