Within the span of a generation, innovation and entrepreneurship have emerged as two of the most vital forces in the economy and, even more broadly, in society (Link, 2017). It was not always that way. During the second industrial paradigm, or the era of mass production, particularly following World War II, innovation was barely on the radar screen of economics, management, and other social sciences. Rather, what mattered for economic performance was articulated concisely by the management scholar, Alfred Chandler (1990), in the title of his seminal analysis of firm competitiveness and productivity – Scale and Scope. Economic success lies in largescale production, which enabled companies to attain the highest levels of efficiency and productivity while reducing average cost to a minimum. The primacy of physical capital as the driving force underlying economic performance was mirrored at the macroeconomic level through the Solow (1956) model. Economic policy reflected the capital-driven economy with its focus on instruments to stimulate investment in physical capital. Innovation played at best a marginal role, which was considerably more than could be said for entrepreneurship. In an economy where scale and scope dictated competitiveness and efficiency, new and small firms were typically viewed as a burden on the economy, and they were characterized as constituting “sub optimal capacity,” meaning that they lacked sufficient scale to be efficient.
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David B. Audretsch, Erik E. Lehmann and Albert N. Link
Edited by David B. Audretsch, Erik E. Lehmann and Albert N. Link
Edited by Urban Gråsjö, Charlie Karlsson and Iréne Bernhard
Jitendra Parajuli and Kingsley E. Haynes
Broadband internet is considered an important determinant of economic growth and development. A number of studies have examined the impact of broadband on migration, firm location and economic growth. However, the relationship between broadband infrastructure and new firm formation in the USA has not been sufficiently described. This chapter fills that gap by empirically examining the relationship between broadband internet and new firm formation. It is found that single-unit firm births and the provision of broadband are positively and significantly related across almost all industry sectors in the USA. However, the impact of broadband provisioning on new firm formation is sensitive to agglomeration and aggregate and growth patterns of states and economic sectors.
Viroj Jienwatcharamongkhol and Sam Tavassoli
It is well known that exporters are productive firms, but the source of their productivity is left unexplained. This chapter aims to endogenize the productivity heterogeneity of exporting firms by incorporating innovation in a structural model framework. In doing so, we close the gap between the innovation–productivity and productivity–export literature. Two waves of the Swedish Community Innovation Survey (CIS) are merged. This allows for a setup that takes into account the links from innovation input to innovation output and also from innovation output to productivity and exports. The main findings highlight that exporters are productive firms with innovation output in the past, which in turn was driven by prior R & D and other innovation activity investments.
Jan Abrahamsson, Håkan Boter and Vladimir Vanyushyn
In this study we examine the scope and pattern of innovation cooperation of international new ventures (INVs) of different age, size and formation type. Using longitudinal micro-matched database and Swedish Community Innovation Survey results for the years 1998–2009, we show that INVs are more likely to be involved in international cooperation than other firms, and that INVs are also more likely to have a broader scope of international partnerships in terms of number of partners and geographic location of these partners. We further show how age of a firm that originated as an INV and its formation type – greenfield, spin-off or merger – affect patterns of international cooperation for innovation.
David B. Audretsch and Maksim Belitski
This study provides compelling evidence on the role of creativity and human in economic development in European cities. The size of the impact depends on the propensity of creative capital to spill over, a living and business environment conducive to creativity and exchange of ideas, agglomeration economies, cultural diversity and entrepreneurship. Utilizing an Urban Audit dataset on 187 cities in 15 European countries during 1999–2009, our study develops the basis of the creative spillover of entrepreneurship theory and introduces the concept of the ‘creativity filter’. It confirms that the availability of creative capital does not per se result in economic development, but entrepreneurship facilitates the spillover and commercialization of those ideas.
Cathy Yang Liu, Gary Painter and Qingfang Wang
Immigrants’ participation in high-tech industries as both workers and business owners has increased steadily since 2000, at a faster rate than that of their US-born counterparts. Immigrant-owned high-tech businesses are more concentrated in a limited number of industries, such as computer sciences and medical and pharmaceutical-related fields. While the largest immigrant gateways account for a dominant share of all immigrant high-tech entrepreneurs in the country in 2011, new immigrant destinations in the South and West have seen significant increase of immigrants in high-tech industries. For both immigrants and the US-born, a higher number of high-tech businesses is positively associated with regional labor markets that have an overall higher percentage of high-tech industries. At the same time, higher ethnic diversity and a larger share of the foreign-born population are crucial factors in attracting or fostering immigrant high-tech entrepreneurship at the metropolitan level.
Roberto Antonietti, Maria Rosaria Ferrante and Riccardo Leoncini
Using an original dataset of small, machine-tool firms located in Emilia Romagna, Italy, we estimate the effect of social capital on the propensity to fully or partially outsource production activities. In particular, we investigate whether social capital favours outsourcing in contexts characterized by a relatively high infrastructure endowment. We show that the likelihood to fully outsource production activities increases with the local level of social capital. We also find that this effect is higher in regions where the density of transport infrastructures is higher. On the other hand, we do not find any significant effect of social capital on the propensity to partially outsource production activities. We argue that social capital is more effective in reducing the scope for opportunistic behaviour when monitoring costs are higher and where mobility is easier.