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Todd Hirsch
Todd Hirsch

Todd Hirsch

How pizza delivers innovation Add to ...

The past few years have been marked by a lot of anxiety over the U.S. jobs market. And without question, it’s in a truly sorry state. For the better part of three years, the unemployment rate has been stuck above 9 per cent – and the recent dip to 8.6 per cent was really about discouraged workers dropping out of the job hunt.

Is there hope for American workers? You bet.

One of the reasons why so many Americans are jobless has to do with the U.S. government’s extension of unemployment benefits. Through Washington’s fiscal stimulus packages a few years ago, the maximum number of weeks of benefits was raised far beyond the standard 26 weeks. But once benefits eventually start expiring, millions of Americans will suddenly be less choosy about their employment options. Desperation will kick in.

Unfortunately, there aren’t too many jobs available, so very low-skill, unappealing jobs – pizza delivery, gas station attendant, etc. – will be reconsidered. Skilled Americans accustomed to much higher wages will find themselves accepting these low-paying jobs. On the surface, that’s bad news. What a waste of education and skill!

But within the husk of this sad state of underemployment lie the seeds of a whole new wave of innovation and creativity. Smart workers who find themselves in these menial jobs will say, “I could do better” or “I can do this differently” or “I have an idea that will revolutionize pizza delivery.” New businesses will be created, many of them improving on the old business models that dominated the pre-Internet age.

This is how economic innovation works. Clever people come up with ideas, which turn into business ventures, which then turn into the economic drivers of tomorrow. Giants of corporate America – Apple, FedEx, Walmart, Starbucks – were all born out of the inkling that there must be a better way to do things. Sometimes innovation needs a jump-start, and the fact that millions of Americans will find themselves in low-paying jobs in 2012 will be the spark that innovation needs.

Skeptics will point to a lot of potential barriers that will stand in the way of these would-be innovators. Crushing household debt will restrict access to small business credit. U.S. educational achievement is not keeping pace with China and India. The political system is broken. All of these factors may be true, but nothing can really stand in the way of entrepreneurial vigour – particularly the U.S. variety, which has propelled nearly 250 years of innovation. Call it greed or call it ambition, but it’s in America’s DNA.

The skeptics will also be quick to point out that most new business ideas fail, which is true. But they won’t all fail, and that’s the beauty of innovation and entrepreneurialism. Only some need to succeed.

Anxiety about where future jobs will come from is common. In every downturn, folks worry themselves sick trying to prevent jobs from disappearing. It’s almost useless to try – and indeed, it’s a good thing job preservation strategies don’t really work. If they did, most of us would still be employed in agriculture, plowing fields in the hot sun with horses. What they couldn’t foresee a century ago were jobs that hadn’t even been invented yet: lab technician, human resource specialist, fibre-optic cable engineer, web designer.

As the long, sluggish, “non-recovery” grinds on and unemployment benefits expire, Americans will finally get fed up. Like pine cones that need the intense heat of a forest fire to release their seeds, American entrepreneurial spirit needs the drudgery of delivering pizzas before it’s released in a whole new way. Creativity thrives in adversity.

Todd Hirsh is a Calgary-based senior economist at ATB Financial. The opinions expressed are the writer’s own.

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