ECONOMIC DEVELOPMENT

The Theory of Economic Development by Joseph A. Schumpeter

The Theory of Economic Development by Joseph A. Schumpeter

Introduction

Economic development is a very broad concept which refers to the development of an economy, economic wealth of the regions and the countries for the comfort, happiness and safety of the people. In the context of economics, development and growth are two dissimilar conditions. In general context, economic development is referred to the issues of countries which are in the process of development or are underdevelopment and economic growth of developed countries (Swedberg, 1992). This paper focuses on the theory of economic development which was written by Joseph Alois Schumpeter. He is one of the famous economists.

Discussion

Joseph Alois Schumpeter was born in 8th February in 1883. He was a political scientist and an Austrian American economist. In 1919, for a short period of time he served as Finance Minister of Austria. In the 20th century, he was one of the most prominent economists. In economics, the term “Creative Destruction” was popularized by Schumpeter. Schumpeter's ever changing, innovation based and change oriented economics was based on the source of the historical school of economics, even though his writing work could be vital of the economics school. His work on the entrepreneurship and innovation role can be regarded as an extension of ideas which have been initiated by historical school of economics and specifically the contribution of Werner Sombart and Gustav Von Schmoller. The scholarship of Schumpeter is a clear evident within his posthumous History of Economic Analysis. Even though part of his assumptions and judgments has been identified as idiosyncratic and sometimes they seem to be cavalier. Several studies of developed economy in the twentieth century recover the entrepreneur, forgotten by some of the scholars of this science in the nineteenth century. Among the most important is developed by Schumpeter (saylor.org, pp.3-5). The importance of the work of this author lies in the role assigned to the entrepreneur in the economy and the fact Schumpeter takes a more holistic view of economic development in contrast to their predecessors, the neo-classical economists and classic.

However, considering that the name of Joseph Alois Schumpeter is perhaps unknown to many experts in management and is a copyright, which is essential to understand the relationship between the economies and creating companies, this essay aims to analyze the role of the Schumpeterian in the theory of economic development. To achieve this objective is accomplished by a critical analysis of four central this theory: 

The design Schumpeterian entrepreneur and company

The role of the entrepreneur in innovative behavior development economic

The risk in the theory of "creative destruction"

Study of the benefit of the employer

Theory of Economic Development

The Theory Of Economic Development is a great contribution in the field of economics, it is the work of an Austrian-American economist Joseph Schumpeter . Schumpeter published his the work at the age of 28 years as a professor in Graz . the publication of this book took a lot of recognition which made the young author very well known. The intellectual work of Schumpeter focuses primarily on two ...