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Technological Innovation Activities In Firms And Propensity Of Individuals Starting New Businesses

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  • Wong, Poh Kam
  • Lee, Lena
  • Foo, Maw Der

Abstract

Prior studies have found that knowledge gained from work experience is a way to gather insights for business opportunity recognition. However, little is known about the specific types of knowledge that lead to business founding. Utilizing concepts from knowledge spillovers and from the opportunity recognition literatures, this paper argues that through an organization’s technological innovation activities, employees develop specialized knowledge that provides them with the entrepreneurial opportunities to found new businesses. Besides highlighting the positive relationship between technological innovation activities in organizations and the propensity of individuals leaving the organizations to start new businesses, this paper also provides a more fine-grained explanation of the types of technological innovation activities that can lead to business founding. We argue that knowledge acquired through product innovations is more easily appropriated by individuals for commercial uses, while knowledge acquired through process innovations must be integrated with other parts of the organization to be valuable. This study proposes that product innovation activities in an organization more so than process innovation activities in an organization are related to new business founding. Implications for opportunity exploitation and ways to appropriate knowledge spillovers are discussed.

Suggested Citation

  • Wong, Poh Kam & Lee, Lena & Foo, Maw Der, 2007. "Technological Innovation Activities In Firms And Propensity Of Individuals Starting New Businesses," MPRA Paper 2617, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2617
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    References listed on IDEAS

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    5. Michael Fritsch & Monika Meschede, 2001. "Product Innovation, Process Innovation, and Size," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(3), pages 335-350, November.
    6. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-243, May.
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    Cited by:

    1. Andersson, Martin & Baltzopoulos, Apostolos & Lööf, Hans, 2012. "R&D strategies and entrepreneurial spawning," Research Policy, Elsevier, vol. 41(1), pages 54-68.

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    More about this item

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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