March 9, 1999
No one can accuse capitalism of being a static system. Trends emerge, flourish and -- in some cases -- eventually disappear. Successful entrepreneurs are those who anticipate and help develop those trends. Austrian economist Joseph Schumpeter described how innovation continually destabilizes a capitalist economy: "Job creation and job destruction are intertwined."
Consider these few examples of how industries and economic activities rose or fell from 1970 to 1996:
- The number of male-only barber shops declined from 24,577 to 4,499, giving way to unisex beauty salons -- with the total number of beauty shops climbing from 70,967 to 81,872.
- The number of drive-in theaters fell from 1,567 to 408 -- even as the number of videotape rental concerns went from zero in 1970 to 20,815.
- The number of bowling centers decreased from 9,215 to 5,735 -- while amusement parks increased from 362 to 1,174.
- The 6,419 trailer parks and campsites existing in 1970 dwindled to 3,984 -- as the number of hotels and motels climbed from 34,674 to 45,252.
Over the period, the number of political organizations multiplied from 928 to 2,579.
Not surprisingly, the most dramatic growth occurred in the computer and data processing sector: from 6,517 in 1975, the number of firms grew to 88,911 in 1996.
The data comes from "Myths of Rich & Poor: Why We Are Better Off Than We Think," by W. Michael Cox and Richard Alm.
Source: Peter Brimelow, "Creation and Destruction," Forbes, March 8, 1999.
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