Creative destruction is a term coined in 1942 by Joseph Schumpeter in his work, Capitalism, Socialism and Democracy, to denote a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

Creative destruction occurs when something new kills something old, for example personal computers which destroyed many mainframe computer companies. Schumpeter goes so far as to say that the "process of Creative Destruction is the essential fact about capitalism." Unfortunately, while a great concept, this became one of the most overused buzzwords of the dotcom boom (and bust), with nearly every technology CEO talking about how creative destruction would replace the old economy with the new. The actual magnitude of the impacts of creative destruction are far more deep felt than they ever imagined!