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Timeline Events / Joseph Schumpeter: Capitalism, Socialism and Democracy 1942

The work within this book has been an important building block towards the understanding of innovation. In this seminal book, Schumpeter first identified the notion of creative destruction. Schumpeter used this term to describe the entry of innovative entrepreneurs within markets dominated by larger firms. It conveys the idea that new entrants would have to be radically different to enjoy success, and that this success would make current products or processes obsolete. With this idea of obsolescence looming, firms within the industries would be forced to remain competitive with continuous improvements.

The term is built on the earlier work by Karl Marx, and has helped somewhat describe the role of small and large firms within industries. It is important within innovation for sustainability as it promotes the idea that creating something new which makes the current process/idea/way of thinking redundant should not be feared, and that it is necessary for continuous innovative improvements.

Source: Joseph Schumpeter: Capitalism, Socialism and Democracy 1942

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