ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Creative destruction is a concept introduced by economist Joseph Schumpeter that refers to the process of innovation and technological change that leads to the destruction of existing economic structures, such as industries, firms, and jobs.

Detailed explanation-2: -Schumpeter believed that capitalism would ultimately be destroyed by its success. He hypothesized that the economic system would eventually create a large intellectual class that survived by attacking the system of private property and freedom that was necessary for sustaining its own existence.

Detailed explanation-3: -Creative destruction refers to the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism’.

Detailed explanation-4: -In 1976, Schumpeter, an Austrian-American economist, developed the concept of creative destruction from the based on the works of Karl Marx.

Detailed explanation-5: -Schumpeter also provides the reader of Theory with his famous list of the five main types of innovations: “a new good, ” “a new method of production, ” “a new market, ” “a new source of supply of raw materials, ” and “the carrying out of a new organization of any industry” (Theory, 66; emphasis added).