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What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
What Is Creative Destruction?
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What Is Creative Destruction?

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A brief introduction to creative destruction.

A brief introduction to creative destruction.

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  • 1. What isCreative Destruction?
  • 2. Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  • 3. The value of theold is destroyedby the new.
  • 4. The value of old technologies…
  • 5. … is destroyed by new technologies
  • 6. You know the song ”Video killed the radio star”? That’s Creative Destruction!
  • 7. The term CreativeDestructionwas used by JosephSchumpeter,an Austrian economist.
  • 8. To Schumpeter capitalism leads to eternal structural changes in firms, industries and economies. And he argued that Innovation is what drives this process…
  • 9. Quote Schumpeter:”In capitalist reality … it is notthat kind of competition(price) which counts but thecompetition from the…
  • 10. … the new commodity…
  • 11. … the new technology…
  • 12. … The new source of supply…
  • 13. …the new type of organization…
  • 14. - Competition which … strikes …existing firm … at their foundationsand their very lives…
  • 15. … this kind of competition is … much more effective that the other … and [is] the powerful lever that in the long run expands output” (End of long quote)Old and New computer Performance? Resources?
  • 16. Quote Schumpeter:”A railroad through new country,i.e., country not yet served byrailroads, as soon as it gets intoworking order upsets all conditionsof location, all cost calculations, allproduction functions within itsradius of influence; and hardly any’ways of doing things’ which havebeen optimal remain so afterward”.
  • 17. Why does it look like this along a smallcountry road in Alabama?
  • 18. If a new highway (an innovation) is builtnext to the country road, noone’s goingto drive on the old road…
  • 19. … The value of the old isdestroyed by the new creation…
  • 20. Here’s another example…
  • 21. Well, actually it is not!The photo is taken in New Orleansafter the terrible Hurricane Katrina…
  • 22. The views are terrible and strikingly similar!Innovations can create the samekind of views as a hurricane disaster…
  • 23. And now a little game…The next slide contains 4 photos2 are from Hurricane New Orleans 2 are from old country roads Guess which ones are from New Orleans!
  • 24. Don’tcheat =)
  • 25. Tricky?Here’s theanswer…
  • 26. TENNESSEE NEW ORLEANS COUNTRY ROAD NEW ORLEANS ALABAMA COUNTRY ROAD Amazing how hard it is to tell the difference!Innovation is really about Creative Destruction!
  • 27. Yesterday’s and today’s capitalist economy isall about Innovation and Creative Destruction.
  • 28. Innovation was what drove the 19th century economy…The telegraph Railway and the steam engine Iron and steelNew energy (coal)
  • 29. … And it drives today’s global economy as well Oil The container The transistor Plast
  • 30. ”From the steam engine to the search engine”
  • 31. Surviving Creative Destruction is a challenge for firms…
  • 32. … Surviving Creative Destruction isa challenge for industries…
  • 33. …a challenge for societies
  • 34. It’s a challenge for people… The tractor innovation destroyed the peasant’s job
  • 35. Other innovations create new jobssomewhere else in the economy…
  • 36. So, Innovation and Creative Destruction drive structural change in societyShare of Swedish population working in agriculture, industry and services over time.
  • 37. Summing it up…Innovations Destroy value at one place, and Create a larger economic value somewhere else.
  • 38. Image attributionshttp://www.flickr.com/photos/psd/40890499/http://www.flickr.com/photos/8401248@N04/2480947481/http://www.flickr.com/photos/45097561@N00/2719658555/http://www.flickr.com/photos/mikebaird/2931160632/http://www.flickr.com/photos/urbangarden/336062325/http://www.flickr.com/photos/lexrex/193012741/http://www.flickr.com/photos/davipt/299545533/http://www.flickr.com/photos/boelaars/1020257996/http://www.flickr.com/photos/freewine/594751479/http://www.flickr.com/photos/germanium/1370966194/http://www.flickr.com/photos/seeingthings/301095573/http://www.flickr.com/photos/keso/108805307/http://www.flickr.com/photos/digitalparadox/171660308/http://www.flickr.com/photos/7175652@N02/2309545221/http://www.flickr.com/photos/pathenson/2170695936/http://www.flickr.com/photos/splat/456591147/http://www.flickr.com/photos/enigmatic/342506270/
  • 39. Find out more:www.christiansandstrom.org

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