The word first appeared in the French dictionary entitled Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities in order to maximize the financial return.
Hayek and the theory of the entrepreneur by Israel Kirzner. Economics as Organic and Dynamic By its very nature, the creative destruction philosophy treats economics as an organic and dynamic process.
This stands in stark contrast with the static and highly mathematical models of Cambridge-tradition economics. For example, the treatment by Schumpeter does not consider equilibrium to be the end goal of market processes; instead, many fluctuating equilibria are constantly reshaped or even replaced by dynamic innovation and competition.
Instead, entrepreneurs and technologies actively create disequilibrium and highlight new profit opportunities that did not previously exist. Henry Ford's assembly line not only revolutionized the automobile and manufacturing industries, but it also displaced many older markets and forced many laborers out of work.
The losers were the old economy companies that could not adapt in time to take advantage of the new technology. The point, as Schumpeter noted, is this evolutionary process rewards profitable adaptations and innovations and punishes less efficient ways of organizing resources.
Application to Other Fields The term creative destruction is commonly used in business governance, particularly in industries associated with technology or other rapid changes.
There are also philosophical, biological and political adaptations of the concept. Indeed, Schumpeter may have been greatly influenced by the philosopher Friedrich Nietzsche and economist Werner Sombart.The papers in this section consider trends in entrepreneurial activity, both in the United States and internationally.
Chiara Criscuolo, Patrick Blanchenay, and Flavio Calvino examine OECD research to offer an international perspective on economic dynamism in their paper, “Business Dynamics and Public Policies: Cross-County Evidence from New Data.”. Creative destruction, a term coined by Joseph Schumpeter in "Capitalism, Socialism and Democracy" in , describes the "process of industrial mutation that incessantly revolutionizes the.
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aspects of the process of creative destruction. Recent evidence on the pace of creative destruction There is abundant recent empirical evidence supporting the Schumpeterian view that the process of creative destruction is a major phenomenon at the core of economic growth in market economies.
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