Deep Thoughts On on Creative Destructions:
Pros and Cons
Creative Destructions is an idea, a concept coined by Austrian-American economist and political scientist Joseph Schumpeter in his book “Capitalism, Socialism and Democracy.” Schumpeter’s theories revolve around the concept of competition and innovation being the chief contributing factors to economic growth. Creative Destruction, in essence, and in what is called a layman view, is when a new invention destroys what came before it. So, Schumpeter declared that “this process of Creative Destruction is the essential fact about capitalism.” And you know, the world is capitalistic.
Pros and Cons: Two Sides of the Same Coin
On the flip (positive) side, innovation from creative destruction can be a source of economic expansion resulting in a significant number of new jobs and technologies derived from new industries and even sub-industries. Progress of this nature has the ability to transform entire economies and improve standards of living.
Think of what the invention of the automobile did for transportation, commerce, jobs, and economic development: It created a plethora of new employment opportunities while allowing people to get where they needed to go faster than a horse-drawn carriage ever could.
Not to mention the other industries like oil, steel, roadway development, and automotive repair that were created or boosted because of this transportation advancement. In the next few years (say 10-15), fossils fuel will be history, oil party will be over, perhaps not as lucrative as it is today. Why? Creative Destruction as electric cars/vehicles are in high production capacities by nations that know what they’re doing. We call it effectiveness – doing the right thing, while other nations are pursuing things, animals, and people. They’re being dropped again in world civilization. Please pursue things that make for your future (visions), not shadows and darkness.
Although with good, usually comes bad. Consider the industries that have been substantially reduced or eliminated by Creative Destruction. For instance, let’s go USA, the agriculture industry used to comprise 41% of the U.S. civil workforce in 1900, but improvements produced in manufacturing by the Industrial Revolution reduced that figure to 3% by 1980. This caused a considerable number of low-skilled workers to be left unemployed and unqualified to work in the newer factory jobs.
This same scenario is playing out today with computers facilitating tasks once performed by people, which is phasing out opportunities in lower-skilled positions, sales, retail, manufacturing, and financial analysis positions, to name a few. Over 55% (unverified statistically) of the graduate workforce in spite of what they studied find their work inseparable from Information Technology. This makes those graduates that can’t switch unemployable.
See you in Part 2.
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