Creative Destruction Theory

Creative Destruction Theory, proposed by economist Joseph Schumpeter, refers to the process where innovation and new technologies replace outdated industries and practices. This cycle stimulates economic growth by fostering new products, services, and markets while making older ones obsolete. For instance, the rise of digital photography disrupted traditional film photography. While some jobs and businesses may decline, the overall economy benefits as new opportunities arise, showcasing how progress often involves both creation and destruction. This dynamic underpins capitalism and emphasizes the importance of adaptability and innovation in a changing economic landscape.