Paradigm Shift

What is a 'Paradigm Shift'

A paradigm shift is 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.

RELATED TERMS
  1. New Paradigm

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

    A theory that provides a three-tiered framework for a company ...
  3. Goods In Process

    An inventory account that is usually identified on the balance ...
  4. Assembly Line

    A production process that breaks the manufacture of a good into ...
  5. Mass Production

    The manufacturing of large quantities of standardized products, ...
  6. Risk Shifting

    The transfer of risk to another party. Risk shifting has many ...
Related Articles
  1. Economics

    Export-Led Growth Strategies Through History

    Export-led growth has been a dominant paradigm for industrial development over the last 40 years, but the future may need a new model.
  2. Fundamental Analysis

    1. Displacement

    Learn about the five typical steps of a bubble: displacement, boom, euphoria, profit taking and panic.
  3. Investing

    Mergers & Acquisitions Report: 2 Trends in the Market

    Learn what attracts buyers and sellers into today's M&A market, as well as what trends are emerging in 2016 by sector and location.
  4. Professionals

    Financial Planning: Process and Rules

    Financial Planning: Process and Rules
  5. Economics

    What is Industrialization?

    Industrialization is the process of a society, usually a country, transforming itself from an agricultural-based economy to one based on manufacturing. Even then, agricultural output grows as ...
  6. What Changes the Industry Structure

    The threat of the five forces can evolve over time. Naturally, this will change the profitability of an industry too. The following examples show how the five forces may shift over time: Shift ...
  7. Budgeting

    Market Crashes: The Dotcom Crash

    By Andrew BeattieWhen: March 11, 2000 to October 9, 2002 Where: Silicon Valley (for the most part)Percentage Lost From Peak to Bottom: The Nasdaq Composite lost 78% of its value as it fell from ...
  8. Fundamental Analysis

    Is a U.S. Industrial Recession on the Horizon in 2016?

    Find out why the industrial economy may be teetering on an industrial recession and what could prevent it from going over the cliff.
  9. Economics

    What It Takes To Be "Made In The USA"

    Discover the rules and standards behind the "Made in the USA" label.
  10. Economics

    The 9 To 5 Job: Challenging How We Earn A Living

    It was my first semester of college. My friend and I were looking for something to eat, but we didn't have much money, so our options were limited.
RELATED FAQS
  1. What emerging markets are best suited for investing in the oil & gas drilling sector?

    Read about which emerging markets or potential emerging markets are well-suited for investing in the oil and natural gas ... Read Answer >>
  2. What factors cause shifts in aggregate demand?

    Find out how aggregate demand is calculated in macroeconomic models. See what kinds of factors can cause the aggregate demand ... Read Answer >>
  3. How have technical skills shifted over the past century in the workforce?

    Learn how technological and economic changes have shaped the American workforce during the past century and how hiring began ... Read Answer >>
  4. What is the average annual dividend yield of companies in the insurance sector?

    Discover why value investors purchase electronics stocks, which are highly sensitive to the business cycle, creating extremes ... Read Answer >>
  5. How has the shift to e-commerce affected the profitability of companies in credit ...

    Learn how the shift to e-commerce has benefited credit services companies by making it easier for consumers to use credit, ... Read Answer >>
  6. Is industrialization good for the economy?

    Find out why industrialization can be considered the most important economic transition in history, dramatically increasing ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center