Unicorns: The Engine of Creative Destruction and Elite Circulation

Abstract

This paper, part of the Elite Quality Report 2024 contributions, examines the impact of unicorns, which are pivotal to structural reforms and elite renewal in national economies. Unicorns—startups valued at over USD one billion—play a crucial role in Schumpeterian creative destruction, fostering new ideas and a dynamic flow of resources that enhance the quality of elite systems without extracting undue rents. This study delineates how unicorns contribute to economic vibrancy through a virtuous cycle of innovation and elite circulation.
Our analysis draws upon data from the Global Unicorn Index 2024 by Hurun Research and the EQx2024, comparing the emergence and impact of unicorns across different economies with a particular focus on the US and China. The paper provides insights into how unicorns shape global economic landscapes and elite quality, offering a nuanced understanding of their role in sustainable value creation and elite circulation within modern economies.

Keywords: Unicorns, elite quality, long-term value, index, elites, elite quality, institutions, value creation, value extraction, economic development, political economy, global rankings, international business