Paradigm Shift Definition - Investopedia

The term paradigm shift refers to a major change in the worldview, concepts, and practices of how something works or is accomplished. A paradigm shift can ... Business BusinessEssentials BusinessEssentials GuidetoMergersandAcquisitions WhatIsaParadigmShift? Thetermparadigmshiftreferstoamajorchangeintheworldview,concepts,andpracticesofhowsomethingworksorisaccomplished.Aparadigmshiftcanhappenwithinawidevarietyofcontextsfromscientificresearchtoindustry. Paradigmshiftsinindustryoftenhappenwhennewtechnologyisintroducedthatradicallyalterstheproductionprocessormanufacturingofagoodorservice.TheseshiftsarekeydriversinmanyoftheprocessesthatasocietyundergoessuchastheAmericanIndustrialRevolution. KeyTakeaways Aparadigmshiftisamajorchangeinhowpeoplethinkandgetthingsdonethatupendsandreplacesapriorparadigm.Aparadigmshiftcanresultaftertheaccumulationofanomaliesorevidencethatchallengesthestatusquo,orduetosomerevolutionaryinnovationordiscovery.TheconceptwasfirstformalizedbyphysicistandphilosopherofscienceThomasKuhn. UnderstandingParadigmShifts Althoughthenotionofparadigmshasbeenaroundforquitesometime,theconceptofparadigmshiftswasexploredbyAmericanphysicistandphilosopherThomasSamuelKuhninhis1962bookTheStructureofScientificRevolutions.Kuhncharacterizedaparadigmshiftasa revolutionthatchallengesandultimatelytakestheplaceofaprevailingscientificframework.Thesechallengesarisewhenthedominantparadigm,underwhichnormallyacceptedscienceoperates,isfoundtobeincompatibleorinsufficientwithnewdataorfindings,facilitatingtheadoptionofarevisedorcompletelynewtheoryorparadigm. Paradigmsareimportantbecausetheydefinehowweperceiverealityandhowwebehavewithinit.Everyoneissubjecttothelimitationsanddistortionsproducedbytheirsociallyconditionednature.Forinstance,beforeEinsteinphysiciststookNewtonianphysicsforgranted.Thatparadigmwasthenchallengedwiththeriseofquantummechanics. Suchshiftshavebecomemuchmorefrequentinthepasthundredyears,astheindustrialrevolutiontransformedmanysocial,scientific,andindustrialprocesses.Theseprocessesarelikelytobecomeevenmorecommonplaceinthefutureasourrateoftechnologicaladvancementincreases. ParadigmShiftsinBusiness Inthebusinessworld,a paradigmshift isoftenachangeintheperceptionofhowthingsshouldbethoughtabout,done,ormade.Aparadigmshiftcanrequireentiredepartmentstobeeliminatedorcreated.Insomecases,millionsorevenbillionsofdollarsofnewequipmentneedtobepurchasedwhiletheoldequipmentissoldorrecycled. Reactingappropriatelytoimpendingparadigmshiftshasalottodowiththelong-termsuccessofabusiness.Anexampleistheassemblyline,whichcreatedasubstantialparadigmshiftintheautoindustryandallotherareasofmanufacturingaswell. Theinternetalsoturnedouttobegroundbreaking,creatingaparadigmshiftinhowpeoplegettheirinformation,communicate,andshop.E-commercecompanieslikeAmazonandeBayhavecapitalizedonthisnewparadigm,whilemanybrick-and-mortardepartmentstoreswentoutofbusiness. SpecialConsiderations Ideascapableofcreatingparadigmshiftsaren’talwayswellreceivedatfirst.Thosefoundinthescientificworldoftenresultfromscientistsworkinginitiallyonthe fringe.Theircontroversialresearchisperceivedasmisguidedoradeadend.Whileskepticismandinquiryareintegralpartsofthescientificprocess,sometimesascientistdoeshavearevelation,whichleadstoaparadigmshift.Theweightofscientificandpublicresistancetothenewparadigmcansometimesprovokeridicule. Whilenotinstantlyaccepted,ifafringescience isproventorestonsoundfooting,momentumslowlybuildsagainsttheestablishedparadigm. Thosewhooccupyanexistingparadigmwilloftenbequitereluctant,orevenhostile,towardcontradictorytheoriesorevidencethatchallengetheirworldvieworpractices. ExampleofaParadigmShift Theinternetcreatedaparadigmshiftinthewayfinancialservicesandstockmarketsoperate.Ordersforsecuritiescannowbeplacedonlinedirectlybytheclientandaresometimesexecutedinseconds. Beforetheinternet,aclientwouldhavetocalltheirbroker,whowouldwriteoutanorderticketforthebroker'srecord,thencallthefirm'sfloorbrokertoexecutethetrade.Stockquotesarenowwidelyavailablethroughmultiplesourcesthankstomoderntechnology,whereaspeopleneededtickermachinesinstalledintheiroffices100yearsago.Alloftheold-timeequipmentsuchasordertickets,faxmachines,andtickermachinesarenowobsolete,thankstotheparadigmshiftbroughtonbymoderntechnology. ArticleSources Investopediarequireswriterstouseprimarysourcestosupporttheirwork.Theseincludewhitepapers,governmentdata,originalreporting,andinterviewswithindustryexperts.Wealsoreferenceoriginalresearchfromotherreputablepublisherswhereappropriate.Youcanlearnmoreaboutthestandardswefollowinproducingaccurate,unbiasedcontentinour editorialpolicy. TheHistoryofScienceSociety."ThomasSamuelKuhn."AccessedSept.2,2021. CompareAccounts AdvertiserDisclosure × TheoffersthatappearinthistablearefrompartnershipsfromwhichInvestopediareceivescompensation.Thiscompensationmayimpacthowandwherelistingsappear.Investopediadoesnotincludealloffersavailableinthemarketplace. Provider Name Description RelatedTerms WhatIsPerformativityinEconomics? Performativitydescribeswhenaneconomicmodelcomestoconstructtherealityitismeanttodescribe,insteadofmerelydescribingit. more Web2.0andWeb3.0Definitions Web2.0referstothecurrentversionoftheinternet;Web3.0isitsnextiteration,whichwillbedecentralized,open,andofgreaterutility. more HowtheIndustrialRevolutionChangedBusinessandSociety TheIndustrialRevolutionwasaperiodofmajorinnovationthatstartedinGreatBritainandspreadaroundtheworldduringthe1700sand1800s. more WhatIsaSmokestackIndustry? Asmokestackindustryisatraditionalheavymanufacturingindustrythattendstoproducepollutioninitsprocess. more NaturalLawDefinition Naturallawisatheoryofethicsthatsaysthathumanbeingspossessintrinsicvaluesthatgoverntheirreasoningandbehavior. more WhoIsJosephSchumpeter? 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