The success and failure of innovation and entrepreneurship research - PowerPoint PPT Presentation

The success and failure of innovation and entrepreneurship research Karl Wennberg, PhD Professor Linköping University karl.wennberg@liu.se

Scholarly tribes in innovation and entrepreneurship research • Economics - Used to ignore entrepreneurship - Last 10-20 years significant progress - Still limited connection between micro (eship) and macro (growth) • Sociology & Psychology - Relationsips, emotions, and networks matter for business (sometimes more than economic factors)) - Entrepreneruship often not of key interest • Management research - too impractical to inform practice? - too immature to inform policy?

We still do not know with certitude if and how innovations lead to Growth.  Policies: effective, ineffective, or destructive? When? How?

A stylized ” growth recipe ” 1. Investment in education and training 2. Investment in (the right type of, at the right time) infrastructure 3. Encourage (innovative) entrepreneurship (maybe …)

Innovation more and more rare… … more and more expensive? …and/or organizations or more and more bureacractic?

Innovations (ideas): • non-rival • non-substitutable • non-proprietory  Direct effects + spillovers  Local universities, research institutions and MNEs crucial!

”Spillovers” broader and of different kinds than implied in simple policy evaluations of specific interventions Exposure to Innovation Exposure to Exposure to Investors • Growing up in a neighborhood or family Entrepreneurship with a high innovation rate leads to a higher patenting, especially for girls. • Increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate.  Many "lost Einsteins" – people who would have had highly impactful inventions had they been exposed to innovation. Bell, Chetty, Jaravel, Petkova, & Van Reenen, 2018

Exposure is physical, as is co-location Non-cognitive ability Exposure variables Work Entry Work Entry Entry Work Work Entry Small Workplace 200% Linköping Stockholm Göteborg Malmö 50% Parents were entrepreneurs 20% General ability Residing in Stockholm Ability variables Work Entry Work Work Work Entry Entry Entry 10% General ability Linköping Stockholm Göteborg Malmö 20% Non-cognitive ability Dahlander & Wennberg, 2017

”Spillovers” difficult to identify and difficult to active with direct policy…

Spillovers…sometimes works in unanticipated ways

What can be done?

Our challenge: Objective probabilities in scientific method (Fisher, von Mises, Neyman, Pearson) - Probabilities relevant to the outcome of repeated experiments - Likelihood objectively determined and unaffected by observations - Possible to generate and test hypotheses Problems : Outcome depends on research plan and criteria for reproducibility. - Not reject a null hypothesis does not mean that we with absolute certainty can accept the hypothesis - Rejecting an hypothesis does not mean accepting another - Past point estimates provide little knowledge of the future

US & UK forecasts of governmental spending The Bank of England publishes probabilistic inflation forecasts US Central Bank and Swedish Riksbank publishes point inflation forecasts in estimates  Consequences?

UK forecasts of CPI inflation 2,5 2 1,5 Mode 1 Median 0,5 0 Mean 4 3,5 3 2,5 Top 2 Mean 1,5 1 Bottom 0,5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 -0,5 -1

Why point estimates? "Ranges are for cattle. Give me a number." "You can’t give the client a bound. The client needs a point."

If we cannot know the number of balls in an urn when assessing the likelihood of drawing a specific color?

Thanks! Questions / comments? Karl Wennberg, PhD Professor Linköping University karl.wennberg@liu.se

References: Manski, C. F. 2013. Public Policy in an Uncertain World : Harvard University Press. Delmar, F. & Wennberg, K. (2010). Knowledge Intensive Entrepreneurship: The Birth, Growth and Demise of Entrepreneurial Firms. Cheltenham: Edward Elgar. Dimov, D., Berglund, H. & Wennberg, K. 2018. Beyond Bridging Rigor and Relevance: The Three-Body Problem in Entrepreneurship. Forthcoming Journal of Business Venturing Insights, in press. Larsson, J. P., Wennberg, K., Wiklund, J., & Wright, M. 2017. Location choices of graduate entrepreneurs. Research Policy, 46(8): 1490-1504. Sandström, C., Wennberg, K., Wallin, M. & Zherlygina, Y. 2016. Public Policy for Academic Entrepreneurship: A review and critical discussion. In Press, Journal of Technology Transfer. doi:10.1007/s10961-016-9536-x. Kim, P., Wennberg, K. & Crodieu, G. (016. Meso-Level Mechanism of Entrepreneurial Activity in Societies. Academy of Management Perspectives. 30 273-291. Wennberg, K., Wiklund, J., Wright, M. (2011). Academic Entrepreneurship: Performance differences between university spin-offs and corporate spin-offs. Research Policy, 40(8): 1128-1143. Berglund, B., Wennberg, K., Bousfiha, M., Laufer, M. & Mansoori, Y. Experimental Entrepreneurship for Practice and Policy Development. Stockholm: Vinnova. Delmar, F. & Wennberg, K. (2011). Evolutionary Views on Entrepreneurial Processes: Managerial and Policy Implications. Policy Brief, Stockholm: Entreprenörskapsforum. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111202 Delmar, F., Wennberg, K. & Hellerstedt, K. (2011). Endogenous growth through knowledge spillovers in entrepreneurship: an empirical test. Strategic Entrepreneurship Journal, 5(3): 199 – 226.