Frontiers in European Entrepreneurship Research
Edited by Robert Blackburn, Frédéric Delmar, Alain Fayolle and Friederike Welter
Chapter 7: Entrepreneurship and technological innovation: the influence of uncertainty and entrepreneurial ability on innovation speed in new technology start-ups
A basic tenet in contemporary theories of innovation is that novel products based on technological advances create temporary monopolies on the market. This favorable position allows for the possibility to reap abnormal profits and provide entrepreneurs with economic incentives to develop products and processes based on new and emerging technologies. However, these temporary monopolies would soon be competed away by rivals and imitators if the underlying insight behind the application of a new technology were not sufficiently protected (Shane 2005). One way of protecting technological advances is through the patent system, which grants a time-limited but exclusive legal right to exploit an invention on the market (Barber and Logan 1999). In exchange for this commercial monopoly, holders of a patent are obliged to publish a detailed description of the new technology so that the know-how underlying the invention can be diffused to stimulate further technological development and economic growth. Technology entrepreneurs who are granted a patent and take measures to develop and commercialize an invention in a new start-up are however never fully protected. Despite the legally protected commercial monopoly, they are also faced with the problem that the window for exploiting technological discoveries is constantly shrinking due to knowledge spillovers, replication and technological obsolescence (Markman et al. 2005). Adding to this, the full range of potential applications based on new technologies is seldom fully understood (Shane 2000) which means that possible future markets might be uncertain and not perfectly clear (Gruber et al. 2012).
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