Creative Non-Destruction

I can also add the following, at least with respect to computers:

At every small, medium, and large scale company I have worked at, there has been a concerted effort to do away with the mainframes (the 'legacy systems') and consolidate all functions under one machine architecture - naturally, the latest one purchased, since it has the most features.

It never comes to fruition. The cost and effort of rewriting all the daily, weekly, and monthly processes is just too much. Half the programs are black boxes to their maintainers, and truly ferreting out all the sources and their interactions and dependencies with other processes is fantastically time and resource consuming. It turns out to be cheaper to simply let the new functions accumulate on the new machines.

My experience, YMMV.

That sounds about right. See also, the bank I work at still uses Office 97. That's right 97, I was 14 what that was released in the fall of '96.

I wanted to book a trip to Chicago so I called Wells Fargo, but they said they are a bank and that the stage coach line closed when the railroad was put in. I called the C&O, but they said they did not deal in less than truckload lots. ...

Schumpeter's discussion of the the devaluation of physical capital by technological innovation included the example of that the railroads had done to the capital of the coach lines.

The computer industry is a bad example. All computers are physical instantiations of a mathematical idea, the Turing Machine. Every computer can do what every other computer can do, just maybe not as quickly.

Every computer can do what every other computer can do, just maybe not as quickly.

True as a generality about processors. Far less true about computer systems. Mainframe architectures produce central superservers capable of managing huge databases for multiple clients - they were optimized for this long before desktop microprocessor systems were for geeks to experiment with.