The Economist Launches “Schumpeter” Column on Innovation, Entrepreneurship & Dynamism

by on September 22, 2009 · 16 comments

Schumpeter ColumnI’m thrilled to hear that the Economist has just launched a new column about business, innovation and entrepreneurship in honor of Joseph Schumpeter (1883-1950), the brilliant Austrian economist who,

argued that innovation is at the heart of economic progress. It gives new businesses a chance to replace old ones, but it also dooms those new businesses to fail unless they can keep on innovating (or find a powerful government patron). In his most famous phrase he likened capitalism to a “perennial gale of creative destruction”.

For Schumpeter the people who kept this gale blowing were entrepreneurs. He was responsible for popularising the word itself, and for identifying the entrepreneur’s central function: of moving resources, however painfully, to areas where they can be used more productively. But he also recognised that big businesses can be as innovative as small ones, and that entrepreneurs can arise from middle management as well as college dorm-rooms.

Schumpeter’s work on the dynamism of high-tech markets (later married with Clayton Christensen‘s concept of “disruptive innovation“) is one of the most persistent themes across cyber-libertarian thinking of all stripes on a wide variety of issues. You can listen to an interview with the new column’s author on the Economist podcast here (MP3). One important point the author makes is that Schumpeter realized that celebrating capitalism did not preclude criticizing individual capitalists when justified and vice versa—something all too often forgotten today.

  • http://www.hallingblog.com/ Dale B. Halling

    Since 2000 we have passed a number of laws and regulations that are killing innovation in the US. The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups. For more information see http://hallingblog.com/2009/05/26/innovation-re….

  • dennisl

    As a libertarian I was confused when I stumbled upon this site/blog searching Google for Schumpeter and The Economists new Column formerly known as Face Value.

    What about this flirt (humbly said) with socialist and communist symbols and slogans? Are you really convinced that ambitions in that direction will preserve, develop, cultivate and establish a more free, open and prosperous technology driven society for the benefit of the people?

    Why all this commie periphernalia? I'm sure I'm not the only one who gets turned off by it? But I guess we are two different kinds of Libertarians, right?

    The concept of liberty and freedom sure have seen some pretty good devaluatins and new meanings since its breakthrough.

    Greetings from Sweden and good luck with this blog (which I basically like, but…)

  • dennisl

    As a libertarian I was confused when I stumbled upon this site/blog searching Google for Schumpeter and The Economists new Column formerly known as Face Value.

    What about this flirt (humbly said) with socialist and communist symbols and slogans? Are you really convinced that ambitions in that direction will preserve, develop, cultivate and establish a more free, open and prosperous technology driven society for the benefit of the people?

    Why all this commie periphernalia? I'm sure I'm not the only one who gets turned off by it? But I guess we are two different kinds of Libertarians, right?

    The concept of liberty and freedom sure have seen some pretty good devaluatins and new meanings since its breakthrough.

    Greetings from Sweden and good luck with this blog (which I basically like, but…)

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