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Let's Not Pretend That Innovation Is Always Great

Despite the positives, some of the best innovations have negative consequences

10Nov

Innovation may be the most overused word of the past decade. We have seen the world jump on the term for almost anything, we have seen innovative gravel, innovative picture frames, and even innovative manure, there is not a product class in the world that hasn't somehow become innovative.

In many cases this is no bad thing, for instance, in China the innovations around electric vehicles has seen their numbers increase by 87% between 2016-2017 and the innovations for smartphone technology has meant that millions of people can now stay in contact and access the internet. Taking an innovative approach to many of the world's problems have seen huge improvements in them, whether that's reducing pollution, increasing knowledge, or improving people's lives, but innovation is not always a good thing.

As I mentioned, we often look at innovation as something that impacts the world in a positive way, but the reality is that even some of the world's best loved innovations come at a huge cost. We took a look at some of the reasons why innovation isn't always a great thing.

Condensing power and money

One of the biggest single issues that innovations, at least the most successful innovations, create is that they condense huge amounts of power and money into the hands of the very few. We can look at some of the most influential innovators in the world over the last 30 years, Amancio Ortega, Bill Gates, Warren Buffett, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Larry Ellison, and Michael Bloomberg, and know that the wealth of those 8 men is more than 3.7 billion of the poorest people in the world.

Innovation in itself with each of these men is not necessarily the issue, it is instead the reward for their innovation that has caused this huge issue. It isn't even their fault, ultimately these men have huge amounts of money because what they created is something that billions of people wanted to use and they got paid for this success. Having billions is a dream for most people but the reality of how this impacts the rest of society is often forgotten, with so much wealth condensed in few pockets, there is considerably less of it to go round.

Impacts on incumbents

The reason most often given for the success of an idea is that it is a better product/service compared to the incumbents. Amazon can deliver a product to their customers quicker and sell it for cheaper that traditional retailers. Uber can get a car to you in minutes without needing to wait out on the street trying to hail down a cab. Renewable energies stop the need to coal and fossil fuel mining. Each of these issues are completely valid reasons why these industries needed innovating, but the reality is that with each there has been huge damage done to existing industries and the people within them.

As it seems to have been in the news over the past year, renewable energies replacing coal is a prime example.

Mining coal is undoubtedly not a good thing, the process itself destroys the environment and then it does even more damage when it's burned. It is no surprise that there has been a huge influx in clean energy companies that have taken its place in many areas. But this decline in what is a fairly universally hated product, has had a big economic impact on the people who worked in the mines and in many cases has destroyed the communities they created. The actual impact on the people in charge of the companies is minimal, for instance Glenn L. Kellow CEO of Peabody Energy Corporation, the largest coal mining company in the US, still make $3.5 million per year despite the company laying off thousands of its employees over the past decade.

This has seen huge knock-on effects with many of the places that have lost these jobs and created a cycle of decline. For instance Owsley County, KY, which is the poorest 'white' county in the US was at one point a booming coal town. Now the median income is $14,871, around 72% less than the US national average. Their main source of income was disrupted and despite coal bosses being the ones who didn't pivot quickly, they still earning millions every year, its very much the boots on the ground who have been impacted the hardest.

Masking underlying problems

Innovation, especially in the past 10 years, has often acted as a band aid to cover gaping wounds in society. We often see Uber, Airbnb, and Deliveroo as positive elements, things that make our lives easier and allows people to earn extra money or have 'flexible working' and although many of these are true, far too often they are simply necessities because of increasing inflation and decreasing wages across the western world.

In the UK, for instance, wage growth is currently 103rd out of 112 ranked countries and some have claimed that growth hasn't been this slow since the napoleonic wars. This declining wage growth has unsurprisingly coincided with the increase in the gig economy as people are forced to work 2nd or 3rd jobs to make ends meet. This has fuelled the increase in 'zero hour contracts' which is an employment contract that offers no guarantee of shifts when working for a company, in the UK, for instance, 6% of all workers currently have these contracts. It means that people are technically employed, because they have an employment contract, but in reality could not be working at all, which means that governments can point to employment figures that are not accurately portraying how many people are actually working, so governments are reluctant to solve a problem that they can't see in numbers.

This is why services like Uber, Deliveroo, and TaskRabbit have been able to become successful, people do not simply commit to doing extra work because they want to, many see working in this way as the only option available to them.

Environmental damage

We can look at many innovations, like solar power or wind power, and clearly see that they have a positive impact on the environment, but some of the biggest innovations of the past 30 years have done a huge amount of environmental damage, often without any intention to do so.

A classic example is Apple, who through their 'innovation' of the iPhone have caused huge environmental damage not only because it contains a huge amount of difficult to mine materials from across the world. The mining process itself has done huge damage to the areas from where this material has been extracted, but equally the movement of this material in huge amounts across the world to create the phones is equally damaging.

If we move back further to the invention of commercial flight and commercial farming, the benefits to people has been huge, suddenly people can go anywhere in the world in under a day and they can afford to eat almost any food you can think of. However, the flip side of this is that planes have did more environmental damage than any other mode of transport between 2010-2015 according to a paper from the IIASA and CICERO 'Specific Climate Impact of Passenger and Freight Transport'. There is little doubt that commercial flight has done a huge amount of positive things in the world, but equally, the damage it has done to the environment has been equally huge. 

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