Question

Which according to Joseph Schumpeter is not a vital function performed by the entrepreneurs?

• A. Regional development
• B. Creative destruction
• C. Challenge accepted ways of doing things
• D. Revolutionising current patterns of production

Answer 1

The correct option is B Creative destruction

Schumpeter describes the act of new innovations replacing old innovations replacing old innovations as "creative destruction". This process is driven by the inevitable copying of new innovations, which cause profit margins to become low ans creates a new incentive to seek out new innovations. This is the essential idea behind capitalism as Schumpeter describes it.