Technology and Creative Destruction

HP Mini and TweetDeck

It amazes me how quickly the newest technologies become commodities.
Eventually everything competes on price because eventually the
difference in quality become negligible.

The NYT had a great article articulating the current reality of this in the World of Technology. $200 Laptops Break a Business Model -

Mr. Title, a 35-year-old new-media manager at a film
production company in New York, has dropped his cable subscription and
moved to watching most of his television online — free. While shopping
for a new laptop for his girlfriend recently, he sidestepped more
expensive full-featured computers and picked a bare-bones, $200 Asus
EeePC laptop, also known as a netbook.

“We’ve reached one of those moments in tech history when there are
low-priced and free alternatives that are both user-friendly and
reliable enough to make the switch,” Mr. Title said. “Then there’s the
extra bonus of saving some cash.”

This could just as easily describe me. No cable, I prefer Netfix and Hulu and I just bought my daughter the HP mini.

But as we all know this also creates a lot of opportunities and its
this drive in innovation that (so far) has kept America at the front of
the pack.

Indeed, Silicon Valley may be one of the few places
where businesses are still aware of the ideas of Joseph Schumpeter, an
Austrian economist who wrote about business cycles during the first
half of the last century. He said the lifeblood of capitalism was
“creative destruction.” Companies rising and falling would unleash
innovation and in the end make the economy stronger.

I love that phrase: Creative Destruction. Sounds fun.

Image by bwana via Flickr

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