My Wrestle with Innovation
Have you hated and loved something at the same time? I hate and love innovation. Innovation according to Merriam-Webster is the process or act of introducing new ideas, devices, or methods. Innovation is so fascinating. It is a never-ending void that is thrown in to make a person question all they know. Innovation breaks nations, cities, and families. Do people want your job to be replaced with a robot? Everyone hates to be replaced with mind-numbing software made of 1 and 0s. What makes innovation good and innovation bad?
More Leisure Time
The average workweek has decreased from 80+ hours to a more standard 40 hours. With added free time we are to spend more time with family, friends, and hobbies. These enrichment activities drive the economy. People need time to connect and build social units. People by nature want friendship and free time. Without innovation, we would be faced with grueling work weeks with little pay. With the dawn of innovation and automation, dangerous tasks have been replaced with robots.
Cheaper Cost of Goods
Do you have a TV? Have you ever done a genetic test? Do you have a phone? Thank innovation. The cheaper costs of goods make it possible for everyone to own these common goods. The first time genome sequencing occurred the cost was over a billion dollars. Now it costs in the thousands. Innovations make goods cheaper and cheaper goods improve life for all involved.
Cheap goods lead to imitation. Imitation decreases the price of good brands’ names under pressure from private labels. Your iPhone only costs more money because of the name. You can still get a high-quality phone cheaper but it isn’t “Special”. Imitation is the stagehand which controls who is cheap and who is expensive.
Creates New Relationships
Without the internet, I would have never met my girlfriend. That sentence is becoming more common due to the impact of innovation. Innovation has been building relationships seemingly impossible. People are marrying people from across the globe, people are working 100 miles away from the office, and people are using payments without centralization. Without innovation most people would live their entire lives in the town they were born.
Most people now have the opportunity to go wherever they please. People are now able to accomplish more than was thought to be possible. Relationships between friends and family have grown due to innovation.
Fraud from Innovative Technologies
Innovation brings fraud. Clever accounting exists in an industry without standards. Without standards, fraud is often called innovation. Enron was called the most innovative company by Fortune for 6 years. For 6 years the company was pulling the wool over everyone’s eyes. People assumed since they were innovative that they weren’t a fraud. Nikola, the top EV startup was a flat-out vaporware company. The CEO, Trevor Milton was previously involved in a fire alarm company that stole millions of investors’ money.
Innovation creates fraud because no person can predict innovation. Innovations hit you like a 2-ton semi-truck. Investors and Customers get trapped in the “It’s so new, I can’t see past the snake oil” mindset. Innovation causes people to blind not read the books and just rely on the company numbers instead of doing their own research. Innovation causes fraud to be prevalent because even basic customers have no idea of the product the company is selling.
Innovation causes (Temporary) Job Loss
All innovation brings some sort of job loss. Someone used to clean the chamber pots in castles but with modern plumbing now most chamber pots are obsolete. Most people used to work on farms. Now farmers make up less than 2% of the population. What happens to all those jobs? They switch from manufacturing, IT, Oil, or other industries. Losing a job is never fun, but all jobs must be lost due to innovation. Wealth creation from the job isn’t lost.
A great example of this is in the movie Charlie and the Chocolate Factory. Charlie’s father was a non-skilled laborer who put on toothpaste caps. As Will Wonka’s golden ticket mania increased the production of toothpaste. His job was replaced with a robot and he was out of a job. Later in the movie with the correct training, his father got a job as a mechanic and repairman for the toothpaste factory. This illustrates that jobs aren’t cut from innovation rather they change from unskilled to skilled and surviving workers have a higher salary in the industry. So innovation creates temporary job destruction with long-term wealth creation.
Innovation is a Terrible Investment
Innovation is a terrible investment. Never is an innovation company or product going to give consistent long-term returns. Innovation is like the hare in Aesop Fable. The hare runs so fast so quickly that it believes it has won. The hare spends the rest of the race partying, sleeping, and getting drunk that it doesn’t even remember that the turtle is racing it. The turtle is doing very little. It is selling products and slowly improving its margins. The turtle is doing very little but the turtle has the edge.
The turtle isn’t sporadic. The turtle is going up slow and steadily. The hare is going up 50%, then crashing down 35%. No sane person would have the nerve to hold a hare. The turtle has little room for growth but it grows because everyone wants the hare to win. Everyone likes the underdog, but no one bets on the favorite. The turtle wins because it is silent and unnoticed. No one knows the turtle wins until it crosses the finish line. The only people who are successful in investing in innovation are lucky. The people who invest in the turtle are wise.
Innovation’s Curse
Innovation isn’t something I can stop, so I let innovation happen. Innovation in its purest form is a great blessing that enriches the lives of everyone it touches. Building nations and economies are something innovation has been doing for centuries. In my opinion, Innovation is the character of death in Harry Potter. The third brother welcomed death because it was his time. So we must be willing to welcome innovation into our lives when it is the right time. Innovation is something that I love and hate.
Sources
https://money.cnn.com/2006/05/29/news/enron_guiltyest/
https://stacker.com/stories/3494/most-common-jobs-america-100-years-ago
https://www.imdb.com/title/tt0367594/plotsummary
Nathaniel Thiele 
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