  We show that world trade network datasets contain empirical evidence that the
dynamics of innovation in the world economy follows indeed the concept of
creative destruction, as proposed by J.A. Schumpeter more than half a century
ago. National economies can be viewed as complex, evolving systems, driven by a
stream of appearance and disappearance of goods and services. Products appear
in bursts of creative cascades. We find that products systematically tend to
co-appear, and that product appearances lead to massive disappearance events of
existing products in the following years. The opposite - disappearances
followed by periods of appearances - is not observed. This is an empirical
validation of the dominance of cascading competitive replacement events on the
scale of national economies, i.e. creative destruction. We find a tendency that
more complex products drive out less complex ones, i.e. progress has a
direction. Finally we show that the growth trajectory of a country's product
output diversity can be understood by a recently proposed evolutionary model of
Schumpeterian economic dynamics.

Physics and Society;General Finance