Assignment No. 2 – April 14, 2011
Session 2 - April 7

Find at least one modern example for each of the five types of Schumpeterian innovation (500-word essay). Please cite your sources: books, journals, newspapers, company website, website, etc. Please cite (only if available) statistics of market size. Be sure to mention innovations, not just inventions. If you think that an invention does have the potential to become an innovation, briefly state the business case!

[REQUIRED READING!] Excerpt from Joseph A. Schumpeter. The Theory of Economic Development, as quoted by Thomas McCraw in Prophet of Innovation. Joseph Schumpeter and Creative Destruction (Cambridge, Massachusetts: Harvard University Press, 2007):

Schumpeter specifies five types of innovation that define the entrepreneurial act. To quote his list directly:

(1) The introduction of a new good –that is one with which consumer are not yet familiar- or of a new quality of a good. 

(2) The introduction of a new method of production [or commercialization], that is one not yet tested by experience in the branch of manufacture [or retail trade] concerned.

(3) The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before.

(4) The conquest of a new source of supply of raw materials or half-manufactured goods, again irrespective of whether this source already exists or whether it has first to be created.

(5) The carrying out of the organization of any industry, like the creation of a monopoly position, or the breaking up of [an existing] monopoly position.
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