This paper examines how Sweden and the United States have been impacted by philanthropicactivities, commercialization of university-based knowledge and internationalentrepreneurship. The analysis comprises a detailed case study of Swedish and U.S.universities, as well as a statistical analysis of the impact of philanthropy on economicgrowth. The results show that the United States has prompted a university system based oncompetition and variety, with an emphasis on philanthropy, promoting knowledge creation.International entrepreneurship has been an important mechanism by which this knowledge isglobalized leading to increased economic growth. Conversely, Swedish universities werecharacterized by less commercialized R&D and weak links to the commercial sector, rootedtraditionally in dependence on tax-financed and homogenous university structure. TheSwedish model has begun to change with important implications for development in smallerdomestic markets. The analysis has important implications for knowledge creation as asource of economic growth through international entrepreneurship taking advantage ofglobalization, especially for smaller countries.
In this paper we suggest that the spillover of knowledge may not occur automatically as typically assumed in models of endogenous growth. Rather, a mechanism is required to serve as a conduit for the spillover and commercialization of knowledge from the source creating it, to the firms actually commercializing the new ideas. In this paper, entrepreneurship is identified as one such mechanism facilitating the spillover of knowledge. Using a panel of entrepreneurship data from 18 countries, we provide empirical evidence that, in addition to measures of Research & Development and human capital, entrepreneurial activity also serves to promote economic growth.
Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.
Professor Philippe Aghion is the 2016 recipient of the Global Award for Entrepreneurship Research, consisting of 100,000 Euros and a statuette designed by the internationally renowned Swedish sculptor Carl Milles. He is one of the most influential researchers worldwide in economics in the last couple of decades. His research has advanced our understanding of the relationship between firm-level innovation, entry and exit on the one hand, and productivity and growth on the other. Aghion has thus accomplished to bridge theoretical macroeconomic growth models with a more complete and consistent microeconomic setting. He is one of the founding fathers of the pioneering and original contribution referred to as Schumpeterian growth theory. Philippe Aghion has not only contributed with more sophisticated theoretical models, but also provided empirical evidence regarding the importance of entrepreneurial endeavours for societal prosperity, thereby initiating a more nuanced policy discussion concerning the interdependencies between entrepreneurship, competition, wealth and growth.
Purpose – Schumpeter claimed the entrepreneur to be instrumental for creative destruction and industrial dynamics. Entrepreneurial entry serves to transform and revitalize industries, thereby enhancing their competitiveness. The purpose of this paper is to investigate if entry of new firms influences productivity amongst incumbent firms, and the extent to which altered productivity can be attributed sector and time specific effects.
Design/methodology/approach – Implementing a unique dataset the paper estimates a firm-level production function in which the productivity of incumbent firms is modeled as a function of firm attributes and regional entrepreneurship activity.
Findings – The analysis finds support for positive productivity effects of entrepreneurship on incumbent firms, albeit the effect varies over time, what the authors refer to as a “delayed entry effect”. An immediate negative influence on productivity is followed by a positive effect several years after the initial entry. Moreover, the productivity of incumbent firms in services sectors appears to be more responsive to regional entrepreneurship, as compared to the productivity of manufacturing firms.
Originality/value – The paper employs a firm-level production function approach allowing for time lags of the effect of entrepreneurship. The unique data implemented allow the authors to identify genuinely new ventures as compared to those associated with reorganizations of existing businesses, thereby overcoming much of data deficiencies in previous studies. In addition, data are distributed on Swedish functional labor market regions.
Is the Bayh-Dole intellectual property regime associated with more and better academic entrepreneurship than the Professor's Privilege regime? The authors examine data on US PhDs in the natural sciences, engineering, and medical fields who became entrepreneurs in 1993-2006 and compare this to similar data from Sweden. They find that, in both countries, those with an academic background have lower rates of entry into entrepreneurship than do those with a non-academic background. The relative rate of academics starting entrepreneurial firms is slightly lower in the United States than in Sweden. Moreover, the mean economic gains from becoming an entrepreneur are negative, both for PhDs originating in academia and for non-academic settings in both countries. Analysis indicates that selection into entrepreneurship occurs from the lower part of the ability distribution among academics. The results suggest that policies supporting entrepreneurial decisions by younger, tenure-track academics may be more effective than are general incentives to increase academic entrepreneurship.
Based on unique data covering individuals, firms, industries and regions for the 1999–2005 period, we contribute with new knowledge concerning the impact of regional variables on spin-offs. Implementing a large number of controls, as well as different estimation techniques and robustness tests, we show that Jacobian externalities have a positive effect on spin-offs. Moreover, using an entropy measure to disentangle unrelated and related variety (RV), we conclude that the effect is confined to RV. These findings are likely to be associated with strong welfare effects: a standard deviation increase (decrease) in related (unrelated) variety increases spin-off propensity by approximately 25%. Other variables are shown to have economic effects of a similar magnitude but may have a different effect across sectors. Sensitivity analyses indicate that the impact of other determinants proposed in the literature (e.g., Marshallian externalities and scale effects) is too small to be detected.
This paper examines the decision by a multinational corporation (MNC) to relocate its business unit and/or corporate HQ overseas. We argue that business unit HQs move overseas in response to changes in the internal configuration of their unit's activities and the demands of the product markets in which they operate, whereas corporate HQs move overseas in response to the demands of external stakeholders, in particular global financial markets and shareholders. Using data on 125 business unit HQs and 35 corporate HQs, we test and find support for these arguments. The research highlights important differences between corporate- and business-level strategy, and it suggests ways in which the theory of the MNC needs to be reconsidered.
Is a shift in intellectual property rights to universities the key instrument in increasing commercialization of publicly funded research? How much can actually be learned from the US system, disregarding the ongoing debate as to whether the USA do actually outperform Europe in terms of commercializing university-based research? Taking Sweden as a role model, the article claims that this policy will not work, from the analysis of a unique database giving individual university researchers' views on participation in commercialization of public research, their commercialization experiences, and the obstacles researchers say exist to increase academic entrepreneurship. Despite researchers' positive attitudes towards engaging in commercial activities, the university culture, weak incentive structures and badly managed support facilities impede the creation of efficient links to markets. Measures must be taken at primarily the national level, but also at the university level, to enhance commercialization activities
Is a shift in intellectual property rights to universities the key instrument in increasing com-mercialization of publicly funded research? How much can actually be learned from the U.S. system, disregarding the ongoing debate as to whether the U.S. do actually outperform Europe in terms of commercializing university based research? Taking Sweden as a role model I claim that this policy will not work. This allegation stems from the analysis of a unique data-base giving individual university researchers view on participation in commercialization of public research, their commercialization experiences, and the obstacles researchers claim exist to increase academic entrepreneurship. Despite researchers positive attitudes towards engag-ing in commercial activities, the university culture, weak incentive structures and badly man-aged support facilities impede the creation of efficient links to markets. I conclude that meas-ures must be taken at primarily the national level, but also at the university level, to enhance commercialization activities.
Considerable advances, even breakthroughs, have been made during the last decades in our understanding of the relationship between knowledge and growth on one hand, and entrepreneurship and growth on the other. Similarly, more profound insights have also been gained as to how entrepreneurship, innovation and knowledge are interrelated. Yet, a comprehensive understanding is still lacking concerning the interface of all of those variables: knowledge, innovation, entrepreneurship and growth. The link between the micro-economic origin of growth and the macro-economic outcome is still too rudimentary modeled to grasp the full width of these complex and intersecting forces. The main objective of this paper is hence to shed light on recent advances in our understanding of the forces that underpin the creation of knowledge, its diffusion and commercialization through innovation, and the role of the entrepreneur in the growth process. The policy implications of recent research findings conclude this survey. Particularly important policy implications refer to the design of regulation influencing knowledge production, ownership, entry barriers, labor mobility and (inefficient) financial markets. They all have implication for the efficient diffusion of knowledge through entry. Knowledge creation has to be matched by incentives that induce mechanisms to convert knowledge into societal and useful needs.
Knowledge plays a critical role in economic development, still our understanding of how knowledge is created, diffused and converted into growth, is fragmented and partial. The neoclassical growth models disregarded the entrepreneur and viewed knowledge as an exogenous factor. Contemporary current knowledge-based growth models have re-introduced the notion of the entrepreneur, however stripped of its most typical characteristics, and the diffusion of knowledge is kept exogenous. It implies that the predictions and policy conclusions derived from these models may be flawed. This paper reviews the literature that addresses the issues of knowledge creation, knowledge diffusion and growth, and the role attributed the entrepreneur in such dynamic processes. I will explore how these insights can be integrated into existing growth models and suggest a more thorough microeconomic foundations from which empirically testable hypotheses can be derived.
Innovation is increasingly viewed as the key to elevate prosperity and secure sustainable long-run growth. The last decades have witnessed a refinement of previous growth models to include also investments in education by individuals and R&D by firms. Better educated individuals and increased expenditure on R&D is then shown to result in innovations and accelerated growth. The issues discussed in this chapter refer to how innovative opportunities arise and are exploited, whether the normative conclusions of contemporary growth models are derived from a realistic micro-economic setting, and suggestions as to how these models can be improved in order to provide appropriate guidance for policy-makers. More precisely, there seems to be a missing link between the production of knowledge and its conversion to societal economic value. Whereas the neoclassical growth model attributed knowledge production to an exogenous 'technical residual', current knowledge based growth models assume the diffusion of to take place exogenously or can be attributed an 'entrepreneurial residual'.
The issue addressed in this paper concerns the emergence and dynamics of a regional cluster inthe music industry. Whereas mainstream economic geography models explain agglomeration ofexisting economic activities, an evolutionary approach is necessary to understand the emergenceof genuinely new clusters. Based on an empirical analysis of the major Swedish music cluster, itis shown how cognitive features, the institutional and organizational framework, as well aseconomic incentives, were interlinked in the process of cluster emergence. A multitude of forcesthus coincided in time and space to support the emerging music cluster. A latent knowledge base,language skill and path-dependence all played a significant role. It is also shown how mobile anddensely located agents, displaying a high degree of connectivity, together with external impulsesthrough immigrants, contributed to the dynamics and re-vitalization of the Stockholm musiccluster.