Creative Destruction: Converting Global Crises Into Opportunities

The geopolitical conflict that has partially closed the Strait of Hormuz is a reminder of something we failed to learn during COVID-19. Going through a crisis — watching supply chains break, prices spike, and systems collapse — only to return to doing exactly the same things afterward is not resilience. It is the absence of it. The phrase "crises are opportunities" is only true when something actually changes. Otherwise, it is just a crisis.

The rise in fossil fuel prices hits every link in the supply chain. Governments respond, as they always do, by subsidizing fuel costs to protect households and avoid social unrest. This is understandable in the short term. But subsidizing fossil fuels in a crisis is, in effect, using public money to preserve the very system that made us vulnerable in the first place. The same logic applies to fertilizers: when prices spike, governments step in to protect food production — a necessary short-term move. But there is a long term solution: promoting local production of organic fertilizers, technologies that convert agricultural waste into soil inputs; regenerative supply chains that do not depend on petrochemical derivatives. The crisis arrives, the subsidy covers it, and the investment in that alternative that saves us from it, never comes. 

Water follows the same pattern. Every year — sometimes every two — cities, industries, and households across Mexico face a water crisis. It reaches the news, the public agenda, the family dinner table. And then it rains, and we forget. Rainwater harvesting and greywater reuse have existed as viable technologies for decades and yet, both remain largely unknown to the private sector and the general public. Wastewater treatment is legally mandated and still largely absent. These are annual crises — and every year, the opportunity slips through our fingers like the water we fail to capture. 

Electricity is no different. Extreme temperatures — cold winters, hot summers — push electricity grids to the edge. Demand-side management tools exist, yet consumers receive neither the economic signals nor the information needed to adjust their behavior. Brazil offers a clear contrast: its tariff system responds to reservoir levels in real time, sending price signals that shift consumption and reduce the need for expensive diesel backup. The crisis becomes a feedback loop — not a recurring emergency.

During COVID-19, global fossil fuel consumption dropped by just 6% to10%. Yet the effect on air quality in cities and on ecosystems was remarkable. For a brief moment, we saw what urban life could look like. Then it passed. And we went back to sitting in traffic listening to podcasts about efficiency.

All of these are crises that were not converted into opportunities. The common thread is a deep resistance to change — a pull back toward exactly how things were before. 

This is what Joseph Schumpeter described as the central tension of capitalism: the process he called “creative destruction.” In "Capitalism, Socialism and Democracy" (1942), Schumpeter argued that economic progress does not happen gradually or comfortably. It happens through a constant process of destroying old structures and replacing them with new ones. That disruption, he wrote, is not a flaw in the system — it is the system.

Daron Acemoglu and James Robinson, in "Why Nations Fail," take this further. They document, across centuries and continents, what happens when elites block creative destruction to protect their own position. The most striking example is the printing press. Gutenberg introduced it in 1445. Within decades it had spread across Europe, democratizing knowledge and reshaping civilization. 

The Ottoman Empire banned it in 1485 and the ban was held until 1727. When a press was finally permitted, it produced just 17 books over 14 years before shutting down. Eighty thousand scribes in Istanbul had a vested interest in things staying exactly as they were. The Ottoman Empire eventually collapsed. The countries and regions that embraced creative destruction earlier, that built inclusive institutions capable of absorbing disruption, were the ones that prospered. The pattern has repeated across every major technological transition in history.

We are living through another one. The subsidies of fossil fuels, the resistance to sustainable solutions, the annual water crises without structural response, the electricity demand that never gets managed — these are not policy failures in isolation. They are the modern version of banning the printing press. They are systems protecting themselves at the cost of the people and economies they are supposed to serve.

Climate change is the largest crisis of all — and the most consistently misread. Unlike the crises described above, this one will be felt by every person on the planet, personally and permanently, and it will intensify with each passing year. Think of it as COVID-19, but without an end date. And yet, most businesses still experience it only as a threat. That is a choice — and an expensive one. 

The energy transition, decentralized food production, circular water systems, energy efficiency: these are not costs imposed on business. They are the next economic structure. Companies that treat sustainability as a compliance burden are placing the same bet the Ottoman scribes placed. Companies that treat it as a design challenge — an opportunity to build the systems that replace the vulnerable ones — are writing a different story, one that determines whether their company is still relevant in twenty years. 

The crises will keep coming, and creative destruction will happen regardless. The question is whether we will be the ones driving it — or the ones it leaves behind. Sustainability is not the obstacle. It is the strategy.