All Annotations of Rediscovering Schumpeter: The Power of Capitalism — HBS Working Knowledge[Preview]

saved by2 people, first byBrian Dowling on 2008-02-11, last byWill deBock on 2008-07-23

• As for my title, here's the quotation that inspired it: "Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion." Schumpeter wrote this sentence during the Great Depression of the 1930s. Many, many smart people of that time believed that technology had reached its limits and capitalism had passed its peak. Schumpeter believed the exact opposite, and of course he was right.
• This is an extremely hard lesson to accept, particularly by successful people. But business is a Darwinian process, and Schumpeter often likened it to evolution. The creative destruction can occur within a large innovative company (Toyota, GE, Microsoft), but it's much more likely to happen with start-ups, particularly since they now have so much access to venture capital. Schumpeter, by the way, was one of the first economists to use that term. He wrote an article in 1943 in which he speaks of "venture capital."
• A: Several economists, including Larry Summers and Brad DeLong, have said that the 21st century is going to be "the century of Schumpeter," and I agree.