Schumpeter and new technology based firms: Towards a framework for how NTBFs cause creative destruction

Although Schumpeter’s “creative destruction” has become something of a buzzword, the theoretical underpinnings of his theory are largely missing from the recent literature on technological change. This paper explores the link between technological change and creative destruction, with particular attention being paid to the role of new technology-based firms in bringing this about. Recurring themes in the technological change literature are examined. These show that the phenomenon of dominant firms failing due to the introduction of a new (disruptive) technology is creative destruction in action. NTBFs are the most common introducers of disruptive technologies and a leading driver of creative destruction.