View source for Creative destruction

{{Short description|Concept in economics}}
{{Distinguish|Creative disruption|text=[[Creative disruption]], a marketing concept dating from the 1990s}}
{{Use dmy dates|date=May 2025}}
{{Use Oxford spelling|date = May 2025}}
{{Neoliberalism sidebar}}
{{Capitalism sidebar}}
{{Marxism}}

'''Creative destruction''' ([[German language|German]]: {{Lang|de|schöpferische Zerstörung}}) is a concept in [[economics]] that describes a process in which new innovations replace and make obsolete older innovations.<ref>{{Cite web |last= |first= |date= |title=Schumpeter's Theory of Creative Destruction - Engineering and Public Policy - College of Engineering - Carnegie Mellon University |url=http://www.cmu.edu/epp/irle/irle-blog-pages/schumpeters-theory-of-creative-destruction.html |access-date=2023-08-13 |website=www.cmu.edu |language=en}}</ref>

The concept is usually identified with the economist [[Joseph Schumpeter]],<ref>{{cite book |last1=Ulgen |first1=Faruk |title=Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship |chapter=Creative Destruction |date=2017 |pages=1–8 |doi=10.1007/978-1-4614-6616-1_407-2|isbn=978-1-4614-6616-1 |s2cid=240686671 }}</ref><ref>{{cite book |last1=Loesche |first1=Frank |last2=Torre |first2=Ilaria |chapter=Creative Destruction |title=Encyclopedia of Creativity |edition=Third |date=2020 |pages=226–231 |doi=10.1016/B978-0-12-809324-5.23696-1|isbn=9780128156155 |s2cid=242692186 }}</ref><ref name="reinert" /> who derived it from the work of [[Karl Marx]] and popularized it as a theory of [[Innovation economics|economic innovation]] and the [[business cycle]]. It is also sometimes known as '''Schumpeter's gale'''. In [[Marxian economic theory]], the concept refers more broadly to the linked processes of the accumulation and annihilation of [[wealth]] under capitalism.<ref name="isbn0-14-044757-1">{{cite book
|author1=Marx, Karl
|author-link1=Karl Marx
|author2=Engels, Friedrich
|author-link2=Friedrich Engels
|others=Moore, Samuel (trans. 1888)
|title=The Communist Manifesto
|publisher=Penguin
|location=Harmondsworth, UK
|year=2002
|orig-year=1848
|page=[https://archive.org/details/communistmanifes00marx_5/page/226 226]
|isbn=978-0-14-044757-6
|url=https://archive.org/details/communistmanifes00marx_5
|url-access=registration
|access-date=2010-11-07
}}</ref><ref name="isbn0-14-044575-7">{{cite book
|author=Marx, Karl
|author-link=Karl Marx
|others=Nicolaus, Martin (trans. 1973)
|title=Grundrisse: Foundations of the Critique of Political Economy (rough draft)
|publisher=Penguin
|location=Harmondsworth, UK
|year=1993
|orig-year=1857
|page=750
|isbn=978-0-14-044575-6
|url=https://books.google.com/books?id=bDyemaqiZjUC
|access-date=2010-11-07
}}</ref><ref name="Marx1863">{{Cite book
|publisher=Lawrence & Wishart
|location=London
|last=Marx
|first=Karl
|author-link=Karl Marx
|title=Theories of Surplus-Value: "Volume IV" of Capital
|volume=2
|pages=495–96
|url=https://books.google.com/books?id=sU23AAAAIAAJ
|access-date=2010-11-10
|year=1969
|isbn=9780853151944
|orig-year=1863
}}</ref>

The German [[sociologist]] [[Werner Sombart]] has been credited<ref name="reinert">{{cite book |doi=10.1007/978-0-387-32980-2_4 |chapter=Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter |title=Friedrich Nietzsche (1844–1900) |series=The European Heritage in Economics and the Social Sciences |year=2006 |last1=Reinert |first1=Hugo |last2=Reinert |first2=Erik S. |volume=3 |pages=55–85 |isbn=978-0-387-32979-6 }}</ref> with the first use of these terms in his work ''{{Lang|de|Krieg und Kapitalismus}}'' (''War and Capitalism'', 1913).<ref name="Krieg_Kapitalismus">Describing the way in which the destruction of forests in Europe laid the foundations for nineteenth-century capitalism, Sombart writes: "Wiederum aber steigt aus der Zerstörung neuer schöpferischer Geist empor" ("Again, however, from destruction a new spirit of creation arises").{{cite book
|author=Sombart, Werner
|author-link=Werner Sombart
|title=Krieg und Kapitalismus
|language=de
|location=München
|year=1913
|page=207
|url=https://archive.org/stream/kriegundkapitali00sombuoft/kriegundkapitali00sombuoft_djvu.txt
|access-date=2010-11-07
|isbn=978-0-405-06539-2
}}</ref> In the earlier work of Marx, however, the idea of creative destruction or annihilation (''{{Lang|de|Vernichtung}}'') implies not only that capitalism destroys and reconfigures previous economic orders, but also that it must continuously devalue existing wealth (whether through war, dereliction, or regular and periodic economic crises) in order to clear the ground for the creation of new wealth.<ref name="isbn0-14-044757-1" /><ref name="isbn0-14-044575-7" /><ref name="Marx1863" />

In ''[[Capitalism, Socialism and Democracy]]'' (1942), Joseph Schumpeter developed the concept out of a careful reading of Marx's thought. In contrast with Marx – who argued that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system – Schumpeter reinforced the evolutionary nature of capitalist economies, downplaying the concerns of static competition analysis (i.e., market concentration), and reinforcing the importance of dynamic competition analysis (i.e., threat of entry, new technologies and means of production, competition in dimensions different than price). In his words, "This process of Creative
Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in [...] The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them. As long as this is not recognized, the investigator does a meaningless job. As soon as it is recognized, his outlook on capitalist practice and its social results changes considerably".<ref name="Schumpeter1942">{{cite book
|last=Schumpeter
|first=Joseph A.
|author-link=Joseph Schumpeter
|title=Capitalism, Socialism and Democracy
|url=https://books.google.com/books?id=6eM6YrMj46sC
|access-date=23 November 2011
|year=1994
|publisher=Routledge
|location=London
|page=139
|isbn=978-0-415-10762-4
|orig-year=1942
}}</ref> Despite this, the term subsequently gained popularity within mainstream economics as a description of processes such as [[Layoff|downsizing]] to increase the efficiency and dynamism of a company. The Marxian usage has, however, been retained and further developed in the work of [[social science|social scientists]] such as [[David Harvey (geographer)|David Harvey]],<ref name="isbn1-84467-095-3">{{cite book
|author=Harvey, David
|author-link=David Harvey (geographer)
|title=Limits to Capital
|edition=2nd
|publisher=Verso
|location=London
|year=2007
|orig-year=1982
|isbn=978-1-84467-095-6
|pages=[https://archive.org/details/limitstocapital00davi/page/200 200]–03
|url=https://archive.org/details/limitstocapital00davi
|url-access=registration
|access-date=2010-11-07
}}</ref> [[Marshall Berman]],<ref name="isbn0-86091-785-1">{{cite book
|author=Berman, Marshall
|author-link=Marshall Berman
|title=All that is Solid Melts into Air: The Experience of Modernity
|publisher=Viking Penguin
|location=Ringwood, Vic
|year=1988
|isbn=978-0-86091-785-4
|url=https://books.google.com/books?id=mox1ywiyhtgC
|access-date=2010-11-07
}}</ref> [[Manuel Castells]]<ref name="isbn0-631-22140-9">{{cite book
|author=Castells, Manuel
|author-link=Manuel Castells
|title=The Rise of the Network Society
|edition=2nd
|publisher=Blackwell Publishers
|location=Oxford
|year=2000
|orig-year=1996
|isbn=978-0-631-22140-1
|url=https://books.google.com/books?id=hngg4aFtJVcC
|access-date=2010-11-07
}}.</ref> and [[Daniele Archibugi]].<ref>{{cite book
|last1=Archibugi |first1=Daniele |author1-link=Daniele Archibugi
|last2=Filippetti |first2=Andrea
|title=Innovation and Economic Crisis. Lessons and Prospects from the Economic Downturn
|publisher=Routledge
|location=London
|year=2003
|isbn=978-0-415-74559-8
|url=https://www.routledge.com/Innovation-and-Economic-Crisis-Lessons-and-Prospects-from-the-Economic/Archibugi-Filippetti/p/book/9780415602280
|access-date=2016-06-25
}}.</ref>

In modern economics, creative destruction is one of the central concepts in the [[endogenous growth theory]].<ref name="AghionHowitt">{{cite book
|last1=Aghion
|first1=Philippe
|last2=Howitt
|first2=Peter
|title= Endogenous growth theory
|url=https://mitpress.mit.edu/9780262528467/endogenous-growth-theory/
|access-date=29 December 2023
|year=1998
|publisher=MIT Press
|location=Cambridge, MA.
|isbn=9780262011662
}}</ref> 
In [[Why Nations Fail]], a popular book on long-term economic development, [[Daron Acemoglu]] and [[James A. Robinson]] argue the major reason countries stagnate and go into decline is the willingness of the ruling elites to block creative destruction, a beneficial process that promotes innovation.<ref>{{cite book |last1=Acemoglu |first1=Daron |last2=Robinson |first2=James A. |title=Why nations fail: the origins of power, prosperity and poverty |date=2012 |publisher=Crown Publishers |location=New York |isbn=978-0307719218 |page=100 |edition=1st |url=https://www.univ.ox.ac.uk/book/why-nations-fail/ |access-date=2 November 2024}}</ref>

==History==

=== By Karl Marx ===
[[File:Karl Marx 001 (rotated).jpg|thumb|[[Karl Marx]] (1818–1883) never explicitly used the mark "creative destruction"]]
Although the modern term "creative destruction" is not used explicitly by Marx, it is largely derived from his analyses, particularly in the work of [[Werner Sombart]],<ref>{{Cite journal |first=Abram L. |last=Harris |title=Sombart and German (National) Socialism |journal=[[Journal of Political Economy]] |volume=50 |issue=6 |year=1942 |pages=805–35 [p. 807] |doi=10.1086/255964 |jstor=1826617 |s2cid=154171970 }}</ref> and of Joseph Schumpeter, who discussed at length the origin of the idea in Marx's work (see below).

In ''[[The Communist Manifesto]]'' of 1848, [[Karl Marx]] and [[Friedrich Engels]] described the crisis tendencies of capitalism in terms of "the enforced destruction of a mass of productive forces":
<blockquote>In these crises, a great part not only of existing production, but also of previously created productive forces, are periodically destroyed.<ref name="isbn0-14-044757-1" /></blockquote>
A few years later, in the ''{{Lang|de|Grundrisse}}'', Marx was writing of "the violent destruction of capital not by relations external to it, but rather as a condition of its self-preservation".<ref name="isbn0-14-044575-7" /> In other words, he establishes a necessary link between the generative or creative forces of production in capitalism and the destruction of capital value as one of the key ways in which capitalism attempts to overcome its internal contradictions:
<blockquote>These contradictions lead to explosions, cataclysms, crises, in which ... momentaneous suspension of labour and annihilation of a great portion of capital ... violently lead it back to the point where it is enabled [to go on] fully employing its productive powers without committing suicide.<ref name="isbn0-14-044575-7" /><ref name="Elliott1978-79">For further discussion of the concept of creative discussion in the Grundrisse, see {{Cite journal | last1 = Elliott | first1 = J. E. | title = Marx's "Grundrisse": Vision of Capitalism's Creative Destruction | jstor = 4537475 | journal = Journal of Post Keynesian Economics | volume = 1 | issue = 2 | pages = 148–69 | year = 1978 | doi = 10.1080/01603477.1978.11489107 }}</ref></blockquote>
In the ''Theories of Surplus Value'' ("Volume IV" of ''[[Das Kapital]]'', 1863), Marx refines this theory to distinguish between scenarios where the destruction of (commodity) values affects either use values or exchange values or both together.<ref name="isbn1-84467-095-3"/> The destruction of exchange value combined with the preservation of use value presents clear opportunities for new capital investment and hence for the repetition of the production-devaluation cycle:
<blockquote>the destruction of capital through crises means the depreciation of values which prevents them from later renewing their reproduction process as capital on the same scale. This is the ruinous effect of the fall in the prices of commodities. It does not cause the destruction of any use-values. What one loses, the other gains. Values used as capital are prevented from acting again as capital in the hands of the same person. The old capitalists go bankrupt. ... A large part of the nominal capital of the society, i.e., of the exchange-value of the existing capital, is once for all destroyed, although this very destruction, since it does not affect the use-value, may very much expedite the new reproduction. This is also the period during which moneyed interest enriches itself at the cost of industrial interest.<ref>{{Cite book
|last=Marx
|first=Karl
|author-link=Karl Marx
|title=Theories of Surplus-Value: "Volume IV" of Capital
|volume=2
|pages=495–96
|url=https://books.google.com/books?id=sU23AAAAIAAJ
|year=1969
|publisher=Lawrence & Wishart
|isbn=9780853151944
|orig-year=1863
}} For further explanation of these quotations see {{cite book
|author=Harvey, David
|author-link=David Harvey (geographer)
|title=Limits to Capital
|publisher=Verso
|year=2007
|orig-year=1982
|isbn=978-1-84467-095-6
|url=https://archive.org/details/limitstocapital00davi
|url-access=registration
|pages=[https://archive.org/details/limitstocapital00davi/page/200 200]–03
}}</ref></blockquote>
Social geographer [[David Harvey (geographer)|David Harvey]] sums up the differences between Marx's usage of these concepts and Schumpeter's: "Both Karl Marx and Joseph Schumpeter wrote at length on the 'creative-destructive' tendencies inherent in capitalism. While Marx clearly admired capitalism's creativity he ... strongly emphasised its self-destructiveness. The Schumpeterians have all along gloried in capitalism's endless creativity while treating the destructiveness as mostly a matter of the normal costs of doing business".<ref name="isbn1-84668-308-4">{{cite book|author=Harvey, David|author-link=David Harvey (geographer)|title=The Enigma of Capital and the Crises of Capitalism|publisher=Profile Books|location=London|year=2010|page=46|isbn=978-1-84668-308-4|url=https://books.google.com/books?id=ww1dPgAACAAJ|access-date=2010-11-10}}{{Dead link|date=December 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

===By Werner Sombart===
In philosophical terms, the concept of "creative destruction" is close to [[Hegel]]'s concept of [[Aufheben|sublation]]. In German economic discourse it was taken up from Marx's writings by [[Werner Sombart]], particularly in his 1913 text ''{{Lang|de|Krieg und Kapitalismus}}'':<ref>{{cite book |last=Sombart |first=W. |author-link=Werner Sombart |year=1913 |title=Krieg und Kapitalismus |trans-title=War and Capitalism |location=Leipzig |publisher=Duncker & Humblot |page=[https://archive.org/details/kriegundkapitali00sombuoft/page/207 207] |isbn=9780405065392 |url=https://archive.org/details/kriegundkapitali00sombuoft }}</ref>
<blockquote>Again, however, ''from destruction a new spirit of creation arises;'' the scarcity of wood and the needs of everyday life... forced the discovery or invention of substitutes for wood, forced the use of coal for heating, forced the invention of coke for the production of iron.</blockquote>

=== Other early usage ===
In the ''[[Origin of Species]]'', which was published in 1859, [[Charles Darwin]] wrote that the "extinction of old forms is the almost inevitable consequence of the production of new forms". One notable exception to this rule is how the extinction of the dinosaurs facilitated the [[adaptive radiation]] of mammals. In this case creation was the consequence, rather than the cause, of destruction.

[[File:Shiva as the Lord of Dance LACMA edit.jpg|thumb|In [[Hinduism]], the god [[Shiva]] is simultaneously destroyer and creator, portrayed as ''[[Shiva Nataraja]]'' (Lord of the Dance), which is proposed as the source of the Western notion of "creative destruction".<ref name="reinert" />]]
Hugo Reinert has argued that Sombart's formulation of the concept was influenced by [[Eastern mysticism]], specifically the image of the [[Hindu]] god [[Shiva]], who is presented in the paradoxical aspect of simultaneous destroyer and creator.<ref name="reinert" /> Conceivably this influence passed from [[Johann Gottfried Herder]], who brought Hindu thought to German philosophy in his ''Philosophy of Human History'' (Ideen zur Philosophie der Geschichte der Menschheit) (Herder 1790–92), specifically volume III, pp.&nbsp;41–64.<ref name="reinert" /> via [[Arthur Schopenhauer]] and the [[oriental studies|Orientalist]] [[Friedrich Maier]] through [[Friedrich Nietzsche]]'s writings. 

Nietzsche represented the creative destruction of modernity through the mythical figure of [[Dionysus]], a figure whom he saw as at one and the same time "destructively creative" and "creatively destructive".<ref>{{Cite book
| publisher = Penguin
| last1 = Bradbury
| first1 = Malcolm
| author1-link = Malcolm Bradbury
| last2 = McFarlane
| first2 = James
| author2-link = James McFarlane
| title = Modernism: A Guide to European Literature 1890–1930
| location = Harmondsworth, UK
| isbn = 978-0140138320
| year = 1976
| page = 446
| url = https://books.google.com/books?id=YMWzAAAAIAAJ
}}</ref> In the following passage from ''[[On the Genealogy of Morality]]'' (1887), Nietzsche argues for a universal principle of a cycle of creation and destruction, such that every creative act has its destructive consequence:
<blockquote>But have you ever asked yourselves sufficiently how much the erection of every ideal on earth has cost? How much reality has had to be misunderstood and slandered, how many lies have had to be sanctified, how many consciences disturbed, how much "God" sacrificed every time? If a temple is to be erected a temple must be destroyed: that is the law – let anyone who can show me a case in which it is not fulfilled! – [[Friedrich Nietzsche]], ''[[On the Genealogy of Morality]]''</blockquote>

Other nineteenth-century formulations of this idea include Russian [[anarchist]] [[Mikhail Bakunin]], who wrote in 1842, "The passion for destruction is a creative passion, too!"<ref>[http://www.marxists.org/reference/archive/bakunin/works/1842/reaction-germany.htm The Reaction in Germany, From the Notebooks of a Frenchman], October 1842</ref> Note, however, that this earlier formulation might more accurately be termed "destructive creation",{{Original research inline|date=July 2014}} and differs sharply from Marx's and Schumpeter's formulations in its focus on the active destruction of the existing social and political order by human agents (as opposed to systemic forces or contradictions in the case of both Marx and Schumpeter).

==Association with Joseph Schumpeter==
[[File:Joseph Schumpeter 1945 Bachrach portrait.png|thumb|[[Joseph Schumpeter]] (1883–1950) is credited with coining the modern understanding of the term]]
The expression "creative destruction" was popularized by and is most associated with Joseph Schumpeter, particularly in his book ''[[Capitalism, Socialism and Democracy]]'', first published in 1942. Already in his 1939 book ''Business Cycles'', he attempted to refine the innovative ideas of [[Nikolai Kondratieff]] and his [[Kondratiev wave|long-wave]] cycle which Schumpeter believed was driven by technological innovation.<ref name="Crumbling Walls">{{cite book
|last=McKraw
|first=Thomas K.
|author-link=Thomas K. McKraw
|title=Business History Review 80
|url=http://hbswk.hbs.edu/pdf/20070207_Schumpeter.pdf
|archive-url=https://web.archive.org/web/20080226211528/http://hbswk.hbs.edu/pdf/20070207_Schumpeter.pdf
|url-status=dead
|archive-date=26 February 2008
|access-date=23 February 2012
|year=2006
|publisher=Cambridge Journals Online
|location=London
|page= 239
}}</ref> Three years later, in ''Capitalism, Socialism and Democracy'', Schumpeter introduced the term "creative destruction", which he explicitly derived from Marxist thought (analysed extensively in Part I of the book) and used it to describe the disruptive process of transformation that accompanies such innovation:
<blockquote>Capitalism ... is by nature a form or method of economic change and not only never is but never can be stationary. ... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.<p>... The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure ''from within'', incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.</p><p>[... Capitalism requires] the perennial gale of Creative Destruction.<ref name="Schumpeter1942_2">{{cite book
|last=Schumpeter
|first=Joseph A.
|author-link=Joseph Schumpeter
|title=Capitalism, Socialism and Democracy
|url=https://books.google.com/books?id=6eM6YrMj46sC
|access-date=23 November 2011
|year=1994
|publisher=Routledge
|location=London
|pages=82–83
|isbn=978-0-415-10762-4
|orig-year=1942
}}</ref></p></blockquote>
In Schumpeter's vision of capitalism, innovative entry by [[entrepreneurs]] was the [[Disruptive innovation|disruptive force]] that sustained [[economic growth]], even as it destroyed the value of established companies and laborers that enjoyed some degree of [[monopoly]] power derived from previous technological, organizational, regulatory, and economic paradigms.<ref>{{cite journal |first1=J. Gregory |last1=Sidak |first2=David J. |last2=Teece |title=Dynamic Competition in Antitrust Law |journal=[[Journal of Competition Law & Economics]] |year=2009 |volume=5  |issue=4 |pages=581–631 [p. 604] |doi=10.1093/joclec/nhp024 |doi-access=free }}</ref> However, Schumpeter was pessimistic about the sustainability of this process, seeing it as leading eventually to the undermining of capitalism's own institutional frameworks:
<blockquote>In breaking down the pre-capitalist framework of society, capitalism thus broke not only barriers that impeded its progress but also flying buttresses that prevented its collapse. That process, impressive in its relentless necessity, was not merely a matter of removing institutional deadwood, but of removing partners of the capitalist stratum, symbiosis with whom was an essential element of the capitalist schema. [... T]he capitalist process in much the same way in which it destroyed the institutional framework of feudal society also undermines its own.<ref name="Schumpeter1942" /></blockquote>

=== Examples ===
[[File:Polaroid OneStep Express.jpg|thumb|right|Polaroid [[instant camera]]s have disappeared almost completely with the spread of [[digital photography]]. They were only to return once again in 2017 with new cameras and films, as the demand for the instant photo was underestimated.]] Schumpeter (1949) in one of his examples used "the railroadization of the [[Midwestern United States|Middle West]] as it was initiated by the [[Illinois Central Railroad|Illinois Central]]". He wrote, "The Illinois Central not only meant very good business whilst it was built and whilst new cities were built around it and land was cultivated, but it spelled the death sentence for the [old] agriculture of the [[Western United States|West]]".<ref>Schumpeter, J. A. (1941): An economic interpretation of our time: The Lowell Lectures, in The Economics and Sociology of Capitalism, Princeton, N.J.: Princeton University Press, pp. 349. As quoted by "Schumpeter and Regional Innovation" by Esben S. Andersen. Chapter for Handbook of Regional Innovation and Growth. (ed. P. Cooke, Elgar Publ.)</ref>

Companies that once revolutionized and dominated new industries – for example, [[Xerox]] in copiers<ref>{{cite journal |last1=de Figueiredo |first1=John M. |last2=Kyle |first2=Margaret K. |title=Surviving the gales of creative destruction: the determinants of product turnover |journal=Strategic Management Journal |date=March 2006 |volume=27 |issue=3 |pages=241–264 |doi=10.1002/smj.512 |jstor=20142331 }}</ref> or [[Polaroid Corporation|Polaroid]] in instant photography – have seen their [[Profit (accounting)|profits]] fall and their dominance vanish as rivals launched improved designs or cut manufacturing costs. In technology, the [[cassette tape]] replaced the [[8-track tape|8-track]], only to be replaced in turn by the [[compact disc]], which was undercut by downloads to [[MP3]] players, which is now being usurped by web-based [[Streaming media|streaming services]].<ref>[https://www.theguardian.com/technology/2015/may/12/warner-music-spotify-streaming-income-downloads Warner Music reveals streaming income has overtaken downloads]''The Guardian'', Tuesday 12 May 2015</ref> Companies that made money out of technology which eventually becomes obsolete do not necessarily adapt well to the business environment created by the new technologies.

One such example is how online [[ad-supported]] news sites such as ''[[The Huffington Post]]'' are leading to creative destruction of the traditional newspaper. ''[[The Christian Science Monitor]]'' announced in January 2009<ref>[http://johngaynardcreativity.blogspot.com/2009/01/christian-science-monitor-is-to.html Creative Destruction and Innovation in The News Industry] John Gaynard's blog, January 21, 2009.</ref> that it would no longer continue to publish a daily paper edition, but would be available online daily and provide a weekly print edition. The ''[[Seattle Post-Intelligencer]]'' became online-only in March 2009.<ref name="pifrontpage">{{cite news |first=Dan |last=Richman |author2=James, Andrea |title=Seattle P-I to publish last edition Tuesday |url=http://www.seattlepi.com/business/403793_piclosure17.html |work=Seattle Post-Intelligencer |date=2009-03-16 }}</ref> At a national level in USA, employment in the newspaper business fell from 455,700 in 1990 to 225,100 in 2013. Over that same period, employment in internet publishing and broadcasting grew from 29,400 to 121,200.<ref>{{cite web|last=Bureau of Labor Statistics|title=Series ID CES5051913001 and CES5051111001|url=http://www.bls.gov|access-date=22 April 2013}}</ref> Traditional French alumni networks, which typically charge their students to network online or through paper directories, are in danger of creative destruction from free social networking sites such as [[LinkedIn]] and [[Viadeo]].<ref>[http://johngaynardcreativity.blogspot.com/2009/01/could-linkedin-and-viadeo-creatively.html Could LinkedIn and Viadeo Creatively Destroy the Traditional French Networks?] John Gaynard's blog, January 13, 2009.</ref>

In fact, successful [[innovation]] is normally a source of temporary [[market power]], eroding the profits and position of old firms, yet ultimately succumbing to the pressure of new inventions commercialised by competing entrants. Creative destruction is a powerful [[economic]] concept because it can explain many of the dynamics or [[Activation energy|kinetics]] of industrial change: the transition from a [[competitive]] to a monopolistic market, and back again.<ref>{{cite journal |last1=Sidak |first1=J. G. |last2=Teece |first2=D. J. |title=Dynamic Competition in Antitrust Law |journal=Journal of Competition Law and Economics |date=1 December 2009 |volume=5 |issue=4 |pages=581–631 |doi=10.1093/joclec/nhp024 |ssrn=1479874 |doi-access=free }}</ref> It has been the inspiration of [[endogenous growth theory]] and also of [[evolutionary economics]].<ref>{{cite journal |last1=Nelson |first1=Richard R. |last2=Nelson |first2=Katherine |title=Technology, institutions, and innovation systems |journal=Research Policy |date=February 2002 |volume=31 |issue=2 |pages=265–272 |doi=10.1016/S0048-7333(01)00140-8 |citeseerx=10.1.1.500.5013 }}</ref>

[[David Ames Wells]] (1890), who was a leading authority on the effects of technology on the economy in the late 19th century, gave many examples of creative destruction (without using the term) brought about by improvements in [[steam engine]] efficiency, shipping, the international [[telegraph]] network, and agricultural mechanization.<ref>{{cite book |title=Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society |last=Wells |first=David A. |year=1890 |publisher= D. Appleton and Co. |location= New York |isbn= 978-0-543-72474-8 |url=https://archive.org/details/recenteconomicc01wellgoog }}</ref>

==Later developments==

===Ludwig Lachmann===

{{Blockquote|These economic facts have certain social consequences. As the critics of the market economy nowadays prefer to take their stand on "social" grounds, it may be not inappropriate here to elucidate the true social results of the market process. We have already spoken of it as a leveling process. More aptly, we may now describe these results as an instance of what [[Vilfredo Pareto|Pareto]] called "[[circulation of elite|the circulation of elites]]". Wealth is unlikely to stay for long in the same hands. It passes from hand to hand as unforeseen change confers value, now on this, now on that specific resource, engendering capital gains and losses. The owners of wealth, we might say with Schumpeter, are like the guests at a hotel or the passengers in a train: They are always there but are never for long the same people.|2=[[Ludwig Lachmann]], The Market Economy and the Distribution of Wealth<ref>{{cite web |title=The Market and the Distribution of Wealth |url=https://mises.org/library/market-and-distribution-wealth |website=Mises Institute |date=30 September 2011 }}</ref>}}

=== David Harvey ===
Geographer and historian [[David Harvey (geographer)|David Harvey]] in a series of works from the 1970s onwards (''Social Justice and the City'', 1973;<ref>{{Cite book |url=https://books.google.com/books?id=VCwLi2nVmooC |isbn=978-0-8203-3403-5 |title=Social Justice and the City |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2009 |publisher=University of Georgia Press |orig-year=1973}}</ref> ''The Limits to Capital'', 1982;<ref>{{cite book |url=https://archive.org/details/limitstocapital00davi |url-access=registration |isbn=978-1-84467-095-6 |title=The Limits to Capital |publisher=Verso |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2006 |orig-year=1982}}</ref> ''The Urbanization of Capital'', 1985;<ref>{{cite book |url=https://books.google.com/books?id=5lvaAAAAMAAJ |isbn=978-0-8018-3144-7 |title=The Urbanization of Capital: Studies in the History and Theory of Capitalist Urbanization |last=Harvey |first=David |author-link=David Harvey (geographer) |year=1985|publisher=Johns Hopkins University Press }}</ref> ''Spaces of Hope'', 2000;<ref>{{cite book |url=https://books.google.com/books?id=W00VHZg3u2MC |isbn=978-0-520-22578-7 |title=Spaces of Hope |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2000|publisher=University of California Press }}</ref> ''Spaces of Capital'', 2001;<ref>{{cite book |url=https://archive.org/details/isbn_9780415932417 |url-access=registration |isbn=978-0-415-93241-7 |title=Spaces of Capital: Towards a Critical Geography |publisher=Routledge |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2001}}</ref> ''Spaces of Neoliberalization'', 2005;<ref>{{cite book |url=https://books.google.com/books?id=Z7sS53uqTJoC |isbn=978-3-515-08746-9 |title=Spaces of Neoliberalization: Towards a Theory of Uneven Geographical Development |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2005|publisher=Franz Steiner Verlag }}</ref> ''The Enigma of Capital and the Crises of Capitalism'', 2010<ref>{{cite book
|author=Harvey, David
|author-link=David Harvey (geographer)
|title=The Enigma of Capital and the Crises of Capitalism
|publisher=Profile Books
|location=London
|year=2010
|isbn=978-1-84668-308-4
|url=https://books.google.com/books?id=ww1dPgAACAAJ
|access-date=2010-11-10
}}{{Dead link|date=December 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>), elaborated Marx's thought on the systemic contradictions of capitalism, particularly in relation to the production of the urban environment (and to the production of space more broadly). He developed the notion that capitalism finds a "[[spatial fix]]"<ref>See in particular "The Spatial Fix: Hegel, Von Thünen and Marx", in {{cite book |url=https://archive.org/details/isbn_9780415932417 |url-access=registration |isbn=978-0-415-93241-7 |title=Spaces of Capital: Towards a Critical Geography |publisher=Routledge |last=Harvey |first=David |author-link=David Harvey (geographer) |year=2001 |pages=[https://archive.org/details/isbn_9780415932417/page/284 284]–311}}</ref> for its periodic crises of overaccumulation through investment in fixed assets of infrastructure, buildings, etc.: "The built environment that constitutes a vast field of collective means of production and consumption absorbs huge amounts of capital in both its construction and its maintenance. Urbanization is one way to absorb the capital surplus".<ref>{{cite book
|author=Harvey, David
|author-link=David Harvey (geographer)
|title=The Enigma of Capital and the Crises of Capitalism
|publisher=Profile Books
|page=85
|location=London
|year=2010
|isbn=978-1-84668-308-4
|url=https://books.google.com/books?id=ww1dPgAACAAJ
|access-date=2010-11-10
}}{{Dead link|date=December 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> While the creation of the built environment can act as a form of crisis displacement, it can also constitute a limit in its own right, as it tends to freeze productive forces into a fixed spatial form. As capital cannot abide a limit to profitability, ever more frantic forms of "[[time-space compression]]"<ref>{{cite book |url=https://books.google.com/books?id=RAGeva8_ElMC |isbn=978-0-631-16294-0 |pages=240–323 |title=The Condition of Postmodernity: an Enquiry into the Origins of Cultural Change |last=Harvey |first=David |author-link=David Harvey (geographer) |year=1995|publisher=Wiley }}</ref> (increased speed of turnover, innovation of ever faster transport and communications' infrastructure, "flexible accumulation"<ref>{{cite book |isbn=978-0-631-16294-0 |page=147 |title=The Condition of Postmodernity |last=Harvey |first=David |author-link=David Harvey (geographer) |year=1995|publisher=Wiley }}</ref>) ensue, often impelling technological innovation. Such innovation, however, is a double-edged sword:

{{Blockquote|The effect of continuous innovation ... is to devalue, if not destroy, past investments and labour skills. ''Creative destruction'' is embedded within the circulation of capital itself. Innovation exacerbates instability, insecurity, and in the end, becomes the prime force pushing capitalism into periodic paroxysms of crisis. ... The struggle to maintain profitability sends capitalists racing off to explore all kinds of other possibilities. New product lines are opened up, and that means the creation of new wants and needs. Capitalists are forced to redouble their efforts to create new needs in others .... The result is to exacerbate insecurity and instability, as masses of capital and workers shift from one line of production to another, leaving whole sectors devastated .... The drive to relocate to more advantageous places (the geographical movement of both capital and labour) periodically revolutionizes the international and territorial division of labour, adding a vital geographical dimension to the insecurity. The resultant transformation in the experience of space and place is matched by revolutions in the time dimension, as capitalists strive to reduce the turnover time of their capital to "the twinkling of an eye".<ref>{{cite book |isbn=978-0-631-16294-0 |pages=105–06 |title=The Condition of Postmodernity |last=Harvey |first=David |author-link=David Harvey (geographer) |year=1995|publisher=Wiley }}</ref>}}

Globalization can be viewed as some ultimate form of time-space compression, allowing capital investment to move almost instantaneously from one corner of the globe to another, devaluing fixed assets and laying off labour in one urban conglomeration while opening up new centres of manufacture in more profitable sites for production operations. Hence, in this continual process of creative destruction, capitalism does not resolve its contradictions and crises, but merely "moves them around geographically".<ref>{{Cite video
|people=David Harvey
|title=Crises of Capitalism
|medium=Webcast
|publisher=RSA Animates
|location=Royal Society for the encouragement of Arts, Manufactures and Commerce, London
|date=28 June 2010
|url=http://comment.rsablogs.org.uk/2010/06/28/rsa-animate-crisis-capitalism/}}
</ref>

=== Marshall Berman ===
In his 1987 book ''All That is Solid Melts into Air: The Experience of Modernity'',<ref name="isbn0-86091-785-1" /> particularly in the chapter entitled "Innovative Self-Destruction" (pp.&nbsp;98–104), [[Marshall Berman]] provides a reading of Marxist "creative destruction" to explain key processes at work within modernity. The title of the book is taken from a well-known passage from ''The Communist Manifesto''. Berman elaborates this into something of a ''[[Zeitgeist]]'' which has profound social and cultural consequences:

{{Blockquote|The truth of the matter, as Marx sees, is that everything that bourgeois society builds is built to be torn down. "All that is solid"—from the clothes on our backs to the looms and mills that weave them, to the men and women who work the machines, to the houses and neighborhoods the workers live in, to the firms and corporations that exploit the workers, to the towns and cities and whole regions and even nations that embrace them all—all these are made to be broken tomorrow, smashed or shredded or pulverized or dissolved, so they can be recycled or replaced next week, and the whole process can go on again and again, hopefully forever, in ever more profitable forms. The pathos of all bourgeois monuments is that their material strength and solidity actually count for nothing and carry no weight at all, that they are blown away like frail reeds by the very forces of capitalist development that they celebrate. Even the most beautiful and impressive bourgeois buildings and public works are disposable, capitalized for fast depreciation and planned to be obsolete, closer in their social functions to tents and encampments than to "Egyptian pyramids, Roman aqueducts, Gothic cathedrals".<ref>{{Cite book |last=Berman |first=Marshall |title=All That is Solid Melts into Air |year=1987 |page=99}}</ref>}}

Here Berman emphasizes Marx's perception of the fragility and evanescence of capitalism's immense creative forces, and makes this apparent contradiction into one of the key explanatory figures of modernity.

In 2021, Berman's younger son applied the elder's conception of creative destruction to the field of art history, writing in Hunter College's graduate art history journal. The essay reconsiders the modern media of photography, photomontage, and collage through the lens of "creative destruction". In doing so, the younger Berman attempts to show that in certain works of art of the above-mentioned media, referents (such as nature, real people, other works of art, newspaper clippings, etc.) can be given new and unique significance even while necessarily being obscured by the very nature of their presentation.<ref>{{Cite journal |last=Berman |first=Daniel |title=Looking the Negative in the Face: Creative Destruction and the Modern Spirit in Photography, Photomontage, and Collage |url=https://www.assemblagejournal.org/issue-2-spring-2021/daniel-berman |url-status=usurped |journal=Assemblage |volume=2 |archive-url=https://web.archive.org/web/20210518153649/https://www.assemblagejournal.org/issue-2-spring-2021/daniel-berman |archive-date=2021-05-18}}</ref>

=== Manuel Castells ===
[[File:Manuel Castells 2020b (cropped).jpg|thumb|[[Manuel Castells]] in 2020]]
The sociologist [[Manuel Castells]], in his trilogy on ''[[The Information Age: Economy, Society and Culture]]'' (the first volume of which, ''[[The Information Age: Economy, Society and Culture#The Rise of the Network Society|The Rise of the Network Society]]'', appeared in 1996),<ref name="isbn0-631-22140-9" /> reinterpreted the processes by which capitalism invests in certain regions of the globe, while divesting from others, using the new paradigm of "informational networks". In the era of globalization, capitalism is characterized by near-instantaneous flow, creating a new spatial dimension, "the [[space of flows]]".<ref>{{Cite book |last=Castells |first=Manuel |title=The Rise of the Network Society |pages=376–428}}</ref> While technological innovation has enabled this unprecedented fluidity, this very process makes redundant whole areas and populations who are bypassed by informational networks. Indeed, the new spatial form of the [[megacity|mega-city]] or megalopolis, is defined by Castells as having the contradictory quality of being "globally connected and locally disconnected, physically and socially".<ref>{{Cite book |last=Castells |first=Manuel |title=The Rise of the Network Society |page=404}}</ref> Castells explicitly links these arguments to the notion of creative destruction:

{{Blockquote|The "spirit of informationalism" is the culture of "creative destruction" accelerated to the speed of the optoelectronic circuits that process its signals. Schumpeter meets [[Max Weber|Weber]] in the cyberspace of the network enterprise.<ref>{{Cite book |last=Castells |first=Manuel |title=The Rise of the Network Society |page=199}} For further discussion, see also {{Cite journal
| issn = 0091-7729
| volume = 33
| issue = 1
| pages = 18–29
| last = Harding
| first = Robert
| title = Manuel Castells' Technocultural Epoch in "The Information Age"
| journal = Science Fiction Studies
| date = March 2006
| jstor = 4241406
}}</ref>
}}

===Daniele Archibugi===
[[File:DanArc2-700x394.jpg|thumb|[[Daniele Archibugi]] in 2006]]
Developing the Schumpeterian legacy, the school of the [[Science Policy Research Unit]] of the [[University of Sussex]] further detailed the importance of creative destruction. In particular, new technologies are often incompatible with the existing productive regimes and will bankrupt companies and even industries that change too slowly. [[Christopher Freeman|Chris Freeman]] and [[Carlota Perez]] developed these insights.<ref>[[Christopher Freeman|Chris Freeman]] and Francisco Louça, ''As Time Goes By: From the Industrial Revolutions to the Information Revolution'' (Oxford, Oxford University Press, 2001). [[Carlota Perez]], ''Technological Revolutions and Financial Capital. The Dynamics of Bubbles and Golden Ages'', (Cheltenham Glos, Edward Elgar, 2003).</ref> More recently, [[Daniele Archibugi]] and Andrea Filippetti associated the 2008 economic crisis with the slow-down of opportunities offered by information and communication technologies (ICTs).<ref>Daniele Archibugi and Andrea Filippetti, [https://www.routledge.com/Innovation-and-Economic-Crisis-Lessons-and-Prospects-from-the-Economic/Archibugi-Filippetti/p/book/9780415602280 ''Innovation and Economic Crisis Lessons and Prospects from the Economic Downturn''], (London, Routledge, 2013).</ref> Archibugi used the 1982 film ''[[Blade Runner]]'' as a metaphor to argue that of the innovations shown, all those associated with ICTs have become part of everyday life. However, none in the field of [[biotechnology]] have been fully commercialized. A new economic recovery will occur when some key technological opportunities are identified and sustained.<ref name="Archibugi2017">{{cite journal |last1=Archibugi |first1=Daniele |title=Blade Runner economics: Will innovation lead the economic recovery? |journal=Research Policy |date=April 2017 |volume=46 |issue=3 |pages=535–543 |doi=10.1016/j.respol.2016.01.021 |url=https://eprints.bbk.ac.uk/id/eprint/18837/6/18837.pdf }}</ref>

{{Blockquote|Technological opportunities do not enter into economic and social life without deliberate efforts and choices. We should be able to envisage new forms of organization associated with emerging technology. ICTs have already changed our lifestyle even more than our economic life: they have generated jobs and profits, but above all they have transformed the way we use our time and interact with the world. Biotech could bring about even more radical social transformations at the core of our life. Why have these not yet been delivered? What can be done to unleash their potential? There are a few basic questions that need to be addressed.<ref name=Archibugi2017/>
}}

=== Others ===
In 1992, the idea of creative destruction was put into formal mathematical terms by [[Philippe Aghion]] and [[Peter Howitt (economist)|Peter Howitt]],<ref>{{cite journal |last1=Aghion |first1=Philippe |last2=Howitt |first2= Peter |title=A Model of Growth Through Creative Destruction |journal=Econometrica |year=1992 |volume=60 |issue=2 |pages=323–51 |jstor=2951599 |doi=10.2307/2951599 |hdl=1721.1/63839 |citeseerx=10.1.1.401.6084 }}</ref> giving an alternative model of [[Endogenous growth theory|endogenous growth]] compared to [[Paul Romer]]'s expanding varieties model. For their work, they were awarded with the [[Nobel Memorial Prize in Economic Sciences|Nobel Prize in Economic Sciences]] in 2025.

In 1995, [[Harvard Business School]] authors [[Richard L. Nolan]] and David C. Croson released a book advocating downsizing to free up slack resources, which could then be reinvested to create [[competitive advantage]].<ref>{{Cite book |last1=Nolan |first1=Richard L. |url=https://books.google.com/books?id=olokqPJi73AC |title=Creative Destruction: A Six-stage Process for Transforming the Organization |last2=Croson |first2=David C. |date=1995 |publisher=Harvard Business School Press |isbn=978-0-87584-498-5 |language=en}}</ref>

The idea of "creative destruction" was utilized by Max Page in his 1999 book, ''The Creative Destruction of Manhattan, 1900–1940.'' The book traces [[Manhattan]]'s constant reinvention, often at the expense of preserving a concrete past. Describing this process as "creative destruction". Page describes the complex historical circumstances, economics, social conditions and personalities that have produced crucial changes in Manhattan's cityscape.<ref>{{cite book|last=Page|first=Max|title=The Creative Destruction of Manhattan, 1900–1940|year=1999|publisher=The University of Chicago Press|location=Chicago|isbn=978-0-226-64468-4}}</ref>

In addition to Max Page, others have used the term "creative destruction" to describe the process of urban renewal and modernization. T.C. Chang and Shirlena Huang referenced "creative destruction" in their paper ''Recreating place, replacing memory: Creative Destruction at the [[Singapore River]].'' The authors explored the efforts to redevelop a waterfront area that reflected a vibrant new culture while paying sufficient homage to the history of the region.<ref>{{cite journal|last1=Chang|first1=T.C.|first2=Shirlena|last2=Huang|title=Recreating place, replacing memory: Creative destruction at the Singapore River|journal=Asia Pacific Viewpoint|date=December 2005|volume=46|issue=3|pages=267–80|doi=10.1111/j.1467-8373.2005.00285.x}}</ref> Rosemary Wakeman chronicled the evolution of an area in central Paris, France known as [[Les Halles]]. Les Halles housed a vibrant marketplace starting in the twelfth century. Ultimately, in 1971, the markets were relocated and the pavilions torn down. In their place, now stand a hub for trains, subways and buses. Les Halles is also the site of the largest shopping mall in France and the controversial Centre Georges Pompidou.<ref>{{cite journal|last=Wakeman|first=Rosemary|title=Fascinating Les Halles|journal=French Politics, Culture & Society|date=Summer 2007|volume=25|issue=2|pages=46–72|doi=10.3167/fpcs.2007.250205}}</ref>

The term "creative destruction" has been applied to the arts. Alan Ackerman and Martin Puncher (2006) edited a collection of essays under the title ''Against Theater: Creative destruction on the modernist stage.'' They detail the changes and the causal motivations experienced in [[theater]] as a result of the modernization of both the production of performances and the underlying economics. They speak of how theater has reinvented itself in the face of [[anti-theatricality]], straining the boundaries of the traditional to include more physical productions, which might be considered avant-garde staging techniques.<ref>{{cite book|last=Ackerman|first=Alan|title=Against Theater|url=https://archive.org/details/againsttheatrecr00puch|url-access=limited|year=2006|publisher=Palgrave MacMillan|location=New York|isbn=978-1-4039-4491-7|pages=[https://archive.org/details/againsttheatrecr00puch/page/n13 1]–17}}</ref>

Additionally within art, [[Tyler Cowen]]'s book ''Creative Destruction'' describes how art styles change as artists are simply exposed to outside ideas and styles, even if they do not intend to incorporate those influences into their art.<ref>{{Cite book|title=Creative Destruction|last=Cowen|first=Tyler|publisher=Princeton University Press|year=2002|isbn=0-691-09016-5}}</ref> Traditional styles may give way to new styles, and thus creative destruction allows for more diversified art, especially when cultures share their art with each other.

In his 1999 book, ''Still the New World, American Literature in a Culture of Creative Destruction'', [[Philip Fisher (author)|Philip Fisher]] analyzes the themes of creative destruction at play in literary works of the twentieth century, including the works of such authors as [[Ralph Waldo Emerson]], [[Walt Whitman]], [[Herman Melville]], [[Mark Twain]], and [[Henry James]], among others. Fisher argues that creative destruction exists within literary forms just as it does within the changing of technology.<ref>{{Cite book|title=Still the New World: American Literature in a Culture of Creative Destruction|last=Fisher|first=Philip|publisher=Harvard University Press, Second Edition|year=1999|isbn=978-0674004092}}</ref>

[[Neoconservative]] author [[Michael Ledeen]] argued in his 2002 book ''The War Against the Terror Masters'' that America is a revolutionary nation, undoing traditional societies: "Creative destruction is our middle name, both within our own society and abroad. We tear down the old order every day, from business to science, literature, art, architecture, and cinema to politics and the law". His characterization of creative destruction as a model for social development has met with fierce opposition from [[paleoconservative]]s.<ref>{{cite journal |author-link=John Laughland |first=John |last=Laughland |url=http://www.amconmag.com/article/2003/jun/30/00013/ |title=Flirting with Fascism. Neocon theorist Michael Ledeen draws more from Italian fascism than from the American Right |journal=American Conservative |date=June 30, 2003 |access-date=August 13, 2009 |archive-url=https://web.archive.org/web/20110828191822/http://www.amconmag.com/article/2003/jun/30/00013/ |archive-date=August 28, 2011 |url-status=dead }}</ref>

Creative destruction has also been linked to sustainable development. The connection was explicitly mentioned for the first time by Stuart L. Hart and Mark B. Milstein in their 1999 article ''Global Sustainability and the Creative Destruction of Industries'',<ref>{{cite journal |first1=Stuart |last1=Hart |first2=Mark |last2=Milstein |title=Global Sustainability and the Creative Destruction of Industries |journal=Sloan Management Review |volume=41 |issue=1 |year=1999 |pages=23–33 }}</ref> in which he argues new profit opportunities lie in a round of creative destruction driven by global sustainability. (They would strengthen this argument later in their 2003 article ''Creating Sustainable Value''<ref>{{cite journal |first1=Stuart L. |last1=Hart |first2=Mark B. |last2=Milstein |s2cid=14480187 |title=Creating Sustainable Value |journal=Academy of Management Executive |volume=17 |issue=2 |year=2003 |pages=56–67 |doi=10.5465/AME.2003.10025194 }}</ref> and, in 2005, with ''Innovation, Creative Destruction and Sustainability''.<ref>{{cite journal |first=Stuart L. |last=Hart |title=Innovation, Creative Destruction and Sustainability |journal=Research Technology Management |volume=48 |issue=5 |year=2005 |pages=21–27 |doi=10.1080/08956308.2005.11657334|s2cid=153047074 }}</ref>) Andrea L. Larson agreed with this vision a year later in ''Sustainable Innovation Through an Entrepreneurship Lens'',<ref>{{cite journal |first=Andrea L. |last=Larson |title=Sustainable Innovation Through an Entrepreneurship Lens |journal=Business Strategy and the Environment |volume=9 |year=2000 |pages=304–17 |doi=10.1002/1099-0836(200009/10)9:5<304::AID-BSE255>3.0.CO;2-O |issue=5 }}</ref> stating entrepreneurs should be open to the opportunities for disruptive improvement based on sustainability. In 2005, James Hartshorn (et al.) emphasized the opportunities for sustainable, disruptive improvement in the construction industry in his article ''Creative Destruction: Building Toward Sustainability''.<ref>{{cite journal |first1=James |last1=Hartshorn |first2=Michael |last2=Maher |first3=Jack |last3=Crooks |first4=Richard |last4=Stahl |first5=Zoë |last5=Bond |title=Creative Destruction: Building Toward Sustainability |journal=Canadian Journal of Civil Engineering |volume=32 |issue=1 |year=2005 |pages=170–80 |doi=10.1139/l04-119 |bibcode=2005CaJCE..32..170H }}</ref>

Some economists argue that the destructive component of creative destruction has become more powerful than it was in the past. They claim that the creative component does not add as much to growth as in earlier generations, and innovation has become more rent-seeking than value-creating.<ref>{{cite journal |last1=Komlos |first1=John |title=Has Creative Destruction become more Destructive? |journal=The B.E. Journal of Economic Analysis & Policy |date=1 October 2016 |volume=16 |issue=4 |doi=10.1515/bejeap-2016-0179 |s2cid=11714688 |url=https://epub.ub.uni-muenchen.de/43465/1/Komlos_Has_Creative_Destruction_become_more_Destructive.pdf }}</ref>

==Alternative name==
The following text appears to be the source of the phrase "Schumpeter's Gale" to refer to creative destruction:

{{blockquote|The opening up of new markets and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ... [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull.|Joseph Schumpeter|''Capitalism, Socialism and Democracy'', 1942}}

==Impediments==
Politicians often impose impediments to the forces of creative destruction by regulating entry and exit rules<ref>{{Cite web|url=https://scholar.harvard.edu/files/shleifer/files/debt_enforcement_jpe_final.pdf|title=Debt Enforcement around the World}}</ref> that make it difficult for churning to take place. In a series of papers [[Andrei Shleifer]] and [[Simeon Djankov]] illustrate<ref>{{Cite web|url=https://scholar.harvard.edu/files/shleifer/files/reg_entry.pdf|title=The Regulation of Entry}}</ref> the effects of such regulation on slowing down competition and innovation.

In building economic resilience against [[Black swan theory|black swan events]] by means of systemic policy, [[Federal Reserve]] researchers warned in May 2025 against conflating creative destruction with a black swan, stating "[s]ystemic policies do not prevent the harms that can arise from routine events such as firm bankruptcies, financial institution failures, and job losses as part of traditional Schumpeterian creative-destruction dynamics. Instead, systemic policies enable the key functions of the financial system to persist during periods of severe distress".<ref>Barth, Daniel, and Stacey Schreft (2025): Black Swans and Financial Stabil A Framework for Building Resilience, Finance and Economics Discussion Se ries 2025-043, p. 16. Washington: Board of Governors of the Federal Reserve System, <nowiki>https://doi.org/10.17016/FEDS.2025.043</nowiki></ref>

==In popular culture==
The film ''[[Other People's Money]]'' (1991) provides contrasting views of creative destruction, presented in two speeches regarding the takeover of a publicly traded wire and cable company in a small New England town. One speech is by a [[corporate raider]], and the other is given by the company CEO, who is principally interested in protecting his employees and the town.

==See also==
{{cols}}
* [[Accelerationism]] 
* [[Creativity techniques]]
* [[Destructionism]]
* [[Disruptive innovation]]
* [[Extinction event]]
* [[International Innovation Index]]
* [[Parable of the broken window]]
* [[Product lifecycle]]
* [[Pseudowork]]
* [[Schumpeterian rent]]
{{colend}}

== References ==
{{Reflist}}

==Further reading==
{{Wikiquote}}
* Akcigit, Ufuk (2023), "[https://www.degruyter.com/document/doi/10.4159/9780674293052-004/html Chapter 2: Creative Destruction and Economic Growth]". in ''Creative Destruction and Economic Growth'', Harvard University Press, pp.&nbsp;21–40. 
* Aghion, Philippe and Peter Howitt. ''A Model of growth through Creative Destruction''. [[Econometrica]] 60:2 (1992), pp.&nbsp;323–351.
* Aghion, Philippe and Peter Howitt. ''Endogenous Growth Theory''. MIT Press. 1997.
* Archibugi, Daniele and Andrea Filippetti. {{cite book|url=https://www.routledge.com/Innovation-and-Economic-Crisis-Lessons-and-Prospects-from-the-Economic/Archibugi-Filippetti/p/book/9780415602280|title=Innovation and Economic Crisis: Lessons and Prospects from the Economic Downturn|year=2011|isbn=978-0415602280|edition=1st Hardback |publisher= Routledge}}
** {{cite journal |last1=Archibugi |first1=Daniele |last2=Filippetti |first2=Andrea |last3=Frenz |first3=Marion |title=Economic crisis and innovation: Is destruction prevailing over accumulation? |journal=Research Policy |date=March 2013 |volume=42 |issue=2 |pages=303–314 |doi=10.1016/j.respol.2012.07.002 |s2cid=56038790 |url=https://eprints.bbk.ac.uk/8469/1/8469.pdf |archive-url=https://web.archive.org/web/20180719223940/http://eprints.bbk.ac.uk/8469/1/8469.pdf |archive-date=2018-07-19 |url-status=live }}
* {{cite book |last1=Caballero |first1=Ricardo J. |title=The New Palgrave Dictionary of Economics |date=2018 |publisher=Palgrave Macmillan |location=London |isbn=978-1-349-95189-5 |pages=2429–2434 |chapter-url=https://link.springer.com/referenceworkentry/10.1057/978-1-349-95189-5_391 |language=en |chapter=Creative Destruction |doi=10.1057/978-1-349-95189-5_391}}
* {{cite book |last1=Clark |first1=James P. |title=Surviving the Machine Age: Intelligent Technology and the Transformation of Human Work |date=2017 |publisher=[[Palgrave Macmillan Cham|Palgrave Macmillan, Cham]] |isbn=978-3-319-51165-8 |pages=35–50 |chapter-url=https://link.springer.com/chapter/10.1007/978-3-319-51165-8_3?fromPaywallRec=true |language=en |chapter=Creative Destruction: Emerging Technology and the Changing Course of Job Creation|doi=10.1007/978-3-319-51165-8_3 }}
* {{cite encyclopedia |last1=Cox |first1=W. Michael |author-link1=W. Michael Cox |last2=Alm|first2=Richard |editor=David R. Henderson |editor-link=David R. Henderson |encyclopedia=[[Concise Encyclopedia of Economics]] |title=Creative Destruction|pages=101–104 |url=https://www.econlib.org/library/Enc/CreativeDestruction.html |year=2008 |edition= 2nd |publisher=[[Library of Economics and Liberty]] |location=Indianapolis |isbn=978-0865976658 |oclc=237794267}}
* {{cite book |last1=Diamond |first1=Arthur M. |title=Openness to Creative Destruction: Sustaining Innovative Dynamism |date=2019 |publisher=[[Oxford University Press]] |location=New York |isbn=9780190263706 |url=https://academic.oup.com/book/34938}}
* Foster, Richard and Sarah Kaplan. [https://web.archive.org/web/20051125082639/http://www.mckinsey.com/ideas/books/creativedestruction/index.asp "Creative Destruction: Why Companies that are Built to Last Underperform the Market – And how to Successfully Transform Them"]. Currency publisher. 2001.
* {{cite book |last1=Heertje |first1=Arnold |title=The New Palgrave Dictionary of Economics |date=2018 |publisher=Palgrave Macmillan |location=London |isbn=978-1-349-95189-5 |pages=2434–2435 |chapter-url=https://link.springer.com/referenceworkentry/10.1057/978-1-349-95189-5_3074?fromPaywallRec=true |language=en |chapter=Creative Destruction (Schumpeterian Conception) |doi=10.1057/978-1-349-95189-5_3074}}
* [[Thomas Homer-Dixon|Homer-Dixon, Thomas]]. ''[[Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization]]'', [http://www.theupsideofdown.com/ The Upside of Down]. Island Press. 2006.
* [[John Komlos]], "Disruptive Innovation: the dark side", ''[https://www.milkenreview.org/articles/disruptive-innovation-the-dark-side Milken Institute Review]'', 17, 1: 28–35;
* [[Stanley I. Kutler|Kutler, Stanley I.]] ''Privilege and Creative Destruction: The Charles River Bridge Case'', The Norton Library, 1971.
* {{cite book |last1=Leih |first1=Sohvi |last2=Teece |first2=David J. |title=The Palgrave Encyclopedia of Strategic Management |date=2018 |publisher=[[Palgrave Macmillan]] |location=London |isbn=978-1-137-00772-8 |pages=370–375 |chapter-url=https://link.springer.com/referenceworkentry/10.1057/978-1-137-00772-8_59?fromPaywallRec=true |language=en |chapter=Creative Destruction |doi=10.1057/978-1-137-00772-8_59}}
* Metcalfe, J. Stanley. ''Evolutionary Economics and Creative Destruction (Graz Schumpeter Lectures, 1)''. Routledge. 1998.
* Nolan, Richard L. and David C. Croson, ''Creative Destruction: A Six-Stage Process for Transforming the Organization''. Harvard Business School Press. 1995.
* Osenton, Osenton G. ''The Death of Demand: Finding Growth in a Saturated Global Economy'' (New Jersey: Financial Times Prentice Hall, 2004)
* Page, Max. ''The Creative Destruction of Manhattan, 1900–1940''. University of Chicago Press. 1999.
* Reinert, Hugo and [[Erik S. Reinert]]. [https://web.archive.org/web/20040412005010/http://www.othercanon.org/papers/more.asp?id=30 "Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter"]. In J.G. Backhaus and W. Drechsler, eds. ''Friedrich Nietzsche: Economy, and Society.'' Springer. 2006.
* {{cite journal |last1=Rogers |first1=Jim |last2=Sparviero |first2=Sergio |title=Same tune, different words: The creative destruction of the music industry |journal=Observatorio |date=14 November 2011 |volume=5 |issue=4 |doi=10.15847/obsOBS542011514 |doi-broken-date=11 July 2025 |url=http://obs.obercom.pt/index.php/obs/article/view/514 }}
* [[Joseph Schumpeter|Schumpeter, Joseph A.]] ''Capitalism, Socialism and Democracy'' (New York: Harper, 1975) [orig. pub. 1942]
* Utterback, James M. ''Mastering the Dynamics of Innovation''. Harvard Business School Press. 1996.

{{Authority control}}

[[Category:Business cycle theories]]
[[Category:Innovation economics]]
[[Category:Technological change]]
[[Category:Marxist theory]]
[[Category:Marxism]]
[[Category:Joseph Schumpeter]]