Entrepreneurship as Experimentation

Dados Bibliográficos

ID4030263
AutoresWilliam R Kerr (0000-0001-7350-075X, Harvard University), Ramana Nanda (0000-0001-7920-7730, Harvard University), Matthew Rhodes-Kropf (Harvard University)
Ano2014
Volume28
Fascículo3
Páginas25-48
Data de publicação2014-08-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Journal of Economic Perspectives (JOURNAL)
Identificadores do periódicoISSN: 0895-3309 • E-ISSN: 1944-7965
EditoraAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.28.3.25
OpenAlexW2400126264
IdiomaEN
Citações recebidas31
Referências citadas44

Entrepreneurship research is on the rise but many questions about the fundamental nature of entrepreneurship still exist. We argue that entrepreneurship is about experimentation; the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences

Entrepreneurship · Political science · Entrepreneurship Studies and Influences · Private Equity and Venture Capital · University-Industry-Government Innovation Models