Jill Lepore has a great article in the New Yorker debunking the hyping of “disruptive innovation” as the key to success in business and everything else. It’s not a bah-humbug piece; it is instead a careful takedown, in which she goes back to the case studies supposedly showing the overwhelming importance of upstart innovators, and shows that what actually happened didn’t fit the script. Specifically, many of the “upstarts” were actually long-established firms, and more often than not the big payoffs went not to disruptive innovators but to firms that focused on incremental change and ordinary forms of efficiency and quality.
Andrew Leonard reports that Silicon Valley types are not pleased. You can understand why. But their annoyance also tells you why the whole disruptive innovation thing took off: it glamorizes business, it lets nerdy guys come across as bold heroes.
The same impulse, I think, is why Schumpeter gets cited so much. If you read his stuff directly, it’s interesting, I guess, although his attempts to explain the business cycle were a waste of good paper. But it’s that glamorizing phrase “creative destruction” that did it, because it’s so flattering to the big money (and excuses a lot of suffering, too).
Lepore tells us that innovation became a popular buzzword in the 1990s. I guess I thought it came much earlier — I wrote aboutproduct-cycle models of trade back in the 1970s, and even then I was formalizing a much older literature.
And in trade, as in business competition, it’s far from clear that the big rewards go to those who trash the past and invent new stuff. What’s the most remarkable export success story out there? Surely it’s Germany, which manages to be an export powerhouse despite very high labor costs. How do the Germans do it? Not by constantly coming out with revolutionary new products, but by producing very high quality goods for which people are willing to pay premium prices.
So here’s a revolutionary thought: maybe we need to do less disruption and put more effort into doing whatever we do well.