DISRUPTIVE
INNOVATION
PAGE 36
iNM VOLUME 9
CREATIVE DESTRUCTION...
DEFYING THE CONVENTION
GANDHALI INAMDAR
BATCH 2016 18
TAPMI MANIPAL
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It is a cold November morning in Bangalore as
the top 30 teams from IITs IIMs and other top
Indian Business Schools gear up themselves to
pitch their ideas in IIMB campus Who are they
pitching to a group of 20 odd venture capitalists
and investors who are there to find the next
innovator or the next Sachin Bansal or a Jennifer
Hyman cofounder of Rent the Runway
Entrepreneurship Innovation Creative
Destruction Change Technology are the buzz
words around
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with understanding the fundamental reasons
of the business cycle booms followed by busts
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Creative destruction is the process of
industrial mutation that incessantly
revolutionizes the economic structure from
within incessantly destroying the old one and
creating a new one Creative destruction allows
fast economic growth without generating
serious inflation This explains the idea behind
the high valuations for companies growing in a
dynamic environment and the government s
initiatives to create a start up and innovation
friendly environment through policies such as
Start up India Digital India etc These start ups
have a potential of creating prosperity even if
the destructive elements bring down
established corporations and lead to job losses
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Welcome to the vision of Joseph Schumpeter
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Schumpeter was the first to draw a definite
connection between the innovation or
destruction performance of an economy and the
functioning of its credit and capital markets
Schumpeter was an Austrian trained economist
economic historian and ardent capitalist He saw
entrepreneurship as the mainspring of capitalism
His theories anticipated an age when an
entrepreneur could command as much global
recognition as the president of the United States
He opined that the vital force behind behind
capitalism is innovation and the entrepreneur
willing to introduce it Schumpeter also grappled
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It is necessary to understand why creative
destructions occur and why they are potential
to thrive in a competitive market Creative
destruction initiatives are Cheaper from an end
customer perspective More accessible from a
usability or distribution perspective and use a
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