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Edited by David B. Audretsch, Oliver Falck, Stephan Heblich and Adam Lederer
Chapter 18: Universities as Research Partners: Entrepreneurial Explorations and Exploitations
Albert N. Link and Charles W. Wessner INTRODUCTION According to Schumpeter (1934), innovation can be described in several ways. He initially spelt out a number of new combinations of resources and structures, including: the creation of a new good or new quality of good; the creation of a new method of production; the opening of a new market; the capture of a new source of supply; and/or the new organization of industry. Over time, the forces of these new combinations dissipate as new becomes part of old. This is the dynamic character of innovation, but as such it does not change the essence of the entrepreneurial function. ‘Everyone is an entrepreneur only when he actually “carries out new combinations”’ (Schumpeter, 1934, p. 78), and he loses that character when his actions become old, or revert to the status quo. Schumpeter also defined innovation by means of the production function. The production function ‘describes the way in which quantity of product varies if quantities of factors vary. If instead of quantities of factors, we vary the form of the function, we have an innovation’ (1939, p. 62). Schumpeter recognized that the knowledge supporting the innovation need not be new, although the combination of resources must. It may be that existing knowledge is used that was previously unused. He wrote (1928, p. 378): [T]here has never been any time when the store of scientific knowledge has yielded all it could in the way of industrial improvement, and, on the other...
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