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New World, New Economy: Adapting Versus Becoming a Modern-Day Luddite

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Change is constant and inevitable. Whether we like it or not, progress happens. But no one could have anticipated the events of 2020. The disruptive nature of a global pandemic has been profound, to say the least. In the process, many have experienced hardships and major life challenges. But likewise, others have seized the moment and embraced creative innovation in an effort to survive. This implies that opportunities to adapt to change and succeed in the midst of these crises are indeed possible. And businesses that embrace such opportunities are the ones that will thrive.

The coronavirus pandemic isn’t the first globally disruptive event to happen, and it won’t be the last either. The Spanish Flu, the Industrial Revolution, the Internet, and the Age of Computing represent similar shifts that suddenly changed worldviews. In each case, some businesses excelled while others stagnated. The key difference between the two is the degree to which they invited creative innovation. With this new pandemic world and evolving Come-to-Me Economy, a similar dilemma faces many businesses today. The question is whether or not they are capable of adapting to change or doomed for failure.

“The disruption of lost jobs and shuttered businesses is immediate, while the payoff from creative destruction comes mainly in the long term. As a result, societies will always be tempted to block the process of creative destruction.” – W. Michael Cox, Senior VP and Chief Economist, Federal Reserve Bank of Dallas

Modern-Day Luddites in the Making

In modern terms, the label of a Luddite refers to someone who is opposed to progress in automation or technology. But the term dates back to early 19th century England in reference to textile workers and craftsmen. As the Industrial Revolution was unfolding, these workers became increasingly upset about machines replacing human labor. Jobs became scarce, and factories were able to make cheaper products in larger supplies. But rather than adapt to change, these textile workers chose a different route. They decided that breaking the actual machines was a better way to go.

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Creative innovation in times of change require adaptation – and that’s especially true of business.

The 19th century Luddites clearly had a shortsighted perspective on things, which is often what gets us into trouble. When change events occur, it’s easy to focus on short-term effects and try to prevent them. After all, adapting to change can be painful. But creative innovation demands a long-term perspective and a broader point of view. Businesses that are able to cultivate these environments will be more resilient and meet changing demands. But those that don’t, will tend to stagnate at best and fail at worst. This tends to be the fate of the modern-day Luddite.

“Societies that try to reap the gain of creative destruction without the pain find themselves enduring the pain but not the gain.” – Richard Alm, Economics Writer, Federal Reserve Bank of Dallas

Creative Innovation Comes from Creative Destruction

Economist Joseph Schumpeter coined the phrase of creative destruction more than a century ago. Like a phoenix rising from its ashes, creative innovation often comes from destructive circumstances. No one would argue that the pandemic has been destructive in a variety of ways. And it is this type of major shift that has the greatest potential to invite creative innovation to take place. However, this requires adapting to change and suffering through the transition. Thus, Schumpeter astutely recognized that resistance to this change would occur with the demise of those resisting.

In examining the current landscape, businesses and societies around the globe are reacting in a manner to avoid such pains. Protectionist policies attempt to preserve jobs in an effort to keep employment figures high. But in the process, these same policies constrain creative innovation and progress. Likewise, businesses can engage in similar practices that attempt to avoid risk and play it safe. But adapting to change demands intellectual bravery and experimental risk-taking. Indeed, these are the pains that creative destruction causes. But they are essential in encouraging the kind of creative innovation needed for businesses to excel.

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Henry Hazlitt, American journalist

Cultivating a Culture of Creative Innovation

For businesses, it’s important to foster environments that invite creative innovation. Such environments are those where disagreement and experimentation are rewarded and not punished. Organizational teams must have the license to disagree and ask challenging questions without repercussions. By allowing constructive dissent, creative innovation will thrive. Likewise, bureaucratic obstacles should be minimized since these are kryptonite to the process of creative innovation. Through these efforts, adapting to change will not only be less difficult but likely more productive as well.

In essence, creative innovation requires space in which to flourish. Therefore, leadership plays an important role in fostering a culture conducive to change. Innovation leaders achieve this by encouraging new ideas and perspectives by criticizing or responding negatively. Likewise, innovation leaders role-model constructive risk-taking behaviors and intellectual bravery. They also invite inclusion and participation while providing members with collaborative tools. With these techniques, leaders support adapting to change in a positive and exciting way.

“Flexibility for individuals [when working at home] obviously can create some collaboration challenges as well. We know from a lot of research that creativity and innovation largely happen through collaboration” – Michael Parke, Assistant Professor of Management, Wharton School of Business

Adapting to Change in the Midst of a Pandemic

Encouraging creative innovation in the midst of a pandemic isn’t supposed to be easy. Businesses must pursue new strategies and techniques in dealing with a disrupted world. But resisting the change is futile and will only lead to inevitable pains and possibly major setbacks. By being proactive and adapting to change in an assertive way, businesses will be in a much better position to succeed. It’s a new world and a new economy with rapidly changing consumer preferences and demands. The business Luddites of the world are not likely to fare well in such an environment. But those prioritizing creative innovation will be well-positioned for today’s changes as well as those down the road.


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