2006–2010

The Inventor’s Role: Was Schumpeter Right?

Reprint No. 2010:15

Author(s): Pontus Braunerhjelm and Roger SvenssonYear: 2010 Title: Journal of Evolutionary Economics Volume (No.): 20 (3) Pages: 413–444
Online article (restrictions may apply)


According to Schumpeter, the creative process of economic development can be divided into the stages of invention, innovation (commercialization) and imitation. Each stage is associated with specific skills. This paper examines whether Schumpeter’s assertion was correct, i.e. whether the invention and innovation stages should be undertaken by different agents. In addition, we examine whether there is a rationale for the Schumpeterian entrepreneur to include the inventor in the commercialization process. Combining the abilities of the entrepreneur and the inventor may serve to facilitate customer adaptation, strengthen knowledge transfers and reduce uncertainty, thereby expanding market opportunities. Based on a unique database covering Swedish patents granted to individuals and small firms, the empirical analysis shows that profitability increases by 22 percentage points when inventions are commercialized by the entrepreneur instead of by inventors. However, active involvement of the inventor is shown to have a significantly positive impact on profitability, irrespective of commercialization mode.


Reference:
Braunerhjelm, Pontus and Roger Svensson (2010), "The Inventor’s Role: Was Schumpeter Right?". Journal of Evolutionary Economics 20(3), 413–444.

Roger Svensson

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Ph: +46 8 665 4549
Mob: +46 70 491 0166
roger.svensson@ifn.se

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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