Disruptive innovation drives economic development
October 04, 2018 by Denis Pombriant
The ideas in The Age of Sustainability are simple. Technology inventions drive economic advances and we’ve seen this play out repeatedly since the Industrial Revolution. Someone invents a low cost and efficient way to make steel and suddenly there are many new products based on it. Railroads bloom causing more commerce and people travel far from home spawning a need for food and accommodations. We saw this pattern beginning with the textile industry and continuing through steel, railroads, electricity, vacuum tubes and computers.
Very often inventions follow a logical course of continuous innovation, automation and price reductions. But as prices fall, the original invention slows as a driving force in the economy. At that point, massive shifts happen and newer inventions take over driving economic progress though the new inventions might not look anything like the older ones.
We’re at that point now. Computing and telecommunications are commoditizing to the point where they are still very important to the economy but they don’t drive economy-wide upticks in wages or even GDP.
Right on schedule, a new set of innovations in clean energy and resource management are coming to market. There are huge economic opportunities in new or revamped industries to consider. For instance, renewables form an increasing part of power delivery and there are new jobs in construction for wind and solar farms, new transmission lines and delivery systems.
New inventions spawn additional inventions too. Consider this: the rise of electric vehicles will drive a massive construction boom to deploy charging stations at logical places like parking lots and home garages. Charging cars will be a profitable business and charging lots will need to hire people to manage them.
Of course, some jobs might wane too. But these changes are relatively slow and enable people time to react. The good news: many of the new jobs don’t require a college degree making them ideal for a large portion of the workforce.
Abundant renewable electricity will also enable new ways to think about older industries. For instance, it will make some aspects of environmental cleanup more realistic to consider and it can make new forms of recycling practical. For example, there are multiple uses for used plastic from things like containers if we can collect them before they’re distributed into the environment.
So the transition from one economic era to another should be seen as a hopeful time. One that enables us to invent the future and reinvent ourselves to take advantage of something better.