ACCTG 1 Lecture Notes - Lecture 13: Money Supply, Market Failure, Joseph Schumpeter
Document Summary
Creativity: the ability or quality displayed when solving hitherto unsolved problems, when developing original and novel solutions to problems others have solved differently or when developing original and novel products underpins innovation. Innovation: means to break away from established patterns, doing things really differently. Innovation is less likely in more mature industries that are highly concentrated and therefore dominated by larger firms larger firms are the dominant innovators. In concentrated industries there is a focus on incremental product innovations and cost-reduction process innovations. In less concentrated industries, there is more likely to be radical or disruptive innovation step changes in products, processes or the framing of markets smaller firms tend to be the dominant innovators. Larger firm miss out on disruptive innovation because they develop a dominant logic (mental model) Dominant logic: dictates how the world is viewed; it filters the information received, subconsciously interpreting environmental data in a certain way: the influence of industry age and stability.
