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Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements

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  • William J. Baumol

Abstract

This paper explores the following hypotheses on the appropriate education for innovating entrepreneurship: a) breakthrough inventions are contributed disproportionately by independent inventors and entrepreneurs, while large firms focus on cumulative, incremental (and often invaluable) improvements; b) education for mastery of scientific knowledge and methods is enormously valuable for innovation and growth, but can impede heterodox thinking and imagination; c) large-firm R&D requires personnel who are highly educated in extant information and analytic methods, while successful independent entrepreneurs and inventors often lack such preparation; d) while procedures for teaching current knowledge and methods in science and engineering are effective, we know little about training for the critical task of breakthrough innovation.

Suggested Citation

  • William J. Baumol, 2004. "Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements," NBER Working Papers 10578, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10578 Note: IO
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    1. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
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    Cited by:

    1. Zara Daghbashyan & Björn Hårsman, 2014. "University choice and entrepreneurship," Small Business Economics, Springer, vol. 42(4), pages 729-746, April.
    2. Werner, Arndt & Moog, Petra, 2009. "Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms," MPRA Paper 18826, University Library of Munich, Germany.
    3. Martin Kalthaus, 2016. "Knowledge recombination along the technology life cycle," Jena Economic Research Papers 2016-012, Friedrich-Schiller-University Jena.
    4. Michele Cincera & Reinhilde Veugelers, 2013. "Exploring Europe's R&D deficit relative to the US: Differences in the rates of return to R&D of young leading R&D firms," iCite Working Papers 2013 - 001, ULB -- Universite Libre de Bruxelles.
    5. Francesco Vona & Davide Consoli, 2015. "Innovation and skill dynamics: a life-cycle approach," Industrial and Corporate Change, Oxford University Press, pages 1393-1415.
    6. Francesco Campanella & Maria Della Peruta & Manlio Del Giudice, 2013. "The Role of Sociocultural Background on the Characteristics and the Financing of Youth Entrepreneurship. An Exploratory Study of University Graduates in Italy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(3), pages 244-259, September.
    7. Hsu, David H. & Roberts, Edward B. & Eesley, Charles E., 2007. "Entrepreneurs from technology-based universities: Evidence from MIT," Research Policy, Elsevier, pages 768-788.
    8. Daniela Grieco, 2007. "Degree of Innovativeness and Market Structure: A Model," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(2), pages 7-27, May.
    9. repec:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9898-y is not listed on IDEAS
    10. Milo Bianchi & Magnus Henrekson, 2005. "Is Neoclassical Economics still Entrepreneurless?," Kyklos, Wiley Blackwell, vol. 58(3), pages 353-377, July.
    11. Nordman, Emilia Rovira & Tolstoy, Daniel, 2016. "The impact of opportunity connectedness on innovation in SMEs’ foreign-market relationships," Technovation, Elsevier, vol. 57, pages 47-57.
    12. Philipp Weinschenk, 2009. "Persistence of Monopoly and Research Specialization," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2009_11, Max Planck Institute for Research on Collective Goods.
    13. Arnab Bhattacharjee & Jean Bonnet & Nicolas Le Pape & Régis Renault, 2016. "Going into Business and Out of Business: The Role of Human Capital," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-04, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    14. Müller, Bettina & Murmann, Martin, 2016. "The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees," ZEW Discussion Papers 16-074, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    15. Matthias Benz, "undated". "Entrepreneurship as a non-profit-seeking activity," IEW - Working Papers 243, Institute for Empirical Research in Economics - University of Zurich.
    16. Silva, Olmo, 2007. "The Jack-of-All-Trades entrepreneur: Innate talent or acquired skill?," Economics Letters, Elsevier, vol. 97(2), pages 118-123, November.
    17. Sid Durbin, 2004. "Review of Workplace Skills, Technology Adoption and Firm Productivity: A Review," Treasury Working Paper Series 04/16, New Zealand Treasury.
    18. Ferrante, Francesco & Sabatini, Fabio, 2007. "Education, social capital and entrepreneurial selection in Italy," MPRA Paper 2451, University Library of Munich, Germany.
    19. Lothar Funk & Axel Plünnecke, 2005. "An international Comparison of Selected Innovation Drivers," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(3), pages 43-52, November.
    20. Yusuf , Shahid & Nabeshima, Kaoru, 2009. "Can Malaysia escape the middle-income Trap ? a strategy for Penang," Policy Research Working Paper Series 4971, The World Bank.
    21. Verheul, Ingrid & Uhlaner, Lorraine & Thurik, Roy, 2005. "Business accomplishments, gender and entrepreneurial self-image," Journal of Business Venturing, Elsevier, pages 483-518.
    22. Backes-Gellner, Uschi & Moog, Petra, 2013. "The disposition to become an entrepreneur and the jacks-of-all-trades in social and human capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 55-72.
    23. Andrea GANZAROLI & Gianluca FISCATO & Luciano PILOTTI, 2006. "Does business succession enhance firms’ innovation capacity? Results from an exploratory analysis in Italian SMEs," Departmental Working Papers 2006-29, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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