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The Disruption Trump Card

While Disruptor’s Handbook is an Australian company, we operate in a global market, and thus it is timely to consider the impact of President-elect Trump on the issue of disruption and innovation generally.

Several commentators have already examined the innovation policies of Trump and so I will not simply repeat their analyses here, but I recommend the Information Technology & Innovation Foundation’s comprehensive assessment, as well as the piquant approach to the subject, from Fortune magazine. Instead, I shall focus on the opportunities of innovation disruption in the forthcoming era, and the methods by which change can continue to help build business and society.

One thing that needs to be remembered is this: Trump is a supporter of business growth in the US. He wants to see corporate tax cut to 15% and he wants construction and infrastructure projects to seed the economy. But while major projects can stimulate economies for a limited period, sustained business growth occurs as a result of productivity as well as short term, aggregate demand.

Construction and infrastructure projects are finite in duration, and they generate short term demand for labour. They create buildings, roads and other infrastructure that can service community growth, but they also necessarily involve capital expenditure and take a long time to recoup their cost. And where construction projects generate a glut of properties and services, the time to recoup costs is actually extended, and can lead to a contraction in economies as it did for an extended period in China.

To stimulate productivity as a counter to the potential impact of oversupply of construction and infrastructure projects, it is necessary to find new ways to increase output while minimising costs of production.

This is the very essence of disruptive innovation.

Disruption, as we facilitate it here at Disruptor’s Handbook, is the opportunity to change the market, to improve productivity through creating new understanding, new efficiencies and new products. As the drive to improve quality of life continues, innovation represents an opportunity to increase aggregate demand while reducing cost of operation. It doesn’t create a mass of short term jobs in the manner that construction and infrastructure projects do, but rather it stimulates long term maintenance and relationship-driven roles in business that sustain the economy much longer.  And while we may not at present be able to conceive of a product that would be so essential to our existences as a smartphone may appear today – creating demand – the reality is that the products that will have sustained growth in the new age will be innovative products that improve our lives in many ways.

Much has been made of the Trump attitude to climate change, encryption and personal privacy. But where energy innovation generates higher productivity and higher profits, Trump will be forced to acknowledge the opportunities they represent. And where encrypted systems improve transaction security and reduce cybercrime, Trump will again choose protection over alternatives. It may not be a greater good that Trump seeks. But the efficiency and continued productivity argument will always hold weight.

While many in the technology and startup sector are wringing their hands about the forthcoming Trump Era (and, admittedly, for many hours, I was one of these), it is wise to remember that what brought him to power was a disruption of the accepted, moderate, informed systems of political ascension. Now, the Trump era will require growth to validate the decision of the people. And productivity will need to be stimulated to ensure that short term gains from major projects don’t generate a demand slump that will lead to recession.

Now, more than ever, businesses need new ways to improve productivity so that demand is sustained, and growth supported.

The Trump Card is disruption. Go forth and disrupt.

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