Do Innovations destroy or expand the market?

Socrates

Socrates

Apparently Socrates in ancient Greece was strongly opposed to the new practice of writing.  He thought that it would kill the long-established skill of memorizing and reciting long stories.  Furthermore he thought that writing would replace or discourage conversation.  It seems ludicrous that any intellectual could oppose writing.  However, every innovation involves an element of destruction.  Often that destruction is of a popular practice or method.  But in general, the net effect of innovation is to grow the whole sector.  In the case of writing it dramatically improved the field of communication,  For sure recitation diminished (though it survived) but writing transformed mankind’s ability to store and transfer knowledge.

Similarly I am sure that the highly skilled monks who transcribed and decorated the hand-written bibles of medieval times must have been dismayed when Gutenberg’s printing press enabled the relatively fast and efficient production of bibles.  The publishers of sheet music thought that Edison’s phonograph was a terrible invention because they thought it would kill the performance of music in homes (and thus the sales of sheet music).  Television was feared by Hollywood as something that would kill the cinema.  The paranoia was repeated with the advent of the video cassette recorder.  But cinema survived, adapted and flourished.

We are seeing many similar instances with the internet.  Newspapers are threatened by on-line news services, websites and blogs.  But the forecasts of the death of newspapers are premature.  Many are adapting and enduring.

The music industry has suffered declining sales for years as downloads and sites like Spotify have replaced sales of vinyl records and CDs.  But the digital downloads do generate revenues and in 2012 sales of recorded music in all forms showed their first increase in a decade.  And even the modest vinyl record is seeing a revival.  Innovations kill practices that cannot adapt but others adjust and survive.  Ultimately innovation opens up many new opportunities and expands the category.

Paul Sloane

 

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