Session 2: The Schumpeterian notion of entrepreneurship
Case: THE MARK NEWS
1. What is Schumpeterian concept of “creative destruction”?
The term “creative destruction” introduced by Joseph Schumpeter express the concept that, in a free and capitalistic society, innovation can impact so intensively, that evolution is necessary to survive by destroying the old structure in order to create a new one.
So if a company doesn't follow the evolution of the market it can probably face a crisis or die.
The main driver of creative destruction are new products or business models that allow, often helped by technology, to offer to the customer better performances, greater convenience and lower costs.
Innovation is in this case a threat for the one where predominant position based on the old paradigm.
Creative destruction is a reversion of conventional thinking, is going over a convention, a behavior that all share, is create an innovative thinking before creating innovation.
2. Discuss the economics of the legacy newspaper industry.
a) What are the challenges it faces?
The evolution of technology, the nowadays strong usage of electronic devices for reading news are some of the challenges faced by the newspaper legacy industry. The different approach young generations as towards news reading, preferring the online version instead of the paper one, the availability through the internet of different sources of news for free and the sharing of news on social media are other.
Other important factors are the high costs of the legacy industry due for example to distribution, printing, raw materials
b) What is the threat from the entrepreneurial entrants like The Mark?
The threat to the legacy market consists in the innovative and low cost business model of the Mark: contributors are not paid, are chosen because of connections with Canada or because their professional credibility. Moreover the aim was to create an active community of thinkers, a platform on which share and debate ideas and opinion about news published, not only reporting what happened but, going deeper, explaining the meaning.
c) Given the challenges, do legacy newspaper have a future? If not, should we be concerned?
Even facing a big crisis in sales, I don't think and hope newspaper will all die. Probably there will be a reduction in the number of different newspapers, but not it's extinction. I think that even among the new generation, there are or there will be some “romantics” whose still want to…