The mainstream of economics, then as now, pretty much tries to describe the economy as if it shouldn’t change. If it is changing, it’s changing towards an equilibrium, where it won’t have to change any more.
Schumpeter noticed that this is not how it works. Both the economy as a whole and individual businesses change constantly. His model of the latter, in his Theory of Economic Development, explains how some entrepreneurs make an unusually large amount of money.
There are three main parts.
First, almost all entrepreneurs don’t make an abnormal amount of money, even of the successful ones. They make the same amount as if they were doing the same job for someone else.
Obviously, some entrepreneurs do make a lot of money. This is the second part of Schumpeter’s argument. Those that make money, an entrepreneurial profit, do so by breaking the status quo. They innovate. They either get their inputs for less or they sell their outputs for more.
Third part of the argument: this entrepreneurial profit goes away over time. Competitors figure out that there is this extra money and they imitate the innovator. When this happens, the surplus or excess profit is worn away as imitators enter the market and compete with the innovator.