Creative Destruction

Schumpeter's term for innovation displacing established firms and methods, the engine of long-run growth.

Specifications & Metrics

type

Macroeconomics

introduced

1942

originator

Joseph Schumpeter

Core Principles & Analysis

• Capitalism, Socialism and Democracy (1942) describes the perennial gale that destroys old structures from within.
• It explains productivity growth as reallocation from declining incumbents to entrants.
• The idea grounds modern research on firm entry, exit, and industry dynamics.

Sources

• Wikipedia: Creative destruction