Creative Destruction

Author: Teresa Hatler Date: Wednesday, May 15, 2019 2:54:24 PM EDT Subject: Creative Destruction

When Joseph Schumpeter, born in 1883, coined the phrase, “creative destruction” the world was a much different place.  The newest innovations were electricity, automobiles, and telephones. Schumpeter found that “competition among entrepreneurs in the search for new ideas that will render their rivals ideas obsolete,” (Francois & Lloyd-Ellis, 2003) caused old ways of doing things to fall by the way for new and improved ways.

Perry Mark, 2018, gives a very interesting list of things that didn’t exist on Christmas fifteen years ago.  Check out some of the list:  iPhone, Facebook, YouTube, Twitter, Instagram, Google Maps, Spotify, Uber, Airbnb, App Store, Google Chrome.  What is currently in the process of being “destroyed” through the creation of the things on the list? Slowly becoming unnecessary are the U.S. postal service, newspapers, magazines, taxi service, traditional hotels, folded maps, atlas books, radios all of which were crucial to society only a short 20 years ago.  

What this has meant for consumers hinges on the age group.  Children under the age of 18 do not know what the world was like when we waited for the newspaper or the mail to be delivered.  Adults over 55 have had a very hard time learning the new technology, and then having to keep up as it has morphed and been updated frequently.  Schumpeter would be amazed at the difference since his lifetime.   

More information

Francois, P., & Lloyd-Ellis, H. (2003, June). Animal spirits through creative destruction. The American Economic Review, 530-550. doi:https://www-jstor-org.ezproxy.regent.edu/stable/3132105?pq-origsite=summon&seq=1#metadata_info_tab_contents

Perry, M. J. (2018). Creative destruction. Washington: American Enterprise Institute for Public Policy Research. Retrieved from http://eres.regent.edu:2048/login?url=https://search-proquest-com.ezproxy.regent.edu/docview/2160647709?accountid=13479