Joseph Schumpeter , is considered the father of the term “creative destruction”. His work stands as a pillar in today’s innovation and economics education. But what Schumpeter didn’t account for in his work was the increasing pace of this creative destruction. Innosight director Richard N. Foster, co-author of the book Creative Destruction recently published a new report, “Creative
Destruction Whips through Corporate America“. Foster’s conclusion, the pace of disruptive innovation is only quickening and the life-span of leading companies are getting shorter. Writes Foster “a warning to execs: At current churn rate, 75% of the S&P 500 will be replaced by 2027”.
The essence of Foster’s findings, as the pace of innovation accelerates, large companies will increasingly find themselves being out-innovated and out-competed. With the existing rates,three out of four large companies will be out-innovated and passed over by start-ups and more innovative companies in the next 15 years.
This report and its implications should be scary reading for today’s executives. Yet, for the next generation of entreprenurs, start-ups and young Pirates, this means the future looks even brighter. Read the full report.