Standstill, lockdown, recession. Neither the corona pandemic nor the resultant economic crisis can be considered as instances of creative destruction per se. However, they have accelerated the forces of creative destruction – including in my own professional life.
Joseph Schumpeter has always been one of my favourite Austrians. The economist, born in the Moravian town of Triesch (now Třešť in the Czech Republic) as the son of a cloth manufacturer, secured his place on this prestigious list for having said that he set out to be “the best lover in Vienna, the best rider in Europe and the best economist in the world.” Later in life, he would say ironically that he only achieved two of these objectives because – unfortunately – he had inherited a bad saddle.
Besides his other exciting qualities, Schumpeter was a man with a good sense of humour. And an excellent intellect. In 1911, he was appointed as Professor for Political Economy at the Karl-Franzens University in Graz – making him the youngest professor in the Austro-Hungarian empire. During his illustrious life, Joseph Schumpeter worked in no less than seven different countries and held three different nationalities. He was married three times to three different women.
The theory of creative destruction
Schumpeter’s name will always be associated with his most famous theory: that of creative destruction. In essence, this theory states that, in economic life, the old must die so that the new can be born. For Schumpeter, this process of destruction was not due to faults in the economic system: it was actually a prerequisite for its continued existence.
No market actor exists in a vacuum. New competitors are always breaking onto the scene – offering new, better, more innovative products. If the existing companies fail to keep up with these new developments and evolve, they will be forced out of the market by the younger, fitter competitors – a destructive process which ends up benefiting economy and society as a whole.
Schumpeter saw this process as a motor for the economy: the creative forces of dynamic entrepreneurs result in innovation, technological progress and growth.
The corona crisis destroys – but not creatively
So, what does this have to do with the current economic crisis due to the corona pandemic? Economically speaking, a lot of china has already been smashed with the imposition of lockdowns. And it will get a lot worse when government aid to businesses dries up. Is this destruction creative in the way Schumpeter meant it?
In short – no. Schumpeter said that creative destruction was intrinsic to the economic system: it is not imposed from outside. And this is the crux of the matter when considering this question in the light of the corona crisis. The pandemic is an external, exogenous factor which has resulted in devastating consequences for the economy. A lot of companies will fail – and not due to the appearance of innovative new competitors and products, but due to an extended period of forced inactivity due to rules which make it significantly more difficult (or even impossible) to continue business operations. There is destruction, but no creation.
The corona crisis as a catalyst for creative destruction
What could be observed in the past few months is how the crisis acted as a huge magnifying glass. Whether in individual people or entire countries: existing characteristics and problems suddenly became much more pronounced.
As a freelance legal translator, it became apparent to me 4 years ago that my job would become obsolete within the next 10 to 20 years because of the rapid advance of machine translation technologies. These technologies are still a long way off being able to transport the fine linguistic nuances of the law from one language into another. Nonetheless, they already produce impressive results and are constantly being improved. The moment when you can feed a complex contract into a machine translation tool and only have to do minimal post-editing work afterwards will come. Then I am no longer required.
Adapt to survive
It is too early to say whether the economic crisis has resulted in an acceleration or deceleration in the development of translation technologies. However, what I can say with certainty is that it has led to a reduction in the general amount of work coming in. This is quite logical: if the economy suffers, companies will too. Uncertainty is rife, they put projects on hold, make less investments. Because orders for translations usually come at the end of such commercial decision-making chains, when the economy falters, I can soon feel the effects. The decline of my business has accelerated.
It is completely natural at a time like this to worry about the future. But, as a businessman or -woman, you have to ask yourself quite calmly: what do I need to do, right now? How can I shore up my business against these developments and survive? Several alternatives were open to me: I could work more intensively on securing translation work – both with my existing customers and by investing time in networking and making new contacts. Or I could invest time in building up a new business and income stream – one that is more future-oriented and reduces the risk of becoming obsolete.
Always look forward
In the end, I chose a combination of both.
With regard to my work as a legal translator, I am continuing to work with my existing customers with the usual 150% commitment. The economic situation automatically means that less work is coming in and this frees up time. I am investing some of this time in making new contacts – and have even acquired a couple of new customers!
However, I cannot look away from the fact that – no matter how hard or well I work – I will also be replaced by a machine in the long term. Which brings us back to Schumpeter and his idea of creative destruction. Irrespective of the pandemic, the foundations of my business are being eaten away – destroyed.
It’s easy to feel gloomy and depressed about it. Even thinking optimistically, it is a huge challenge. But where there is destruction, space is created for things to grow. The same technological revolution which is replacing my vocation also offers fertile ground and plenty of ideas for building up something entirely new. Digital marketing is the direction I’ve chosen to go.
On the right side of the digital revolution
The trend towards digitisation is of course nothing new. Digital marketing has been a well-known concept for years: a dynamic, quickly developing field. The pandemic has enhanced this trend, as lockdowns and similar restrictions have forced more and more companies to offer their products and services online. Digital marketing is here to stay.
At home, I already have the advantage of a partner who is a digital marketing expert with his own agency. This means I am able to closely observe and support his work, ask questions, get quick advice – I get to learn from the master!
First steps into a new future
My first step in this new direction was to complete a couple of online courses to try out different aspects of the broad digital marketing field. Today, it is simpler and easier than ever to educate yourself and acquire new skills. My favourite online provider of courses is Udemy, which offers countless courses at competitive prices in all kinds of fields, from communications to computer programming.
Doing these courses enabled me to acquire skills but also to develop a feeling for which fields within digital marketing could interest me most. I have already worked out an idea and hope that I will soon be able to support my partner in his work and later – when I have got a little more experience – offer these services independently.
As my experience shows, the corona crisis has magnified the creative destruction processes in my industry. However, this has made me take positive steps to create and to build up a new, future-fit business.
My tips for uncertain times:
- Don’t deny your feelings: for the sake of your own mental hygiene, it is important to let your feelings in (grief, uncertainty etc.). But it’s important not to let them overwhelm or control you. After an emotional phase, it is important to…
- get to a point when you can accept the situation as it is. I had to accept that the technological changes happening in the translation industry were only going in one direction and that I was powerless to stop it. Resistance is futile – if I didn’t want to go crazy, the only way forward was acceptance. If you manage to get to that place, your head will be free for…
- new ideas. I needed several attempts and a number of ideas before I found an area where I could imagine working in the future. Now, it’s all about…
- rolling up my sleeves and getting on with it!