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Basic Statistics on the Success Rate and Profits for Independent Inventors

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  • Thomas Ã…stebro

Abstract

1,095 responses were received from a telephone survey of independent inventors. The majority of inventors surveyed (89%) are male, and a plurality of their inventions are designed for consumer products (47%). Conditional on commercializing their invention, and at development costs about 1/8 of those in established firms, inventive efforts by independent inventors lead to gains virtually comparable to those of established firms. Their innovations survive for about as long as the average start-up. Gross profit margins are comparable to the pharmaceutical industry (29%). However, only a small fraction of inventions developed by independent inventors reach the market (6.5%). The probability of reaching the market is four to eight times less than for inventions developed by established firms. Why do only a fraction of inventions developed by independent inventors become commercialized when those that do commercialize are quite profitable and survive for as long as other start-ups?

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  • Thomas Ã…stebro, 1998. "Basic Statistics on the Success Rate and Profits for Independent Inventors," Entrepreneurship Theory and Practice, , vol. 23(2), pages 41-48, December.
  • Handle: RePEc:sae:entthe:v:23:y:1998:i:2:p:41-48
    DOI: 10.1177/104225879802300203
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    References listed on IDEAS

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    1. C. Wickramasinghe & Nobaya Ahmad & Sharifah Rashid & Zahid Emby, 2011. "Impact of Subjective Well-Being on Success of Technological Knowledge Creation among Independent Inventors in Developing Countries: A First Look at Sri Lanka," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 2(3), pages 432-452, September.
    2. Astebro, Thomas B. & Dahlin, Kristina B., 2005. "Opportunity knocks," Research Policy, Elsevier, vol. 34(9), pages 1404-1418, November.
    3. Albert N. Link & Christopher J. Ruhm, 2013. "Bringing science to market:commercializing from NIH SBIR awards," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 1, pages 3-24, Edward Elgar Publishing.
    4. Thomas Åstebro & Samir Elhedhli, 2006. "The Effectiveness of Simple Decision Heuristics: Forecasting Commercial Success for Early-Stage Ventures," Management Science, INFORMS, vol. 52(3), pages 395-409, March.
    5. Dahlin, Kristina & Taylor, Margaret & Fichman, Mark, 2004. "Today's Edisons or weekend hobbyists: technical merit and success of inventions by independent inventors," Research Policy, Elsevier, vol. 33(8), pages 1167-1183, October.
    6. Anne Chwolka & Matthias G. Raith, 2023. "Overconfidence as a driver of entrepreneurial market entry decisions: a critical appraisal," Review of Managerial Science, Springer, vol. 17(3), pages 985-1016, April.

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