Creative Destruction: Technology and Trade (episode 2)

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- [Narrator] "Infinity War" is known
for its spectacular special effects.

But we can pretty certain
that in a couple of decades.

they'll look old and outdated.

That's just the way it goes with movies.

- [Ian] The first adult movie

that I ever saw was
the original "Jaws" in summer camp.

It was terrifying,

and now you go back
and look at the mechanical shark

that jumped onto the boat,

the great white,
over 20 feet long, thrashing about,

and you go that is a ridiculous,
stupid-looking thing.

So, I feel pretty clear
that we have come a long way

since the '70s in terms
of graphics.

- [Narrator] This constant
improvement is not limited

to special effects --

sound quality, picture quality,
theater seats.

You name it,
it seems to have improved.

Well, maybe not the acting.

- [Edward] Oh no, not the bees!
Not the bees! Ahh!

- [Narrator] Economists have a term
for this type of improvement --

"creative destruction."

- [Tyler] Creative destruction was
a term in Economics

coined by an Austrian economist,
Joseph Schumpeter,

early in the 20th century.

It's really become
a central driving idea in Economics.

- [Narrator] Creative destruction
describes the continual process

of innovation in which new products
and services replace outdated ones.

Take photos -- we live in a world

of smartphones, Instagram,
and augmented reality.

How we got here reveals
a long and winding path

of creative destruction.

- When I was a kid,
you take a photo,

and the Polaroid comes out,

you wave it around 'cause you think
it's going to make it dry faster.

I don't know
if that actually worked.

And it's several minutes later,

and it probably doesn't
look very good,

but you have it!

And 10 years later, it's all faded,
and it probably doesn't keep.

- [Narrator] Before the digital era,
you might have a Polaroid

or you might buy film,
typically from Kodak.

You had to pay
a few dollars for film,

which got you about 20 pictures,

and then pay more
to get them developed.

- [man] Got double prints with mine!

- [Narrator] If, whoops,
your eyes were shut -- too bad!

You didn't know until days later.

And if you accidentally
opened your camera,

poof, your pictures are gone!

Digital cameras came on the scene
at the end of the 20th century.

Entrepreneurs quickly improved
the cameras, the software,

and the accessories.

People increasingly switched
away from film.

It was cheaper, easier
and more enjoyable.

These entrepreneurs represent
the creative side

of creative destruction.

But what about the flip side,
the destruction?

Polaroid employed
over 20,000 people in their heyday.