Creative Destruction in International Trade: Insights from the Quadruple and Quintuple Innovation Helix Models

Abstract

Joseph Schumpeter described the concepts of creative destruction, innovation, and entrepreneurship in the economy. These perspectives can offer ideas to the challenges and opportunities in current international trade issues as well as provide insights for policy makers. Since the end of World War II, nations that fostered free and open international trade experienced competitive business environments, high growth economic growth rates, and increasing standards of living. The globalization process conformed the creative destruction theory as innovation and competition between the leading powers to seek new markets and open new sources for exploitation lead to growth and new spheres of power and influence. Numerous shifts in economic development among countries have occurred, but recent adjustments in wealth and power caused by globalization have resulted in difficult adjustments and altered perceptions as well as the rise of populist social movements that promote forms of mercantilism, protectionism, and economic nationalism. This conceptual overview applies the helix models of innovation to explicate the relationships among business enterprises government, as well as entrepreneurship, change, and socio-economic development. The objective is to model the relationships in national structures as they have positive and negative impacts on economic development, competitiveness, and for international trade under the ever-present state of creative destruction. The present study indicates a need for empirical data among the most affected nations.