Joseph Schumpeter - The theory of economic development (1912)

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Entrepreneurial profit... is the expression of the value of what the entrepreneur contributes to production in exactly the same sense that wages are the value expression of what the worker "produces." It is not a profit of exploitation any more than are wages.

Joseph Schumpeter
Only a few people have these qualities of leadership and only a few in such a situation, that is a situation which is not itself already a boom, can succeed in this direction. However, if one or a few have advanced with success many of the difficulties disappear. Others can then follow these pioneers, as they will clearly do under the stimulus of the success now attainable. Their success again makes it easier, through the increasingly complete removal of the obstacles analysed in the second chapter, for more people to follow suit, until finally the innovation becomes familiar and the acceptance of it a matter of free choice.

Joseph Schumpeter
When we inquire about the general forms of economic phenomena, about their uniformities, or about a key to understanding them, we ipso facto indicate that we wish at that moment to consider them as something to be investigated, to be sought for, as the unknown ; and that we wish to trace them to the relatively known, just as any science deals with its object of inquiry.

Joseph Schumpeter
Why do entrepreneurs appear, not continuously, that is singly in every appropriately chosen interval, but in clusters? Exclusively because the appearance of one or a few entrepreneurs facilitates the appearance of others, and these the appearance of more, in ever-increasing numbers.

Joseph Schumpeter
The innovation is hazardous, impossible for most producers. But if someone establishes a business having regard to this source of supply, and everything goes well, then he can produce a unit of product more cheaply, while at first the existing prices substantially continue to exist. He then makes a profit. Again he has contributed nothing but will and action, has done nothing but recombine existing factors. Again he is an entrepreneur, his profit entrepreneurial profit. And again the latter, and also the entrepreneurial function as such, perish in the vortex of the competition which streams after them. The case of the choice of new trade routes belongs here.

Joseph Schumpeter
The strategic stimulus to economic development in Schumpeter's analysis is innovation, defined as the commercial or industrial application of something new---a new product, process or method of production, a new market or source of supply, a new form of commercial, business or financial organization.

Joseph Schumpeter
The banker, therefore, is not so much primarily a middleman in the commodity "purchasing power" as a producer of this commodity. However, since all reserve funds and savings today usually flow to him, and the total demand for free purchasing power, whether existing or to be created, concentrates on him, he has either replaced private capitalists or become their agent; he has himself become the capitalist par excellence.

Joseph Schumpeter
Access to the national dividend is usually to be had only on condition of some productive service previously rendered or of some product previously sold. This condition is, in this case, not yet fulfilled. It will be fulfilled only after the successful completion of the new combinations. Hence this credit will in the meantime affect the price level.

Joseph Schumpeter