Indeed, Schumpeter was among the first to lay out a clear concept of entrepreneurship. He distinguished inventions from the entrepreneur's innovations. Schumpeter pointed out that entrepreneurs innovate, not just by figuring out how to use inventions, but also by introducing new means of production, new products, and new forms of organization. These innovations, he argued, take just as much skill and daring as does the process of invention.
Under perfect competition all firms in an industry produced the same good, sold it for the same price, and had access to the same technology. Schumpeter saw this kind of competition as relatively unimportant. He wrote: "[What counts is] competition from the new commodity, the new technology, the new source of supply, the new type of organization... competition which... strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives."
Most economists accept the latter argument and, on that basis, believe that companies should be able to keep their production processes secret, have their trademarks protected from infringement, and obtain patents.
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- The question, especially in the digital age, is how long and under what conditions such a monopoly should be extended.
  posted by brianddrpm on 2008-02-11 03:59:42

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Rediscovering Schumpeter: The Power of Capitalism — HBS Working Knowledge

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Creative Destruction's Reconstruction: Joseph Schumpeter Revisited - ChronicleReview.com

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The average literate Americans know of three 20th-century economists: John Maynard Keynes, Milton Friedman, and Alan Greenspan
post by brianddrpm on 2008-02-11 03:00:55

Schumpeter saw farther: that market capitalism destroys its own earlier generations. There is, he wrote, a constant "process of industrial mutation — if I may use that biological term — that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in, and what every capitalist concern has got to live in."
It is important to stress that a Schumpeterian entrepreneur is not an inventor, but an innovator.
He did not think governments could maintain enough social insurance to counter the destructive part of capitalism without strangling the sources of rapid growth. But why Schumpeter's Capitalism, Socialism, and Democracy places so much blame on "democracy" is unclear to me: Oligarchs fear change at least as much as democratic electorates do.
One great test of our era will be whether creative destruction can flourish alongside public order and political liberty. If not, we're in big trouble. But if so — and I'm an optimist on the point — the results could be a marvel.

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Open Innovation

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Information Arbitrage: Creative Destruction: Solving Problems through Innovation

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Two Views of Innovation, Colliding in Washington - New York Times

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From the vantage point of a half-century, for example, it’s clear that the formation of Silicon Valley involved serendipity more than intentional design.
It appears that the Senate leadership has sympathy for the large technology companies. Opposed to big tech is a small group of high-profile inventors, like the Segway designer Dean Kamen and the former Apple engineer and QuickTime co-inventor Steve Perlman, as well as venture capitalists and a growing array of smaller businesses that do not share the market power of the largest companies. They have joined forces with the pharmaceutical industry, which has traditionally relied on the protection of a strong patent system.
Mr. Perlman says the Supreme Court has already made two landmark rulings that he says have largely addressed the “troll” problem without harming independent inventors like himself. In one case, eBay v. MercExchange, the court limited the ability of a patent covering a small feature to be used as a weapon, as in the NTP-R.I.M. settlement. In April, the court went much further in KSR International v. Teleflex, substantially raising the bar for patent holders in proving that their invention is not obvious. The ruling will make many existing patents more vulnerable and make new patents harder to get as well.
“I have to say I’m frankly astonished that apportionment has been this controversial,” said Mark A. Lemley, an intellectual-property scholar at Stanford who has testified in support of the legislation. “I can’t think of a straight-faced argument that you as a patent owner are entitled to more than your invention has contributed to a product.”
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- This may be a bridge between the innovation and collaboration article and creative-destruction I have in the conceptual stage or it may be a stand alone.
  posted by brianddrpm on 2008-01-22 01:36:17

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Innovative Minds Don’t Think Alike - New York Times

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The Innovation Institute at McColl Center for Visual Art

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