Elaborating on the Demand-Side of Economic Development: Schumpeter and Neo-Schumpeterian Theory

Abstract

The article aims at integrating Schumpeter’s focus on innovation, entrepreneurship, and qualitative change with a theory of the demand side. It argues that, by remaining close to Schumpeter’s “methodological core”, it is possible to go forward with Schumpeter’s seminal contribution. The new perspective deals with innovation and demand together, therefore, laying out the basics for a theory of the demand side, a goal that despite the numerous attempts has remained elusive to Neo-Schumpeterian\\Evolutionist theory. Its recent development highlights a “micro” orientation that does not facilitate that task. The suggested approach in this article focuses on the exploitation of the potential implicit in current consumption patterns by means of innovation and new products. Its main goal is to provide a theoretical framework for the large number of case studies and empirical analyses of new products and innovation that constitutes the bulk of research on demand in the Neo-Schumpeterian\\Evolutionist literature. That should also contribute to analyzing the structural aspects of the “demand generating” process.