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Embracing Creative Evolution

Paul Krugman expresses his dislike of the concept of “creative destruction” in this post on his blog.  He says:

“Jill Lepore has a great article in the New Yorker debunking the hyping of “disruptive innovation” as the key to success in business and everything else. It’s not a bah-humbug piece; it is instead a careful takedown, in which she goes back to the case studies supposedly showing the overwhelming importance of upstart innovators, and shows that what actually happened didn’t fit the script. Specifically, many of the “upstarts” were actually long-established firms, and more often than not the big payoffs went not to disruptive innovators but to firms that focused on incremental change and ordinary forms of efficiency and quality.

Andrew Leonard reports that Silicon Valley types are not pleased. You can understand why. But their annoyance also tells you why the whole disruptive innovation thing took off: it glamorizes business, it lets nerdy guys come across as bold heroes.”

I think Krugman overreaches a bit here.  The piece comes across as downplaying the importance of business and innovation and perhaps even being anti-business.  But I think he has a point that can be expressed more evenly.  You see, what businesses do is build on past creations.  It’s very rare to see an innovation that is totally disconnected from past production.  That is, there is very little genuine creation (as in, from nothing) occurring in the process of innovation.  It is really a process of creative evolution.  What most innovators do is specialize in something that exists and create ways to do it better.  So there isn’t any real “destruction” or “creation” there.  There is just an evolution of past production.

But this doesn’t mean we should downplay the importance of innovators.  It just reinforces the point that innovators don’t build everything on their own in some sort of Robinson Crusoe economy.  Innovators rely on many different elements within the economy to build their improved vision.  That’s a good thing.  But we need to keep it in the right perspective otherwise we might be inclined to put innovators on a pedestal as if they are an island disconnected from those who came before them and those who built the infrastructure within which they succeed.

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