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“Schumpeterian” entrepreneurs, those that are “creatively destroying” the old in favor of the new, are critical for breakthrough innovations and rapid advances
by contingencies 9y ago
“Schumpeterian” entrepreneurs, those that are “creatively destroying” the old in favor of the new, are critical for breakthrough innovations and rapid advances in productivity and standards of living.
Awesome term, explained in a referenced paper[0] as one of the following:
1. A new product.
2. A new method of production.
3. A new market.
4. A new supply of raw materials or components.
5. The re-organization of an industry.
The question, then, would be "what isn't covered by Schumpeterian?" .. rent-seeking only?
[0] http://www.colorado.edu/ibs/es/alston/econ4504/readings/Baumol%201990.pdf http://www.colorado.edu/ibs/es/alston/econ4504/readings/Baum...
- keenerd 9y ago> The question, then, would be "what isn't covered by Schumpeterian?" .. rent-seeking only? Normal businesses that are created for traditional reasons. For example, to partake in a gold rush (like phone apps a few years ago). Or to attempt to get a slice of economic pie, typically in a "perfect competition" market that precludes monopolies. Anyone who produces a commodity by standard methods. These aren't rent seeking, they are adding fair competition to an (un)established market. They aren't Schumpeterian either, they are more-of-the-same to help the market meet demand. Arguably a rational actor would invest their money in the commodity to allow existing companies to grow, but some people prefer to get their hands dirty instead.