Entrepreneurship, knowledge and employment

The role of the Schupeterian entrepreneur in the past decade

Belluga Hiscio, Universidad Complutense de Madrid

Schumpeter´s Economic Cycle theory was a groundbreaking proposal in the last century. With that theory, he developed the idea that Economic cycles can be divided in three different types, depending on the time length, he categorized them in short, medium and long cycles, however, the factor that made this theory jump into one of the most relevant theories of the 20th century was the idea of the Innovative Entrepreneur. This messianic figure was the Alpha and the Omega of the Economic cycles through a process known as creative destruction. Through his ideas and the creation of innovative techniques, methods or products, he was meant to be the end of an old and failing cycle and the beginning of a new one. Ever since then, entrepreneurship has taken a vital role in all economic activities, let us not forget that great entrepreneurs have been shaping the world in the last century and even today, from Thomas Alba Edison to Elon Musk, they all have created brilliant products and ideas that have made the developed world a better place. It is also important to know, that these messianic idea of innovation acquired special importance right before the last financial crisis of 2008 with the creation of supposedly new financial products that were not precisely new but in fact, a conglomerate of pieces of and factors of different already made products that instead of creating something new, they reinforced the vices and failures of the present economic cycle. One of the solutions that many governments decided to take in order to solve the Great Recession, was to motivate new ideas through the process of entrepreneurship. In this paper I will try to explain what is the process of creative destruction and why false innovative entrepreneurs can provoke market failures whereas true innovations can mean the beginning of a new bright economic cycle with a special approach to Spanish policy regarding entrepreneurs ever since the backlash of the Great Recession.

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Keywords: Business cycles, creative destruction, entrepreneur, financial crisis.

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