Change is the essence of capitalism.
Back in 1942, Joseph Schumpeter popularised the idea that creative destruction of economies, and/or sectors of economies, was critical to prosperity and growth. He argued that progress in a capitalist system relied on the destruction of an existing economic order to make room for the next. Capitalism was, essentially, an evolutionary process of continuous innovation.
Agents of this creative destruction range from the opening up of new markets to revolutionary technologies like steam engines, electricity, the combustion engine, and the internet. And let’s not forget the rise of the robot. (They’re comin’, look busy!)
Right now, creative destruction is everywhere you look. Take traditional retail. Remember Borders or the clothing retailer Fletcher Jones? They’ve joined the long list of ossified “once-weres” now gone while the likes of David Jones and Myer continue to struggle to find a reason for being, let alone profiting.
As for the future of banking and money, well that’s a post by itself. Suffice to say the banking business may have already peaked. And cash money could well become an anomaly.
Then there’s the rise of the robots. For decades now robots have fascinated writers, poets and punters, who have used them to explore contemporary anxieties about the future of technology. Robots added more than a touch of mystery to the unpredictable or even unfathomable future for humans, and a palpable fear that, one day, they’ll be smarter than us – dubbed ‘the Singularity’ by legendary futurist, Ray Kurzweil. Jobs most likely to be replaced by robots are in sales, manufacturing, transport, office support, service and extraction. Amazon has automated its pack-and-send process with robots so it can send out more parcels but employ fewer workers. Google owns a string of robot start-ups, and its driverless car is set to replace millions of people who make a living behind the wheel. Crop sprayers and chopper pilots beware! Drones (yep they’re robots) will be spraying crops and snapping everything from surfing to cityscapes. Major advances in the use of robots in surgery also mean smaller incisions, less pain and quicker healing time. So over the next few years expect to hear the term, ‘cyber-structural unemployment’ and it won’t be a cyclical downturn, but structural and permanent as more jobs are lost to robots.
Right now capital is as fluid as it’s ever been, moving away from “old models” and into the next wave. This is the classic creative destruction posited by Joseph Schumpeter. Old, inefficient businesses outsmarted by new, better, more innovative business models, unshackled from legacy technology.
Change remains our only constant. How will you deal with it when it comes to your workplace?