Ramblings & ephemera

Word of the day: creative destruction

From Wikipedia’s “Creative destruction” (13 July 2006):

Creative destruction, introduced by the economist Joseph Schumpeter, describes the process of industrial transformation that accompanies radical innovation. In Schumpeter’s vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power. …

There are numerous types of innovation generating creative destruction in an industry:

New markets or products
New equipment
New sources of labor and raw materials
New methods of organization or management
New methods of inventory management
New methods of transportation
New methods of communication (e.g., the Internet)
New methods of advertising and marketing
New financial instruments
New ways to lobby politicians or new legal strategies

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