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Creative destruction of jobs

  • Adam WATSON BROWN profile
    Adam WATSON BROWN
    2 February 2016 - updated 4 years ago
  • 2 comments
    Total votes: 1

A central debate behind disruptive innovation and the forces of creative destruction unleashed by new technologies is on employment. What is the impact on jobs? Factory jobs have fallen in Europe over the past 40 years, thanks to offshoring and substitution by capital of labour. The share of wages in the economy has fallen, the so called "Hourglass economy" syndrome. The problem is not just European, as the USA has experienced the same decline. Is this a permanent change or temporary? Opinion is divided. The two sides can be characterised by the optimists – such as Andrew Haldane of the Bank of England – whose recent talk to the UK Trades Union Congress argued that the labour market would compensate for lost jobs with new ones in due course - to pessimists such as Lawrence H. Summers who argue that first world economies are going through secular stagnation, lower productivity and diminished innovation. Futurists and MIT faculty such as Erik Brynjolfsson argue that up to 50% of all jobs won't exist in n years' time. The World Economic Forum is keen to initiate Industry 4.0, a more positive reading of the issue.

Much follows from who is right – and when they are right in electoral terms. If economies don't share the rewards of economic activity, then there will be strong pressure for redistribution as proposed by Thomas Piketty, sceptical that the "caprices of technology" will end in rational or just outcomes. Also notable is a renewed interest in the "basic income" concept, to be guaranteed by the state to all citizens. This has had supporters over the years from economists of both the right and the left. Commentators also mention new concepts such as pre-distribution, replacing redistribution.

How far innovation leads to new jobs will therefore affect much wider issues in society, of which taxation is an obvious one. But what lies beyond?

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Paul Hobcraft's picture
Paul Hobcraft,
12/04/2016 14:07

We have been entering some perilous times recently and I can’t imagine when Joseph Schrumpeter outlined his groundbreaking efforts for explaining “creative destruction” he or anyone else, could image this being flipped around to what we are facing more today, that of “destructive creation”.

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

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 to actually 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 placed the emphasis on 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, to corner markets, to dominate and wanting to achieve monopolistic positions and not so worried over the wealth creation aspects of creating jobs, building communities, cherishing certain values, giving back into the broader community, apart from 'remote' donations. Where is the first hand commitment and real identification?

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, which seems so much the case.

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.

We are facing more uncertainly and incoherence than ever. Should we call a moratorium on innovation or is it just invention? Can we afford too? How do we differentiate between that that is more destructive than helpful and advancing to us as a broad community and not to certain individuals or selective parties, being remote from what they are actually unleashing in the name of advancement?

It is interesting observation, we do seem to have moved back to enjoy narratives, myths and cult stories more than in the past, is that a yearning for something from the past in our lives where one person tells a story that just made sense as it seemed full of wisdom and real good for many?

I think we, as humans, have been reduced down and until we can regain mastery over the complex, needing a structural and societal adjustment or we otherwise will continue to suffer the consequences of “destructive creation.” I think we might start yearning for the good old days of just “creative destruction.” Is technology leading and we are lagging? Can we regain control?

So some commentators have suggested that we have to reawaken our imaginations and really think deeply about our values. Then innovation can perhaps return to being context-specific working in positive enhancing 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.

Total votes: 4
Paul Hobcraft's picture
Paul Hobcraft,
12/04/2016 13:51

I wrote a post some time back, if you care to read it the link is here. It was wondering what is in our future life- disruption, destruction and digital are all combining or si it seems. It makes me uncomfortable or should it? What can counter this?
https://paul4innovating.com/2015/05/09/disruption-destruction-digital-ou...

It ended with these thoughts

We all need to keep moving

We are all being warned to “keep moving”. I often feel we have become like our forefathers, a nomadic tribe that is both physically being forced to move, to hunt the jobs that allow us to live and to keep applying knowledge found through the internet to survive and thrive.

So it does seem we are in the “disruptive era” but I prefer to think this is more a ‘transformation’ period, often uncomfortable since much of its boundaries and borders are not clear. It is fluid and we need to adapt to this flow until the disruptive events subside into something we can learn to accommodate and manage. It is transforming much of what we know, our technology and all that comes with it.

Yet, we need to equip ourselves to be empowered in this transition, we need to keep constantly engaged and attempt to figure out what’s next or at least go with the flow. We need to keep our focus on outcomes and not get caught up in the inputs or the process.

The return of the hunter gatherers.

Hunting and gathering has suddenly returned as an increasingly important part of our lives, it is changing us back. Nomadic hunter-gatherer tribes follow the animals they hunt; we need to follow the jobs and opportunities. We are perhaps facing the same constant transition, so it is not a disease but a symptom of what is needed in our future lives, at least for the foreseeable future.

We need to embrace transition as the future way of living

My need, and I think yours as well, is to stay alert and be aware. In many of our jobs there must be this chance to evolve, or we should move on. I don’t feel we can stand still long enough; we need to chance it far more by taking a number of different risks. Keep moving is part of our futures.

I believe we do become far more empowered in any transition if we chose to actually make the change, instead of rejecting it on the premise that there is no need for movement. There is no hiding place it seems.

I just feel far better ‘in transition’ it is that feeling that I am still pushing forward, what I do is in my hands than the alternative, when that moment that I have stopped I am being threatened with disruption and destruction. Both are a little scary and will get exhausting. Extinction is very threatening, oh just screw it,bring it on… whoopee”.

Total votes: 4