Beer’s role in innovation – Joe Hadzima

Joe Hadzima,
MIT Sloan Senior Lecturer

From Huffington Post

Many great—or seemingly great—ideas come to fruition during the course of drinking a beer. When you’re out with the guys (or girls), one or two cold ones could have you rhapsodizing about how you’re going to change the world. This is most likely when self-lowering toilet seats, automatic pet petters, and self-twirling ice cream cones were all dreamed into existence.

As great as these and other inventions are, we’re not sure beer had any role in their creation. But has beer had a role in actual innovation?

Self-driving cars are all the rage in the news lately, with Google and Uber fighting it out over patents and racing to the front of the line for consumer release. While they were focused on cars for the everyday driver, the first self-driving truck delivered 50,000 cans of Budweiser 120 miles in Colorado.

That’s right. The first self-driven truck was used to deliver beer.

Budweiser has come a long way since the days of the horse and cart, right? In the first days of beer delivery, customers only had access because their drink of choice was brought daily by horse and wagon.

You’re probably familiar with the Clydesdales, still often used in Budweiser commercials to tug at heartstrings. These horses were bred by farmers along the banks of the River Clyde in Lanarkshire, Scotland. The Great Flemish Horse was the forerunner of the Clydesdale, which was bred to pull loads of more than one ton at a walking speed of five miles per hour. While that kind of pulling power was amazing during those days, it was still slow and expensive. Each hitch horse needed 20 to 25 quarts of whole grains, minerals and vitamins, 50 to 60 pounds of hay, and 30 gallons of water per day.

Is it any wonder that Anheuser Busch was the exclusive US licensee of the Rudolph Diesel patents? One might assume Ford or the railroad would have been first on board with the development of diesel powered trucks, but it was actually beer.

Knowing how much was needed to keep those magnificent horses healthy and hardy, it seems diesel was a logical next step. This is a classic example of early adopter customers driving a new technology.

Effect on Jobs

As with most disruptive innovation, jobs were impacted first when the diesel truck was introduced and again with the self-driving truck. T here is a fundamental difference between the two cases, as we’ll discuss.

When the diesel trucks were introduced, of course some people found their skills were no longer necessary. The overall net effect, however, was not that great. Those who took care of the horses and replaced the stables did feel the sting. Those jobs were replaced by mechanics and garage managers. Those who drove the horse-drawn wagons were replaced by truck drivers.

It’s worth noting here that the Teamsters Union was formed to protect those who drove teams of draft animals, such as oxen, horses, or mules. While they didn’t stop diesel trucks from eventually taking all the jobs, they did get workers organized. Organization led to training, which then led those horse and mule drivers to drive trucks instead. There’s one problem solved.

With some training and education, the jobs for mechanics and garage managers were eventually filled, too. What seemed insurmountable was, in fact, just a small step toward the future of trucking. Now, according to NPR, truck driving might be the most predominant job in America. Thus far, the trucking industry has been nearly immune to the automation that has eliminated thousands of other blue-collar jobs in the past forty years.

Until now.

Read the full post at Huffington Post.

Joseph Hadzima is a Senior Lecturer in the Martin Trust Center for MIT Entrepreneurship.

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