Growth comes from new methods destroying incumbent firms and industries, not from incremental improvement within them.
Schumpeter's 1942 phrase. His awkward corollary is that the process cannot be made painless: preserving the incumbent firms is preserving the thing growth requires destroying.
In practice
- A payments company destroys a bank's fee income and employs a tenth of the people, and the aggregate is better and the transition is not.
- A town's retail high street is hollowed out by a distribution model that produces cheaper goods and no obvious replacement for the jobs.
- Further reading
- Wikipedia
- Subject
- Economics & Incentives
- Essay
- The theories behind every argument about money