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The Interaction of Schumpeterian Institutional Entrepreneurship and Hayekian Institutional Change in Innovative Industries

Author

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  • Henrekson, Magnus

    (Research Institute of Industrial Economics (IFN))

  • Lakomaa, Erik

    (Institute for Economic and Business History Research (EHFF))

  • Sanandaji, Tino

    (Institute for Economic and Business History Research (EHFF))

Abstract

Innovation often takes place in entrepreneurial ecosystems. We use the history of the Silicon Valley venture capital model and the Hollywood motion picture industry to illustrate how specialized institutions that regulate these entrepreneurial ecosystems emerged through actions by business entrepreneurs, rather than being designed by policymakers. Schumpeterian entrepreneurs not only create new companies; they also create new institutions as an integral part of the restructuring process. At times, efforts of identifiable entrepreneurs are crucial, while in other instances institutional change results from a Hayekian process of emergence fueled by business entrepreneurs’ efforts. Some institutions remain informal, whereas others become formalized. The greater room to forge institutions through business practices may in part account for the higher rates of entrepreneurship observed in common law countries.

Suggested Citation

  • Henrekson, Magnus & Lakomaa, Erik & Sanandaji, Tino, 2021. "The Interaction of Schumpeterian Institutional Entrepreneurship and Hayekian Institutional Change in Innovative Industries," Working Paper Series 1409, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1409
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    More about this item

    Keywords

    Entrepreneurship policy; High-impact entrepreneurship; Innovation; Institutional entrepreneurship; Schumpeterian entrepreneurship;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights

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