for schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. schumpeter's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. in this case, the innovation (i.e. the car) was transformational, but did not require the development of dramatic new technology. it did not immediately replace the horse-drawn carriage, but in time incremental improvements reduced the cost and improved the technology, leading to the modern auto industry. despite schumpeter's early 20th-century contributions, the traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through a price system). in this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of x-efficiency.