Skip to main navigation menu Skip to main content Skip to site footer
##common.pageHeaderLogo.altText##

Original Research Articles

Vol. 7 No. 3 (2019): MISES Journal 2019 (sep-dec)

For a less dramatic creative destruction: Innovation and entrepreneurship as features of the market process

DOI
https://doi.org/10.30800/mises.2019.v7.1245
Submitted
September 30, 2019
Published
2019-11-07

Abstract

Innovation is at the core of any market economy and it is necessary for any organization to survive in competitive environments. This article aims to discuss the current approach to innovation seen in most of the management and economics literature and it will suggest that this understanding, loosely based on Schumpeter’s ideas on creative destruction, is not capable of representing the actual dynamism seen in the markets. In order to better understand that dynamism, the market process approach of the Austrian School is presented as a substitute. The comparison indicates that adopting the market process approach, in which entrepreneurship and innovation are endogenous and not-necessarily related to breaks or shocks, leads to a much better understanding of the innovation phenomena and, consequently, and opens new paths in the understanding of the entrepreneurial role. The work concludes presenting limitations and suggestions for future research in management, and economics, and finally, some pedagogical suggestions are also given.

References

  1. ALEXOPOULOS, M.. Read all about it!! What happens following a technology shock? American Economic Review, v. 101, n. 4, p. 1144–1179, 2011.
  2. ALVAREZ; S. A; BUSENITZ, L. W. The entrepreneurship of resource-based theory. Journal of Management, v. 27, n. 6, p. 755–775, 2001. DOI: https://doi.org/10.1177/014920630102700609
  3. ARGURES, N.; BIGELOW, L.; NICKERSON, J. A. Dominant designs, innovation shocks, and the follower’s dilemma. Strategic Management Journal, v. 36, n. 2, p. 216–234, 2015. DOI: https://doi.org/10.1002/smj.2207
  4. BARBIERI, F. O processo de mercado na escola austríaca moderna. Biblioteca Digital de Teses e Dissertações da Universidade de São Paulo, São Paulo, 2001.
  5. BOTAPH, S. Driving the market process: “Alertness” versus Innovation and Creative Destruction. Quarterly Journal of Austrian Economics, v. 16, n. 4, p. 421–458, 2013.
  6. BYLUND, P. L. The problem of production: a new theory of the firm. Londres: Routledge, 2016.
  7. CHESBROUGHT, H. Open innovation. Boston: Harvard Business School Press, 2003.
  8. D’ANDREA, F. A. M. C. Entrepreneurs as source of Innovation: A Strategic Marketing Perspective ((Unpublished Manuscript)), 2019a.
  9. D’ANDREA, F. A. M. C. Strategic marketing & Austrian economics: The foundations of resource-advantage theory. The Review of Austrian Economics, 2019b. DOI: https://doi.org/10.1007/s11138-019-00472-x
  10. D’ANDREA, F. A. M. C.; LUCE, F. B. Entrepreneurs, Organizations, and Dynamic Capabilities: A Strategic Marketing approach to the entrepreneurial theory of the firm (Unpublished Manuscript), 2019.
  11. DAVIDSSON, P. The field of entrepreneurship research: Some significant developments. In: BÖGENHOLD, D. et al. (eds.). Contemporary Entrepreneurship: Multidisciplinary Perspectives on Innovation and Growth. Cham, Zug, Switzerland: Springer, 2016.
  12. DUBRIN, A. J. Essentials of management. South-Western, 2010.
  13. FAGERBERG, J. Innovation: a guide to the literature. In: FAGERBERG J.; MOWERY, D.; NELSON, R. (eds.). The Oxford handbook of innovation. Oxford: Oxford University Press, 2006.
  14. FERRERO, B. Are Structural Fluctuations Natural or Policy-Induced? Analyzing Mises’s and Schumpeter’s Contributions to Business Cycle Theory. Quarterly Journal of Austrian Economics, London, v. 22, n. 2, 2019. DOI: https://doi.org/10.35297/qjae.010011
  15. FOSS, K., et al. Heterogeneous Capital, Entrepreneurship, and Economic Organization. Journal Des Economistes et Des Etudes Humaines, v. 12, n. 1, 2002. DOI: https://doi.org/10.2202/1145-6396.1049
  16. FOSS, K. et al. The entrepreneurial organization of heterogeneous capital. Journal of Management Studies, v. 44, n. 7, p. 1165–1186, 2007.
  17. FOSS, N. J.; KLEIN, P. G. Organizing entrepreneurial judgment: a new approach to the firm. Cambridge: Cambridge University Press, 2012. DOI: https://doi.org/10.1017/CBO9781139021173
  18. FREEMAN, C.; SOETE, L. The Economics of Industrial Innovation. Massachusetts: MIT Press Books, 1997.
  19. HOLCOMBE, R. G. The origins of entrepreneurial opportunities. The Review of Austrian Economics, v. 16, n. 1, p. 25–43, 2003. DOI: https://doi.org/10.1023/A:1022953123111
  20. HOLCOMBE, R. G. Entrepreneurship and economic progress. Londres: Routledge, 2007. DOI: https://doi.org/10.4324/9780203966341
  21. HÜLSMANN, J. G. Mises: The Last Knight of Liberalism. Auburn: Mises Institute, 2007.
  22. HUNT, S. D.; MORGAN, R. M. Resource-Advantage Theory: A Snake Swallowing Its Tail or a General Theory of Competition? Journal of Marketing, v. 61, n. 4, p. 74, 1997. DOI: https://doi.org/10.2307/1252088
  23. IORIO, U. J. Ação, tempo e conhecimento: A escola Austríaca. São Paulo: LVM Editora, 2011.
  24. IORIO, U. J. Ação, Tempo e Conhecimento. Escola Austríaca, Ciência e Humanismo. MISES: Interdisciplinary Journal of Philosophy, Law and Economics, v. 3, n. 2, p. 317–326, 2015. DOI: https://doi.org/10.30800/mises.2015.v3.763
  25. JOHANSSON, Dan; MALM, A. Economics Doctoral Programs Still Elide Entrepreneurship. Econ Journal Watch, v. 14, n. 2, p. 196–217, 2017.
  26. KIRZNER, I. M. Perception, opportunity, and profit: studies in the theory of entrepreneurship. Chicago: University of Chicago Press, 1979.
  27. KIRZNER, I. M. The meaning of the market process: Essays in the development of modern Austrian economics. New York: Routledge, 2002. DOI: https://doi.org/10.4324/9780203004456
  28. KLEIN, P. G. The Capitalist & The Entrepreneur. Auburn: Ludwig von Mises Institute, 2010.
  29. KNIGHT, K. E. A Descriptive Model of the Intra-Firm Innovation Process. The Journal of Business. The University of Chicago Press, 1967. DOI: https://doi.org/10.1086/295013
  30. KOTSEMIR, M.; ABROSKIN, A., MEISSNER, D. Innovation concepts and typology - an evolutionary discussion (MPRA Paper 45400), Moscow, 2013. Retrieved from: https://osf.io/ruyp3/download?format=pdf. Acessed at: June, 15th, 2019
  31. LACHMANN, L. M. Ludwig von Mises and the market process. In: LACHMANN, L. M. (ed). Capital, Expectations and the Market Process. Kansas City: Sheed, Andrews and McMeel, 1977.
  32. LACHMANN, L. M. The Market as an Economic Process. New York: Basil Blackwell, 1986.
  33. LANGLOIS, R. N. Schumpeter and the Obsolescence of the Entrepreneur. Economics Working Papers, n. 200219, 2002. Retrieved from: http://digitalcommons.uconn.edu/econ_wpapers/200219. Acessed at: May, 10th, 2019.
  34. LIERBERMAN, M. B.; MONTGOMEY, D. B. First-mover advantages. Strategic Management Journal, v. 9 (S1), p. 41–58, 1988. DOI: https://doi.org/10.1002/smj.4250090706
  35. LUNDVALL; B.-Å.; BORRÁS, S. Science, technology, and innovation policy. Oxford handbook of innovation. Oxford: Oxford University Press, 2005. DOI: https://doi.org/10.1093/oxfordhb/9780199286805.003.0022
  36. MACIARIELLO, J. Marketing and innovation in the Drucker Management System. Journal of the Academy of Marketing Science, v. 3, n. 1, p. 35–43, 2009. DOI: https://doi.org/10.1007/s11747-008-0098-9
  37. MCAFFREY, M. Entrepreneurship, economic evolution, and the end of capitalism: Reconsidering Schumpeter’s thesis. Quarterly Journal of Austrian Economics, v. 12, n. 4, p. 3–21, 2009.
  38. MCKENNA, R. Marketing is everything. Harvard Business Review, v. 69, n. 1, p. 65–79, 1991.
  39. MISES, L. Human action. Auburn: Mises Institute, 1998.
  40. NELSON, R. WINTER, S. Neoclassical vs. Evolutionary Theories of Economic Growth: Critique and Prospectus. The Economic Journal, v. 84, n. 336, 1974. DOI: https://doi.org/10.2307/2230572
  41. OECD/EUROSTAT. Oslo Manual 2018. Guidelines for Collecting, Reporting and Using Data on Innovation. 4th Edition (The Measurement of Scientific, Technological and Innovation Activities). Paris & Luxemburg: OECD, 2018.
  42. PAVITT, K. Innovation Processes. In: FAGERBERG, J.; MOWERY, D.; NELSON, R. (eds.). The Oxford Handbook of Innovation. Oxford University Press, 2006. DOI: https://doi.org/10.1093/oxfordhb/9780199286805.003.0004
  43. RANDHAWA, K.; WILDEN, R.; HOHBERGER, J. A Bibliometric Review of Open Innovation: Setting a Research Agenda. Journal of Product Innovation Management, v. 33, n. 6, p. 750–772, 2016. DOI: https://doi.org/10.1111/jpim.12312
  44. ROTHBARD, M. N. Breaking Out of the Walrasian Box: Schumpeter and Hansen. In Economic Controversies. Auburn: Mises Institute, 2011.
  45. RUFFONI, E. P. et al. R&D investment and the arrangement of innovation capabilities in Brazilian manufacturing firms. Journal of Technology Management & Innovation, v. 13, n. 4, p. 74–83, 2018. DOI: https://doi.org/10.4067/S0718-27242018000400074
  46. SALERNO, J. T. The place of mises’s Human Action in the development of modern economic thought. The Quarterly Journal of Austrian Economics, v. 2, n. 1, p. 35–65, 1999. DOI: https://doi.org/10.1007/s12113-999-1025-8
  47. SAMUELSON, P. A. Schumpeter as a Teacher and Economic Theorist. The Review of Economics and Statistics, v. 33, n. 2, p. 98, 1951. DOI: https://doi.org/10.2307/1925869
  48. SARASVATHY, S. D. Effectuation: elements of entrepreneurial expertise. Cheltenham: Elgar, 2009.
  49. SCHNEIDER, E. Schumpeter’s Early German Work, 1906-17. The Review of Economics and Statistics, v. 33, n. 2, p. 104, 1951. DOI: https://doi.org/10.2307/1925870
  50. SCHUMPETER, J. A. Capitalism, Socialism and Democracy. New York: Harper and Row, 1942.
  51. SCHUMPETER, J. A. The Nature and Essence of Economic Theory. New Brunswick: Transaction Publishers, 2010.
  52. SELDEN, L.; MACMILLAN, I. C. Manage customer-centric innovation-systematically. Harvard Business Review, v. 84, n. 4, p. 108, 2006.
  53. SWEDBERG, R. Schumpeter: a biography. Princeton: Princeton University Press, 1991.
  54. SWEDBERG, R. (ed) Introduction. In: SCHUMPETER, J. Capitalism, Socialism and Democracy. London and New York: Routledge, 2003.
  55. WADHWANI, R. D.; LUBINKSI, C. Reinventing Entrepreneurial History. Business History Review, v. 91, n. 4, p. 767–799, 2017. DOI: https://doi.org/10.1017/S0007680517001374
  56. WELTER, F. et al. Everyday Entrepreneurship — A Call for Entrepreneurship Research to Embrace Entrepreneurial Diversity. Entrepreneurship Theory and Practice, v. 41, n. 3, p. 311–321, 2017. DOI: https://doi.org/10.1111/etap.12258
  57. ZAWISLAK, et al. Innovation capability: From technology development to transaction capability. Journal of Technology Management and Innovation, v. 7, n. 2, p. 14–25, 2012. DOI: https://doi.org/10.4067/S0718-27242012000200002

Downloads

Download data is not yet available.