Introduction
The structure of the American economy, capitalism, and many financial systems are built on the opportunity created through continuous economic change, and its production. Across the world, entrepreneurs are manufacturing new production methods for essential and non-essential goods that will completely rupture the market. Through successful innovation or recreation of ideas, entrepreneurs bring about high-volume demand. As a result, suppliers must account for all variables such as purchasing cost of resources, while being able to properly supply their target consumers. Buyers and sellers engage in these back-and-forth transactions of supply and demand which highlights the direction of the market trend.
Market Influence
While many entrepreneurs have attempted to predict the direction their market is heading in, I have found that it is extremely difficult, and very few have had any success doing so. No matter the research, trial and error, or surveys sellers have created, ultimately there is no concrete way to predict the market. However, while they cannot control the market flow, they are able to use their gathered information to make informative decisions that will increase their company’s production. Production is one of the most critical parts of an inventor’s journey. Bylund uses several well-established economists, to illustrate the importance of this process and the variety of internal and external factors that directly influence it. During my readings, I began to realize that successful entrepreneurs are those who can absorb these influences, like social development, technology advancement, cultural shift, economic growth, and turn these factors into strength that increase their company’s outcome. As Schumpeter outlined,
“The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumer's goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.” (Schumpeter, p. 82, 1962).
Entrepreneurs carry a load of responsibility with their marketing campaigns across the market trend. However, in the end, consumers are the true dictators of the market. Because there is no entirely accurate way to measure the psychology of the wants and needs of an entire target audience, entrepreneurs must rely on research and intuition to try and meet their consumer’s desires. Schumpeter’s quote emphasizes this idea as he points out the ongoing new creations that have come into society over the years are a result of new technology, and ideas created by entrepreneurs to profit off the wants and needs of citizens. As the market grows over time, creators must adjust their frame of work to accommodate it. This business model has existed for decades, and in this chapter Bylund demonstrates the cause and effect of this model. He briefly mentions,
“It is also a much more scalable model that allows for more economic production….” (Bylund, 2016, p. 56).
Economic production is the goal for most inventors. However, to create any product, resources are required. Thus, entrepreneurs and businesspeople are constantly in search of creative methods to cut down on prices for resources to expand their profit margins. This is the biggest reason Bylund stresses being efficient when dealing with business ventures. All products or services require the sacrifice of other resources to bring them about. Ultimately, one of the biggest quotas these individuals must measure lies in determining the risk/reward, and opportunity cost required to bring their idea to fruition. Whenever an individual provides resources for one of their ideas or another, they must bear the loss of opportunity presented if those resources were used in a different manner. Most entrepreneurs choose to present their resources to the idea they believe will bring the most capitalistic gain.(Bylund, 2016, p. 63-64) In my mind, it is this greediness that ultimately breeds the creative destruction of a market.
Creative Destruction
Schumpeter demonstrates several points about creative destruction being the process through which newly developed constructions of a market will overtime render older inventions/ideas to be outdated and out of use. With this idea in mind, we must ask ourselves, what is the underlying theme of entrepreneurial renovations? Most consumers' wants and desires have already been created and implemented into society. Many individuals simply renovate these products/services in a more efficient way to lower their opportunity cost, while simultaneously maximizing their profit margins and leaving these older ideas outdated. Because entrepreneurs are constantly creating new technology or services in pursuit of their financial goals, they are responsible for drowning out ideas of the past, constructing a creative destruction in the market. Bylund does an excellent job highlighting the importance of production, partnerships, and the entire process that leads to this, but what is the end game? When you are in a competitive market, it’s eat or be eaten. If you want to scale your business and obtain the highest financial payout you can, you need to measure all variables accordingly in your decision making. Those lucky enough, will inevitably drown out a competitor.
Citations
Bylund, P. L. (2016). Chapter 4: Unbeatable, Imperfect Markets. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 47–72). essay, Lexington Books.
Schumpeter, J. A. (1962). Chapter VII: The Process of Creative Destruction. In Capitalism, socialism and democracy (pp. 81–86). essay, Harper Torchbooks, Harper & Row.
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I agree that when it comes to the economic market, there is no sense in telling what the next move is going to look like. There have been a very select few who have been able to figure out the direction of the market and no doubt that luck played a big factor in the process. Now like you said, there are ways to give yourself a better position when it comes to producing in the uncertainty. The main thing that will help your coming become more successful is
Being able to adopt to the changes that occur in the world is the best way to stay relevant and not fall behind this fast paces economy. Adapting new technology and new trends makes sure your company is up-to-date and shows customers you are trying. It is weird to think that entrepreneurs are not the main factor of the economy at the end of the day. We, the consumers are the main factor. We dictate what has value and what does not, not the producers. All they can do is produce products and pray the population gives it a high enough value. That why as an entrepreneur, being up-to-date and being able to adapt to new changes is vital. As a producer, your main goal is to gain as much revenue as possible. This means going as cheap as possible, while still having good quality, and selling it as high as possible, while still making it seem like a reasonable purchase. This means sacrificing resources for your beneficial gain, which likely hurts the manufacture of where you got your resources from. As, you stated, the creative destruction is when new products overthrow old ones. It is interesting, being in the year 2023, what else could we want. How are there still new products coming out left and right? Our desires and wants are full filled, but for producers, their goal is to meet our wants while finding a cheaper way to produce. The entrepreneurs created creative destruction on their own. Like you said, it is either eat or be eaten. You either adapt and change, or stay stagnate and become part of the past.