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Schumpeter and the strategy
of Creative Destruction
Dr. Sreenivas Rajan
Strategist and Research
The legitimacy of creative
destruction
 Is it ok for entrepreneurs to change
the world.
 Schumpeter was first to organize the
theory and legitimize
entrepreneurship
 Entrepreneurs might cause loss to
existing jobs and Marx of the opinion
to take side of workers
Ideas are like Balloons
Creative Destruction Through
Govt Spending or Investments
 Governments have switched to
Sovereign wealth fund
 Government investment in education
ineffective when knowledge is out of
date or lacking employable skills.
 Government investment in
infrastructure has to be updated to be
sustainable
 Creative destruction of Government
role
Govt Creative and Destructive
Monetary Policy and Creative
Destruction
 Monetary policy enables Continuous
Innovation and improvement.
 A stable and efficient policy provides a
fertile ground for entrepreneurs
 Friedman initiated econometrics and
came up with the GDP system
 GDP growth requires creative
destruction which requires even more
entreprenuers
The original economic engine
Creative Destruction and
Unicorns
 Creative destruction has come into
focus because of Unicorns
 While monetary policy encourages
private sector and govt investments
educates us and provides
infrastructure, entrepreneurs are
required for creative destruction and
genuine GDP growth, quality of life
and delivery of innovation.
Unicorn birth rate
Competitive Advantage of CD
 Connects CD in one generation of
family to CD in the next generation of
family.
 CD allows the firm to switch positions
over generations
 CD increases the scale of innovation
 Shared Values, Five force analysis
and Porter’s Diamond accelerate the
innovation as entrepreneurs focus on
value creation across value chain.
Why we can’t predict
everything
Core Competence and CD
 While we can’t predict the outside, we
can atleast shape the inside ie. Our
core competence.
 Creative destruction ensure that there
is uncertainty across generation
 Core competence gives us the
strength to face technological and
global forces.
Relying on inner competence
Schumpeter and India
 India has always been an imperial
country. Democracy is a creative
destruction of India’s ruling policy.
 India has traditionally aligned interests
across seven generations
 Creative destruction was permitted
and Lord Shiva for instance started
Ganga and the beginning of
civilization in India.
Trimurti regulated CD
Schumpeter and China
 The great wall of China represents the
reliability and Yin and Yang way of
dealing with creation and destruction
of older ideas.
 China has jumped across various
ages and always relied on the Tao
 Structural excellence as in Shangri La
is seen to regulate the energies of
Change.
Yin and Yang forces of CD

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Schumpeter and the strategy of creative destruction

  • 1. Schumpeter and the strategy of Creative Destruction Dr. Sreenivas Rajan Strategist and Research
  • 2. The legitimacy of creative destruction  Is it ok for entrepreneurs to change the world.  Schumpeter was first to organize the theory and legitimize entrepreneurship  Entrepreneurs might cause loss to existing jobs and Marx of the opinion to take side of workers
  • 3. Ideas are like Balloons
  • 4. Creative Destruction Through Govt Spending or Investments  Governments have switched to Sovereign wealth fund  Government investment in education ineffective when knowledge is out of date or lacking employable skills.  Government investment in infrastructure has to be updated to be sustainable  Creative destruction of Government role
  • 5. Govt Creative and Destructive
  • 6. Monetary Policy and Creative Destruction  Monetary policy enables Continuous Innovation and improvement.  A stable and efficient policy provides a fertile ground for entrepreneurs  Friedman initiated econometrics and came up with the GDP system  GDP growth requires creative destruction which requires even more entreprenuers
  • 8. Creative Destruction and Unicorns  Creative destruction has come into focus because of Unicorns  While monetary policy encourages private sector and govt investments educates us and provides infrastructure, entrepreneurs are required for creative destruction and genuine GDP growth, quality of life and delivery of innovation.
  • 10. Competitive Advantage of CD  Connects CD in one generation of family to CD in the next generation of family.  CD allows the firm to switch positions over generations  CD increases the scale of innovation  Shared Values, Five force analysis and Porter’s Diamond accelerate the innovation as entrepreneurs focus on value creation across value chain.
  • 11. Why we can’t predict everything
  • 12. Core Competence and CD  While we can’t predict the outside, we can atleast shape the inside ie. Our core competence.  Creative destruction ensure that there is uncertainty across generation  Core competence gives us the strength to face technological and global forces.
  • 13. Relying on inner competence
  • 14. Schumpeter and India  India has always been an imperial country. Democracy is a creative destruction of India’s ruling policy.  India has traditionally aligned interests across seven generations  Creative destruction was permitted and Lord Shiva for instance started Ganga and the beginning of civilization in India.
  • 16. Schumpeter and China  The great wall of China represents the reliability and Yin and Yang way of dealing with creation and destruction of older ideas.  China has jumped across various ages and always relied on the Tao  Structural excellence as in Shangri La is seen to regulate the energies of Change.
  • 17. Yin and Yang forces of CD