Technology

Technology

Every new technology is a force for “creative destruction.” Your company is more likely to be buried by a new technology than by its current competitors. Horse-drawn carriage makers were not defeated by a better horse-drawn carriage but by the horseless carriage. Transistors hurt the vacuum-tube industry, xerography hurt the carbon paper business, and the digital camera will hurt the film business.

New technology can also change social relations and lifestyles. The contraceptive pill, for example, was a factor leading to smaller families, more working wives, and larger discretionary income—resulting in higher expenditures on vacation travel, durable goods, and luxury items.

New technologies will hopefully increase productivity at a greater rate than their cost. But avoid adding a new technology to an old organization. This will only result in an expensive old organization.