Creative Destruction

Creative destruction essentially means an existing industry is being destroyed by a new one based on a new technology. This phenomenon has been occurring since old times, but much more pronounced in modern days. For instance, the invention of the rifle or machine gun have largely destroyed the industry of sword or spear making. Likewise, the invention of the steam or gasoline engine has rendered obsolete the muscle power of horses and humans.

The dramatic changes in modern life are largely the result of the creative destruction caused by computers. The new information-processing technology brings both benefits and miseries all over the world. Those who adapt quickly will reap the benefits. Those who are slow to react will likely lose out because of the closing of outdated industries or the outsourcing of existing ones. Can we stop creative destruction? No, unless we stop humans from thinking. Technological inventions originate from the thinking process. The consequence is always a mixture of good and bad. What we can do is maximizing the good and minimizing the bad.

In a relatively short period spanning four decades, we have seen the following dramatic upheavals:

In the 1980s, the personal computer began replacing the mainframe, whose usage is now limited to basic research and commercial functions involving very large-scale data processing.

At the same time, the performance of the computer chip has skyrocketed, while its size and price continue to decrease. Thus personal computers become increasingly powerful but less costly, hence more people can afford them. Among all the losing industries since the advent of the personal computer, the typewriter is the most obvious.

In the 1990’s, the Internet began connecting personal computers together, further multiplying their performance and reach. This has empowered billions of people worldwide for whatever they want to pursue. The most obvious casualties are mails sent through the post office, newspapers and magazines.

In the 2000’s, Apple pioneered the concept of making the personal computer the “digital hub” for various consumer products such as record/CD players, tape recorders, mobile phones, and cameras. The personal computer provides the extra advantage for uploading, processing and storing whatever data being used on the digital consumer devices.

The iPod has revolutionized the way we consume music. Facing the proliferation of illegal downloads, the music industry is forced to accept the virtual iTunes stores that provide at least some revenues to compensate for the lost sales of albums and CDs. For the consumers, they can now buy selected songs on iTunes rather than an album or CD containing “filler” songs that they don’t want. In effect, the iPod has outdated the albums, CDs and tape recorders.

The cell phone combines three technologies into one: mobile, touch screen, and camera. Mobile technology is obviously the wave of the future that is making the telephone land line obsolete. Incorporating a camera into the cell phone increases the portability of the camera and allows the photos or videos to be processed and stored by your home computer. The touch screen revolutionizes human interfacing with the device.

The tablet is an extension of the touch-screen technology. It performs close to a personal computer without a keyboard and mouse. Due to its smaller size and weight, the tablet serves as a platform for digital books, newspapers, magazines, and videos too. This adds further pressure to the publishing and printing industries.

The latest technology happening now is the Cloud. It reduces the central role of the personal computer in content management. The Cloud enables data and application programs in your personal computer or other devices to be stored in secured servers managed by a third party. The data and programs are retrieved quickly and wirelessly anywhere from the Cloud, to be processed by your computer or other devices whenever needed.

The next revolution will probably occur in television. Besides the dramatic changes in thickness, weight and visual effects, can you guess what will be coming?

September 2013

This entry was posted in 21st Century, Business/Investment, Game Changer, Inspiration. Bookmark the permalink.

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