| Abstract: |
We show that world trade network datasets contain empirical evidence that the
dynamics of innovation in the world economy follows indeed the concept of
creative destruction, as proposed by J.A. Schumpeter more than half a century
ago. National economies can be viewed as complex, evolving systems, driven by
a stream of appearance and disappearance of goods and services. Products
appear in bursts of creative cascades. We find that products systematically
tend to co-appear, and that product appearances lead to massive disappearance
events of existing products in the following years. The
opposite--disappearances followed by periods of appearances--is not observed.
This is an empirical validation of the dominance of cascading competitive
replacement events on the scale of national economies, i.e. creative
destruction. We find a tendency that more complex products drive out less
complex ones, i.e. progress has a direction. Finally we show that the growth
trajectory of a country's product output diversity can be understood by a
recently proposed evolutionary model of Schumpeterian economic dynamics. |