Creative destruction is the market process where new technologies and the firms that implement them supersede older, less efficient ones. According to Joseph Schumpeter, firms that fail to adapt are displaced because they are unable to compete; their higher production costs prevent them from selling goods at a profitable market price. Schumpeter considered this process 'creative' because the failure of these unprofitable businesses releases labor and capital, making these resources available for reallocation into new, more innovative firms and production methods.