Parable of the New Combination and the Surface of the Water
2017-10-25
Schumpeter, who coined the term innovation, also called innovation a new combination. The basic premise Schumpeter. believed that "if new combinations do not occur, the economy will move toward balance." This corresponds to a flattening of the water surface.
He also believed that "when the economy is in equilibrium, profit disappears and recession sets in." This corresponds to the loss of flow when the water surface is flattened.
The new union is a hole in the wall, connecting two previously unconnected areas.
With the new union, the water that was in equilibrium begins to flow again.
Then a new equilibrium is reached
https://gyazo.com/fc52178e6b78cb06a229c5b69857aaba
Effective new bonds are under pressure at both ends.
So when they join, water begins to flow through it.
The water flow itself can widen the hole and further increase the flow.
On the other hand, water will not flow if you do new combinations that are not effective.
No flowing water, no difference in pressure, trying to flow against gravity, these new bonds are not valid.
https://gyazo.com/b8f6db1f4202fa4175339b6e4e8dd24a
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