The concept of creative destruction is actually over 70 years old, and was proposed by the Austrian economist Josef Schumpeter, who in turn derived it from the work of Karl Marx. The essence of the concept lies in the theory of business cycles and economic innovation. Thus, Schumpeter says that "the storm of creative destruction" demonstrates " process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." He further argues: “Capitalism ... is by nature a form or method of economic change and not only never is but never can be stationary. ... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates."
In his Theories of Surplus Value, Marx’s similarly developed this concept: “The destruction of capital through crises means the depreciation of values which prevents them from later renewing their reproduction process as capital on the same scale. This is the ruinous effect of the fall in the prices of commodities. It does not cause the destruction of any use-values. What one loses, the other gains. Values used as capital are prevented from acting again as capital in the hands of the same person. The old capitalists go bankrupt. ... A large part of the nominal capital of the society, i.e., of the exchange-value of the existing capital, is once for all destroyed, although this very destruction, since it does not affect the use-value, may very much expedite the new reproduction. This is also the period during which moneyed interest enriches itself at the cost of industrial interest."
It is also interesting to take a look at the perspective of David Harvey, Anglo-American historian and geographer, popularizer of Marx's ideas: “The effect of continuous innovation ... is to devalue, if not destroy, past investments and labour skills. Creative destruction is embedded within the circulation of capital itself. Innovation exacerbates instability, insecurity, and in the end, becomes the prime force pushing capitalism into periodic paroxysms of crisis. ... The struggle to maintain profitability sends capitalists racing off to explore all kinds of other possibilities. New product lines are opened up, and that means the creation of new wants and needs. Capitalists are forced to redouble their efforts to create new needs in others .... The result is to exacerbate insecurity and instability, as masses of capital and workers shift from one line of production to another, leaving whole sectors devastated .... The drive to relocate to more advantageous places (the geographical movement of both capital and labour) periodically revolutionizes the international and territorial division of labour, adding a vital geographical dimension to the insecurity. The resultant transformation in the experience of space and place is matched by revolutions in the time dimension, as capitalists strive to reduce the turnover time of their capital to "the twinkling of an eye".
In the next article, I plan to speculate on applying the concepts of creative destruction to a real big topic about the VUCA world. I continue to publish articles about business development incl. of digital and information technologies and engage in business consulting. If you are interested in articles on this topic, then subscribe to my Telegram channel: https://t.me/biz_in. If you have a need for business consulting support, then I am waiting for you on my website: https://akonnov.ru/.