The term “Creative Destruction” was coined by Joseph Schumpeter in 1942. He defined the term as “the process through which industries undergo mutation” (Schumpeter, 1942). Schumpeter goes on to state that the mutation allows the industries to revolutionize incessantly through the economic structure internally. Lastly, he notes that this revolution destroys the old economic structure and creates a new one. Creative accumulation, on the other hand, seeks to advance the ideology in the way that the old technologies need to be replaced by the new technologies. On the contrary, the concept advances the idea that the new technologies need to interact with the old ones, so as to be able to develop novel products whose performance is substantially changed or improved. This concept, thus, proposes that the new areas of knowledge have to be aligned to the already existing ones; it also should be ensured that there is rapid evolvement and the technologies align to each other.
An entrepreneur needs to keenly observe the technological regime of the industry before determining whether or not to enter into any industry. The most important reason for this is that the technological regime of an industry acts as its synthetic description if that industry’s framework (Breschi, Malerba and Orsenigo, 2000). Castellacci notes that upon these conditions industries lay their framework, upon which they intend to undertake their innovative activities (2007, p. 1111). Entrepreneurs also need to observe such regimes in order to be able to determine the channel through which the industries, they seek to invest, channel innovative activities. Entrepreneurs also make use of the technological regimes to determine several factors about the industries they intend to invest in. The entrepreneurs can be able to determine factors like the appropriateness of the industry’s innovations, the accumulative aspects of the technological advances, and, lastly, the characteristics that act as the activities underlining the innovations (Hall and Rosenberg, 2010).