IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v53y2019i3d10.1007_s11187-018-0072-y.html
   My bibliography  Save this article

Entrepreneurial experimentation: a key function in systems of innovation

Author

Listed:
  • Åsa Lindholm-Dahlstrand

    (Lund University)

  • Martin Andersson

    (Lund University)

  • Bo Carlsson

    (Lund University)

Abstract

The literature on innovation systems focuses on the supply side (the creation of technology) rather than on how innovations are converted into economic activity and growth via the market (the demand side, and the interface between supply and demand). One implication of this is that there is a dearth of research on the links between innovation systems and economic growth. The purpose of this paper is to begin to fill this gap in the literature. We articulate the function of entrepreneurial experimentation as an essential mechanism for translating new knowledge into economic activity and growth created in innovation systems. We argue that entrepreneurial experimentation comprises both “technical” and “market” experimentation. Spinoffs and acquisitions are proposed as micro-mechanisms that give rise to system-wide entrepreneurial experimentation. Our framework suggests that entrepreneurial experimentation is central in driving both the supply- and the demand-side dynamics of innovation systems, hence linking both innovation systems and entrepreneurship to economic growth.

Suggested Citation

  • Åsa Lindholm-Dahlstrand & Martin Andersson & Bo Carlsson, 2019. "Entrepreneurial experimentation: a key function in systems of innovation," Small Business Economics, Springer, vol. 53(3), pages 591-610, October.
  • Handle: RePEc:kap:sbusec:v:53:y:2019:i:3:d:10.1007_s11187-018-0072-y
    DOI: 10.1007/s11187-018-0072-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-018-0072-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11187-018-0072-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andreas Freytag & Roy Thurik, 2010. "Entrepreneurship and its Determinants in a Cross-Country Setting," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 157-170, Springer.
    2. Freeman, Chris, 2002. "Continental, national and sub-national innovation systems--complementarity and economic growth," Research Policy, Elsevier, vol. 31(2), pages 191-211, February.
    3. Colombo, Massimo G. & Grilli, Luca, 2005. "Start-up size: The role of external financing," Economics Letters, Elsevier, vol. 88(2), pages 243-250, August.
    4. Gans, Joshua S. & Stern, Scott, 2003. "The product market and the market for "ideas": commercialization strategies for technology entrepreneurs," Research Policy, Elsevier, vol. 32(2), pages 333-350, February.
    5. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December.
    6. Van De Ven, H., 1993. "The development of an infrastructure for entrepreneurship," Journal of Business Venturing, Elsevier, vol. 8(3), pages 211-230, May.
    7. Guido Buenstorf, 2007. "Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(3), pages 179-202, May.
    8. Carlsson, B & Stankiewicz, R, 1991. "On the Nature, Function and Composition of Technological Systems," Journal of Evolutionary Economics, Springer, vol. 1(2), pages 93-118, April.
    9. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2018. "The knowledge spillover theory of intrapreneurship," Small Business Economics, Springer, vol. 51(1), pages 1-30, June.
    10. Norback, Pehr-Johan & Persson, Lars, 2004. "Privatization and foreign competition," Journal of International Economics, Elsevier, vol. 62(2), pages 409-416, March.
    11. Erik Stam, 2015. "Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique," European Planning Studies, Taylor & Francis Journals, vol. 23(9), pages 1759-1769, September.
    12. Bo Carlsson & Zoltán J. Ács & David B. Audretsch & Pontus Braunerhjelm, 2015. "Knowledge creation, entrepreneurship, and economic growth: a historical review," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 5, pages 71-107, Edward Elgar Publishing.
    13. Guido Buenstorf, 2017. "Schumpeterian Incumbents and Industry Evolution," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 283-297, Springer.
    14. Zoltán J. Ács & Erkko Autio & László Szerb, 2015. "National Systems of Entrepreneurship: Measurement issues and policy implications," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 28, pages 523-541, Edward Elgar Publishing.
    15. Ensley, Michael D. & Hmieleski, Keith M., 2005. "A comparative study of new venture top management team composition, dynamics and performance between university-based and independent start-ups," Research Policy, Elsevier, vol. 34(7), pages 1091-1105, September.
    16. Eriksson, Tor & Moritz Kuhn, Johan, 2006. "Firm spin-offs in Denmark 1981-2000 -- patterns of entry and exit," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1021-1040, September.
    17. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    18. Martin Andersson & Johan P Larsson, 2016. "Local entrepreneurship clusters in cities," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 39-66.
    19. Utterback, James M. & Meyer, Marc & Roberts, Edward & Reitberger, Goren, 1988. "Technology and industrial innovation in Sweden: A study of technology-based firms formed between 1965 and 1980," Research Policy, Elsevier, vol. 17(1), pages 15-26, February.
    20. Markard, Jochen & Truffer, Bernhard, 2008. "Technological innovation systems and the multi-level perspective: Towards an integrated framework," Research Policy, Elsevier, vol. 37(4), pages 596-615, May.
    21. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 153-182, February.
    22. Wennberg, Karl & Wiklund, Johan & Wright, Mike, 2011. "The effectiveness of university knowledge spillovers: Performance differences between university spinoffs and corporate spinoffs," Research Policy, Elsevier, vol. 40(8), pages 1128-1143, October.
    23. Matt Marx & Deborah Strumsky & Lee Fleming, 2009. "Mobility, Skills, and the Michigan Non-Compete Experiment," Management Science, INFORMS, vol. 55(6), pages 875-889, June.
    24. Martin Andersson & Steven Klepper, 2013. "Characteristics and performance of new firms and spinoffs in Sweden," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 245-280, February.
    25. Klepper, Steven & Thompson, Peter, 2010. "Disagreements and intra-industry spinoffs," International Journal of Industrial Organization, Elsevier, vol. 28(5), pages 526-538, September.
    26. William R. Kerr & Ramana Nanda & Matthew Rhodes-Kropf, 2014. "Entrepreneurship as Experimentation," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 25-48, Summer.
    27. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    28. Michael Fritsch & Florian Noseleit, 2013. "Start-ups, long- and short-term survivors, and their contribution to employment growth," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 719-733, September.
    29. Bergek, Anna & Jacobsson, Staffan & Carlsson, Bo & Lindmark, Sven & Rickne, Annika, 2008. "Analyzing the functional dynamics of technological innovation systems: A scheme of analysis," Research Policy, Elsevier, vol. 37(3), pages 407-429, April.
    30. Cooke, Philip, 2001. "Regional Innovation Systems, Clusters, and the Knowledge Economy," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 945-974, December.
    31. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-674, September.
    32. William J. Baumol, 2002. "Entrepreneurship, Innovation and Growth: The David-Goliath Symbiosis," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 7(2), pages 1-10, Summer.
    33. Robert E. Carpenter & Bruce C. Petersen, 2002. "Capital Market Imperfections, High-Tech Investment, and New Equity Financing," Economic Journal, Royal Economic Society, vol. 112(477), pages 54-72, February.
    34. Radosevic, Slavo & Yoruk, Esin, 2013. "Entrepreneurial propensity of innovation systems: Theory, methodology and evidence," Research Policy, Elsevier, vol. 42(5), pages 1015-1038.
    35. Maskell, Peter & Malmberg, Anders, 1999. "Localised Learning and Industrial Competitiveness," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 167-185, March.
    36. Pontus Braunerhjelm & Zoltán J. Ács & David B. Audretsch & Bo Carlsson, 2015. "The missing link: knowledge diffusion and entrepreneurship in endogenous growth," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 6, pages 108-128, Edward Elgar Publishing.
    37. Landström, Hans & Harirchi, Gouya & Åström, Fredrik, 2012. "Entrepreneurship: Exploring the knowledge base," Research Policy, Elsevier, vol. 41(7), pages 1154-1181.
    38. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468.
    39. Frank R. Lichtenberg & Donald Siegel, 1987. "Productivity and Changes in Ownership of Manufactoring Plants," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 643-684.
    40. Michael Fritsch & Michael Wyrwich, 2014. "The Long Persistence of Regional Levels of Entrepreneurship: Germany, 1925-2005," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 955-973, June.
    41. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2013. "Who Creates Jobs? Small versus Large versus Young," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 347-361, May.
    42. Carlsson, Bo, 2006. "Internationalization of innovation systems: A survey of the literature," Research Policy, Elsevier, vol. 35(1), pages 56-67, February.
    43. Massimo Colombo & Luca Grilli, 2007. "Funding Gaps? Access To Bank Loans By High-Tech Start-Ups," Small Business Economics, Springer, vol. 29(1), pages 25-46, June.
    44. Staffan Jacobsson & Anna Bergek, 2004. "Transforming the energy sector: the evolution of technological systems in renewable energy technology," Industrial and Corporate Change, Oxford University Press, vol. 13(5), pages 815-849, October.
    45. Bo Carlsson & Gunnar Eliasson, 2003. "Industrial Dynamics and Endogenous Growth," Industry and Innovation, Taylor & Francis Journals, vol. 10(4), pages 435-455.
    46. Granstrand, Ove & Sjölander, Sören, 1990. "The Acquisition of Technology and Small Firms by Large Firms," Working Paper Series 213, Research Institute of Industrial Economics.
    47. Scott Shane, 2000. "Prior Knowledge and the Discovery of Entrepreneurial Opportunities," Organization Science, INFORMS, vol. 11(4), pages 448-469, August.
    48. Scherer, F. M. & Harhoff, Dietmar, 2000. "Technology policy for a world of skew-distributed outcomes," Research Policy, Elsevier, vol. 29(4-5), pages 559-566, April.
    49. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953.
    50. Apostolos Baltzopoulos & Pontus Braunerhjelm & Ioannis Tikoudis, 2016. "Spin-offs: why geography matters," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 273-303.
    51. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2015. "And the winner is—Acquired. Entrepreneurship as a contest yielding radical innovations," Research Policy, Elsevier, vol. 44(2), pages 295-310.
    52. Bo Carlsson, 2016. "Industrial Dynamics: A Review of the Literature 1990--2009," Industry and Innovation, Taylor & Francis Journals, vol. 23(1), pages 1-61, January.
    53. Steven Klepper, 2002. "The capabilities of new firms and the evolution of the US automobile industry," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 645-666, August.
    54. Peter Thompson & Jing Chen, 2011. "Disagreements, employee spinoffs and the choice of technology," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 455-474, July.
    55. Hans Westlund & Johan P. Larsson & Amy Rader Olsson, 2014. "Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 974-994, June.
    56. Granstrand, Ove & Sjolander, Soren, 1990. "The acquisition of technology and small firms by large firms," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 367-386, June.
    57. Andersson, Martin & Xiao, Jing, 2014. "Acquisitions of Start-ups by Incumbent Businesses A market selection process of “high-quality” entrants?," Papers in Innovation Studies 2014/19, Lund University, CIRCLE - Centre for Innovation Research.
    58. Agrawal, Ajay & Cockburn, Iain, 2003. "The anchor tenant hypothesis: exploring the role of large, local, R&D-intensive firms in regional innovation systems," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1227-1253, November.
    59. Carlsson , Bo, 2016. "Industrial Dynamics: A Review of the Literature 1990-2009," Papers in Innovation Studies 2016/3, Lund University, CIRCLE - Centre for Innovation Research.
    60. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olivier Meier & Aurélie Sannajust, 2021. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 57(2), pages 1073-1088, August.
    2. Hsini Huang, 2020. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 703-725, December.
    3. Hsini Huang, 0. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 0, pages 1-23.
    4. Jörn H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 2021. "The entrepreneurial finance markets of the future : a comparison of crowdfunding and initial coin offerings," Post-Print hal-03337456, HAL.
    5. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 2021. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 865-882, August.
    6. Carlsson, Bo, 2020. "How do you design an experimental economy?," Papers in Innovation Studies 2020/14, Lund University, CIRCLE - Centre for Innovation Research.
    7. Thorsten Lammers & Dilek Cetindamar & Maren Borkert, 2021. "A Digital Tale of Two Cities—Observing the Dynamics of the Artificial Intelligence Ecosystems in Berlin and Sydney," Sustainability, MDPI, Open Access Journal, vol. 13(19), pages 1-19, September.
    8. Olivier Meier & Aurélie Sannajust, 0. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 0, pages 1-16.
    9. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 0. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 0, pages 1-18.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lindholm-Dahlstrand, Asa & Andersson, Martin & Carlsson, Bo, 2016. "Entrepreneurial Experimentation: A key function in Entrepreneurial Systems of Innovation," Papers in Innovation Studies 2016/20, Lund University, CIRCLE - Centre for Innovation Research.
    2. Andersson, Martin & Xiao, Jing, 2014. "Acquisitions of Start-ups by Incumbent Businesses A market selection process of “high-quality” entrants?," Papers in Innovation Studies 2014/19, Lund University, CIRCLE - Centre for Innovation Research.
    3. Andersson, Martin & Xiao, Jing, 2016. "Acquisitions of start-ups by incumbent businesses," Research Policy, Elsevier, vol. 45(1), pages 272-290.
    4. Xiao, Jing, 2018. "Post-acquisition dynamics of technology start-ups: drawing the temporal boundaries of post-acquisition restructuring process," Papers in Innovation Studies 2018/12, Lund University, CIRCLE - Centre for Innovation Research.
    5. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2018. "The knowledge spillover theory of intrapreneurship," Small Business Economics, Springer, vol. 51(1), pages 1-30, June.
    6. Haifeng Qian, 2018. "Knowledge-Based Regional Economic Development: A Synthetic Review of Knowledge Spillovers, Entrepreneurship, and Entrepreneurial Ecosystems," Economic Development Quarterly, , vol. 32(2), pages 163-176, May.
    7. Rakas, Marija & Hain, Daniel S., 2019. "The state of innovation system research: What happens beneath the surface?," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    8. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    9. Yeganegi, Sepideh & Laplume, André O. & Dass, Parshotam & Huynh, Cam-Loi, 2016. "Where do spinouts come from? The role of technology relatedness and institutional context," Research Policy, Elsevier, vol. 45(5), pages 1103-1112.
    10. Hsini Huang, 2020. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 703-725, December.
    11. Erik Stam & Andrew Ven, 2021. "Entrepreneurial ecosystem elements," Small Business Economics, Springer, vol. 56(2), pages 809-832, February.
    12. Guo-Hua Cao & Jing Zhang, 2021. "Is a sustainable loop of economy and entrepreneurial ecosystem possible? a structural perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(5), pages 7002-7040, May.
    13. Ethan Gifford & Guido Buenstorf & Daniel Ljungberg & Maureen Mckelvey & Olof Zaring, 0. "Variety in founder experience and the performance of knowledge-intensive innovative firms," Journal of Evolutionary Economics, Springer, vol. 0, pages 1-37.
    14. David Urbano & Sebastian Aparicio & David Audretsch, 2019. "Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned?," Small Business Economics, Springer, vol. 53(1), pages 21-49, June.
    15. Hsini Huang, 0. "The effect of the small-firm dominated ecology on regional innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 0, pages 1-23.
    16. Zhigao Liu & Yimei Yin & Weidong Liu & Michael Dunford, 2015. "Visualizing the intellectual structure and evolution of innovation systems research: a bibliometric analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 103(1), pages 135-158, April.
    17. Agarwal, Rajshree & Shah, Sonali K., 2014. "Knowledge sources of entrepreneurship: Firm formation by academic, user and employee innovators," Research Policy, Elsevier, vol. 43(7), pages 1109-1133.
    18. Jing Xiao, 2015. "The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter?," Small Business Economics, Springer, vol. 45(3), pages 487-504, October.
    19. Coenen, Lars & Benneworth, Paul & Truffer, Bernhard, 2012. "Toward a spatial perspective on sustainability transitions," Research Policy, Elsevier, vol. 41(6), pages 968-979.
    20. Niccolò Ghio & Massimiliano Guerini & Erik Lehmann & Cristina Rossi-Lamastra, 2015. "The emergence of the knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 44(1), pages 1-18, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:53:y:2019:i:3:d:10.1007_s11187-018-0072-y. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.