for schumpeter, the entrepreneur did not bear risk: the capitalist did. schumpeter believed that the equilibrium was imperfect. schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability. some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit. schumpeter was of the opinion that entrepreneurs shift the production possibility curve to a higher level using innovations.