Joseph Schumpeter was an outstanding economist that immigrated to the U.S. Many of his works were not mathematical like other economists but he did delve into the economy as a complete economic system. His work has led to new ways of thinking about the economy as a system and offered a greater understanding of creative destruction and entrepreneurship as part of the economic model. He believed that entrepreneurship is an important part of the economic system. These difficult to account for innovations result from companies that have the ability to research important product improvements. Innovative improvements are a force that changes the market and allows some companies to earn higher levels of revenue for a time until their products are copied by others. The innovative process is needed to maintain new products and a market leading position. He outlined his theory in the book Theory of Economic Development (1911) and maintained the fundamentals throughout his life.
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Is your organization changing to the times? It is important for organizations to consider the market conditions when loosing revenue or attempting to create sustainable growth. Market factors can cause some organizations to be successful while others are forced out of business. This is a process that fits within the evolutionary economic model that sees innovation, change, and development as a result of adjusting developmental patterns. Evolutionary economics counters neoclassical models by focusing on the fluid development of economic systems throughout history. Where evolutionary economics sees adjustment in a more unpredictable adaptive context, the neoclassical model sees the economy at rest with well anticipated changes. The evolutionary model is fluid by nature and tries to explain how innovation and adaptation emerges from chaotic economic trials. In evolutionary economics the rationality of the system is bounded (Simon, 1955). This means that people make decisions as instit