Sector Destruction

I have to confess that I like everyone on the planet it seems is a customer of an online book retailer. After being gouged for decades by local bookstores who thought that stealing off people was a good business model it is somewhat of a relief to deal with the Amazon/Book Depository/Fishponds of the world. One click shopping is a wonderful thing.

The thing I find interesting about the changing economy is that unlike other periods in history where technical innovation has lead economies in different directions is their are no real replacement industries appearing. All online book sellers do is replace traditional book stores with an electronic equivalent – they don’t create anything that is new to replace it and take up the slack from removing the competition.

Consider the early 20th century when the motor car first appeared. At that time there would have been a raft of industries devoted to horse drawn travel, everything from low tech jobs such as stable hands to higher skilled jobs like coach builders. When the car appeared it was able to assimilate many of these trades. Engineers who built primitive suspension units for horse drawn travel simply applied that same technology to early cars. And in Australia we persisted with the same primitive suspension technology up until the 1970’s. Coach builders would have simply moved into making bodies for cars.

The current shift in technology is not allowing for this because there is very little overlap between the skills required to run a bookshop and an electronic version of the same shop. Bookshops are staffed by generally low killed casual workers such as students. Their electronic counterparts are staffed by specialist engineers and code cutters. One is low tech the other is high tech and there is very little overlap. Hence the notion of sector destruction.

If you didn’t know how far the reach of Amazon is consider the graphic below.

Courtesy of Frugal Dad