IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/1397.html

Declining Business Dynamism Among Our Best Opportunities: The Role of the Burden of Knowledge

Author

Listed:
  • Astebro, Thomas B.

    (HEC Paris)

  • Braguinsky, Serguey

    (University of Maryland - Department of Management & Organization; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research)

  • Ding, Yuheng

    (University of Maryland - Robert H. Smith School of Business)

Abstract

Declining rates of new business formation in the U.S. have been documented in macroeconomic literature but we still know relatively little about its causes and how it might affect innovation. We use individual-level work data to examine trends in new firm formation by U.S. PhD recipients in science and engineering and its causes. Since 1997, the fraction of startup founders with PhDs in science and engineering among all business owners with the same PhDs has declined by 38 percent, and the share of PhDs in science and engineering who work for startups has declined by 30 percent. These trends are joined by a long-term earnings decline for startup founders, especially less experienced ones, and increasing number of R&D and administrative tasks performed by founders, indicating less attractiveness for doctorate recipients to found startups. We use abductive reasoning to examine a plausible explanation for these trends being driven at least in part by an increasing complexity of conducting innovation. Established firms have been able to handle this better than startups through greater division of labor, thereby attracting PhDs in greater numbers. Since economy-wide innovation largely depends on science- and technology-based startups, the development is of great concern.

Suggested Citation

  • Astebro, Thomas B. & Braguinsky, Serguey & Ding, Yuheng, 2020. "Declining Business Dynamism Among Our Best Opportunities: The Role of the Burden of Knowledge," HEC Research Papers Series 1397, HEC Paris.
    • Handle: RePEc:ebg:heccah:1397
    DOI: 10.2139/ssrn.3684945
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3684945
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.2139/ssrn.3684945?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
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Lutz Bornmann & Russell J. Funk, 2025. "Popper’s probability calculus and the decline of scientific disruptiveness," Scientometrics, Springer;Akadémiai Kiadó, vol. 130(8), pages 4801-4807, August.
    2. Callaghan, Christian William, 2021. "Growth contributions of technological change: Is there a burden of knowledge effect?," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    3. Haruyama, Tetsugen, 2025. "A Schumpeterian exploration of Gini and top/bottom income shares," Macroeconomic Dynamics, Cambridge University Press, vol. 29, pages 1-1, January.
    4. Wim Naudé, 2023. "Late industrialisation and global value chains under platform capitalism," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(1), pages 91-119, March.
    5. Diane Coyle, 2021. "The idea of productivity," Working Papers 003, The Productivity Institute.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    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:ebg:heccah:1397. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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: Antoine Haldemann The email address of this maintainer does not seem to be valid anymore. Please ask Antoine Haldemann to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.