As such, they are the stuff of non-business. They are directed explicitly at contributing to well-being rather than undertaken in the myopic pursuit of profits, revenues, market share or other strategic objectives. On an economic Beaufort scale, with Schumpeter's destructive gale occupying the more tempestuous territory, they might best be classified as a gentle and benign breeze.

As such, maybe inevitably, their reach and effect are frequently moderate - sometimes even confined solely to the home. Take, for instance, an act as quotidian as producing a fine meal from inexpensive ingredients or transforming a wasteland into a garden.

More widely, though, common innovation is capable of addressing socio-economic issues that its business counterpart is either unable or unwilling to tackle. Examples include the use of microcredit and ultra-local currencies; online facilities that allow people to conduct their own repairs; and the part played by citizens and civic institutions in the regeneration of derelict areas that business, its own interests no longer served to its satisfaction, has deserted.

It might well be that the neatest articulation of common innovation is that it creates where there is nothing. By contrast, business innovation routinely destroys what is already there. Common innovation is therefore not just more compatible with the harmonious society: it actually plays an active role in it.

To better understand why this is so we need to compare the relatively linear process by which business innovation purportedly creates material wealth and well-being to the much more subtle process by which common innovation lends itself to the harmonious society.

The linear model dictates that education, science, the arts and other sectors can make a difference only if they are channeled into business. Business makes innovations using these "inputs"; these innovations enable a company to offer a better deal in terms of products and services; consumers benefit from consumption of these better deals; and well-being is thus created. Nothing else has meaning, so the argument goes, and nothing else matters.

By way of illustration, consider a project to enhance a rundown district. Economic analysis shows that natural environment helps attract start-up companies, yet the alarming implication is that in the absence of this effect - that is, if business is not attracted - such a scheme is devoid of merit.

This is no fantasy. Take the United Kingdom for example. In 2011 it was revealed that senior Conservative ministers in the Thatcher government during the 1980s had advocated the "managed decline" of the northwestern city of Liverpool: spending public money on such "stony ground", they advised, would be akin to "trying to make water flow uphill".

This is the very antithesis of the harmonious society, which demands a much less blinkered model of wealth creation - one that acknowledges the possibilities afforded by a far broader range of interactions. Education, science, the arts, the socio-economic environment, the natural environment, health, the marketplace, consumption, well-being, business - each of these, at least in principle, should link to all the others. Everything should be connected to everything else.

In a fully developed harmonious society every such linkage would both exist and, crucially, be positive. That, after all, is what harmony is about. Common innovation can create most of them; business innovation can create some of them, but they are often negative.

China could be forgiven, of course, for reminding us that business innovation has powered the extraordinary economic journey of the past 30 years and more. This much is undeniable, and it would be foolish to claim otherwise. Equally, it would be dangerously naive to intimate that those with limited material wealth could survive - less still thrive - by relying on common innovation alone. The inescapable fact is that there remain many things that only business innovation can achieve.

Yet to dismiss the value of common innovation out of hand is just as foolish. In a finite world that craves sustainability, with the distribution of wealth growing ever more inequitable and the shadow of "austerity" lengthening, common innovation is likely to have an ever-larger part to play. It deserves to be encouraged, nurtured and treated with respect.

John Ruskin, one of the great Victorian polymaths, could well have had the harmonious society in mind when he remarked: "There is no wealth but life." Sadly, history suggests the path of economic development inevitably leads to the rejection of this credo. It would be heartening - not to mention potentially pivotal - if China could somehow stay true to such a precious ideal and so avoid the fate of the West, where business was once society's servant but is now indisputably its master.

The author is emeritus professor of industrial economics at Nottingham University Business School and the author of Common Innovation: How We Create the Wealth of Nations, published by Edward Elgar. The views do not necessarily reflect those of China Daily.