Friday, March 20, 2009

The Genius of Schumpeter - Part I

Not too many people in marketing will know of Joseph Schumpeter.

He was an economist, and a very good one at that. He's best know for his pioneering theory that business cycles are caused by innovation, rather than by nerdy economic factors - and he came up with this way back in the 1930's.

While that may involve a wee bit o' paraphrasing, it certainly captures the gist of his position - entrepreneurs cause business cycles. His position was that what we would call a recession would actually be a launchpad for entrepreneurs to come up with new ideas - which would otherwise have not received widespread attention.

There's a whole host of economic jargon that rumbles on for 900+ pages, which we shall ignore for the nonce. We will, however, cover more of his ideas in the days to come - for the moment, think this one through:

Entrepreneurs cause business cycles through creative destruction.

If that isn't incentive to go out there and do stuff, I don't know what is.

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