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How COVID-19 is accelerating the shift away from fossil fuels

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Creative destruction “is the essential fact about capitalism,” wrote the great Austrian economist Joseph Schumpeter in 1942. New technologies and processes continuously revolutionize the economic structure from within, “incessantly destroying the old one, incessantly creating a new one.”

Change happens more quickly and creatively during times of economic disruption. Innovations meeting material and cultural needs accelerate. Structures preventing new, more efficient technologies weaken. As the old economy collapses, innovations “cluster” to become the core of the new economy.

Over the past three centuries, there have been five great “waves” of economic disruption and clustering. The first was driven by harnessing water power, the second by steam power, the third by coal and electricity, the fourth by oil and gas, and the fifth by digital transformation.

[Read: 5 reasons why autonomous cars still aren’t on our roads]

We are now at the start of the sixth great wave, driven by renewable energy combined with electromobility and smart-city technology.