Showing papers by "Zoltan J. Acs published in 2013"

Regional systems of entrepreneurship: the nexus of human capital, knowledge and new firm formation

Abstract: This article focuses on entrepreneurship in economic geography and aims at a systematic investigation of regional variation in knowledge-based entrepreneurial activity. We develop and test a three-phase structural model forregional systems of entrepreneurshipafter introducing a systems approach to entrepreneurship. The model is built upon the absorptive capacity theory of knowledge spillover entrepreneurship that identifies new knowledge as one source of entrepreneurial opportunities and human capital as the major source of entrepreneurial absorptive capacity. Based on data of US metropolitan areas, we find that entrepreneurial absorptive capacity is a critical driving force for knowledge-based entrepreneurial activity. We also find that high technology and cultural diversity contribute to the vibrancy of regional systems of entrepreneurship.

An absorptive capacity theory of knowledge spillover entrepreneurship

Abstract: The knowledge spillover theory of entrepreneurship identifies new knowledge as a source of entrepreneurial opportunities, and suggests that entrepreneurs play an important role in commercializing new knowledge developed in large incumbent firms or research institutions. This paper argues that, knowledge spillover entrepreneurship depends not only on new knowledge but more importantly on entrepreneurial absorptive capacity that allows entrepreneurs to understand new knowledge, recognize its value, and commercialize it by creating a firm. This absorptive capacity theory of knowledge spillover entrepreneurship is tested using data based on U.S. metropolitan areas.

National Systems of Entrepreneurship: Measurement Issues and Policy Implications

Abstract: We introduce a novel concept of National Systems of Entrepreneurship and provide an approach to characterizing them. National Systems of Entrepreneurship are fundamentally resource allocation systems that are driven by individual-level opportunity pursuit, through the creation of new ventures, with this activity and its outcomes regulated by country-specific institutional characteristics. In contrast with the institutional emphasis of the National Systems of Innovation frameworks, where institutions engender and regulate action, National Systems of Entrepreneurship are driven by individuals, with institutions regulating who acts and the outcomes of individual action. Building on these principles, we also introduce a novel index methodology to characterizing National Systems of Entrepreneurship. The distinctive features of the methodology are: (1) systemic approach, which allows interactions between components of National Systems of Entrepreneurship; (2) the Penalty for Bottleneck feature, which identifies bottleneck factors that hold back system performance; (3) contextualization, which recognizes that national entrepreneurship processes are always embedded in a given country’s institutional framework.

The social value of productive entrepreneurship

Abstract: As a critical contribution to the literature on social entrepreneurship, this paper provides structure and clarity to this concept, situating it within the context of charity and philanthropy as sources of social value creation. Identifying social entrepreneurship as creating both social and economic value, we discuss productive, unproductive, and destructive entrepreneurship in terms of social value creation. To illustrate these issues comparative case studies are presented on Microsoft Corporation and Grameen Bank. Even if their successes have been derived from different motivations, these highly innovative ventures have created significant economic and social value.

Entrepreneurship, Growth, and Public Policy

Abstract: 1. Introduction to entrepreneurship, growth and public policy Zoltan J. Acs, David B. Audretsch and Robert Strom Part I. The Role of Entrepreneurship in Innovation: 2. Capitalism: growth miracle maker, growth saboteur William J. Baumol, Robert Litan and Carl Schramm 3. Toward a model of innovation and performance along the lines of Knight, Keynes, Hayek and M. Polany Edmund S. Phelps 4. Advance of total factor productivity from entrepreneurial innovations Paul A. Samuelson 5. Silicon Valley - a chip off the old Detroit bloc Steven Klepper Part II. Linking Entrepreneurship to Growth: 6. Entrepreneurship and job growth John Haltiwanger 7. Entrepreneurship at American universities Nathan Rosenberg 8. The knowledge filter and economic growth: the role of scientist entrepreneurship David B. Audretsch, Taylor Aldridge and Alexander Oettl 9. Why entrepreneurship matters for growth Max Keilbach Part III. Policy: 10. On entrepreneurship, economic growth and policy Roy Thurik 11. The Bayh-Dole Act and high-technology entrepreneurship in the United States during the 1980s and 1990s David C. Mowery 12. Academic entrepreneurship in Europe: a different perspective Mirjam van Praag 13. Creating an entrepreneurial economy: the role of public policy Heike Grimm 14. Entrepreneurial capitalism in capitalist development: toward a synthesis of capitalist development and the economy as a whole Zoltan J. Acs.

A Model of Destructive Entrepreneurship: Insight for Conflict and Postconflict Recovery

Abstract: The research on entrepreneurship as an economic phenomenon often assumes its desirability as a driver of economic development and growth. However, entrepreneurial talent can be allocated among productive, unproductive and destructive activities. This allocation has important implications in the developing world, particularly for countries hosting conflict or recovering from conflict. The allocation of entrepreneurship is theorized as driven by institutions. Although the trade-off between productive and unproductive entrepreneurship has been examined, destructive entrepreneurship has been largely ignored. We build from existing theory and define destructive entrepreneurship as wealth destroying. We propose three assumptions to develop a model of destructive entrepreneurship that presents the mechanisms through which entrepreneurial talent behaves in this manner. We present four key propositions on the nature and behavior of destructive entrepreneurship. We conclude by identifying research agendas and policy streams, with a focus on relevance to conflict and postconflict recovery.

Knowledge spillover entrepreneurship in an endogenous growth model

Abstract: We present a model that separates entrepreneurship from profit-motivated corporate R&D aimed at improving existing production processes. Our model embeds the core idea of the knowledge spillover theory of entrepreneurship in established knowledge-based growth models by enriching their knowledge spillover structure. Introducing knowledge spillovers drives a wedge between the optimal and market allocation of resources between new knowledge creation and commercialization. We show the first best allocation depends exclusively on the relative strength of knowledge spillovers between them and derive propositions to guide policy that can bring the market equilibrium closer to this optimum.

Entrepreneurship and Policy: The National System of Entrepreneurship in the European Union and in Its Member Countries

Abstract: In this paper, we provide a brief review of how entrepreneurship policies have evolved and what implied conceptions of “entrepreneurship” underlie attempts to measure the phenomenon. We propose that a major shortcoming in policy thinking is the insufficient recognition that entrepreneurship, at a country level, is a systemic phenomenon and should be approached as such. To address this gap, we propose the concept of National Systems of Entrepreneurship that recognizes the systemic character of country-level entrepreneurship, and also recognizes that, although embedded in a country-level context, entrepreneurial processes are fundamentally driven by individuals. We then explain how the Global Entrepreneurship and Development Index methodology is designed to profile National Systems of Entrepreneurship. We apply the GEDI approach to examine the entrepreneurial performance of the European Union. According to the GEDI index, the EU countries reveal considerable differences in their entrepreneurial performance. Moreover, there are even larger differences over the 14 pillars of entrepreneurship. In addition to highlighting bottleneck factors, the index also provides rough indications on how much a country should seek to alleviate a given bottleneck. While there are numerous ways to improve entrepreneurship in the EU and its member states, we analyze only one simple situation. An important implication of the analysis is that uniform policy does not work, and the EU member states should apply different policy mixes to reach the same improvement in the GEDI points.

Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-Being

Abstract: Philanthropy has long been a distinctive feature of American culture, but its crucial role in the economic well-being of the nation--and the world--has remained largely unexplored Why Philanthropy Matters takes an in-depth look at philanthropy as an underappreciated force in capitalism, measures its critical influence on the free-market system, and demonstrates how American philanthropy could serve as a model for the productive reinvestment of wealth in other countries Factoring in philanthropic cycles that help balance the economy, Zoltan Acs offers a richer picture of capitalism, and a more accurate backdrop for considering policies that would promote the capitalist system for the good of all Examining the dynamics of American-style capitalism since the eighteenth century, Acs argues that philanthropy achieves three critical outcomes It deals with the question of what to do with wealth--keep it, tax it, or give it away It complements government in creating public goods And, by focusing on education, science, and medicine, philanthropy has a positive effect on economic growth and productivity Acs describes how individuals such as Benjamin Franklin, Andrew Carnegie, Bill Gates, and Oprah Winfrey have used their wealth to establish institutions and promote knowledge, and Acs shows how philanthropy has given an edge to capitalism by promoting vital forces--like university research--necessary for technological innovation, economic equality, and economic security Philanthropy also serves as a guide for countries with less flexible capitalist institutions, and Acs makes the case for a larger, global philanthropic culture Providing a new perspective on the development of capitalism, Why Philanthropy Matters highlights philanthropy's critical links to the economic progress, health, and future of the United States--and beyond

Global Entrepreneurship and Development Index 2013

Abstract: The Global Entrepreneurship and Development Index both captures the context features of entrepreneurship and fills a gap in the measurement of development. Building on recent advances in entrepreneurship and economic development, the authors have created an index that offers a measure of the quality of the business formation process in 118 of the most important countries in the world.

Born local: toward a theory of new venture’s choice of internationalization

Abstract: This manuscript offers a theory regarding two distinct avenues to new venture internationalization: a direct path described in much of the extant literature and an intermediated one in which new ventures and multinational firms create symbiotic relationships in order to expand internationally. The term “born local”, as opposed to “born global”, describes how new ventures are created from knowledge spillovers and other resources in a geographically bounded environment. The theory suggests that the greater the number of value chain activities and the greater the number of countries involved, the more likely that the new venture will pursue the intermediated mode of internationalization. We suggest that new ventures frequently specialize and use existing MNEs as conduits for international expansion; however the greater the perceived ex-post costs of protecting intellectual property, transaction costs, and extraction costs related to hold-up, agency, and monopoly rents, the more likely the new venture will pursue a direct mode of internationalization.

Where Angels Fear to Tread: Internationalization of Emerging Country SMEs

Abstract: Based on institutional theory and risk perspectives, this study examines how the entrepreneurial orientation of firms as determined by national cultural factors is related to the internationalization of small- and medium-sized enterprises (SMEs) from emerging and developing countries. We also suggest that institutional improvements can have a moderating effect on the relationship between culture and internationalization. We develop a unique measure of internationalization and test it on a sample of 7,212 SMEs from 36 developing countries using a multilevel linear hierarchical model that allows us to examine both firm- and country-level effects. We find that developed institutions support the internationalization of SMEs from more masculine and individualistic cultures.

The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies

Abstract: The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies has four aims: (1) to provide a comprehensive comparison of the GEM and GEDI approaches by using both methods side by side to analyze entrepreneurship development; (2) to offer the GEM community a useful example on how the GEM and the GEDI methodologies can be successfully combined to allow for a more in-depth country analysis of entrepreneurial performance; (3) to provide a comprehensive summary of Hungary’s entrepreneurial performance from 2006-2010; and (4) to demonstrate the policy applications of the GEDI Index.

The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies

Abstract: The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies

The Regional Entrepreneurship and Development Index – Measuring regional entrepreneurship

Abstract: EXECUTIVE SUMMARY From a Managed to an Entrepreneurial Economy The shift from a ‘managed’ economy to an ‘entrepreneurial’ economy is among the most important challenges developed economies have faced over the last few decades. This challenge is closely coupled with the increasing importance of non-physical capital, such as human and intellectual capital for wealth creation. The most notable signs of this shift are the following: 1. knowledge is increasingly replacing physical capital and labor as the key driving force of economic growth; 2. individuals rather than large firms are the leading factor in new knowledge creation; 3. alongside with large conglomerates, new and small firms play a dominant role in translating newly created knowledge into marketable goods and services; 4. traditional industrial policy, with antitrust laws and small business protection, has been replaced by a much broader entrepreneurship policy aiming to promote entrepreneurial innovation and facilitate high-growth potential start-ups. Entrepreneurship Policy Three distinct foci can be identified in EU entrepreneurship policy, as it has evolved over time: 1. focus on SMEs; 2. focus on innovation through SMEs; 3. focus on high-growth SMEs. These co-existing foci reflect evolution in the understanding of the varied roles that entrepreneurship can play in economic development. However, although each of these focus areas adds important elements to the European economic policy toolbox, none of them alone provides a definitive answers to the diverse and varied challenges that different European regions face, as they seek to implement policies to enhance regional dynamism and competitiveness. The most recent evolution in entrepreneurship policy – an increasing emphasis on taking a more holistic and multi-pronged view of entrepreneurship, as advocated by the ‘entrepreneurship support ecosystem’ thinking – represents yet another evolution in European policy thinking. The focus on ‘entrepreneurship ecosystems’ calls attention to entrepreneurship support policies and initiatives over the entire lifecycle of the new venture, the key insight being that entrepreneurship support should be considered in a wider regional context. Thus, this emphasis naturally shifts focus towards a regional level of analysis, consistent with the focus of this current report and its ‘Systems of Entrepreneurship’ approach. Yet, although similar on the surface, the two concepts are fundamentally different. Whereas the notion of ‘Entrepreneurship Ecosystems’ focuses on entrepreneurship support policies and initiatives from a policy perspective, the notion of ‘Systems of Entrepreneurship’ draws attention to the entrepreneurial dynamic that ultimately drives productivity growth in regions. The two approaches therefore complement one 2 another, and the REDI index should provide important guidance for the design of entrepreneurship support ecosystems.

Entrepreneurship in Africa through the eyes of GEDI

Abstract: Since the 1990s, several new indices like the Index of Economic Freedom, Doing Business, Global Competitiveness Index, have been created to achieving real progress in modernizing the business climates of developed and developing countries alike. These indicators however are focused largely on ameliorating burdens for current business, addressing issues with property rights, processes, etc. While necessary conditions, in the public effort to improve the economic incentives and create employment, they remain insufficient to foster the economic font of development: entrepreneurship. It has to be clear that entrepreneurship, and entrepreneurship policy is not merely about small business, or even at times about business at all, but about creating environments where people are able to perceive entrepreneurial opportunities, opportunities to improve their lives and been powered by the environment to act upon their visions. While much has been written about the Global Entrepreneurship Monitor (GEM) and increasingly about the Global Entrepreneurship Development Index (GEDI), this paper represents the first attempt to examine private enterprise development in Africa.

Technology commercialization on campus: twentieth century frameworks and twenty-first century blind spots

Abstract: This paper uses an interpretive analysis to exam past and present developments in knowledge commercialization and provide researchers, policy makers, and university leaders an alternative framework. The model is based on historical precedent, and current economic realities, for effectively commercializing knowledge in the entrepreneurial age. While traditional technology transfer focused on an organizational centric approach, we propose an individual centric model of technology commercialization from universities. The move from an organization centric model to an individual centric model will likely follow past eras of change and innovation in higher education. The challenge for regional and university leadership is clear. Find methods and models for unleashing the knowledge across campus to solve local and regional challenges.

Entrepreneurship in Africa Through the Eyes of Gedi

Abstract: Since the 1990s, several new indices like the Index of Economic Freedom, Doing Business, Global Competitiveness Index, have been created to achieving real progress in modernizing the business climates of developed and developing countries alike. These indicators however are focused largely on ameliorating burdens for current business, addressing issues with property rights, processes, etc. While necessary conditions, in the public effort to improve the economic incentives and create employment, they remain insufficient to foster the economic font of development: entrepreneurship. It has to be clear that entrepreneurship, and entrepreneurship policy is not merely about small business, or even at times about business at all, but about creating environments where people are able to perceive entrepreneurial opportunities, opportunities to improve their lives and be empowered by the environment to act upon their visions. While much has been written about the Global Entrepreneurship Monitor (GEM) and increasingly about the Global Entrepreneurship Development Index (GEDI), this paper represents the first attempt to examine private enterprise development in Africa.

Measuring regional entrepreneurship in Hungary

Abstract: This paper presents a regional application of the Global Entrepreneurship and Development Index (GEDI) methodology of Acs et al. (2013) to examine the level of entrepreneurship across Hungary’s seven NUTS-2 level regions. The Regional Entrepreneurship and Development Index (REDI) has been constructed for capturing the contextual features of entrepreneurship across regions. The REDI method builds on a Systems of Entrepreneurship Theory and provides a way to profile Regional Systems of Entrepreneurship. Important aspects of the REDI method including the Penalty for Bottleneck analysis, which helps identify constraining factors in Regional Systems of Entrepreneurship, and Policy Portfolio Optimization analysis, which helps policy-makers consider trade-offs between alternative policy scenarios and associated allocations of policy resources. The paper portrays the entrepreneurial disparities amongst Hungarian regions and provides public policy suggestions to improve the level of entrepreneurship and optimize resource allocation over the 14 pillars of entrepreneurship in the seven Hungarian regions.

Economic Growth, National Systems of Entrepreneurship and the Solow Residual

Abstract: For over 50 years finding an explanation for the Solow Residual has eluded researchers. This paper offers an explanation for the Solow residual by creating a measure of National Systems of Entrepreneurship (institutions and entrepreneurial behavior). The System is based on a penalty for bottleneck function that identified the weakest link in the system. The results show that over 75% of the variance in a cross section of 60 countries can be explained by national systems of entrepreneurship.