Entrepreneurship, Innovation, and Wealth Distirbution: the Impact of Creative Destruction on Income Inequality
The purpose of this article is to investigate theories that have produced differences in entrepreneurship definitions. We raise this issue because equitable wealth distribution is a fundamental focus of economics. Yet, recent attempts to guide research on entrepreneurship embrace innovation while ignoring the wealth redistribution aspect of entrepreneurship. Schumpeter argues that entrepreneurship means innovation by independently owned start-up firms that cause creative destruction that yields equitable wealth redistribution. Currently, most entrepreneurship scholars focus on innovation, by any firm, as a source of wealth creation without recognizing that redistribution only occurs when innovation originates in new, independently owned firms. In this article, we describe how new micro- and nano-technologies championed by high-tech start-ups redefined the electronics industry, deconstructed the mainframe computer industry and are redefining the pharmaceutical industry today. We suggest entrepreneurship research should focus more on entrepreneurs that form and operate independent new firms.