Is schumpeter a medicine man for curing the media's diseases?
| Autor | Wallez |
| Cargo del Autor | MS Columbia U, NYC, Ph.D Aix-Marseille U |
| Páginas | 1009-1032 |
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CAPÍTULO 57
IS SCHUMPETER A MEDICINE MAN FOR CURING
THE MEDIA'S DISEASES?
WALLEZ
MS Columbia U, NYC, Ph.D Aix-Marseille U
1. INTRODUCTION
It has become commonplace to predict the disappearance of newspapers.
Given that the history of print media is a history of continual innovations
of all sorts, it seems challenging to summon Schumpeter’s innovation-
based creative destruction theory as a guideline to analyze the past and
current situation of the daily newspapers. Schumpeter is known as the
"Prophet of Innovation" (Mc Craw, 2007). His theories are frequently
used in various fields but have never been applied to the media.
The Austrian scholar indeed set up a scientific model. The keyword here
is "evolution", through successive steps; first, the ‘circular flow’ de-
scribes an economy of routine with little profit at stake, such as the tra-
ditional rural and agriculture-based economy that prevailed before the
Industrial Revolution in Western countries, and in an Asian Country
such as Japan before the 1867 Meiji Revolution.
In such a traditional economy, there is "growth", but not "development”
in a Schumpeterian sense. « Development » is the next step. According to
the Austrian American economist (1883-1950), innovation and entre-
preneurship are the main factors of economic development. Innovation is
defined as “a new combinations of production,” including technological
inventions among other possibilities. A “special breed of men” named en-
trepreneurs introduce those new means, which have a disruptive effect on
the market affecting the equilibrium state, i.e., the circular flow.
Schumpeter spelled out five situations that constitute innovations (1) a
new good; (2) a new method of production; (3) the opening of a new
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market; (4) the capture of a new source of supply; and (5) a new organ-
ization of the industry. Innovation is closely related to the so-called
“Creative Destruction”. The zenith of this process is reached when a new
technology has replaced the old one, and eventually, ‘start up” compa-
nies have superseded existing ones. Schumpeter gave as example the
railroad replacing the stagecoach as a mean of travel. Then there was a
new equilibrium state until the next wave of innovations, aircraft as an
example in the transport sector.
Later, authors such as Christensen (1997-2016), and Kirzner (1999) re-
discussed Schumpeter’s theories. Christensen who introduced the con-
cept of “disruptive innovation” distinguished between sustaining and
disruptive technologies. For this author, sustaining innovations are de-
fined as new technologies that “improve the performance of established
products” (Christensen, 2016, p. xix), while disruptive innovations are
defined as new technologies that “result in a worse performance [of ex-
isting products]”, and, hence, can lead to “leading firms’ failure”. Is the
Internet a sustaining or disruptive innovation regarding newspapers? We
will assert this important point.
At first glance, the entire description fits the successive steps of the print
media history, including the current transition between declining print
system and rising digital start-ups in the industry. Is a creative destruc-
tion in the full Schumpeterian meaning at work? The danger would be
to ignore the opportunity to update and upgrade the theory and perform
a fortune-telling trick. It is therefore essential to dig deep into the theory
and then take on board the critics, to gauge Schumpeter's contribution to
our work.
We will study.
The different aspects of the theory linked to historical examples.
Discussion and conclusions
1.1. SCHUMPETERIAN CONCEPTS
Schumpeter went further into his theory. According to our author, the
concept of innovation is the basis and the driving cause of economic
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