We generally think of innovation, especially technological innovation, as socially and politically neutral, but this is not the case. Disruptive innovation in particular is subversive in the sense that it overturns the established order and accepted values. It drives democratic change, which explains why it is important and why it is fiercely resisted.
In his book Capitalism, Socialism and Democracy, economist Joseph Schumpeter famously described the capitalist economic process as one of “creative destruction,” in which the new is created by destroying, at least in part, the old. This process is systemic; it is not just about companies being replaced by others; it happens at the level of an entire ecosystem. It also affects the way we see the world. In this sense, we talk about disruption because there is a discontinuity with the past. Disruptive innovation is a source of renewal of the system because it undermines rents, whether industrial, social or political, and because it constantly opens up the game to new players. Specifically, its impact is threefold: it promotes new industry leaders, it makes technology accessible to a larger number of people, and it offers opportunity to outsiders.
The three democratic effects of disruptive innovation
The first democratic impact of disruptive innovation is that it promotes new industry leaders. In his work on the subject, the American researcher Clayton Christensen observed that continuous innovation favors incumbents: thanks to it, they improve their performance and thus raise the barriers to entry for new players. But in the event of disruption, industry leaders collapse and are replaced by new entrants who take their place. These new entrants are usually outsiders, newcomers. In other words, disruption changes the established industrial order. In less than fifteen years, Thomas Edison replaced the gas lighting industry that had dominated the sector for over fifty years. Netflix replaced Blockbuster. Typewriter makers did not become computer makers.
The second democratic effect of disruptive innovation is that it makes technology accessible to more people. Schumpeter wrote about this: “Queen Elizabeth owned silk stockings. The capitalist achievement does not generally consist in making more silk stockings available to queens, but in making them available to workers in return for a constant reduction in the amount of effort (…)”. Making things more accessible means making them easier and cheaper. Before Henry Ford, the automobile was a complex luxury product. In 1908, with the Ford T, he introduced a car that was easy to drive at a third of the price. Technology was democratized. Disruption is what makes it possible for anyone to make a video with a phone, whereas thirty years ago you would have had to rent a studio with a crew to do the same thing. Chris Anderson, author of Makers, a book about the 3D printing revolution, noted, “Revolutionary change happens when industries are democratized, when they are taken out of the exclusive domain of corporations, governments, and institutions and put into the hands of ordinary people. This democratization reduces the need for experts to perform a given task: you no longer need a video technician to make a movie, you no longer need a doctor to take a pregnancy test. You no longer need to be chaperoned.
The third democratic impact of disruptive innovation is that it is often driven by individuals outside the established system. Disruption is often their only chance to succeed. The Industrial Revolution was born not within the academic, economic, or social elite of the time, but outside of it. James Watt, co-inventor of the steam engine, came from a poor family. By following the established rules, outsiders have no chance. Disruptive innovation is one of the ways our system fulfills the promise of the Enlightenment that an individual’s place in society will no longer depend on birth or status, but on talent and hard work, regardless of birth.
The Resistance of the Established Order
In this process of creative destruction, it is not surprising that what is threatened with destruction, i.e. the established order, tries to defend itself. An unlikely and heterogeneous coalition is formed. It will include the clergy and the professors of morality, of course, but also the leaders of the current industries that are under threat. This coalition will try to block the disruption under various pretexts. It will try to use the moral argument (video games corrupt youth), the health risk argument (GMOs are dangerous), and now the planet argument (Amazon’s carbon footprint). It will attack the intuitu personae of entrepreneurs, accusing them of personal failings and of having the darkest of intentions (cf. the current Elon Musk smear shows). While hiding behind the defense of morality and the general interest, these approaches really have only one goal: to protect the elite from the effects of the current disruption. They are deeply conservative. More specifically, the socio-political elite wants to prevent entrepreneurship from becoming a means of social advancement that competes with those it controls (essentially higher education). This is one of the reasons why innovation and entrepreneurs are so denigrated in practice, behind a cloak of good words, and why the current elite, if it does not block them, at least tries to control them by subjecting them to imperatives defined by it (“innovation for good”).
Skin in the game
In sum, disruptive innovation drives democratic change by promoting new leaders, making technology accessible to a wider range of people, and opening up opportunities for individuals outside the established system. This explains the established order’s resistance to disruption and the motivations behind it.
The next time you hear an expert waxing lyrical about the dangers of this or that innovation, don’t be fooled; ask yourself what he or she has to lose from its success. Because behind the moral indignation, the ethical protest and the appeal to the common good often lies the defense of one’s own self-interest and the fear of a competing elite.
To read more on the topic, see my previous article: How innovators battle entrenched mental models. Lessons from Thomas Edison’s success.
🇫🇷 French version of this article here.