Medical Economics September 14, 2021
Companies short on innovation won’t be able to adapt to changing markets and thus are imperiled.
If economist Joseph Schumpeter (1883-1950) were alive today, he’d be amazed by how right he was about the potential impacts of business innovation.
The renowned Austrian economist, who spent his later years at Harvard University, coined the now-familiar phrase “creative destruction” to describe how innovation by entrepreneurs can lead to overwhelming competitive advantages that redefine industries. We now call this disruption.
Schumpeter believed that creative destruction from innovating new technologies or processes would always have far more economic impact than competition between businesses using existing innovations. Today we view this as obvious, but that wasn’t the case in the early 20th century.