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Schumpeter’s Theory of Economic Development: 100 years of development

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Abstract

This article sheds light on the impact of Schumpeter’s Theory of Economic Development over the last 100 years, and identifies insights from that work that are less well-known, but that have the potential for informing current developments in evolutionary economics. We identify these insights by tracing the development of Schumpeter’s ideas in Theory of Economic Development, which he revised heavily between the first and second German and the English editions. We not only report material lost in the process and developments in Schumpeter’s thinking that can be read off of the revisions, but also indicate how the newfound material can inform and inspire evolutionary economics today.

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Notes

  1. A notable exception is the favorable review by John Bates Clark (1912) in the American Economic Review.

  2. We carried out the search in JSTOR (complete, without limiting the search to particular disciplines such as ‘economics’). We did not use any filters for content (such as articles, etc.). The search term used was (Schumpeter) AND ((“Theorie der wirtschaftlichen Entwicklung”) OR (“Theory of Economic Development”)) in the field ‘full text’. This search identified 2101 hits. We manually counted up the hits per calendar year, excluding publications that were considered not to refer to the book’s content, such as front matter, back matter, JEL overviews per subject matter, books received for review, pure bibliographic references (e.g., bibliographies) except for those that contain a description of or comment on Theory of Economic Development. Where publications carried a double year of publication (e.g. 1919/1920), we counted them in the first year. The search was last updated on 18 September, 2012.

  3. In this citation analysis, we examined references to TED and to Nelson and Winter’s (1982) ‘An Evolutionary Theory of Economic Change’ in the top five economics journals and the top five management journals. (Economics: The American Economic Review first published in 1886, Econometrica first published in 1933, The Economic Journal first published in 1891, Journal of Political Economy first published in 1892, and The Quarterly Journal of Economics first published in 1886. Management: Academy of Management Journal first published in 1958, Academy of Management Review first published in 1976, Administrative Science Quarterly first published in 1956, Organization Science first published in 1980, and the Strategic Management Journal first published in 1990.) We conducted a search of these ten journals using the JSTOR database, with the search string (((Schumpeter) AND ((“Theorie der wirtschaftlichen Entwicklung”) OR (“Theory of Economic Development”))). The search covered the 100 years from 1911 to 2011 and was last updated on 18 September 2012.

  4. This is further supported by an analysis of the content of a sub-sample of the top management journal sample. The most frequently cited of Schumpeter’s works in the Academy of Management Journal and the Academy of Management Review in the period 1961 to 1997 is indeed Theory of Economic Development. The second most cited work is Capitalism, Socialism, and Democracy. In the Academy journals and the three other leading management journals, the citation frequency for any other writings by Schumpeter is very low.

  5. English translations of chapter 7 and of the 1911 version of chapter 2 are available in Becker et al. (2011).

  6. Schumpeter first uses the expression ‘entrepreneurial function’ in Entrepreneur (1928), which he finished at the time (1926) he also revised the second edition of Theory of Economic Development (Becker and Knudsen 2003).

  7. This aspect comes out particularly clearly in Entrepreneur (1928).

  8. In this way, Schumpeter also positioned himself as both rival and heir to Karl Marx whose view of the economic system had not incorporated a detailed specification of the interaction among social subsystems.

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Authors and Affiliations

  1. Strategic Organization Design Unit (SOD) & Danish Institute for Advanced Study (DIAS), University of Southern Denmark, Campusvej 55, DK-5230, Odense M, Denmark

    Markus C. Becker & Thorbjørn Knudsen

  2. Department of Sociology, Cornell University, Uris Hall 328, Ithaca, NY, 14853, USA

    Richard Swedberg

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  1. Markus C. Becker
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  2. Thorbjørn Knudsen
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  3. Richard Swedberg
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Correspondence to Markus C. Becker.

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Becker, M.C., Knudsen, T. & Swedberg, R. Schumpeter’s Theory of Economic Development: 100 years of development. J Evol Econ 22, 917–933 (2012). https://doi.org/10.1007/s00191-012-0297-x

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