Incumbents Hate Competition But Customers Love It

All business people live the ultimate contradiction. They pray at night for supernormal profits and spend their days driving down those profits by competitively supplying customers with more of what they want. As the economist Joseph Schumpeter so poetically phrased it, entrepreneurial innovations make up the “perennial gale of creative destruction,” whereby entire industries have been eliminated due to this dynamism of free markets. Buggy whip manufacturers didn’t invent the automobile and slide rule manufacturers did not invent the calculator. Businesses are the ultimate change agents in society, ushering in new products, services, and ways of conducting our affairs. This role of business is often ignored in the debate over the jobs destroyed in the process, which is the wrong metric: the creativity is more important than the destruction. Join Ed and Ron for a discussion of the dynamic process of competition.