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Which Entrepreneurs Boost Productivity?

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Abstract

Why do some entrepreneurs drive economic growth while others do not? This piece discusses new work that studies entrepreneurs using a comprehensive dataset from Denmark. We study who becomes an entrepreneur, along with their hiring and business decisions, and find that a distinct minority are “transformative.” These individuals, who generate disproportionate productivity gains, tend to have high IQ scores, be well-educated, and hire technical (R&D) workers. The data support the idea of productivity growth being driven by the symbiotic relationship between transformative entrepreneurs and R&D workers. For policymakers, the lesson is that when an economy has more R&D workers and transformative entrepreneurs, they sustain higher long-run productivity growth.

Suggested Citation

  • Ufuk Akcigit & Harun Alp & Jeremy Pearce & Marta Prato, 2026. "Which Entrepreneurs Boost Productivity?," Liberty Street Economics 20260105, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:102298
    DOI: 10.59576/lse.20260105
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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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