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Creative Destruction, New Ideas and the Current Economic Crisis

May 21, 2009

Economists who theorize that the world economy proceeds in cycles of boom and bust also recognize that it is in the wreckage of those economic failures that the seeds for the new era of financial success are planted. At Foreign Policy, a reminder that we may be at the beginning of a new period of creativity and cultural rejuvenation.

Today, with the pillars of capitalism falling all around us, it might seem odd to wonder what world-changing shifts this Great Recession will help bring to life—what Next Big Thing is just around the corner. But moments of rupture such as these are precisely what true innovators seek to exploit, creating new paradigms and leaving a trail of winners and losers in their wake. Companies, technologies, and ideas that survive this latest tide of creative destruction will emerge sharper, stronger, and more resilient for it.

History virtually guarantees it. The Long Recession that began in 1873 paved the way for new titans of industry and finance. The Great Depression before World War II gave us synthetic rubber, television, and the New Deal. The popping of the 1990s tech bubble cleared the field for Google.

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