Welcoming Versus Blocking Innovation


One need not await yet another multimillion dollar study to learn that the Internet has improved efficiency in innumerable areas of human productivity. What is not so widely appreciated, judging by all the complaints one hears about outsourcing'taking jobs that have been done in a given location and relocating them someplace else where labor is less expensive'is the incredible volatility that exists in the job market as a result of the Internet.

Consider the situation of an author of books who in the past used a typewriter to produce reams of pages of work which then had to be reworked by hand, then taken to the post office and sent off to be copy edited and returned via the snail mail for checking, then sent off again to the publisher, where it would be set in typeface and the galleys then would be returned to the author who would proof read them and once done, send them to the person doing the index'and the story goes on, with what now seem to be obsolete and tedious steps slowly moving to the final production of the work.

What happens today in most cases? The initial manuscript is created on a PC where it is easily edited, with sections moved around, sentences reworked with no need to discard actual pages of text, with no need for pencils and white-out correction fluid. Most of the editing can be done by the author, who can also make improvements in the text as it is being reworked. Then the manuscript is uploaded into an email as an attachment and sent instantaneously to the editor at the publishing house, bypassing the mails, thus not utilizing the driver who would have carted it to some airport where others would have loaded it into some cargo plane, etc., and so forth'you get the picture, I hope.

In short, all kinds of hands have been laid off as a result of the widely championed as well as denounced electronic gadgets. Talk about a labor saving revolution! Talk about down sizing!

Yet, of course, that is just a fraction of the picture, as it is with any kind of outsourcing, domestic or foreign. More closely looked at, what emerges is that with the speed-up of production more work can be produced, more books get published, more editorial task can be accomplished. With the money saved from not having to spend so much on postage and editing and proofing and with money earned from more books being produced and sold, savings and earnings can be spent on different items that will need to be produced. Those who used to work driving the trucks to the airport, just to focus on one fragment of the eliminated process, are now able to get jobs in those industries that are funded from the spending of the new savings and earnings.

What's more, the process continues without any end in sight in many other lines of work across the globe! As with everything new, some old things will be replaced but even that has to be qualified. Just as TV didn't displace the movies, just as video cassettes didn't displace the multiplex cinema, just as CDs didn't quite do away with LPs, even cassettes, so anything else that's new tends mainly to add to the array of available goodies human beings love to use for their various types of benefits. Even the famous 'horse and buggy' didn't quite die out, given the incredible increase in the human use of horses for athletic and recreational purposes.

Many old things come back in somewhat revised fashion, even if some do disappear for good. In the latter case those who specialized in producing them will either learn another skill, move to where the change hasn't yet taken place, or, if they have reached a certain age, retire and make room for the new generation of producers. The goods that have been replaced will often enter either the used or the antique market place, often with quite a span of extended duration there, requiring all the work produced by those caring for them in repair shops and such.

In a relatively free market environment, these matters go on without a lot of fuss. Common sense tells anyone (who will but consult it) that this is how things ought to go and people will make preparations to cope accordingly. Only when various groups go to the government to get some kind of special favors, by way of subsidies, protectionism, or price supports, does the situation begin to go seriously awry, with the whole process becoming politicized and creating, in its wake, hostilities and feelings of victimization all around.

Moreover, there will also be the accompanying embarrassment on the part of those who gain political protection for their specialization that they themselves often take full advantage of innovation and, yes, outsourcing in numerous regions of the marketplace as they look for new and better ways of doing what they want to do in their lives.

Your rating: None
Tibor R. Machan's picture
Columns on STR: 70

Tibor Machan is a professor of business ethics and Western Civilization at Chapman University in Orange, Calif., and recent author of Neither Left Nor Right: Selected Columns (Hoover Institution Press, 2004).  He is a research fellow at the Hoover Institution, Stanford University.