Displacement of the Working Class Though Disruptive Innovation

I have always been a tinkerer. I’ve spent most of my life fascinated by gadgets, and if I wasn’t experimenting with the latest gadgets, I was off reading the latest issue of Popular Mechanics. Unlike most people, I see the world as a collection of gears and levers; every turn made by a gear is a catalyst for another gear to turn. During my sophomore year of college, I took my first business course, and I was introduced to the concept of Disruptive Innovation. The term disruptive innovation is defined as technology or innovation that displaces an existing way of doing things or completely revolutionizes an industry. I immediately became fascinated with this term because it was something that I was seeing happening in front of me as the gears of the world were turning. Disruptive technology was ever-present in the lives of millennials, but nobody was familiar with the concept of disruptive innovation until recently; this term was first coined in 1997 in the book titled The Innovator’s Dilemma, written by professor Clayton Christensen of Harvard University. Notably, my interest in this topic was driven by the desire to see the outcome of the gears turning ever faster. However, many economists have a lingering fear that advancements in technology may lead to job loss.

A Technological Dilemma

In The Innovator’s Dilemma, Christensen describes innovation as either being sustaining or disruptive. Unlike disruptive innovation, sustaining innovation maintains the current system of doing things and improves upon it. For the most part of history, businesses have relied on sustaining technology and only ever making slight improvement on their existing products and services. However, in the past 3 decades, technology has made huge strides, and disruptive innovation has become the norm; this type of technology has turned the business world into a highly competitive and hostile environment, and many corporations have gone bankrupt in lieu of this new trend in technology. Moreover, the rate of technological advancements is exponentially increasing as our computer processing power doubles every 2 years, according to Moore’s Law. Because of the correlation between technological advancements and disruptive innovation, Moore’s Law implies that disruptive technology will only become more commonplace with time. Indeed, millennials are a generation that turned the earth upside down while striving for change and innovation. Millennials were there when the world wide web was born, when media became digitized, when Google created its search engine, and when the first smartphone was released. Perhaps, the greatest achievement of modern day times has been the evolution of artificial intelligence. The future may look brighter for innovation and technology, but this technology is a Trojan horse that will lead to social economic disparity and severely high unemployment rates.

Who Will Lose?

A prime example of the consequences of disruptive innovation on the working class is the rapid innovation of AI (Artificial Intelligence) and robotics that has displaced thousands of workers. Scientists believe that it may someday be possible for many of the world’s high-end jobs to be performed by robots. In the article “The End of Work?” of The New York Times, Ji Shisan writes, “But I think it’s important to understand why the job market will change. There have been important advances in AI in recent years, especially in the area known as deep learning. Rather than telling a computer exactly how to do a task with step-by-step programming, researchers employing a deep learning system step back and let it apply techniques such as pattern recognition and trial and error to teach itself how — techniques humans use” (1). Shisan explains that advances in AI deep learning are allowing machines to perform tasks that were once only done by humans; this is an important notion because companies will seek to reduce the cost of labor by employing AI to do complex tasks. Much how robotics replaced workers in the manufacturing sector, AI may soon come to replace someone in advanced field such as finance or teaching. Scientists and businesses have been suggesting the use of AI to assist doctors, and even replace surgeons entirely, which isn’t far from fiction. Companies like Intuitive Surgical have designed advanced robots to be used in surgery. Given enough time, robots will eventually be able to independently perform open surgery.

Image: Da Vnci surgical robot. Source: www.davincisurgery.com

Consequently, the displacement of the workers from blue collar and white collar jobs will lead to a large reduction of the middle class and an even greater income inequality than Americans have today. A strong middle class is good for the economy; however, businesses do not adhere to this reasoning. In order for a business to compete in a world economy, it must reduce its overhead and cost of goods sold. For any business, it’s logical to forego an employee for a machine that is capable of performing better, longer, and at a lower cost. Machines have a lower margin of error; furthermore, they don’t suffer from fatigue and require little to no oversight. A machine is simply the closest thing to being the perfect employee. In “Time to talk Robots” of The New York Times, Emma Roller writes, “There’s no easy answer on how best to foster innovation, though. Even the most enticing tax incentives are unlikely to make companies fire their robots and hire back assembly-line workers” (1). Roller believes that getting a business to choose a human worker over a machine would be a tricky thing. Since it’s far more cost effective to hire robots, the robot-employee trend will likely continue to reduce jobs and the middle class’ purchasing power; likewise, this trend will undoubtedly lead to an economic dystopia where the vast majority of the population lives in poverty. Society can perhaps only overcome the problems associated with disruptive technology by adapting progressive ideas, behaviors, and suggestions.

Planning Ahead

The media must emphasize the importance of the consequences and benefits of disruptive innovation, so that the public can proceed to build a better world and adapt to the changes in society and the economy. Furthermore, knowledge on the topic of disruptive technology is important in the modern business world due to its hostile nature. If society doesn’t act now, disruptive technology will undoubtedly lead to social and economic issues and high unemployment rates, so society must seek out new solutions in order create a world where this technology can be used in ways that will benefit everyone.


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