Friday, April 27, 2007

Schumpeter revival

Schumpeter was one of the most influential economists of the 20th century. McCraw has published a new biography. Although Schumpeter, who was born in Austria and then moved to the US, didn't leave a coherent theory, he is most associated with inovation and entrepreneurship today. In the words of the Economist:

Schumpeter's two greatest insights were that innovation is the driving force not only of capitalism but also of economic progress in general, and that entrepreneurs are the agents of innovation. Entrepreneurs are possessed by “the dream and the will to found a private kingdom”. But they are confronted with all sorts of obstacles. Innovation is hard to produce and harder to sustain: all successful businessmen stand on ground that is “crumbling beneath their feet”. And of course it produces losers as well as winners.

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