This section establishes a comprehensive theoretical foundation for Post-Schumpeterian Economics (PSE), a framework designed to address the foremost challenge of the twenty-first century: reconciling innovation-driven economic growth with the existential threat posed by climate change. The analysis begins by tracing the evolution of Schumpeterian thought, from the original concept of entrepreneurial ‘creative destruction’ to the systemic and institutional perspectives of Neo-Schumpeterian Economics and Comprehensive Neo-Schumpeterian Economics. While these frameworks elucidate the dynamics of modern capitalism, they insufficiently account for global ecological constraints. PSE fills this gap by explicitly integrating the ecological dimension, treating the climate as a global common good and climate change as a social cost that must be internalised. The framework then examines two principal strategies for transforming ‘brown’ economies into sustainable ‘green’ economies. The first involves reforming the market-price mechanism through idealistic approaches such as ‘true prices’ or pragmatic instruments like emission trading. The second, and more promising, strategy concentrates on directly steering the innovation process via a ‘green technology policy’. The analysis concludes that a ‘supervised positive-sum policy’, wherein a ‘supervising state’ guides the National Innovation System towards green trajectories, provides the most robust pathway to achieving a sustainable Post-Schumpeterian transformation.