Customer Reviews

Creative Destruction: Business Survival Strategies in the Global Internet Economy

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There are three recent publications with the same title (Creative Destruction) whose authors correlate Joseph Schumpeter's concept of "creative destruction" with the contemporary business world. Foster and Kaplan explain "why companies that are built to last underperform the market -- and how to successfully transform them" whereas in their work, Nolan and Croson offer "a six-stage process for transforming the organization." In the third volume co-edited by McKnight, Vaaler, and Katz, various authors and co-authors of 13 anthologized essays examine various "business survival strategies for the global Internet economy." I highly recommend all three volumes as well as two of Schumpeter's works: Capitalism, Socialism and Democracy, and, Essays: On Entrepreneurs, Innovations, Business Cycles, and the Evolution of Capitalism.

This book grew out of a symposium held at the Fletcher School of Law and Diplomacy at Tufts University in the spring of 1999. The topic was "Creative Destruction -- or Just Destruction?" Those who presented papers were asked to address "the key technological, regulatory, organizational, and competitive dynamics compelling change in the way firms and stakeholders do business in an increasingly global and Internet-centric society." At the symposium there were (and in this volume there are) four points which are consistent with the theme of "creative destruction":

The Destruction of Traditional Industry Structures

The Destruction of Traditional Regulatory Structures

The Destruction of Traditional Competitive Positioning Strategies

The Destruction of Traditional Technological Assumptions

It is important to keep in mind that this is not a manual. Although there are numerous suggestions, checklists, points of emphasis, graphic illustrations, and examples offered, the volume's primary purpose is to stimulate continued discussion and debate on the major challenges now facing firms, governments, and other players -- while suggesting "how to exploit the new opportunities created by creative dynamics."

The material is organized within five Parts: Introduction, Theory and Practice of Creative Destruction, The Global Context for Creative Destruction, Business Destruction Strategies in the Global Internet Economy, and Creative Business Survival Strategies. For the reader's convenience, the editors offer brief comments about each subject and about each of those who address it. After reading the excellent Introduction, you may decide not to read the everything that follows from beginning to end. In that event, select what is directly relevant to your and your organization's most immediate and urgent needs and interests. (In all probability, some of those needs and interests will soon change.) The editors provide three supplementary sections (Contributors, Notes, and References) which assist and encourage further study as well as "continued discussion and debate."

I am curious to know what Schumpeter would say about the material in this book if he were discussing it as I am now. My guess (only a guess) is that he would observe that his basic concept of "creative destruction" remains relevant but the process is occurring at an ever-increasing velocity and in ways and to an extent he could not have envisioned 50-60 years ago. Another guess (only a guess) is that, based on what is now happening (and not happening) in the global community, he would suggest that process of "creative destruction" in all organizations (regardless of their size or nature) has only begun. The Chinese character for the word "crisis" has two meanings: "peril" and "opportunity." For many (perhaps most) organizations, the process of creative destruction means death; for others, it offers the opportunity for at least survival and perhaps regeneration. The authors represented in this superb volume help us to understand the differences between the two groups....also, the probable consequences of those differences.

Rather than focusing on a single angle and building a long argument in its favor, this compendium's treatment of diverse dimensions of creative destruction lets the reader paint his or her own picture of the net effects of Schumpeter's famous concept. The book's 11 articles touch on topics as diverse as the future of telecommunications firms in a Net-centric world, the impact of regulatory reform on the Internet in Europe, the institutional barriers to Internet-driven creative destruction in Japan, and the impact of open-source software business models.

Creative Destruction is a Lego-box of interesting ideas that managers and academics can recombine into constructs valuable to their work, teaching, or research. I found it very rich reading.

This is an outstanding collection of articles. These papers combine scholarly depth with usefulness for practitioners. They will help you understand where we've been and forecast where we are going with the Internet. I teach courses on Internet Business Strategy and will use this collection next year. My favorites are Baumol's "Innovation and Creative Destruction; McKnight's "Internet Business Models: Creative Destruction as Usual" and Lehr's "A New Theory of the Internet Firm." They provide a solid conceptual basis for understanding the implications of the Internet economy. One thing truly unique about this book is the thoughtful and detailed discussions of the implications of the Internet on international business. There are six papers that focus on these issues. I have not seen this anywhere else. In a world where people publish books peddling derivative nostrums about the network economy, it's a pleasure to finally find one that deals with these issues in a serious, thoughtful and, most of all, useful way.

It is a thorough analysis of the technological advances of our era and the depth of the internet industry. I was particularly interested in the implications for Latin America and the technological transfer from liberalization. It is a useful book for practictioners and for more academic minds.

Creative Destruction presents a fascinating revival of an old concept in the context of recent technological developments and innovation. It offers a brilliant account of how information technologies accelerate the process of creative destruction today and helps understand how information society articulates with in a wider framework of economic history. Those interested in Latin America will appreciate, in particluar, the recent developments in the telecommunications industry in the region.