Our innovation era: creative destruction or destructive creation- which?

I keep coming back to the dilemma often faced in innovation- do we practice “creative destruction” or “destructive creation?

We are entering some perilous times in climate change and what this will mean in destruction in what we know, what we value and what we are used to.

I can’t imagine when Joseph Schumpeter outlined his groundbreaking efforts for explaining “creative destruction” he or anyone else could imagine this being flipped around to what we are facing more of today, that of “destructive creation”. We live in a throwaway society, and simply this is not sustainable.

Schumpeter saw “creative destruction” as the renewing, through innovation, society’s dynamics that would lead to higher economic development and welfare levels. At the same time, recognizing that this destroyed a few of the incumbents to benefit many more newcomers and increase value creation for broader society.

Today we are in a destructive creations world.

Today it seems we are caught in the reverse of this- the process of “destructive creation”- where it benefits a few rather than the many. This sets out often to destroy or greatly diminish the usage value of existing products and services before it is optimal actually to do so, and in the process incurring often significant costs not taken into account at the time. These unforeseen issues have consequences that negatively affect parts of society not foreseen or contemplated at the time.

The shift has emphasized the role of destruction rather than creation in driving innovation activity. This is getting uncomfortable; innovation then becomes not so good for you, perhaps?

This is becoming the game for a few to make money, corner markets, dominate and want to achieve monopolistic positions, and not worry over the wealth creation aspects of creating jobs, building communities, and cherishing certain values.

We need to be on guard in understanding the fundamentals within innovation as it should advance for the good of society, not be actually working to its detriment.

Actually, who is benefiting from the distribution of new wealth? The developed world is seeking desperately ways to regain growth, but it needs to be more equitable, not in the hands of a few that determine our choices but increasingly seem unaccountable for their actions.

The obsession with innovation- myself included!

Presently our Governments are obsessed with innovation- it sometimes feels it is the only game in town for future growth. Let’s keep adding novelty and ever-increasing value to get our economies going seems to be the mantra.  The problem is we seem to be destroying more than we can build at present, yet a ‘few’ gain from these seeds of “destructive creation” while a majority don’t. We need to flip this back to “creative destruction”.

How much of a social cost are we prepared to pay? Sometime soon, this needs addressing.

Should all this societal destruction be laid at the door of innovation? We need to inquire about, to explain and understand these forces, both the positive and negative, far more to change our habits and obsessions to have the latest and greatest option and not simply keep the existing, as it is still adequate and does our jobs needed to be achieved.  You can get to a certain point where you hit innovation saturation. We will begin to reject it unless we see its value invested within our community, not in others far away or just for ourselves.

The replacement rate is speeding up.

The other part of “destructive creation” is the attention we do not pay to the replacement rate. The way we discard our mobile phones, cars, household goods and creative increasing ‘toxic’ waste has its destructive creation part. These were foreseen, even have been actively encouraged to promote our economic well being but are they

I know Apple is regarded as a beacon of success, but there is a darker side. High rates of innovation or product extension, often not truly needed, can be disruptive to the larger society as a whole. Many outsourced jobs are outsourced into low-cost environments, leading to jobless growth in the rest of the industry; it destroys the usage value (useful lifetime left) of existing products to benefit the few rather than the many.

Some might call this a “shutdown game”, establishing conditions that negatively affect the values of other products, or is that still called offensive marketing, knowing exactly what the customer needs? I’m not 100% convinced.

Shareholder value dominates far too much.

Shareholder value is our focus point, but what about the shutdowns, those old, empty, rusty buildings that seem to be increasing, not decreasing. We are faced more with de-industrialization issues than seeing re-industrialization coming from the present ‘destruction’ forces unleashed upon us all today.

What is the cost of disruption and destruction of whole communities in social costs, in our investments for the future when we can’t ‘feel’ or see the benefits of “creative destruction” emerging?

Many industries start out thinking they are on the path to “creative destruction”, but somewhere along the road got flipped into “destructive creation”. Often this was not the intended path, but it became the consequence. Adding more just reinforced the greater destruction leaving it less creative, except in pockets of expertise.

Pressures suddenly built. Competition fell away; they went into troughs of uninspiring innovation for some time. Consumer software upgrades come to mind here, killing off perfect software to force us into upgrading but actually pushing us to search for alternatives, killing off useful gained knowledge and continued utility. Where is the cross over point in “creative” and “destruction”?

The quicker we adapt, the sharper we suffer declines somewhere else.

We need to balance technological choices and social consequences- new gadgets vs decline in privacy, for example. Yet the total industry consequence of one party dominating in “destructive creation” is only seen that much later on when the total decline cannot be stopped.

It is often not one parties fault unless they are deliberate in their design. Still, we are losing the ability to understand all the consequences of decisions, with unforeseen knock-on consequences.

.For instance, if our banks don’t change as society perceives they should, and the policymakers seem unable to work through the complexity of this level of change. Society has two choices: remain with the present system where a few seem to gain over the majority, or seek out a change in the financial lending system, so society again puts back “creative” at the front of “destruction” to benefit the broader community.

Let’s be honest; the banking industry has not been so innovative in many ways besides enhancing wealth creation by using financial instruments or to sustain the existing ‘world order constantly’. Will an alternative to our existing financial system evolve and or disrupt, but at what destructive cost?

Disconnects are all around.
When you look around, there is a lot of seemingly partial and disconnected aspects to our advancement. Where are we in our debates on climate change, stem cell research, toxic chemicals, landfills and plenty more?

How will we manage the feeding of the world in years to come? How will we manage the old and sick? How will society re-integrate growing groups who are getting disenfranchised?

All of these can be destructive or built on constructive ways that ‘create’ orderly change. Yet, they seem bogged down in complexity, opposing forces, and we are not breaking through these in new order ways. We somehow must.

There are always contesting sides and consistent daily arguments from all sides in complex arguments about how the world would work and why their solution provides the answer. The problem is we simply don’t know. We seem to be losing comprehension of the bigger picture. I’m not sure when you try to describe the big picture, it really is so coherent, which is one of our big problems.

Issues are just far too complex.

We are facing more uncertainly and incoherence than ever. Should we call a moratorium on innovation, or should we focus only on just invention that brings significant value over the existing? Can we afford to?

What we need to do, is realize these times ahead are going to be radically different.  We need to reawaken our imaginations, think deeply about our values, and then make lasting changes in how we consume.

Then innovation can perhaps return to being context-specific, working in positive ways to improve society as a whole and not be used for a selected few.

All I hope is it will let us ensure we put the emphasis back far more on the “creative” innovation part and not the ‘destructive’ nature we have been moving towards recently.

 

*I have written previously about these two different destructions and much of the body of this post is based on that one, but updated.

 

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