To Schumpeter, disruption was the hallmark of capitalism – more important even than the efficient allocation of capital and labor to productive ends highlighted in neoclassical economics. Disruption is not an unhappy byproduct. Disruption is critical to economic growth and societal advancement. Disruption is the famous residual from Nobel Prize-winner Robert Solow’s treatise on economic growth. Only by creating new technologies, products and services that replace the old, can we advance society and improve the human condition.
Today, disruption has become all the rage in business circles. Faced with an overwhelming number of advances in digital technology – from data analytics to artificial intelligence to automation to the Internet of Things to Blockchain – business leaders are struggling to disrupt, rather than be disrupted. Everyone seemingly wants some of that Silicon Valley magic, to be the place where hipster kids want to work, to be the place that innovates, to avoid being the place that failed to change and died.
At the same time, a backlash against disruption is occurring. Calls to rein in the tech giants grow daily. Are we moving too fast? Do we comprehend the full implications of our new technologies? Unintended consequences abound, such as the impact of social media on democratic institutions and the potential of machine learning to eliminate jobs and drive income inequality. In the rush to disrupt and break things, we haven’t always figured out how to best put things back together. Perhaps we should not be embracing disruption as vigorously as the evangelists in Silicon Valley advocate.
However, in my own work on climate change, I have come to view disruption as absolutely critical. We will not achieve the target of limiting global warming to 2° Celsius that was laid out in the Paris Climate Agreement without significant disruption across many different industries. By some estimates, we will have to achieve zero net emissions globally by 2060; in essence, we need to decarbonize the global economy in 40 years. This will not be achieved with modest improvements in vehicle fuel efficiency or the energy efficiency of buildings. We need 100% electric vehicles. We need 100% of our electricity to be provided by renewable energy (or at least zero greenhouse gas-emitting sources, such as nuclear energy).
Disruption is absolutely necessary if we are to mitigate the worst effects of climate change. We need innovators experimenting with new breakthrough battery technology. We need entrepreneurs, like Elon Musk of Tesla, pursuing bold new ventures to upset the status quo. We need established players to disrupt themselves, adopting new business models that lower their environmental footprint. Most important, we need policies and institutions that encourage and support the disruptors.
So, embrace disruption. Do not fear it. It is necessary and natural. But be critical of disruption as well. Not all disruptions are created equal. Only through the vigorous-yet-critical pursuit of disruption can we create a bold and beautiful future in which we can flourish.