Paradigm Shift


DEFINITION of 'Paradigm Shift'

A major change in how some process is accomplished. A paradigm shift can happen when new technology is introduced that radically alters the production process of a good. For example, the assembly line created a substantial paradigm shift not only in the auto industry, but in all other areas of manufacturing as well.

BREAKING DOWN 'Paradigm Shift'

Paradigm shifts can require that entire departments be eliminated or created in some cases, and millions or even billions of dollars of new equipment purchased while the old equipment is sold or recycled. Paradigm shifts have become much more frequent in the past hundred years, as the industrial revolution has transformed many social and industrial processes. This process is likely to become even more commonplace in the future as our rate of technological advancement increases.

  1. New Paradigm

    In the investing world, a new paradigm is a totally new way of ...
  2. Monopoly

    A situation in which a single company or group owns all or nearly ...
  3. Old Economy

    A term for the old blue chip industries that enjoyed fabulous ...
  4. Silicon Valley

    A part of the San Francisco Bay Area that is known for the many ...
  5. Eclectic Paradigm

    A theory that provides a three-tiered framework for a company ...
  6. New Economy

    A buzzword describing new, high-growth industries that are on ...
Related Articles
  1. Active Trading Fundamentals

    Brains Don't Always Bring The Bucks

    Common mistakes can prevent even the smartest investors from beating the market.
  2. Investing Basics

    Should You Get A Six Sigma Black Belt? Average Salary: 98K

    Interested in the Six Sigma Black Belt but unsure whether you need one? Here's a guide to it and how it differs from other belts.
  3. Investing Basics

    What is Equity?

    Think of equity as ownership in any asset after all debts stemming from that asset are paid.
  4. Economics

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  5. Economics

    Explaining Quality Control

    Businesses use quality control to ensure their products and services meet a certain standard, as well as any industry regulations.
  6. Professionals

    What is Backward Integration?

    What is backward integration, and how can it affect industries?
  7. Economics

    How a Monopoly Works

    In economics, a monopoly occurs when one company is the sole (or nearly sole) provider of a good or service within an industry. This potentially allows that company to become powerful enough ...
  8. Taxes

    Which Receipts Save Big Money at Tax Time

    Don't wait to April 13th to set up a smart receipt-filing system. These 7 categories could save you some significant money.
  9. Investing Basics

    Investopedia's Oddest Business and Investing Terms

    Think finance and investing are boring? These terms will prove you wrong.
  10. Entrepreneurship

    How to Start a Seasonal Business

    Starting a seasonal small business isn't as hard as you think. With the right planning, you can have a successful business that operates seasonally.
  1. What's the difference between old- and new-economy stocks?

    Old-economy stocks represent large, well-established companies that participate in more traditional industry sectors and ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  4. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  5. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  6. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center