Explanation:

Schumpeter’s theory of development assigns paramount role to the entrepreneur and innovations introduced by him in the process of economic development. According to Schumpeter, the process of production is marked by a combination of material and immaterial productive forces. The material productive forces arise from the original factors of production, viz., land and labour, etc., while the immaterial set of productive forces are conditioned by the ‘technical facts’ and ‘facts of social organization’.