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
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ineffective when knowledge is out of
date or lacking employable skills.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
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.
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.
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.