SOCI 235 Lecture Notes - Lecture 10: Creative Destruction, Joseph Schumpeter, Xerography

• School: McGill University
• Department: Sociology (Arts)
• Course: SOCI 235
• Professor: Michael Smith

Document Summary

Innovations that are large enough to be characterized as qualitative and discontinuous can happen in small firms in competitive situations - the case of haloid and xerography illustrates this. The personal computer industry suggests that creative destruction is not just a function of the magnitude of the innovation. Rapid growth of a market was, in the case of that industry as was the vertical disintegration of the industry. Where those conditions are absent the result of a qualitative and discontinuous change may not be creative destruction. Government contracting - especially for defence purposes - can take the risk and cost out of the innovative process for the private firm involved. The threat of anti-trust action seems to be an important complement to monopoly power. It was in the case of at&t and the transistor: intellectual property may well serve as an incentive to innovate.