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 The Emergence of the Entrepreneurial Economy

David B. Audretsch, Max C. Keilbach, and Erik E. Lehmann

in Entrepreneurship and Economic Growth

This chapter explains how and why the economic role of entrepreneurship has changed so dramatically in the past half century. It explains how the economic role of new startups and small business in ... More

This chapter explains how and why the economic role of entrepreneurship has changed so dramatically in the past half century. It explains how the economic role of new startups and small business in the capital (or Solow) economy was generally viewed as imposing inefficiency on the economy. It then discusses how this marginal or negative role of new and small firms in the knowledge economy was actually reinforced. The reasons why the contributions of entrepreneurship to economic growth become widely recognized only with the emergence of the entrepreneurial economy are considered. A view is proposed in which the entrepreneurial economy can be defined as an economy where entrepreneurship plays a key role in generating economic growth.Less

University Spillovers and Entrepreneurial Location

David B. Audretsch, Max C. Keilbach, and Erik E. Lehmann

in Entrepreneurship and Economic Growth

This chapter asks whether the Knowledge Spillover Theory of Entrepreneurship also has a spatial component in that the startups tend to cluster within geographic proximity to knowledge sources. It ... More

This chapter asks whether the Knowledge Spillover Theory of Entrepreneurship also has a spatial component in that the startups tend to cluster within geographic proximity to knowledge sources. It examines whether the role of location in transmitting knowledge spillovers to entrepreneurial startups is heterogeneous, and varies systematically across different scientific and academic fields and for different spillover mechanisms. Evidence provides general support for the Localization Hypothesis. Universities with greater investment in knowledge and where the regional investment in knowledge is greater tend to generate more technology startups, suggesting that university spillovers tend to be localized and spatially constrained. However, the contribution of geographical proximity to accessing and absorbing university spillovers is apparently highly nuanced and varies systematically across different scientific fields and academic disciplines as well as different spillover mechanisms. The exact role that geographic proximity plays in facilitating university spillovers depends on the degree to which the type of knowledge and actual spillover mechanism are based on tacit, rather than codified knowledge.Less

 Entrepreneurial Performance

David B. Audretsch, Max C. Keilbach, and Erik E. Lehmann

in Entrepreneurship and Economic Growth

This chapter tests the Entrepreneurial Performance Hypothesis, which suggests that the performance of knowledge-based startups should be superior when they are able to access knowledge spillovers ... More

This chapter tests the Entrepreneurial Performance Hypothesis, which suggests that the performance of knowledge-based startups should be superior when they are able to access knowledge spillovers through geographic proximity to universities as a source of knowledge. It is shown that the exact relationship between location and entrepreneurial performance is complex. The impact of geographic proximity on entrepreneurial performance is shaped by the amount and type of knowledge produced at a university. If the research output of a university is meagre, close proximity to a university will not bestow significant performance benefits. However, close proximity to a university with strong research output and spillover mechanisms enhances entrepreneurial performance.Less

The International Mobility of Entrepreneurs and Regional Upgrading in India and China

AnnaLee Saxenian

in The International Mobility of Talent: Types, Causes, and Development Impact

By 2000, over one-third of Silicon Valley's high-skilled workers were foreign-born, and overwhelmingly from Asia. These US-educated engineers are transforming developmental opportunities for formerly ... More

By 2000, over one-third of Silicon Valley's high-skilled workers were foreign-born, and overwhelmingly from Asia. These US-educated engineers are transforming developmental opportunities for formerly peripheral regions as they build professional and business connections to their home countries. In a process more akin to ‘brain circulation’ than ‘brain drain’, these engineers and entrepreneurs, aided by the lowered transaction costs associated with digitization, are transferring technical and institutional know-how between distant regional economies faster and more flexibly than most large corporations. This chapter examines how Chinese and Indian-born engineers are contributing to highly localized processes of entrepreneurial experimentation in their home countries, while maintaining close ties to the technology and markets in Silicon Valley.Less

The Persistence Of Inequality

Cecilia L. Ridgeway

in Framed by Gender: How Gender Inequality Persists in the Modern World

Previous chapters addressed the persistence of inequality in existing institutions; this chapter examines persistence at sites of economic and social innovation. Evidence shows that gender ... More

Previous chapters addressed the persistence of inequality in existing institutions; this chapter examines persistence at sites of economic and social innovation. Evidence shows that gender stereotypes change more slowly than material arrangements between men and women (cultural lag). At sites of innovation, people implicitly draw on lagging stereotypes to help organize their uncertain new situations, rewriting gender inequality into the new organizational procedures and structures they create. Some of these new organizational routines spread widely to become blueprints for new industries and social forms, reinventing but also modifying inequality for a new era. This argument is examined through studies of innovative work sites (biotechnology and information-technology start-ups) and forms of heterosexual union (student hook-ups).Less

Waiting for the Omelet to Set: Match-Specific Assets and Minority Oppression in Close Corporations

EDWARD B. ROCK and MICHAEL L. WACHTER

in The Governance of Close Corporations and Partnerships: US and European Perspectives

This chapter focuses on the persistent features of the close corporation that serve to protect participants from the misconduct by fellow participants. It shows that where there is an intensity of ... More

This chapter focuses on the persistent features of the close corporation that serve to protect participants from the misconduct by fellow participants. It shows that where there is an intensity of match-specific assets in which all participants invest, the close corporation is best served by rules that lock-in the majority and minority participants by giving them a limited right to dissociate. This view is more in line with the experiences of high-tech start ups where a rule against opportunistic exit serves to protect the initial investments of human and physical capital made by the participants in the development stage.Less

Start-up Scale-up: Addressing the Manufacturing Challenge for Start-ups

William B. Bonvillian and Peter L. Singer

in Advanced Manufacturing: The New American Innovation Policies

This chapter looks at a new but related problem: start-up scale-up. There is an additional and compounding innovation gap problem affecting start-ups that need to manufacture their products. While ... More

This chapter looks at a new but related problem: start-up scale-up. There is an additional and compounding innovation gap problem affecting start-ups that need to manufacture their products. While the advanced manufacturing institute model detailed in the previous chapter addresses innovation at large, midsize, and small manufacturing firms, to date it has largely focused on existing firms and has not encompassed new entrepreneurial start-ups. These start-up firms face not only an early-stage technology development gap, but also a production scale-up gap. Start-up scale-up is a problem in general, and particularly for manufacturing start-ups. This third category of firms, then, comprises the start-up and entrepreneurial firms that manufacture products based on their own new innovative technologies, typically emerging from university research centers.Less

Demographics and Business Entrepreneurship

Yue Chim Richard Wong

in Fixing Inequality in Hong Kong

Entrepreneurial capability depends on two types of abilities: creativity and business acumen. Creativity declines with age, but business skills increase with experience in high-level positions. The ... More

Entrepreneurial capability depends on two types of abilities: creativity and business acumen. Creativity declines with age, but business skills increase with experience in high-level positions. The very young do not have the requisite human capital and the very old have lost their creativity. A young society provides more opportunity for the young and the most creative to acquire the skills necessary for entrepreneurship. One should be optimistic for the future of Hong Kong’s young people because of the return of positive demographics in the workforce.Less

University Technology Transfer Offices, Licensing, and Start-Ups

Donald S. Siegel and Mike Wright

in The Chicago Handbook of University Technology Transfer and Academic Entrepreneurship

The recent increase in commercialization of university intellectual property in the United States and Europe has important policy implications. Recent studies of the antecedents and consequences of ... More

The recent increase in commercialization of university intellectual property in the United States and Europe has important policy implications. Recent studies of the antecedents and consequences of these activities are reviewed and lessons learned for policymakers are offered. The key conclusion is that universities and regions must formulate a coherent and feasible technology transfer strategy.Less

Challenges in University Technology Transfer and the Promising Role of Entrepreneurship Education

Andrew Nelson and Thomas Byers

in The Chicago Handbook of University Technology Transfer and Academic Entrepreneurship

This chapter outlines the many challenges that confront efforts to commercialize university technologies via spinouts or startups. It also considers the role of entrepreneurship education in relation ... More

This chapter outlines the many challenges that confront efforts to commercialize university technologies via spinouts or startups. It also considers the role of entrepreneurship education in relation to these challenges. We begin by contextualizing the role of startups vis-à-vis other mechanisms in the commercialization of university research. We then outline the resource requirements for successful startups, including financial resources; facilities; specialized equipment; and people, including potential managers, team members, board members and advisors. Next, we consider the role ofentrepreneurship education in addressing these resource requirements and, drawing upon an extensive literature review, we elaborate on best practices for entrepreneurship education in terms of audience, curriculum, and external engagement. Finally, we highlight a number of important distinctions between entrepreneurship education and technology transfer, and we propose a set of questions that can aid programs in assessing the relationship between these areas. Ultimately, we point to a number of ways by which entrepreneurship education can enhance technology transfer, but we caution against excessively close relationships and the cooptation of entrepreneurship education for technology transfer aims.Less

Consolidation in the 1990s

Hudson Cattell

in Wines of Eastern North America: From Prohibition to the Present-A History and Desk Reference

This chapter looks at the wine industry in the 1990s, a decade of consolidation as the health benefits of wine became a compelling factor. For the remainder of the decade and beyond, the results of ... More

This chapter looks at the wine industry in the 1990s, a decade of consolidation as the health benefits of wine became a compelling factor. For the remainder of the decade and beyond, the results of confirming research studies were published with increasing frequency. Adding to the positive image of wine was the publicity given to the Mediterranean diet in which wine was included. As such, public interest in wine increased during the decade. Wine events continued to be popular, the number of festivals grew, and attendance at them multiplied. After 1995, winery start-ups began to increase, and the number of wineries climbed from 565 to 803 in 2000.Less

Changing Attitudes

in Science for Sale: The Perils, Rewards, and Delusions of Campus Capitalism

This chapter discusses the changing of attitude of researchers towards the commercialization of academic research in the U.S. It explains that it has become a norm for professors to sell their ... More

This chapter discusses the changing of attitude of researchers towards the commercialization of academic research in the U.S. It explains that it has become a norm for professors to sell their expertise off campus or perform industry-financed research in their university laboratories. Many companies, particularly big pharmaceutical firms, have become dependent on academic research, either through financing of research or buying start-ups of academic entrepreneurs.Less

Venture Capital Data: Opportunities and Challenges

Steven N. Kaplan and Josh Lerner

in Measuring Entrepreneurial Businesses: Current Knowledge and Challenges

Despite the extent of interest in venture capital, substantial misunderstandings about this intermediary persist. Venture capitalists typically do not disclose much information to the United States ... More

Despite the extent of interest in venture capital, substantial misunderstandings about this intermediary persist. Venture capitalists typically do not disclose much information to the United States Securities and Exchange Commission or other regulators. This has led to a shortage of reliable industry data, but industry advocates and critics still make sweeping claims about venture capital on shaky empirical foundations. This lack of a comprehensive dataset has also posed challenges to academic research. This chapter describes the available data and research on venture capital investments and performance. We comment on the challenges inherent in those data and research as well as possible opportunities to do better. We describe the data and research on investments by venture capital funds in portfolio companies, and then describe the data and research on investments (by institutional investors and wealthy individuals) in the venture capital funds. Less

The Promise and Potential of Linked Employer-Employee Data for Entrepreneurship Research

Christopher Goetz, Henry Hyatt, Erika McEntarfer, and Kristin Sandusky

in Measuring Entrepreneurial Businesses: Current Knowledge and Challenges

In this chapter, we highlight the potential for linked employer-employee data to be used in entrepreneurship research, describing new data on business start-ups, their founders and early employees, ... More

In this chapter, we highlight the potential for linked employer-employee data to be used in entrepreneurship research, describing new data on business start-ups, their founders and early employees, and providing examples of how they can be used to study the dynamics of new firms. Linked employer-employee data provide a unique perspective on new business creation by combining information on the business, workforce, and individual. By combining data on both workers and firms, linked data can answer many questions that owner-level or firm-level data cannot easily address alone - such as composition of the workforce at start-ups and their role in explaining business dynamics, the flow of workers across new and established firms, and the employment paths of the business owners themselves.Less

The Afterlives of Hope

Anne Pollock

in Synthesizing Hope: Matter, Knowledge, and Place in South African Drug Discovery

The Epilogue describes plural legacies of iThemba’s project. iThemba both was and was not a failure. Like most start-ups, iThemba failed as an incorporated entity. Yet even though iThemba was ... More

The Epilogue describes plural legacies of iThemba’s project. iThemba both was and was not a failure. Like most start-ups, iThemba failed as an incorporated entity. Yet even though iThemba was unsuccessful in discovering new drugs, it was generative. Following the paths taken by the scientists that have moved on from iThemba shows that scientific capacity in South Africa has been enhanced. iThemba’s story is also conceptually generative: a story of place and matter in pharmaceutical knowledge-making, as it is and as it might be. The epilogue reflects on iThemba’s trajectory through the narrative trope of the tragic hero to consider how this company’s experience can illuminate larger social, political, and economic orders. The same elements that created the conditions of possibility for building drug discovery capacity in South Africa also became powerful constraints: extraction industries remain dominant; science in the democratic South Africa operates on tight timelines; international interest in drug discovery is marginalized by global health discourses, which marginalize African scientists because Africans are framed as objects of, rather than as contributors to, global knowledge. Even as deeply entrenched inequalities continue to constrain efforts to build a more just global order for postcolonial science and society, hope remains essential.Less

Empirical Evidence on the Determination of the Extent of Product Innovation

Paul Stoneman, Eleonora Bartoloni, and Maurizio Baussola

in The Microeconomics of Product Innovation

This chapter considers determinants of product innovation across and within firms. Firms that are innovative in one dimension are also innovative in others; thus both what distinguishes the ... More

This chapter considers determinants of product innovation across and within firms. Firms that are innovative in one dimension are also innovative in others; thus both what distinguishes the innovating firm and the literature based upon the analysis of various innovation indicators can give insight into the determinants of product innovation. It is concluded that (i) technological characteristics of industries matter; (ii) firm and market characteristics are related, but not linearly, to innovation; (iii) the two most important firm characteristics are internal finance and sales; (iv) there is an inverted U-curve relationship between competition and R&D; (v) competition in foreign markets is predominantly found to have positive effects on innovation at home; (vi) there are various spillover effects. Survey data on the constraints to innovation indicate that the issues considered to be of main importance are (i) innovation costs; (ii) risk and finance; and (iii) the availability of qualified labour.Less

From Start-Up to Scale-Up: Examining Public Policies for the Financing of High-Growth Ventures

Gilles Duruflé, Thomas Hellmann, and Karen Wilson

in Finance and Investment: The European Case

This chapter examines the challenge for entrepreneurial companies of going beyond the start-up phase and growing into large successful companies. We examine the long-term financing of these so-called ... More

This chapter examines the challenge for entrepreneurial companies of going beyond the start-up phase and growing into large successful companies. We examine the long-term financing of these so-called scale-up companies, focusing on the United States, Europe, and Canada. The chapter first provides a conceptual framework for understanding the challenges of financing scale-ups. It emphasizes the need for investors with deep pockets, for smart money, for investor networks, and for patient money. It then shows some data about the various aspects of financing scale-ups in the United States, Europe, and Canada, showing how Europe and Canada are lagging behind the US relatively more at the scale-up than the start-up stage. Finally, the chapter raises the question of long-term public policies for supporting the creation of a better scale-up environment.Less

Organization and Structure

David B. Audretsch

in Everything in Its Place: Entrepreneurship and the Strategic Management of Cities, Regions, and States

Chapter 4 makes clear that while having key resources is important in generating a positive economic performance, what is done with the underlying resources and factors, in terms of how they are ... More

Chapter 4 makes clear that while having key resources is important in generating a positive economic performance, what is done with the underlying resources and factors, in terms of how they are organized and structured into firms and industries, is crucial for the economic performance of a place. In particular, six dimensions of spatial organization and structure are considered: (1) the extent to which economic activity is organized within firms possessing market power; (2) the extent to which economic activity is organized by firms operating in competitive markets; (3) the extent to which entrepreneurial start-ups and new firms play a role; (4) the extent to which economic activity is specialized; (5) the degree of diversity of economic activity located at a particular place; (6) the organization of firms into clusters of complementary economic activity. Ultimately, each place must create its own configuration to achieve a positive and sustainable economic outcome.Less

Untangling the Companies’ Motives and Actions

Tijana Milosevic

in Protecting Children Online?: Cyberbullying Policies of Social Media Companies

An analysis of the policies and mechanisms that social media companies have developed to address bullying on their platforms is provided in this chapter. Relying on an analysis of texts and an ... More

An analysis of the policies and mechanisms that social media companies have developed to address bullying on their platforms is provided in this chapter. Relying on an analysis of texts and an examination of specific platforms, as well as on in-depth interviews with social media companies, e-safety experts and NGO representatives, the chapter documents what is missing in the policies and what the implications of such wording are. The companies’ moderation systems are examined, what can be known about their effectiveness and the consequences of such mechanisms for child protection and empowerment on the one hand and users’ freedom of speech on the other. The pattern of how the policies tend to evolve, and how this development can affect the perceptions of regulators, is considered as well.Less