Schumpeterian rent

Schumpeterian rents are earned by innovators and occur during the period of time between the introduction of an innovation and its successful diffusion. It is expected that successful innovations, in time, will be imitated, but until that occurs, the innovator will earn Schumpeterian rents. They were named after economist Joseph Schumpeter, who saw profits made by businesses as resulting from the development of new processes which disturb economic equilibrium, temporarily raising revenues above their resource costs.[1] This type of profit is also called entrepreneurial rent.[2]

Schumpeterian rent is seen as a form of economic rent, although Schumpeterian rent may be seen as an incentive towards greater economic efficiency.

Karl Marx

In Marxian economics, the equivalent to Schumpeterian rent is the extra surplus value that is extracted from the laborer during the rise of local productivity, meaning the development of the productive forces through innovation owned by the respective capitalist, while all other enterprises are left with yet undeveloped productive forces. The result is the rise of the local rate of profit, as the respective commodity is now produced cheaper by this enterprise alone, yet can still be sold for its general market price. In Marxian theory, the earning of extra surplus value is what drives and guides the capitalist, and thus capitalism itself.[3]

See also

References

  1. ↑ Sautet, Frederic. "Schumpeterian Rent in The New Palgrave Encyclopedia of Strategic Management". Palgrave. doi:10.1057/9781137294678.0611. Missing or empty |url= (help)
  2. ↑ Collis, Montgomery (2005). Corporate Strategy: A Resource based Approach (Second ed.). Boston: Irwin McGraw-Hill. p. 44. ISBN 0-07-231286-6.
  3. ↑ Marx, Capital, Part IV: Production of Relative Surplus Value, Chapter Twelve: The Concept of Relative Surplus Value
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