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Managerial Economics For Dummies by Robert J. Graham

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Chapter 7

Innovation and Technological Change: The Future Is Now

In This Chapter

arrow Understanding the components of technological change

arrow Measuring technological change

arrow Evaluating research and development spending

arrow Timing diffusion

Creative destructionism isn’t a term coined by Hollywood to describe the many ways global disaster occurs in the movies — earthquakes, asteroids, tsunamis, aliens, and so on. Economist Joseph Schumpeter used creative destructionism to refer to the constant technological revolution that affects business. Technological progress creates new products and new production techniques that destroy or replace established products and production techniques. Because of creative destructionism, you can’t buy record players for music or VCRs for movies. The future also looks bleak for paper maps, landline telephones, and CDs.

One of life’s guarantees is that things constantly change. Successful business decisions must recognize the inevitability of change. Consider that in its 116 year history, the Dow Jones Industrials (currently consisting of 30 companies) has been revised ...

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