Innovation, Entrepreneurship and Culture The Interaction between Technology, Progress and Economic Growth
The Interaction between Technology, Progress and Economic Growth
Edited by Terrence E. Brown and Jan Ulijn
Chapter 5: Schumpeter's theory of economic development revisited
5. Schumpeter’s theory of economic development revisited Robbin Te Velde INTRODUCTION It has been more than 90 years since Joseph Schumpeter published his Theorie der wirtschaftlichen Entwicklung (1911). Give and take a few often cited passages it seems to be forgotten altogether. The most obvious reason to discard the work as a sin of youth is the overly romantic thesis of the entrepreneurial ‘act of will’ on which the greater part of the theory rests. Moreover, the conventional reading of Schumpeter stresses the diﬀerence between his early work (Schumpeter Mark I) and his later work (Schumpeter Mark II, especially referring to Capitalism, Socialism, and Democracy) which seems to suggest that Schumpeter dissociated himself from the central thesis of The Theory of Economic Development. Closer reading, though, shows that Schumpeter’s vision during his entire career was in fact completely consistent (Langlois, 1987). He has never abandoned his initial model of the entrepreneur as the agent of technological and economical change (Csontos, 1987). Furthermore, his stress on the individualism of the entrepreneur is only romantic with hindsight from the current stage of industrial capitalism. In the waning years of the AustroHungarian empire, during which The Theory of Economic Development was written, the typical entrepreneur was his1 own manager, engaged in activities ranging from invention to ﬁnance to direct supervision of his factory (Chandler, 1977; 1990). Hence if we glance back from a distant entrepreneurship at the end of the twentieth century it was a ‘romantic activity’ centred on heroic individuals. The...
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