Creative Destruction

My recent encounter with Dr Ashford's (from MIT) lectures about Joseph Schumpeter's "creative destruction" has left an indelible impression on the way I see technologies.

Wherever and whenever I see a new technology, I am always thinking about the potential displacement of an old technology that once thrived in the yesteryears. Linking this 65 year-old thinking with the things that we encounter daily makes classroom learning extremely interesting and fun.

You probably thought what the heck have I gone wrong now, posting some academic terminology in the blog?! You see, it's not at all academic but something very real happening in our society. It's just that we seldom care to find out that there's a term to it.

So what is creative destruction? As Schumpeter put it, creative destruction is the process of transformation that accompanies radical innovation. In my course, we link it to the mechanism of sustainability. Disruptive technologies are leading new and more effective solutions to today's problems and displacing old and archaic technologies of yesteryears.

Let me draw you to some examples:

1. Internet /email is a disruptive technology to Pos Malaysia's snail mail.
2. Skype/ VOIP is a disruptive technology to Telekom Malaysia or your Maxis bills.
3. MP3 is a disruptive technology to CDs; or should I say piracy.
4. Digital camera is a disruptive technology to film cameras.

I have also noticed very obvious trends coming up in Malaysia which appear to be a form of disruptive technology in disguise to replacing other archaic industries. It's really scary if you put this disruptive technology and creative destruction into perspective and see how things are slowly unfolding in Malaysia which would affect you and I later. Dr Ashford could not emphasis more that the only way to survive is to innovate!

1. GPS is a disruptive technology to our land surveyors? Why would anyone need to hire land surveyors in future when Civil Engineers only need to have a GPS device and mark out the areas for construction?

2. Hypermarkets are disruptive business innovation to our local grocery stores or roti-man roaming on the neighbourhood streets? Think about the last time you bought your bottle of Coca-Cola or Lee Kum Kee oyster sauce from a local grocer or roti from a roti-man?

3. No-frills airlines are a disruptive business innovation to our full service airlines. Look at the effects it had on MAS and upside potential to our KLIA Airports.

4. Online recruiting is a disruptive business innovation to our office-based recruitment agencies.

5. Colour or photo printers are a disruptive technology to Kodak or Fujifilm's printing shops?


Disruptive technologies have over again made many big companies pale into insignificance once their technology is displaced. These are called the dinosaur companies, which I think is a pretty good term coined for this technological displacement. I just shudder to think how is our generation going to explain to our future generations what/who is a roti-man or why do we have to pay for drinks in plane, or why has Kodak changed its model from a photo company to a benefit-oriented company with a tagline "Kodak Moments"?

If you find this interesting, this is one of those lectures that we had in Cambridge. And if I may put a marketing pitch to it, that's one small part of what we learnt in Engineering for Sustainable Development in Cambridge; extremely practical, mentally stimulating and absolutely thought provoking!

If you've just gotten too excited with this topic, may I lead you to argue on this point:

Is money a creative destruction to human ethics, conscience, feelings and soul?