Schumpeter’s gale.


A victim of Schumpeter’s Gale…                                     …and the man himself

Named tropical storms have been with us for decades; Andrew, Katrina, Sandy and other names are today not familiar only to meteorologists; they’re part of the public vocabulary. Starting in 2011, The Weather Channel began naming winter storms, although this practice has so far proved more controversial.

Which brings us to Schumpeter’s gale, a decades-long-enduring, but ever-coming storm that ought to focus the minds of meteorologists – and, for that matter, Earth scientists, and indeed earth scientists and academics of every stripe.

Schumpeter’s gale is actually better known to economists than meteorologists, and even in the social sciences and public discourse is better known by its other, generic name: creative destruction. Here’s an excerpt from the Wikipedia link, which gives the idea:

Creative destruction (German: schöpferische Zerstörung), sometimes known as Schumpeter’s gale, is a term in economics which has since the 1950s become most readily identified with the Austrian American economist Joseph Schumpeter’s theory of economic innovation and business cycle.

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.”

Economists would describe the collapse of former industrial giants such as Kodak and Xerox and the rise of Microsoft and Google, the outsourcing of call centers, cellphone manufacture, and many other jobs overseas, the rise of Fed Ex and other carriers to challenge the U.S. Postal Service, and much more as examples of creative destruction.

The concept originated in the work of Marxist economists, who considered such processes a necessary, and extremely negative, end result of capitalism. Here’s more from Wikipedia:

The German Marxist sociologist Werner Sombart has been credited with the first use of these terms in his work Krieg und Kapitalismus (“War and Capitalism”, 1913). In the earlier work of Marx, however, the idea of creative destruction or annihilation (German: Vernichtung) implies not only that capitalism destroys and reconfigures previous economic orders, but also that it must ceaselessly devalue existing wealth (whether through war, dereliction, or regular and periodic economic crises) in order to clear the ground for the creation of new wealth.

In Capitalism, Socialism and Democracy (1942), Joseph Schumpeter developed the concept out of a careful reading of Marx’s thought (to which the whole of Part I of the book is devoted), arguing (in Part II) that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system.

Today, mainstream economists tend to see this oppositely: as a necessary but positive aspect of innovation, and as a strong positive, not just for market economies, but for societies as a whole.

It’s tempting to see creative destruction as belonging to another realm. However, much as U.S. hurricanes wreak havoc on Caribbean nations prior to their arrival on U.S. shore, the track of creative destruction is headed for our science-based and academic community. Here are a few signs (you can easily come up with your list of better examples.

Crowdsourcing science. Historically, perhaps the cheapest way to accomplish science and invention is to offer prizes. In the 1950’s when I was growing up, my father, a research mathematician, used to hold up the example of the invention of the tin can. Napoleon, he said, needed a means of preserving food for his army. He offered a prize. The can was the result. Years earlier, the British government had offered a prize for a practical means to determine longitude; John Harrison’s chronometer ultimately claimed the award. Even then my father claimed that offering such prizes might be a much cheaper, faster way of accomplishing scientific research, and that scientists might once again struggle to support themselves, much as they had during the 1800’s.

Crowdsourcing science is now on offer in our field. Here’s an example, which we’ll introduce by telling a Joe Fletcher story (yesterday’s LOTRW post mentioned Joe in a different context) that gives you an insight into the man and his thought process. Joe was telling me in the 1980’s how he had launched the so-called international Comprehensive Ocean-Atmosphere Data Set (COADS) project, which offers gridded 10x10 marine data going back to 1800. The core task involved digitizing records from ship logs of the period. Joe first sought funds (the order of $500K) for doing this in-house in NOAA from the then-director of the NOAA Environmental Research Labs, George Ludwig. George refused, saying it was too expensive. “So”, Joe told me, “I realized that I needed to have this done somewhere in the world where scientific standards were high but labor costs were low.” He made a personal three-week trip to China, but relations between the United States and China were strained during those Cold War years. He then tried India, where he gained a welcome reception. He approached Robert White, the NOAA Administrator of NOAA at the time, for funds. Bob growled, according to Joe, that “there was nothing in it of advantage to India.” “So,” Joe said, “I went back to Boulder for a few weeks, then revisited Bob, showing him what was in it for the Indians.”

Today, Joe could have saved himself trouble and effort by going to Zooniverse. A major player in the crowdsourcing arena, Zooniverse acts as a needed middleman for such efforts. Click here and you’ll see opportunities to digitize ship data or analyze patterns in old hurricane storm imagery.

(Here’s a link to one of thousands of online posts on crowdsourcing science. Of special interest is Michael Nielsen’s TEDx lecture linked there, which gives a great success story, the Polymath Project, but discusses why crowdsourcing has been slow to take hold in science more broadly. )

Uber for experiments. This recent article in The Economist discusses innovative ways and means being explored to make major experimental facilities available for hire, much as Uber has provided a means for individuals needing a lift with nearby individual drivers willing to take them to their destination. Here’s an extended excerpt:

Most research equipment is under-used. Once it has been budgeted for, grant proposals written or fee schedules set to cover its purchase, kit costing millions of dollars can sit idle for most of the working day. This inefficiency troubled Elizabeth Iorns, a biologist from New Zealand. So she came up with the idea of a marketplace where laboratories could rent out their machines to conduct experiments for others.

Dr Iorns started Science Exchange in 2011 when working as an assistant professor at the University of Miami. She was backed by Y Combinator, a Silicon Valley firm that helps startups, and she now serves as the exchange’s chief executive.

Laboratories that carry out contract research have existed for a long time. But Science Exchange is exploring a new frontier, that of the shared economy, in which the best-known examples are Uber, an app-based ride-sharing and taxi service, and Airbnb, which helps people rent out rooms. The idea is that the marketmaker shaves away the awkward bits relating to contractual, ad hoc relationships, often between parties who do not know each other, to create something fungible or nearly so.

Dr Iorns is clear that certain laboratories are demonstrably better at some things than others. Her firm takes out contracts with some of the leading ones, including facilities at Johns Hopkins University, the Mayo Clinic and Harvard Medical School. It then provides ratings, reviews and other feedback, coupled with vetting, so that users can choose laboratories that can provide what they require and then compare pricing.

MOOC’s. More generally, the unsustainable rise in the cost of higher education is prompting exploration of alternatives, such as Massively Open Online Courses or MOOC’s. And when U.S. leaders start suggesting that the first two years of college should be free, as President Obama did the other night in his State of the Union address, you may be skeptical of the particulars and the political realities. But you can be equally sure that public pressures will force creative destruction of some kind.

Public-private partnerships in the provision of weather services. The weather community is currently in a great discussion of how weather information should be gathered and made available for both public and private benefit. Recent NAS/NRC reports – e.g., Fair Weather: Effective Partnership in Weather and Climate Services, and Weather Services to the Nation: Becoming Second to None – have articulated some of the issues and opportunities.

Schumpeter’s Gale is coming.

The Navier-Stokes equations are silent on this unfolding future. If you think the communication of weather impacts and risk could stand improvement, ask yourself how communication of Schumpeter’s gale and its implications for the environmental intelligence community (and our society as a whole) is going. And consider this: creative destruction here, as elsewhere, is inevitable and ongoing. It confers risks for those clinging to the past, but offers enormous benefits for those who embrace and even shape it.

So please, the N-S equations not withstanding, don’t you remain silent! Join in the discussions already underway on these matters, and where appropriate initiate side conversations of your own.

Remember… in today’s world, people aren’t satisfied with leaders who can ride out the storm. They expect their leaders to make the weather.

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One Response to Schumpeter’s gale.

  1. Bill:-
    Creative destruction is a positive force, but with the cost of harm [hopefully temporary] to those displaced.

    Like you, I was fortunate enough [OK, a blind hog rooting in a field occasionally finds a truffle] to go to a good liberal arts school. The richer education we received I believe broadened our outlooks so that we could see a path for ourselves even in the midst of turbulent change. In spite of bureaucratic roadblocks, the gale of creative destruction is intensifying. This makes it imperative that our educational system prepare our kids to “learn to learn” throughout their lives so they can recognize the opportunities inherent in change – and grasp them (I’ve offered some suggestions at if any are interested).

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