For anyone seriously interested in innovation, and in particular anyone who has the responsibility of building an innovative enterprise, this magnificent book by Thomas K. McGraw is a must read. The book was published just last year by Harvard University Press (The Balknap Press).
The book is a product of intensive research and is written with almost a novelist’s touch. Schumpeter has gained ever-increasing prominence and influence in economic thinking and public policy over the past quarter century or more, but this book is more than a history of the development of his influence on business and government thinking. It goes to some lengths, as did Schumpeter himself, to deal with the weaknesses of capitalism and the difficulties of maintaining in a business or in a country steady flow of innovation that is the root of economic growth.
As anyone knows from reading The Eye for Innovation, I have a decided distrust of economics as a foundation for studying and practicing strategic thinking and strategy. McGraw captures the hub of this problem: “Today, in the twenty-first century, many economists add entrepreneurship to the three factors of production as traditionally conceived: land, labor and capital. That addition owes a very great deal to Schumpeter’s own work. But large numbers of analysts still downplay the idea. Entrepreneurship is very difficult to measure, and virtually impossible to express mathematically. It therefore does not easily fit into formal models.” [emphasis added]