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Growing by leaps and inches: creative destruction, real cost reduction, and inching up

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  • Michael R. Darby
  • Lynne G. Zucker

Abstract

Most firms achieve perfective progress, incrementally improving commodities or productivity. But technological progress is concentrated in a few firms achieving metamorphic progress: forming or transforming industries with technological breakthroughs (e.g., biotechnology, lasers, semiconductors, nanotechnology). Unless congruent with incumbents' science and technology base, metamorphic progress promotes entry. Scientific breakthroughs embodied in discovering scientists, protected by natural excludability and transferred by learning-by-doing-with at the bench generally drive metamorphic progress. Embodied knowledge is rivalrous and leads to entry and industry dominance by star scientist--linked firms. Incorporating this scientific entrepreneurial process is essential to improving--if not transforming--endogenous growth models. Copyright 2003, Oxford University Press.
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  • Michael R. Darby & Lynne G. Zucker, 2003. "Growing by leaps and inches: creative destruction, real cost reduction, and inching up," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 13-42.
    • Handle: RePEc:fip:feddpr:y:2003:i:sep:p:13-42
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    3. Paige Ouimet & Rebecca Zarutskie, 2011. "Who Works for Startups? The Relation between Firm Age, Employee Age, and Growth," Working Papers 11-31, Center for Economic Studies, U.S. Census Bureau.
    4. Srikant Devaraj & Marcus T. Wolfe & Pankaj C. Patel, 2021. "Creative destruction and regional health: evidence from the US," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 573-604, April.
    5. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    6. Michael R. Darby & Lynne G. Zucker, 2006. "Innovation, Competition and Welfare-Enhancing Monopoly," NBER Working Papers 12094, National Bureau of Economic Research, Inc.
    7. Ouimet, Paige & Zarutskie, Rebecca, 2014. "Who works for startups? The relation between firm age, employee age, and growth," Journal of Financial Economics, Elsevier, vol. 112(3), pages 386-407.
    8. Jeff S. Armstrong & Michael R. Darby & Lynne G. Zucker, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
    9. Pedro Aceituno-Aceituno & Joaquín Danvila-del-Valle & Abel González García & Carlos Bousoño-Calzón, 2018. "Entrepreneurship, intrapreneurship and scientific mobility: The Spanish case," PLOS ONE, Public Library of Science, vol. 13(9), pages 1-20, September.
    10. Chava, Sudheer & Oettl, Alexander & Subramanian, Ajay & Subramanian, Krishnamurthy V., 2013. "Banking deregulation and innovation," Journal of Financial Economics, Elsevier, vol. 109(3), pages 759-774.
    11. John V. Duca & Mine K. Yücel, 2002. "An overview of science and cents: exploring the economics of biotechnology," Economic and Financial Policy Review, Federal Reserve Bank of Dallas.
    12. Lynne G. Zucker & Michael R. Darby, 2009. "Star Scientists, Innovation and Regional and National Immigration," Chapters, in: David B. Audretsch & Robert E. Litan & Robert Strom (ed.), Entrepreneurship and Openness, chapter 6, Edward Elgar Publishing.
    13. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2004. "Joint Ventures, Universities, and Success in the Advanced Technology Program," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 145-161, April.
    14. Kalcheva, Ivalina & McLemore, Ping & Pant, Shagun, 2018. "Innovation: The interplay between demand-side shock and supply-side environment," Research Policy, Elsevier, vol. 47(2), pages 440-461.
    15. Stefano Colombo & Luca Grilli, 2017. "Should I stay or should I go? Founder’s decision to leave an entrepreneurial venture during an industrial crisis," Industry and Innovation, Taylor & Francis Journals, vol. 24(2), pages 97-121, February.
    16. Russell S. Sobel & Andrea M Dean, 2008. "Has Wal‐Mart Buried Mom And Pop?: The Impact Of Wal‐Mart On Self‐Employment And Small Establishments In The United States," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 676-695, October.
    17. Wang, Ning & Hagedoorn, John, 2014. "The lag structure of the relationship between patenting and internal R&D revisited," Research Policy, Elsevier, vol. 43(8), pages 1275-1285.
    18. Amir Tabarzad & Ali Asghar Ghaemi & Shahrokh Zand-parsa, 2016. "Barley Grain Yield and Protein Content Response to Deficit Irrigation and Sowing Dates in Semi-Arid Region," Modern Applied Science, Canadian Center of Science and Education, vol. 10(10), pages 193-193, October.
    19. Andrea Bonaccorsi & Daniele Biancardi & Mabel Sanchez Barrioluengo & Federico Biagi, 2019. "Study on Higher Education Institutions and Local Development," JRC Research Reports JRC117272, Joint Research Centre.
    20. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2003. "Universities, Joint Ventures, and Success in the Advanced Technology Program," NBER Working Papers 9463, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Research and development; Intellectual property; Venture capital;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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