The success and failure of innovation and entrepreneurship research - - PowerPoint PPT Presentation

The success and failure of innovation and entrepreneurship research

Karl Wennberg, PhD Professor Linköping University karl.wennberg@liu.se

Scholarly tribes in innovation and entrepreneurship research

• Economics
• Used to ignore entrepreneurship
• Last 10-20 years significant progress
• Still limited connection between micro (eship) and macro (growth)
• Sociology & Psychology
• Relationsips, emotions, and networks matter for business (sometimes

more than economic factors))

• Entrepreneruship often not of key interest
• Management research
• too impractical to inform practice?
• too immature to inform policy?

We still do not know with certitude if and how innovations lead to Growth.

 Policies: effective, ineffective, or destructive? When? How?

A stylized ”growth recipe”

• 1. Investment in education and training
• 2. Investment in (the right type of, at the right time) infrastructure
• 3. Encourage (innovative) entrepreneurship (maybe…)

Innovation more and more rare… …more and more expensive? …and/or organizations or more and more bureacractic?

Innovations (ideas):

• non-rival
• non-substitutable
• non-proprietory

 Direct effects + spillovers  Local universities, research institutions and MNEs crucial!

”Spillovers” broader and of different kinds than implied in simple policy evaluations of specific interventions

• Growing up in a neighborhood or family

with a high innovation rate leads to a higher patenting, especially for girls.

• Increasing exposure to innovation in

childhood may have larger impacts on innovation than increasing the financial incentives to innovate.  Many "lost Einsteins" – people who would have had highly impactful inventions had they been exposed to innovation.

Bell, Chetty, Jaravel, Petkova, & Van Reenen, 2018

Exposure to Innovation Exposure to Entrepreneurship Exposure to Investors

Exposure is physical, as is co-location

Entry Entry Entry Entry

Stockholm Malmö Linköping Göteborg

Entry Entry Entry Entry Work Work Work Work Work Work Work Work

Non-cognitive ability General ability

Stockholm Malmö Linköping Göteborg

Exposure variables Small Workplace 200% Parents were entrepreneurs

50%

Residing in Stockholm

20%

Ability variables General ability

10%

Non-cognitive ability

20%

Dahlander & Wennberg, 2017

”Spillovers” difficult to identify and difficult to active with direct policy…

Spillovers…sometimes works in unanticipated ways

What can be done?

Our challenge: Objective probabilities in scientific method (Fisher, von Mises, Neyman, Pearson)

• Probabilities relevant to the outcome of repeated experiments
• Likelihood objectively determined and unaffected by observations
• Possible to generate and test hypotheses

Problems: Outcome depends on research plan and criteria for reproducibility.

• Not reject a null hypothesis does not mean that we with

absolute certainty can accept the hypothesis

• Rejecting an hypothesis does not mean accepting another
• Past point estimates provide little knowledge of the future

US & UK forecasts of governmental spending

The Bank of England publishes probabilistic inflation forecasts US Central Bank and Swedish Riksbank publishes point inflation forecasts in estimates

Consequences?

UK forecasts of CPI inflation

0,5 1 1,5 2 2,5

Mode Median Mean

• 1
• 0,5

0,5 1 1,5 2 2,5 3 3,5 4

1 2 3 4 5 6 7 8 9 10 11 12 13

Top Mean Bottom

Why point estimates?

"You can’t give the client a bound. The client needs a point." "Ranges are for cattle. Give me a number."

If we cannot know the number of balls in an urn when assessing the likelihood of drawing a specific color?

Thanks! Questions / comments?

Karl Wennberg, PhD Professor Linköping University karl.wennberg@liu.se

References:

Delmar, F. & Wennberg, K. (2010). Knowledge Intensive Entrepreneurship: The Birth, Growth and Demise of Entrepreneurial Firms. Cheltenham: Edward Elgar. Dimov, D., Berglund, H. & Wennberg, K. 2018. Beyond Bridging Rigor and Relevance: The Three-Body Problem in Entrepreneurship. Forthcoming Journal of Business Venturing Insights, in press. Larsson, J. P., Wennberg, K., Wiklund, J., & Wright, M. 2017. Location choices of graduate entrepreneurs. Research Policy, 46(8): 1490-1504. Sandström, C., Wennberg, K., Wallin, M. & Zherlygina, Y. 2016. Public Policy for Academic Entrepreneurship: A review and critical discussion. In Press, Journal

• f Technology Transfer. doi:10.1007/s10961-016-9536-x.

Kim, P., Wennberg, K. & Crodieu, G. (016. Meso-Level Mechanism of Entrepreneurial Activity in Societies. Academy of Management Perspectives. 30 273-291. Wennberg, K., Wiklund, J., Wright, M. (2011). Academic Entrepreneurship: Performance differences between university spin-offs and corporate spin-offs. Research Policy, 40(8): 1128-1143. Berglund, B., Wennberg, K., Bousfiha, M., Laufer, M. & Mansoori, Y. Experimental Entrepreneurship for Practice and Policy Development. Stockholm: Vinnova. Delmar, F. & Wennberg, K. (2011). Evolutionary Views on Entrepreneurial Processes: Managerial and Policy Implications. Policy Brief, Stockholm: Entreprenörskapsforum. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111202 Delmar, F., Wennberg, K. & Hellerstedt, K. (2011). Endogenous growth through knowledge spillovers in entrepreneurship: an empirical test. Strategic Entrepreneurship Journal, 5(3): 199–226.

Manski, C. F. 2013. Public Policy in an Uncertain World: Harvard University Press.