DISRUPTIVE
INNOVATION
PAGE 39
The idea of major innovations occurring every
50 odd years echoes Schumpeter s analysis of
economic cycles He spoke of capitalism s
history being punctuated by long and short
waves of disruptions A long upswing is
triggered when new technologies arrive
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iNM VOLUME 9
Schumpeter s theory also creates a vicious cycle
of its own destruction The entrepreneur brings
along something new which becomes his or her
source of profit Others join the market and
profit gets distributed New investments come
People speculate on the market and market
booms But then all this has to evaporate
eventually as everyone has most of the goods
and there is demand now for replacement
goods only
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From the steam engine to a search engine the
capitalist economy is now all about innovation
and creative destruction than ever before as
exemplified by CDL Creative Destruction Lab
in Rotman School of Management in Toronto
Canada Had he been here today Schumpeter
also known as the Prophet of Bust and Boom
would have been delighted to see his theory
standing even today
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