Widely heralded as one of the most forward-thinking economists of his time, Joseph Schumpeter's more recent accolades include an endorsement from Obama's Chief Economic Advisor Larry Summers, who referred to him as the most influential economist of the 21st century. This is because Schumpeter's work was largely centered on innovation and entrepreneurship. In 1942, he published Capitalism, Socialism and Democracy and in it, coined the term "creative destruction," which he defined as the tendency for industrial change to come from within, even in the midst of unpredictable conditions, because it is driven by entrepreneurial innovation, risk-taking, successes and failures.
At times it seems like everyone I know is an entrepreneur: From former housemates launching a yoga business for kids, to the work colleague setting up a tea import business on the side and restaurant owner sending discounted shoes back to Nigeria to be sold at full price, the 21st century is indeed Schumpeterianism at work. But perhaps few industries have, or stand to gain more from "creative destruction" than fashion retail, where e-commerce has birthed a veritable entrepreneurial explosion.
Montreal's answer to Mr. Porter, Frank & Oak, launched a year ago and has since grown a formidable following of men eager to find the right fit in what is arguably Canada's most fashionable city. With 60 employees and $6 million in revenue, it's hard to still classify the online retailer as a start-up. But the company, launched by two Deloitte alums who quit their jobs to follow their dreams, has come a long way thanks to a solid understanding of their niche and a dynamic platform whose breadth of multichannel integrations earned them an award for Best New Canadian Start Up this year.
When it comes to entrepreneurship, Canada stands as a shining example to many. The federal government recently introduced a "Start-Up Visa" aimed at making "Canada the destination of choice for the world's best and brightest to launch their companies," by offering permanent resident visas in return. Launched on April 1st 2013, the new visa also gives immigrant entrepreneurs access to private sector organizations in Canada offering mentorship and financial support. Frank & Oak have themselves benefited extensively from Quebec's plethora of government-sponsored small business programs, such as Anges Québec.
Half-way around the world in Accra, Ghana, where government sponsorship is less easy to come by, fashion entrepreneurs are still making their mark. Heel The World (HTW) is a luxury footwear and accessories brand, championing a new "Made in Africa" movement and challenging global views on the continent's ability to produce high-quality merchandise. Launched in 2011, HTW has not only expanded its product line but even more so its mantra, becoming beacon of inspiration for budding African entrepreneurs most evident in its top-selling "empowerment beads." Thanks to social media and the availability of low cost ecommerce platforms, some of their uniquely designed, hand-crafted pieces can now be bought via a platform hosted on Big Cartel, expanding their reach to a growing number of fans beyond the African continent.
Inspiring though these two examples may be, the question inevitably turns to that of scalability and how small scale entrepreneurs can not only compete, but also survive against the experience, resources and budgets of more established fashion e-tailers. This is where "creative destruction" is most exemplified: Entrepreneurs exist to inspire consistent adaptability, thereby forcing larger retailers to rethink existing models and innovate further.
Last week, Dolce & Gabbana set a record for the most expensive item of clothing sold on Net-a-porter.com: A limited edition beaded piece from its Fall 2013 collection, priced at an amount so stratospheric it could have inspired the blood-tinged hue of the dress itself -- £32,000 (or $50,000). When they launched in the mid-'80s, online sales were the last of the luxury brand's worries; two decades later, ecommerce stands at the heart of a growth strategy that has expanded their global footprint faster and on a comparatively frugal budget than could have been achieved via free standing stores.
Though famously reported to have been a relentless gentleman who spent an hour a day just getting dressed, it is hard to imagine Schumpeter as a man overly enthused by the inner workings of fashion. Yet the manifestations of his theory of "creative destruction" in the industry have been uncanny and a welcome glimpse into a future of even more innovative possibilities; a reminder that, like the delicately embellished centerpiece of a couture collection, there is always an element of beauty and growth to be found in destruction.