The Startup
Published in

The Startup

Disruption in America: Please hold

Last Tuesday, 59.7 million Americans voted against a concept long cherished by Silicon Valley and American business élite: “disruption”. The word itself was never mentioned by the two candidates vying to become Leader of the Free World (*cough*), but its shadow loomed large.

At this point you may reasonably object: “But the vote was actually for disruption! Disruption in Washington, disruption of the élite” — and that is also true, but it’s a different context compared to the more common business-oriented one. Here is a definition of disruption vs. innovation from Forbes:

“Innovation and disruption are similar in that they are both makers and builders. Disruption takes a left turn by literally uprooting and changing how we think, behave, do business, learn and go about our day-to-day. Harvard Business School professor and disruption guru Clayton Christensen says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.”

Well, Republican voters said loud and clear that they haven’t liked being disrupted. 59.7 million Americans have now rejected “a left turn” that tries to “change how we think, behave, do business, learn and go about our day-to-day”. Trump told them that they don’t have to be constantly uprooted, and instead can go back to how things were before this whole disruption thing started happening.

Free trade, immigration and globalization were the target of Trump’s wrath because they are the platforms that enable disruptive innovation. The message has been sent, and Trump needs to follow through somehow (assuming he cares about getting re-elected). So now the question is: How will he show his voters in 2020 that disruption has been rolled back or at least put on hold?

General Motors broke the news today that they will lay off 2,000 workers in Ohio and Michigan — states that played a large part in Trump’s victory. It is obvious that GM waited after the election to announce this news. It’s exactly the kind of thing that Trump has promised to prevent.

The automobile industry has a large disruption on the horizon: automated vehicles. Elon Musk believes that the Teslas coming out of factories today will be self-driving in 2020, and he’s committed to building a car-sharing network of driverless Teslas. Uber is working on the same. All auto makers are working on self-driving technology, and even Apple has spent billions on a secret car project codenamed “Titan” (a rather poorly held secret by Apple’s standards!).

If that happens, it will put taxi drivers out of work and reduce the need for new cars because existing ones are more efficiently used, thus threatening more livelihoods in Ohio and Michigan. But the really big disruption from automated driving could be in trucks rather than private cars. There are approximately 3.5 million professional truck drivers in the United States, according to estimates by the American Trucking Association. These workers are a prime target for disruption by automated driving.

Will Trump and a Republican Congress allow Silicon Valley to try put 3.5 million Americans out of work? Don’t count on it.

The tools that can be used to curb disruption may look similar to the existing legislation in many US states that prevents Tesla from selling cars directly to consumers. It sounds incredible from my European perspective, but Tesla is actually forbidden from just selling cars themselves without a middleman. Instead of being able to walk into a Tesla store and drive out with an electric car bought at list price, the American customer has to haggle with a car salesman — and ostensibly this is for the benefit of the customer herself, even though the middleman’s profit comes straight from her pocket and delivers no obvious value.

If Trump and the Republicans carry through with promises of protecting jobs, there will be much more of this kind of legislation in 2017–2020 aimed at protecting blue-collar workers and existing businesses from disruption by Silicon Valley style actors.

What can tech companies do? One answer is to move innovative operations outside of USA. Chinese tech companies have already outpaced American ones in many respects, but the Chinese market is insular and structurally resistant to foreign competitors, as Uber found out. Companies will be looking elsewhere.

There’s a real opportunity for Europe here. Instead of meekly following Trump down the rabbit hole of protectionism, European leaders should finally take a strong stand for the globalization project. They’ve been building it up for 30 years, so isn’t it finally time to lay out the cards in the open and double down? Europe should welcome disruptive innovators by cutting down further on red tape and promoting education. Tesla and others should feel welcome in removing drivers from European roads. We don’t need truck drivers — instead we need meaningful work for everyone who wants it, and the existing European social safety networks can be an amazing asset in managing this kind of transition.

EU leaders: if you want it, the Trump victory has just handed you the perfect opportunity to demonstrate why an open, liberal market economy backed by social safety nets is a superior model to protectionism and isolationism. You’ve been working towards globalization for decades. Now is the time to act boldly on that conviction.



Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +760K followers.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Pauli Olavi Ojala

Pauli Olavi Ojala

"Say the words" is how the world's oldest surviving book begins. Writing is the original magic. 💮 Video tools @ Facebook. Previously Vidpresso (YC W14), Neonto