New ideas are the basic craft and contribution of entrepreneurs. Whether a new product or service, “building a better mousetrap,” or a new way of producing, distributing, or delivering products and services, new ideas are the essence of innovation, which drives productivity gains and economic growth, and creates jobs, wealth, and opportunity. As economist Joseph Schumpeter observed:
“The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates…The opening up of new markets, foreign or domestic…[The process] incessantly revolutionizes from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact of capitalism.”
Entrepreneurs and the new businesses they launch are disproportionately responsible for the major innovations that have defined economic progress over the past 150 years: the telegraph and telephone, the railroad, electrification, the automobile, the airplane, air conditioning and refrigeration, the computer, innumerable applications of the Internet, wireless communication, and many others. New ideas can come from the mind and imagination of entrepreneurs or as the result of scientific inquiry and discovery.