Monday, March 9, 2009

Creative destruction:We don't need GM, we need kiva!

American Car industry is an inefficient, old, dying industry. It has huge operational and overhead costs. American cars are not technologically competitive with Japanese or German cars. I can see that we can not save them in the long run(at least in their present form) even if they make Electric cars or Fuel-efficient cars(as advised by Barack Obama) because of the fact that they are fundamentally inefficient. Still we are bailing out huge amount of money(although people don't think Billion is a large unit nowadays after we started this Bailout concept). Even the lawmakers and the company executives are pretty much sure that they can not survive in the long term. But just to save some jobs(which can not be saved in the long run) we are trying to infuse oxygen to a dying patient. This is a very wasteful use of resources.

Steve Jobs called death the "single best invention of life". We need to get out of old dying industries to create the new ones, which are efficient, meaningful and promising. Rather than prolonging the life of a dying patient we need to give birth and provide education to the new generation. That is the idea of creative destruction. We need more kiva and less GM. Let the GM Fail and let these people get resources from kiva(Goverment may bailout kiva for that matter) to start their own small companies. We need new Technology inventions, new process innovations and new entrepreneul sprits to get out of this recession. It's a tough and painful process in the short term but that is the best way the world can see a new sustainable prosperity. To quote Tom Peters, "Fail fast, succeed sooner."

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