Creative Destruction and Work as Transformation

by Luke Rousch

Editor’s note: This content was originally published for the Christian Economic Forum’s 2019 Global Event. This content is shared with Denver Institute for Faith & Work with consent from CEF.

Joseph Schumpeter, a prominent economist in the mid-20th century, devoted his life work to the study of capitalism. According to Schumpeter, the “gale of creative destruction” describes the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

We see this continuous evolution in the history of global business over the last 100 years, and the acceleration of its cadence has been the topic of much discussion. Xerox has experienced this in the realm of photocopying, Polaroid in the context of photography, and traditional newspapers have given way to online-only publishers like Huffington Post. In only 50 years we’ve gone from vinyl to 8-Tracks to cassettes to CDs to MP3s to Cloud-based streaming. Further to the product itself, the modes of distribution and purchase have been transformed multiple times, with e-commerce being a notable transformation. Industries like agriculture have been transformed as well, with biological engineering and mechanization creating new economies of scale that have transformed a number of industries. And, more examples continue to develop each year.

The work of Clay Christensen in The Innovator’s Dilemma does a great job of chronicling the difficulties big companies face in their attempt to defend market share and maintain their leadership position. Successful innovation is, most often, a source of temporary market power, eroding the profits and position of incumbents, yet ultimately succumbing to the pressure of new inventions brought to market by the next generation of innovators. Schumpeter’s work is a powerful economic concept because it helps explain this cycle of industrial change—the transition from a competitive to a monopolistic market, and back again.

As Christians, when we observe this creative destruction, and the acceleration in its cycle time, how should we respond? What guidance does Scripture have for us? All the way back in Genesis 1:27–28, Jesus talks about our mission in the world:

So God created mankind in his own image, in the image of God he created them;  male and female he created them. God blessed them and said to them, “Be fruitful and increase in number; fill the earth and subdue it. Rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.

God has made man in His image, and as His image-bearers we are equipped to mimic God in His creativity. To be clear, we are not intended to “become” God, but instead to reflect God’s creativity, redemption, and restoration into the world. As we do this, we must do it in a manner that is consistent with the entirety of Scripture, led by the Spirit through prayer, and informed by godly counsel from others. N.T. Wright builds on this intent in his book, Surprised by Hope:

Earth—the renewed Earth—is where the reign will take place, which is why the New Testament regularly speaks not of our going to be where Jesus is but of his coming to where we are . . . . And what he was promising for that future, and doing in that present, was not saving souls for a disembodied eternity but rescuing people from the corruption and decay of the way the world presently is so they could enjoy, already in the present, that renewal of creation which is God’s ultimate purpose—and so they could thus become colleagues and partners in that larger project.

For fun reading on what this quote doesn’t look like, one can review the history of the Luddites, who were a secret oath-based organization of English textile workers in the 19th century. Within this group, a radical faction destroyed textile machinery as a form of protest. While most choose a more peaceful form of protest today, there are groups whose arguments against change and innovation are eerily similar to the Luddites of the 19th century.

Are there new challenges that the Gig Economy has brought to light between management and labor? You bet. Are jobs going to be disrupted by robotics, artificial intelligence, autonomous vehicles, and a third wave of Internet and mobile-enabled services? For sure. But disruption has always been the case, and will always be the case. It’s the by-product of creating new things. As the cadence of change has accelerated, the need for all of us to become lifelong learners who are continuously capable of building new skills has become urgent and mandatory.

As we deliver this message to ourselves, our families, and our communities, we must do so with transparency and we must lead with love. We must listen and seek to understand before sharing our views. We must be prepared as citizens and as Christ-followers to help shoulder the burden for training and re-education of our colleagues. If we are going to equip individuals to provide for themselves and thrive as contributing members of society, we must be individually willing to engage in this mission. Federal, state, and local municipalities should not the primary drivers in this mission. Instead, this is a mission we as Christ-followers should be leading and speaking into.

Thomas Cahill who authored Gifts of the Jews, provides a great historical context for where we’ve been, and where we’re headed:

We normally think of history as one catastrophe after another, war followed by war, outrage by outrage–almost as if history were nothing more than all the narratives of human pain, assembled in sequence. And surely this is, often enough, an adequate description. But history is also the narratives of grace, the recountings of those blessed and inexplicable moments when someone did something for someone else, saved a life, bestowed a gift, gave something beyond what was required by circumstance . . . . This is also the story of the evolution of Western sensibility, a narration of how we became the people that we are and why we think and feel the way we do. And it is, finally, a recounting of those essential moments when everything was at stake, when the mighty stream that became Western history was in ultimate danger and might have divided into a hundred useless tributaries or frozen in death or evaporated altogether. But the great gift-givers, arriving in the moment of crisis, provided for transition, for transformation, and even for transfiguration, leaving us a world more varied and complex, more awesome and delightful, more beautiful and strong than the one they had found.

As we assemble here together at CEF 2019, let us imagine together how we might reflect these words and inspire others in our various communities to do the same as we lean into the creativity and innovation given to us by our Creator. 

Hear More From Luke Roush at "Business for the Common Good."

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Luke Rousch

Luke co-founded Sovereign’s Capital in 2012 and is a Managing Partner in the firm. While living in Kuala Lumpur and Jakarta from 2013-2016, he opened the fund’s operations in Southeast Asia. Luke is primarily focused on the fund’s healthcare and consumer product investments. Prior to Sovereign’s Capital, Luke had twelve years of experience in global commercialization and business development at both venture-backed and Fortune 500 companies. His areas of industry experience include medical devices, biotechnology, and consumer products. He also co-founded 410 Medical, a device company focused on pediatric trauma, in 2012. Luke graduated summa cum laude from Duke University and later earned his MBA from The Fuqua School of Business. He served as a Board Member with TROSA from 2011-2014, and as Board Vice-Chair with Ten Thousand Villages from 2007-2016. He also co-founded Inklings fellowship groups in Jakarta and Singapore, while living in the region.