I keep coming back to the dilemma often faced in innovation–do we practice “creative destruction” or “destructive creation? Is one a form of the other?

We are entering some perilous times in regards to climate change, which will likely alter 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” that he, or anyone else, could imagine this theory being flipped to the “destructive creation” we are experiencing today. We live in a throwaway society, and this is simply not sustainable.

Schumpeter saw “creative destruction” as renewing, through innovation, the dynamics of society to create higher economic development. At the same time, recognising 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 creation” 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 emphasised the role of destruction rather than creation in driving innovation activity. This creates an attitude that innovation is perhaps not necessary. 

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 desperately seeking ways to regain growth, but it needs to be more equitable, not in the hands of a few that determine our choices but not held accountable for their actions.

The obsession with innovation- myself included!

Presently, it feels we are obsessed with innovation–like it’s 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? 

Should all this societal destruction be laid at the door of innovation? We need to inquire, explain, and understand these forces, both the positive and negative, in order to change our habits and obsessions to have the latest and greatest option. 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 lack of attention to the replacement rate. The way we discard our mobile phones, cars, household goods, and other waste is a demonstration of our destructive nature. 

Apple is regarded as a beacon of success, but there is a darker side to their business. High rates of innovation or product extension that are not truly needed can be disruptive to the larger society as a whole. Many jobs are outsourced into lower middle-income countries with low costs of labour, leading to stagnant growth in the rest of the industry. Apple is also known for destroying the usage value (useful lifetime left) of existing products in order to benefit their bottom line.

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–all those old, empty buildings that only seem to be increasing, not decreasing. Right now, we are faced more with de-industrialisation issues rather than seeing re-industrialisation forces at work. 

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 a greater destruction.

Pressures suddenly build. Competition falls away and they enter 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 crossover point between “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 versus a decline in privacy, for example. Yet the total industry consequence of one party dominating in “destructive creation” is only observed much later, when the total decline cannot be stopped.

It is often not one party’s 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 policymakers are unable to work through the complexity of this 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. The banking industry has not been very innovative, except to enhance wealth creation and sustain the existing order. An alternative to our existing financial system will certainly evolve and or disrupt our world, but at what destructive cost?

Disconnects are all around.
When you look around, there are a lot of seemingly partial and disconnected aspects to our advancement. Where are we in our debates on climate change, stem cell research, 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 instead build on constructive ways that ‘create’ orderly change. Yet they seem bogged down in complexity and opposing forces, and we are not breaking through. We somehow must.

There are always contesting sides and consistent daily arguments, from all sides, in complex arguments about how the world should work and why their solution provides the answer. The problem is that we simply don’t know. We seem to be losing comprehension of the bigger picture. 

Issues are just far too complex.

We are facing more uncertainty than ever before. Should we call a moratorium on innovation, or should we focus only on inventions that bring significant value? Can we afford to?

What we need to do is realise these times ahead are going to be very different, and radically so. We need to reawaken our imaginations and think deeply about our values, in order to create lasting changes in how we consume.

Then, innovation will be able to return to a context-specific state, working in positive ways to improve society as a whole, rather than being used only for a selected few.

This will ensure we put the emphasis back far more on creative innovation, and not the destructive nature we have been moving towards recently.