Schumpeterian economics

Schumpeterian economics, named after economist Joseph Schumpeter, focuses on the role of innovation and entrepreneurship in economic growth. It emphasizes that creative destruction—where new products and technologies replace outdated ones—drives progress. Entrepreneurs introduce innovations that disrupt established markets, leading to improved efficiency and new industries. This cycle of innovation fosters competition and ultimately benefits consumers. Schumpeter argued that while this process can lead to short-term instability, it is essential for long-term economic development and prosperity, highlighting the dynamic nature of capitalism.