– The paper seeks to examine the influence of the Austrian School of Economics and its views of innovations and entrepreneurship on one of their champions, Joseph Schumpeter. Schumpeter believes that creativity or innovation is the key factor in any entrepreneur’s field of specialization. He is not often thought of as a libertarian. Innovator utilizes discoveries in order to make new combinations. Despite the fact that Schumpeter was among the first who lay out the clear concept of innovation his views on the topic changed over time. On the other extreme of definitions, anyone who wants to work for himself or herself is considered to be an entrepreneur. Around the 1930s Schumpeter started studying how the capitalist system was affected by market innovations. Seventy years ago, on January 8, 1950, one of the most famous economists of the 20 th century passed away at the age of 66, Joseph A. Schumpeter. Schumpeter’s Views on Innovation Economics Schumpeter had placed the emphasis on the entrepreneur as the engine of the capitalist innovation process. Related eJournals. He was born in Moravia, and briefly served as Finance Minister of German-Austria in 1919. Therefore, according to Schumpeter, an entrepreneur is one who innovates, raises money, collects inputs, organizes talent, provides leadership and sets the organization. Why Schumpeter was Right: Innovation, Market Power, and Creative Destruction in 1920s America TOMNICHOLAS Are firms with strong market positions powerful engines of technological progress? He was also one of the most unusual personalities of the 20th century, as Harvard Business School professor emeritus Thomas K. McCraw shows in a new biography. Schumpeter's views on the mechanism of eco-nomic change in the capitalist economy. Seventy years ago, on January 8, 1950, one of the most famous economists of the 20 th century passed away at the age of 66, Joseph A. Schumpeter. Professor Schumpeter's starting point is an economy from which change (though not growth) is assumed to be absent.' Joseph Schumpeter was an economist and perhaps his most distinctive contribution to economics was his work on innovation and entrepreneurship (Śledzik 2013). Schumpeter’s beloved mother died in the same year, a three-fold emotional wounding from which Schumpeter, then 42, never fully recovered. He saw entrepreneurs and their new ideas create new “disequilibrium” that are part and parcel of the capitalist system. He saw entrepreneurs and their new ideas create new “disequilibrium” that are part and parcel of the capitalist system. The entrepreneur brings along something new, a new source of profit, says Schumpeter. In other words, the specific factor that causes change is abstracted. With his combined diciplines of history, sociology and economics, Joseph Schumpeter would have been amused at the idea of creating the perfect economy merely by setting the perfect tax rate. Entrepreneurial profit is the expression of the value of what the entrepreneur contributes to production. It is because in underdeveloped economies, the path of innovativeness is blocked by scarcity of capital and other facilities. The innovative theory is one of the most famous theories of entrepreneurship used all around the world. Joseph Alois Schumpeter (German: [ˈʃʊmpeːtɐ]; 8 February 1883 – 8 January 1950) was an Austrian political economist.He later emigrated to the US and, in 1939, he obtained American citizenship. During and after his lifetime, he has been identified with two related ideas, the notion of the innovative entrepreneur and the imagery of the competitive market as a process of creative destruction. Joseph Schumpeter, an eminent economist published many works on entrepreneurship. Article shared by. His theory of entrepreneurship directly says that entrepreneurship is innovation. Innovation by the entrepreneur, argued Schumpeter, leads to gales of “ creative destruction ” as innovations cause old inventories, ideas, technologies, skills, and equipment to become obsolete. Schumpeter’s cyclical process of economic development has been illustrated in the above diagram where the secondary wave is superimposed on the primary wave of innovation. The resurgence of neo-Schumpeterian theories and models of technological innovation and development1 is an enduring sign of the historical significance of Joseph A. Schumpeters theoretical works on the dynamics of economic change as a result of long-term technological change. However, Schumpeter viewed innovation along with knowledge as the main catalysts of successful entrepreneurship. 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