Schumpeter's Theory of Innovation

Schumpeter's Theory of Innovation emphasizes that innovation is the driving force behind economic development. According to him, entrepreneurs introduce new products, processes, or ideas that disrupt markets and create new opportunities. This "creative destruction" leads to improved efficiency and growth, as older technologies or businesses are replaced. Schumpeter believed that this cycle of innovation is essential for progress, as it stimulates competition and encourages investment, ultimately benefiting society as a whole. In essence, innovation is pivotal for economic vitality and transformation.