David Audretsch on creative destruction and destructive creation

Audretsch started the lecture by emphasizing that the standard of living is driven forward by the creative destruction with new ideas replacing old. Firms founded by entrepreneurs with new innovative ideas and products displace the stagnant existing companies, which fuels the economy.

The creation of new entrepreneurial firms leads to the destruction of less innovative companies. By contrast, in the era of globalization, the destruction of  companies is often the result of global competition. Entrepreneurship has emerged as the positive, proactive response to globalization rather than succumbing to it.

Sweden tops the Innovation Capacity Index Rankings in R&D investments with a high amount of tech companies but it does not lead to higher productivity. Something more is crucial – entrepreneurial capacity in the economy.

David Audretsch 

The entrepreneurial capacity must be present in incumbent companies, as well. Those who value new ideas are the ones that will  succeed. Companies that didn’t understand new ideas or business models are gone. We are now in the middle of the fourth industrial revolution, this means we need new ways of thinking.

Annika Lundius, board member Industrivärden and SSAB,  and Marie Wall, Deputy Director for Startups at the Ministry for Enterprise, where the invited on to stage to give their comments on the lecture. Sweden got plenty of startups, Lundius said. The challenge is that few companies scale up. Sweden’s big and successful companies were founded 50-100 years ago.

Even the public sector needs to be challenged by creative destruction, be open to new innovations and business models.

David Audretsch, Annika Lundius and Marie Wall

Wall, agreed on the scale up problem. But emphasized that Sweden is a small country where it might be hard to find enough customers to take your business to the next level.

Sweden has to be better at attract international talent to be able to stay ahead.

I hope the younger population will provide new ways of thinking regarding businesses and entrepreneurship, Audretsch concluded the discussion.