AI as an example of creative destruction clearly embodies all the benefits and limitations mentioned above. Indeed, people are mesmerized by the gains in productivity and efficiency brought by AI into their day-to-day tasks. A recent study suggests that the implementation of AI can uplift individual productivity by 40% compared to non-AI users. Equally, AI is constantly deployed for use cases that improve the world around us. For instance, in the healthcare industry AI tools are enabling the early detection of deadly illnesses that can be cured if treated in advance.
However, the fear of job loss is rising, with 14% of workers already undergoing redundancies due to the rise of AI. It is for this reason that institutions across all sectors including the media industry are developing guiding principles to ensure the ethical implementation of AI.
Closing thoughts
Creative destruction is the process whereby the old is replaced by the new. We see this happening recurrently around us, with for example, online streaming platforms taking over cinema and theater consumption. Technology and innovation are the agents behind this phenomenon. They add value to the way we consume our day-to-day goods and services, whilst introducing precarity and risk to established ways of doing things. Significant advantages of creative destruction include improved efficiency in production processes which, as described by Schumpeter, lead to economic growth and prosperity for economies around the globe. Unemployment and unequal distribution of creative destruction benefits are some of the theory’s pitfalls and limitations. For instance, in the entertainment sector, cinema projectionists or theater actors may feel stranded both professionally and personally as individuals shift their consumption to streaming platforms. These pitfalls can be mitigated by robust regulatory institutions and initiatives that ensure creative destruction constructs an environment for individuals to thrive as opposed to one that fosters overconsumption.
Further reading on Perlego
To read more about Joseph Schumpeter’s contributions to creative destruction theory, you can read The Theory of Economic Development (1934, [2021]) by Joseph Schumpeter
To read more about artificial intelligence and its ethical implications, you can explore our dedicated study guide on AI ethics and the Artificial Intelligence section of Perlego’s online library
To find out more about creative destruction in post-war periods, you can read Times of Creative Destruction: Shaping Buildings and Cities in the late C20th (2016) by Alexander Tzonis and Liane Lefaivre
To read more about how to navigate creative destruction in a business context, you can read Play Bold by Magnus Penker: How to Win the Business Game through Creative Destruction (2021) summarized by GetAbstract