Creative destruction means opportunity, December 16, 2007, 2D.

When I was a kid, my father worked in New York City and we lived in Connecticut. I remember my grandparents coming to visit us from their home in New Orleans each summer for two weeks.  They made their cross-country trip each year by train—which even in the 1970s seemed like an outdated method of transportation.

While still common in many parts of the world, the popularity of long-distance train travel in our country has become negligible compared to what is was a century ago.  The rise of the automobile and highway systems, and the birth and development of airline transportation relegated the train-travel industry to an almost forgotten mode of transportation—just as trains did to horse and stagecoach travel in earlier times.

The forces that propelled interest in automobile and airline travel over railroad travel caused many railroad-related jobs to become irrelevant and unnecessary.   Many jobs and industries ceased to exist when the new, superior, and preferred types of transportation came into being.  The lost railroad-related jobs were replaced in the economy by countless jobs in the automobile, highway, and airlines industries.  New technologies, jobs, and industries supplanted old technologies, jobs, and industries.

This replacement process is not limited to the transportation industries.   The medical field is continually announcing new procedures, treatments, and ways to prevent and remedy diseases and afflictions.   Scientists and researchers are constantly discovering new things that improve the ways we live and work—in agriculture, engineering, and through pure and applied research in chemistry, biology, and physics. Advances in electronics and computer technology have given us countless new products that radically replaced old products and equipment—from more powerful personal computers to bigger televisions to smaller cell phones.  Each radical product advancement brings with it new technologies and new jobs.  Old technologies, jobs, and products are lost in the economy.  

Economists refer to the process of new and better products, ideas, and innovations replacing old ones as “creative destruction.”  New innovations bring with them new sets of required skills, knowledge, and abilities of workers.  The jobs related to the old products become irrelevant and new jobs become in demand.   Our capitalistic economy is one that encourages and rewards the invention and creation of new and better things.  Entrepreneurs and innovative companies constantly look to find and develop the next “big thing” for the market and to make themselves and their companies wealthy in the process.  Because “new and better” is the norm of the market, the required skills, knowledge, and abilities of workers in the marketplace are also constantly changing. 

New developments and innovations mean new opportunities for innovative companies and workers.  Companies and workers who possess knowledge of outdated technologies and the skills needed to produce unwanted offerings will find themselves irrelevant in the marketplace.  Individuals and organizations must constantly keep their knowledge and skills up-to-date with the market to make themselves relevant in the future—through continuous training, development, and education, and strong senses of curiosity and personal discovery.