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Handbook of Entrepreneurship Research pp 273–301Cite as

Knowledge Spillover Entrepreneurship

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Part of the book series: International Handbook Series on Entrepreneurship ((IHSE,volume 5))

Abstract

Just as the economy has been besieged by a wave of technological change that has left virtually no sector of the economy untouched, scientific understanding of the innovative process—that is, the manner by which firms innovate, and the impact such technological change has on enterprises and markets—has also undergone a revolution, which, although somewhat quieter, has been no less fundamental. Well into the 1970s, a conventional wisdom about the nature of technological change generally pervaded. This conventional wisdom had been shaped largely by scholars such as Alfred Chandler (1977), Joseph Schumpeter (1942), and John Kenneth Galbraith (1956) who convinced a generation of scholars and policymakers that innovation and technological change lay in the domain of large corporations and that small business would fade away as the victim of its own inefficiencies.

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Notes

  1. 1.

    Similar results emphasizing the importance of informal R&D are found by Santarelli and Sterlachinni (1990).

  2. 2.

    For example, Shepherd (1979, 40) concludes that, “Patents are a notoriously weak measure. Most of the eighty thousand patents issued each year are worthless and are never used. Still others have negative social value. They are used as ‘blocking’ patents to stop innovation, or they simply are developed to keep competition out.”

  3. 3.

    Chakrabarti and Halperin (1990) use a fairly standard source of data for US patents issued by the US Office of Patents and Trademarks, the BRS/PATSEARCH online database, to identify the number of inventions patented by over 470 enterprises between 1975 and 1986. Of particular interest is their comparison between the propensity of firms to patent and company R&D expenditures, and a measure not often found in the economics literature the number of published papers and publications contributed by employees of each firm. Not only do they bring together data from a number of rich sources, but they also compare how the relationships between the various measures of innovative activity vary across firm size.

  4. 4.

    The SPRU innovation data are explained in considerable detail in Pavitt et al. (1987) and Rothwell (1989).

  5. 5.

    A detailed description of the US Small Business Administration’s Innovation Database can be found in Chap. 2 of Acs and Audretsch (1990).

  6. 6.

    It should be emphasized, however, that Acs and Audretsch (1990, Chap. 2) perform a careful analysis of the significance of the innovations based on four broad categories ranking the importance of each innovation.

  7. 7.

    The database used by Graf von der Schulenburg and Wagner (1991) is the IFO Innovations-Test and is explained in greater detail in Oppenlander (1990) and Konig and Zimmermann (1986).

  8. 8.

    Fisher and Temin (1973) demonstrated that the Schumpeterian Hypothesis could not be substantiated unless it was established that the elasticity of innovative output with respect to firm size exceeds one. They pointed out that if scale economies in R&D do exist, a firm’s size may grow faster than its R&D activities. Kohn and Scott (1982) later showed that if the elasticity of R&D input with respect to firm size is greater than unity, then the elasticity of R&D output with respect to firm size must also be greater than one.

  9. 9.

    Since we are not interested in arbitrage, prices can be viewed as constant, e.g., monopolistic competition leads to equalized prices on differentiated products within an industry.

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Acknowledgments

Thanks go to Al Link for his thoughtful comments and insights as well as to the suggestions made by a number of other contributors to this volume.

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  1. School of Public Policy, George Mason University, Fairfax, VA, USA

    Zoltan J. Acs

  2. School of Public and Environmental Affairs Indiana University, Bloomington, IN, USA

    David B. Audretsch

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    Zoltan J. Acs

  2. Indiana University, Bloomington, 47405, USA

    David B. Audretsch

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Acs, Z.J., Audretsch, D.B. (2010). Knowledge Spillover Entrepreneurship. In: Acs, Z., Audretsch, D. (eds) Handbook of Entrepreneurship Research. International Handbook Series on Entrepreneurship, vol 5. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-1191-9_11

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