Innovation for Hong Kong's Upward Social Mobility

44 5.2.3 Innovation is undoubtedly defined relative to old technologies. Technological innovation in each field will inevitably bring disruptions, and even devastating effects, to the existing production technologies and rules. But on the other hand, new technologies and new inventions also bring new driving forces to the economy and create jobs that did not exist before. Therefore, the destruction caused by innovation is also called creative destruction. Creative destruction is “a process of sudden change in industrial production which continuously innovates the original production mode from the inside, destroys the old structure, and develops a brand-new mode of production on this basis108.” Under Schumpeter’s growth framework, the continuous emergence of innovators continues to challenge and destroy the original production methods, while also opening up new areas, injecting new energy, and creating diversified economic growth possibilities. Technological innovation marks the coexistence of destruction and creation. Some old job opportunities disappear from people’s sight, harming the interests of some working people, but on the other hand, it means more new job opportunities and a higher economic growth rate109. The answer to whether job opportunities created by technology and innovation are greater than those destroyed can be determined on a research data related to the United States110. The data shows that the higher the proportion of creative destruction in a society, the smaller the difference in education level of people in the society. Since there is a positive connection between education and social mobility, we can infer that, as a whole, creative destruction can enhance social mobility111. 5.2.4 In fact, in regions where the technological level is at the “frontier”, in other words, more advanced regions, the role of innovation in promoting productivity growth is particularly obvious. As a city at an advanced level of development, the Hong Kong government must introduce various favorable policies which promote technology and innovation to increase social mobility and promote economic growth. Only when Hong Kong society can let the next generation see the hope of upward mobility can Hong Kong have a bright future112. 108 Schumpeter, Joseph A. (1942) Capitalism, Socialism and Democracy. Cambridge, MA: Harvard University Press. 109 Aghion, Philippe and Akcigit, Ufuk and Howitt, Peter, (August 2015). The Schumpeterian Growth Paradigm. Annual Review of Economics, Vol. 7, pp. 557-575, 2015, Available at SSRN: or 110 Aghion, P. & Antonin, C. (2018). Technical Progress and Growth since the Crisis. Revue de l’OFCE, 157(3), 65-66 . reof.157.0055 111 Chetty R., N. Hendren, P. Kline and E. Saez, (2014). “Where is the land of opportunity? The geography of intergenerational mobility in the United States”, The Quarterly Journal of Economics, 129(4): 1553-1623. 112 org/10.3917/reof.157.0055 5 Upward Social Mobility