Question

1. Can you give other contemporary examples of creative destruction? Which old firms/industries/products are being replaced by new ones? Why do the new comers often win? 2. Will creative destruction affect your life/job? If so, how? 3. Explain how creative destruction is related to monopoly power. 4. What should be the government's role with regard to creative destruction? Explain using the economic concepts you studied in this course

Answer 1

Creative Destruction is a phenomenon where old is "destroyed" to pave the way for the new, The creative destruction is essential part of rapidly changing global economy where the emergence of new technologies everyday is changing the status quo and making the market economy highly dynamic. The best example of this kind of creative destruction is probably KODAK and DIGITAL CAMERA, where a new technology like Digital photography has destroyed the once reigning giant and made it a bankrupt organization.New comers often win due to the ability to change rapidly and the no baggage of the already existing technology or practice. Kodak was destroyed because of its disinterest in letting go of its "photography film" business and the reputation it built with marketing campaigns like " Kodak Moment" while Digital Camera players like Nikon or Canon had no overhead like these and had much more to gain with introduction of new technology because there is no competition and whole market is there for capturing,