4. Creative Destruction and Sustainability
More than 50 years ago, economist Joseph Schumpeter described the dynamic pattern in which innovative upstarts unseat established firms as “creative destruction.”1 Whereas most twentieth-century economists focused on competition under conditions of static equilibrium, Schumpeter insisted that disequilibrium was the driving force of capitalism. There is now little doubt that the economy is driven by firms that are able to capitalize on the “new combinations” described by Schumpeter: Coal Age technologies gave way to Oil Age technologies that are now giving way to Information Age technologies. With each change, the technological and socio-economic infrastructure of society experiences dramatic transformation, ...
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