The Schumpeter bits are about how a business's ability to extract market value from innovation changes over time. Then the author says there are two kinds of startups. The first kind is job replacement. He says the problem is then that there is no nomenclature for the second kind, which is the one that creates more jobs and which is an object of policy incentives. Unfortunately, the author does not leave us with any nomenclature, either - maybe I missed it. Left hanging.
It's strange how we have a system based on entrepreneurship and innovation and we make doing those things next to impossible. Between the stress, the risk, and the workload it's a miracle anybody wants to start a new business. Just go to school to prepare yourself for one of the five monopolies. The incentives are backwards.
The differentiation of types of entrepreneurs he details is very important. One person "companies" who derive most of their revenue from one customer are not really small businesses run by an entrepreneur, they are employees by another name.
Back in the day, when I was into these sorts of things, I always found that people who quoted Schumpeter (who is popular among a group of folks who tend to look for economic theories which enforces their world view and not reality) were safely ignorable.
Yeah, ad hominem but as a general rule it worked out well.
Though it might be good for the “disrupt all the things” people to follow a flawed view on entrepreneurship to maybe reign in the concentration of wealth in a few SV hands without regard to the common folk suffering at the (virtual) hands of The Algorithm.
It's hard to ignore Schumpeter when his circle of influence is pretty solid - his student was Paul Samuelson, and his adviser was Böhm von Bawerk, who also taught Ludwig von Mises who went onto teach Hayek.
Each one literally wrote the book of Economics for their time, and Samuelson's is still considered standard reading.
It should also be noted that (as a product of their time) each of these affiliated economists had a vastly different approach and view on economics.
In light of this plurality, ignoring any quote from Schumpeter by default seems unwise. He clearly stimulated academic output in all sorts of directions and the same might hold true for the current reader.
I know quite a few scholars who happily quote Marx, Foucalt, Hayek, Lucas or Friedman and yet, many of them are absolutely worth listening to.
