In 1942, an Austrian economist, Joseph Schumpeter first time described the term creative

destruction in Capitalism, Socialism and Democracy. The term 'creative destruction' emphasizes
creative destruction is the essential fact of capitalism, which is a process that creates not only new
technologies with higher economic efficiency and enables innovators to earn higher profits but
also causes old technologies to be destroyed and discarded, so that the products of companies that
do not innovate or fail to innovate do not sell in the market or sales decline and economic
efficiency deteriorates[1][1].
We can use the following example to explain creative destruction further:
The steam engine was invented by Watt in 1712. As the world's most important power machine,
the invention of the steam engine is an essential creation in 18th. It took 50 years until 1830 that
had replaced human and animal power on a large scale in many machines. And when steam
engines were used on a large scale, many traditional machines and jobs gradually disappeared,
such as horsemen who was replaced by steam cars.
In this example, it seems that the invention of the steam engine brought a great shock to the job
market in England at that time; the centuries-old horsepower machines were replaced by steam
engines, and many people and factories that had depended on horses for their livelihoods suffered
a great shock, and for a long time, the productivity of English society was in a state of prolonged
stagnation.
From here, it seems that creative destruction is a process of destruction, and as Schumpeter
described, creative destruction will eventually lead capitalism to a self-destructive result [2][2].
However, this is not the case. It is true that innovation will destroy some traditional companies,
and it is also true that in the early stages there will be more destruction than creation, but every
innovation is not entirely launched by a completely new company, and many traditional
enterprises are constantly observing, thinking and developing themselves. A traditional company
also can become an innovator. The developing process needs time. The companies that can adapt
to new technology will survive and rely on new innovative technologies to improve their own
productivity and have higher profits, and the companies that cannot adapt will exit the market. So,
at a later stage, because of the innovative technologies, there will be a situation of creation more
than destruction.
In conclusion, 'creative destruction' is a long-time process. In the early stage of the process, due to
the sudden appearance of new technologies, existing companies cannot adopt in time, so there will
be more destruction than creation. In the later stage, the surviving companies will earn higher
profits with the new technology.
So this explains clearly whether the German bank N26 destroys or creates jobs.
According to the case, Antony Jenkins and Andy Haldane have warned that the innovation would
cause severe disruptions in the job market, and around 50 percent of all jobs in banks will be
replaced. This seems that the innovation brought great destruction to the job market, and many
banks' employees lost their jobs. However, as we mentioned above, in the early stage of 'creative
destruction', there also be more destruction than creation. At that time, the German bank N26
destroys jobs for normal banks. But after a while, we can conclude that the German bank N26 is
creating jobs. Because the N26 is creating a new online banking system that replaces traditional
banks' payment services. With the creation of new online banking systems, not only can banks
create new kinds of jobs but also can have fewer operating costs without the physical locations.
Therefore, for banks, not only can employees get new jobs again in banks, but also banks can have
lower operating costs and higher efficiency with the new system. So, the German bank N26's new
banking system is creating new jobs.
[1][1]
Cowen, T. (2002). Creative destruction / Tyler Cowen. Princeton University Press.
[2][2]
Schumpeter, J. A. (1994). Capitalism, socialism, and democracy / Joseph A. Schumpeter ; introduction Richard
Swedberg. Routledge.