Innovation is Great For Job Growth

Posted by Jeff Carter
on March 25th, 2012

A lot of people get displaced by innovation. Software eats people, machines and robots eat people. But, the funny thing is as we progress down the chain of innovation, more jobs are actually created not less.

Unions fight innovation tooth and nail in factories. They hate robotics. They don’t see outside of the box. For the immediate future, that person’s job bolting on something in a factory goes away. But that robot had to be built by someone, and freeing up creative labor allows that person to be allocated to another job which adds value somewhere else. It might not be within the constraints of the union, or in the factory-but it’s somewhere else in the economy.

Think of it this way.

Humans used to walk every where. Then we invented the wheel. We invented better and better wagons to go around that wheel. With each progressive innovation, more jobs were created. Eventually, we had conestoga wagons that took people from east to west.

Then came engines. Eventually, the gas powered engine was perfected to go on wheels. How many jobs have been created worldwide with the advent of car production? They put some industries out of business. Horses, tack and equipment, the makers of the wagons. But the value they created invented far more jobs than would have been available with just the wagons.

It seems simplistic to say, but when you think about it, all the innovation we are seeing that take jobs and reinterpret them into an app you download to your phone actually creates more opportunity. Too often, people focus on the jobs that have been eliminated. Our President actually said the ATM destroyed jobs! He can’t think out of the box.

The solution isn’t a job council to determine where jobs will be. The solution is to let the market dictate where the jobs will be and people train themselves to perform them.

Think about this the next time you read legislation, or hear people debate about jobs. Are they incentivizing innovation? Because if they aren’t, they aren’t creating jobs.

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