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Schumpeter's growth theory (based on innovations, entrepreneurs, long waves and "creative destruction") seems to be most adequate to discuss principles of the Knowledge Based Economy. In the paper, the author discussed the assumptions of Schumpeter's theory in three subsections: "Long waves" leading to the Knowledge Based Economy, Innovation as a core of Schumpeter's economy, and Neo-Schumpeterian "growth" as a pillar of Knowledge Based Economy. The purpose of this paper is to show thedoi:10.12775/equil.2013.027 fatcat:towkga4s7fbqjaxjeol7vn3nxi