The Role of Innovation and Entrepreneurship in Economic Growth
Michael Andrews, Aaron Chatterji, Josh Lerner, and Scott Stern, editors
We live in an era in which innovation and entrepreneurship seem ubiquitous, particularly in regions like Silicon Valley, Boston, and Research Triangle Park. But many metrics of economic growth, such as productivity growth and business dynamism, have been at best modest in recent years. The resolution of this apparent paradox can be found in dramatic heterogeneity across sectors, with some industries experiencing robust innovation and entrepreneurship and others stagnation.
By construction, the impact of innovation and entrepreneurship on overall economic performance is the cumulative impact of their effects on individual sectors. Understanding the potential for growth in the aggregate economy depends, therefore, on understanding the sector-by-sector potential for growth. This insight motivates the 12 studies of different sectors that are presented in this volume. Each study identifies specific productivity improvements enabled by innovation and entrepreneurship, for example as a result of new production technologies, increased competition, or new organizational forms. The studies, along with three synthetic chapters, provide new insights on the sectoral patterns and concentration of contributions of innovation and entrepreneurship to economic growth.