Showing papers in "Journal of Entrepreneurship and Public Policy in 2018"

Visions of entrepreneurship policy

Abstract: The purpose of this paper is to present and compare alternative theoretical frameworks for understanding entrepreneurship policy: targeted interventions to increase venture creation and/or performance. The authors contrast the Standard view of the state as a coherent entity willing and able to rectify market failures with an Individualistic view that treats policymakers as self-interested individuals with limited knowledge.,The authors draw on the perspective of “politics as exchange” to provide a taxonomy of assumptions about knowledge and incentives of both entrepreneurship policymakers and market participants. The authors position extant literature in relation to this taxonomy, and assess the implications of alternative assumptions.,The rationale for entrepreneurship policy intervention is strong under the Standard view but becomes considerably more tenuous in the Individualistic view. The authors raise several conceptual challenges to the Standard view, highlighting inconsistencies between this view and the fundamental elements of the entrepreneurial market process such as uncertainty, dispersed knowledge and self-interest.,Entrepreneurship policy research is often applied; hence, the theoretical rationale for intervention can be overlooked. The authors make the implicit assumptions of these rationales explicit, showing how the adoption of “realistic” assumptions offers a robust toolkit to evaluate entrepreneurship policy.,While the authors agree with entrepreneurship policy interventionists that an “entrepreneurial society” is conducive to economic development, this framework suggests that targeted efforts to promote entrepreneurship may be inconsistent with that goal.,The Individualistic view draws on the rich traditions of public choice and the entrepreneurial market process to highlight the intended and unintended consequences of entrepreneurship policy.

Institutions, human capital and entrepreneurial orientation: implications for growth policy

Abstract: The purpose of this paper is to establish a more robust empirical support for the long established postulation by Adam Smith and Joseph Schumpeter that human capital and institutions enable Schumpeterian entrepreneurship, which, in turn, facilitates economic growth.,Adopting entrepreneurial orientation (EO) (i.e. innovativeness, proactiveness and risk taking; Mthanti and Ojah, 2017, Research Policy, 46:4, pp. 724-739) as the measure of Schumpeterian entrepreneurship at the macro-level, and using a sample of 93 countries, over 1980-2008, the authors employ system Generalised Method of Moments to investigate institutions and human capital as possible determinants of Schumpeterian entrepreneurship (EO).,The authors find that the human capital-EO nexus is robust across economic development levels. However, there is a cross-country variation in the institutions-EO nexus. In line with theoretical predictions, institutions indeed drive EO in middle-to-high-income countries. However, in low-income countries, building institutions in order to foster EO yields perverse outcomes, which, for us and especially based on deeper analysis, suggest that improving the quality of institutions may not be a necessary precondition for EO/growth policy in low-income countries. Furthermore, the authors find that EO is a highly persistent series, with self-reinforcing network effects, i.e. lofty EO behaviour encourages more lofty EO behaviour.,Drivers of macro EO are erroneously taken as of growth. This empirical analysis corrects the sequencing.,Policy practice must acknowledge macro-EO importantly has both direct and indirect growth effects.,This study is the first to empirically test the theoretical sequence between drivers of growth/EO and economic growth.

An evaluation of German active labour market policies: a review of the empirical evidence

Abstract: The purpose of this paper is to review the results of studies that investigate the most important active labour market policy (ALMP) measures in Germany. A focus is also on programmes devoted to foster entrepreneurship which can make important contributions to a country’s growth and social welfare.,The study relies on quantitative and qualitative assessments and a comparison of results of previous studies on ALMPs.,The available evidence suggests that most ALMP measures increase labour market prospects of the participants. In particular, evaluations of the entrepreneurship promotion activities show high success rates as well as high cost efficiency. The bulk share of participants of entrepreneurship measures is still self-employed after several years and nearly one-third of these businesses had at least one employee. The authors mention problems regarding the evaluation of previous programmes and highlight future challenges of German ALMP.,This is the first study on ALMP that has an extensive and explicit focus on entrepreneurship-promoting programs.

Emergent politics and constitutional drift: the fragility of procedural liberalism

Abstract: The purpose of this paper is to integrate classical elite theory into theories of constitutional bargains,Qualitative methods/surveys/case studies,Open-ended constitutional entrepreneurship cannot be forestalled Constitutional entrepreneurs will almost always be social elites,The research yields a toolkit for analysing constitutional bargains It needs to be used in historical settings to acquire greater empirical content Need to be applied to concrete historical cases to do economic history Right now it is still only institutionally contingent theory,Formal constitutions do not, and cannot, bind Informal constitutions can, but they are continually evolving due to elite pressure group behaviors,Liberalism needs another method to institutionalize itself!,Open-ended nature of constitutional bargaining overlooked in orthodox institutional entrepreneurship/constitutional economics literature

How to cure cancer: unbinding entrepreneurs in medicine

Abstract: Purpose Since the 1960s, experts have predicted that we are on the verge of curing cancer. The purpose of this paper is to explore the obstacles to progress, and to propose policies that will lead more quickly to more success. Design/methodology/approach To speed future cures, we need to look at the traits, and methods of those innovative medical entrepreneurs who achieved breakthroughs in the past, and learn what institutions and policies enabled, or blocked, their progress. Findings Breakthrough innovators tend to be less-credentialed outsiders who “see what others do not see,” often by nimble and persistent pursuit of serendipitous discoveries or slow hunches. For example, Freireich and DeVita were less-credentialed outsiders. Freireich cured childhood leukemia and DeVita cured Hodgkin’s lymphoma, by pursuing nimble trial-and-error experimentation in their anti-cancer chemotherapy cocktails. Min Chiu Li pursued his slow hunch that his patients would benefit from longer chemotherapy than the mandated National Cancer Institute protocol allowed. He was fired, but his patients were cured. Today, FDA-mandated regulatory protocols, often defended as applications of the precautionary principle, greatly restrict innovative medical entrepreneurs, thereby delaying cancer cures and costing lives. Originality/value The paper proposes a new approach to medical innovation, allowing cancer researchers to engage in trial-and-error experiments that follow up on serendipitous discoveries and plausible hunches. The result will be more cures and longer lives.

Exploring innovation creation across rural and urban firms: Analysis of the National Survey of Business Competitiveness

Abstract: Purpose The innovation creation literature primarily focuses on urban firms/regions or relies heavily on these data; less studied are rural firms and areas in this regard. The purpose of this paper is to employ a new firm-level data set, national in scale, and analyze characteristics that potentially influence innovation creation across rural and urban firms. Design/methodology/approach The authors use the 2014 National Survey of Business Competitiveness (NSBC) covering multiple firm-level variables related to innovation creation combined with secondary data reflecting the regional business and innovative environments where these firms operate. The number of patent applications filed by these firms measures their innovation creation, and the paper employs a negative binomial regression estimation for analysis. Findings After controlling for industry, county and state factors, rural and urban firms differ in their innovation creation characteristics and behaviors, suggesting that urban firms capitalize on their resources better than rural firms. Other major findings of the paper provide evidence that: first, for rural firms, the influence of university RD and second, rural firms that are willing to try, but fail, in terms of innovation creation have a slight advantage over other rural firms less willing to take on the risk. Originality/value This paper is one of the first to analyze the 2014 NSBC, a firm-level national survey covering a wide range of innovation-related variables. The authors combine it with other regional secondary data, and use appropriate analytical modeling to provide empirical evidence of influencing factors on innovation creation across rural and urban firms.

Bargaining over crowdfunding benefits

Abstract: Purpose Crowdfunding creates multifaceted benefits for different agents who all desire to extract some of these benefits. The purpose of this paper is to analyze the allocation of crowdfunding benefits among crowdfunders, entrepreneurs, and venture capitalists. Design/methodology/approach The present paper develops a multi-stage bargaining model with a double-sided moral hazard. Findings It is demonstrated that higher entrepreneurial bargaining power vis-a-vis the crowd may not always be beneficial for the venture. Most importantly, this is due to the reduced success probability of crowdfunding resulting from higher bargaining power of the entrepreneur. Bargaining power and the value of outside options determine the equilibrium allocation of crowdfunding benefits, expected venture value, and thus expected wealth of all agents. Practical implications Entrepreneurs face a tradeoff between venture quality gains and worse outcomes from crowdfunding campaigns. Crowdfunding success and thus venture quality gains are the ultimate goal of policy makers if they aim to enhance the overall social welfare. Originality/value This paper is the first to investigate how multifaceted crowdfunding benefits are allocated between the crowd, entrepreneurs, and venture capitalists. The paper furthers the development of an appropriate regulatory framework for crowdfunding by depicting new and original effects related to crowdfunding.

Foreign aid: boosting or hindering entrepreneurship?

Abstract: Purpose The current literature has not made any connection between foreign aid and entrepreneurship. The purpose of this paper is to investigate if foreign aid influences entrepreneurial activities in a recipient country. Design/methodology/approach Using system generalized method of moments (Blundell and Bond, 1998) estimators with a panel of 38 recipient countries during 2005–2014, the author tests for 33 measures of entrepreneurial activities. Findings This paper finds that aggregate aid tends to only boost necessity-driven early-stage entrepreneurship and benefit low-income entrepreneurs. Aid to infrastructure promotes entrepreneurship driven by both opportunity and necessity motivations. It also incentivizes competition with homogeneous products. Additionally, evidence suggests that both aggregate aid and infrastructural aid discourage adoption of state-of-the-art technologies, raise business failure rate and are associated more with necessity-driven early-stage entrepreneurial activities for females. Originality/value This is the first research examining “aid and entrepreneurship” relation.

Targeted state economic development incentives and entrepreneurship

Abstract: The purpose of this paper is to examine the relationship between state economic development incentives programs and entrepreneurial activity.,The authors use panel data and a fixed-effects model to examine the determinants of five measures of entrepreneurial activity. To measure state economic development incentives programs, they use a new and substantially improved data set from Bartik (2017). They also include a measure for economic freedom, the Fraser Institute’s Economic Freedom of North America index.,The authors find a robustly negative relationship between development incentives and patent activity. They find some evidence that incentives are negatively associated with small business establishments ( 500 employees) share. They also find evidence of a positive relationship between economic freedom and both patent activity and net business formation.,The results imply that economic development incentive programs are unlikely to increase entrepreneurial activity and may decrease it. They also imply increased economic freedom (lower taxes, lower spending, and lower governmental restrictions on labor markets) may increase entrepreneurial activity.,To the authors’ knowledge, this paper provides the first examination of the relationship between development incentives and entrepreneurial activity that utilizes Bartik (2017), a new vastly improved data set of state economic development incentive programs. The paper also contributes to the literature on the relationship between economic freedom and entrepreneurial activity.

Do entrepreneur-focused facility incentives create economic impacts? Evidence from Indiana

Abstract: As a component of a benefit-cost analysis into the efficacy of publicly funded facility incentives, the purpose of this paper is to examine the county-wide impact of business incubators, makerspaces and co-working spaces on employment, proprietor’s employment and the average wage per job. The period under analysis is 1971 through 2015 across Indiana’s 92 counties.,Using a unique data set on facility incentives in Indiana, a spatial panel model, which includes a unique identification strategy to account for underlying conditions identified as a source of incubator success in earlier studies, is developed.,This study finds no statistically significant impact of these facilities on total employment or average wage per job during this period. There is a statistically meaningful impact of co-working spaces on proprietor’s employment, but the effect is an economically insignificant one-time increase of 2.3 jobs in the typical county, which can be interpreted as shifting employment from traditional employment to proprietorship employment.,This is the first empirical estimate of the contribution of modern facility incentives on measures of local economic activity.

Refugee special economic zones

Abstract: The purpose of this paper is to show how special economic zones (SEZs) can be applied to refugee camps. Zones are powerful tools for investors to act like institutional entrepreneurs, who promote institutional reform by pursuing exemptions from government constraints and taxes or by advocating for reform. Refugee SEZs (R-SEZs) would similarly allow for institutional entrepreneurs to promote broader immigration reform.,The authors apply a political economy framework to R-SEZs that explores the factors that make them feasible. A mathematical model is applied to explicitly define the conditions under which the zones could succeed in benefiting refugees, investors and the host economy alike.,Under certain conditions, appropriate tax rates can be applied to R-SEZs that make them feasible. Feasibility is determined by being beneficial for the host country while also attracting investors. The zones are feasible if they attract enough foreign investors as opposed to domestic investors. Other factors contributing to zone success are higher wages outside the zone, lower wages inside it, higher cost to the government of non-employed refugees, lower relocation cost for businesses and a higher tax rate outside the zone.,This policy would aim to provide job opportunities to refugees, profit opportunities to investors and lower net costs for the host government. R-SEZs should be considered by policy makers in countries hosting refugee camps. Just like the old model of SEZs, they can benefit workers while also enhancing the government’s budget.,R-SEZs have the potential to alleviate the refugee crisis the world is facing, which is arguably one of the largest social challenges of our time.,This paper is the first to outline the political economy conditions for SEZs applied to refugee camps.

Regional integration and entrepreneurship: evidence from European Union

Abstract: Purpose The purpose of this paper is to empirically uncover the relationship between economic integration and levels of entrepreneurial activity across 24 EU countries between 2004 and 2012. The deepening of EU integration corresponds to increases in the size and competitiveness of domestic markets as member states reorient economic activity toward the larger, competitive single market. Spillovers of both economic and political dimensions of integration in the common market on micro firm and self-employment are considered. The paper contributes to the understanding of the hypothesized relationship between globalization and the rise of entrepreneurial economy. Design/methodology/approach The paper uses fixed effects linear regression models to estimate the marginal effects of economic integration on entrepreneurial activity. Several dependent variables and controls for social, economics, and institutional context are used to confirm the robustness of the results. Findings The paper finds that increased economic activity of member countries within the EU common market, as well as institutional compliance and integration in the European Monetary Union and Schengen Agreement are positively and significantly associated with the rise of entrepreneurship. Notably, it is found that a standard deviation increase in economic and political integration is associated with, respectively, 16 and 7.2 percent increase in micro firm density. Some preliminary evidence on the quality of the arising entrepreneurial activity are also given. Originality/value The paper takes stock of existing descriptive and theoretical literature on global economic integration and entrepreneurship to uncover, for the first time, the empirical relationship between entrepreneurship and levels of economic and political integration within the EU bloc.

Regulatory burden and business dynamics: a preliminary analysis

Abstract: Stigler (1971) first presented a theory of regulation in which the regulator eventually serves the interests of the regulated rather than in the interest of the public good. In such an institutional environment, one should expect to observe outcomes associated with reduced competitive pressures on existing firms. The paper aims to discuss this issue.,In this paper, the authors use RegData, which quantifies regulatory restrictions by industry, to determine whether and to what degree regulation reduces establishment entry and the associated job creation and how regulation impacts existing establishment exit and job creation and destruction.,The results, while not definitive, are supportive of Stigler’s theory of regulatory capture.,This paper adds to the small but growing empirical literature examining the effects of cronyism more broadly. Prior studies of regulation have generally been either narrowly focused on a specific regulation or employ less precise measures of the extent of regulation. By employing RegData as a measure of regulatory restrictions by industry, this paper offers new insights on the impact of regulation on business dynamics.

Institutional drivers of born-public ventures

Abstract: The purpose of this paper is to identify and theoretically delineate the government-based institutional drivers of “born-public ventures” – ventures that seek to fulfill government contracts or sell goods and services to government agencies.,The authors develop theory that explains how the government influences the pursuit of public sector opportunities, thereby influencing where new ventures expend their finite effort. Specifically, the authors use institutional theory to delineate the regulatory, cognitive, and normative drivers of born-public ventures. In doing so, the authors highlight both the government’s regulative and non-regulative institutional influences. Finally, the authors present a research agenda to encourage further understanding of this important phenomenon.,The authors find that the government can affect the allocation of finite entrepreneurial effort toward or away from public sector opportunities by using regulative, normative, and cognitive institutional forces. This influence is important because entrepreneurship targeted at the public sector likely has broad implications for the economy and society as a whole.,Despite recent attention to questions about entrepreneurial allocation, scholars have largely overlooked the importance of why some new ventures choose to allocate their effort toward public sector opportunities. Given the growing number of public sector opportunities and the potential economic and societal implications associated with pursuing these opportunities, research is needed to understand this allocative choice. By introducing the phenomenon of born-public ventures and outlining important research questions, this theoretical paper provides the foundation for further work on this topic.

Institutional barriers to productive public-sector entrepreneurship: An exploratory analysis

Abstract: The purpose of this paper is to outline barriers to public-sector entrepreneurship and explore the impact of those barriers on population shifts within the USA.,This paper lays out five specific barriers to public-sector entrepreneurship: barriers to entry and exit for consumers and producers, increased centralization and concentration in government, the lack of residual claim amongst public-sector actors, the rise of public-sector union membership and increasingly uncompetitive elections. The paper then assesses the impact of each of these barriers on population and production changes within the USA from 2010 to 2017.,Those state governments with limited barriers for productive public-sector entrepreneurship are rewarded with faster growing populations. Specifically, states with higher incomes, less centralized spending, lower public-sector unionization rates and higher state credit ratings tend to experience the greatest levels of population growth. States with less centralized spending also experience the largest increases in gross state product per capita.,This paper offers practical applications for policy makers wishing to increase their tax bases, increase the standard of living for their constituents or increase the efficiency in production and distribution of government goods and services. In particular, this paper offers evidence that an improved credit rating carries the most economic significance for population gains.,To the best of the authors’ knowledge, this is the first paper to examine Tiebout effects from barriers to public-sector entrepreneurship in the USA. Researchers in fields including political science, economics, management and public policy have all contributed to our understanding of public entrepreneurship. And yet, there are still numerous barriers preventing productive public-sector entrepreneurship from occurring at an optimal level.

IPO activity and market volatility

Abstract: The purpose of this paper is to hypothesize two channels in which market volatility affects initial public offering (IPO) activity.,First, CEOs time the market for IPOs and volatility makes this decision process harder. Second, risk-averse IPO investors become more reluctant toward IPOs during periods of higher volatility for their after-IPO returns.,The authors provide evidence that higher market volatility leads to lower IPO activity, supporting these hypotheses. More importantly, the authors show that it is not the realized volatility, but rather the implied (expected) volatility, that causes lower IPO activity.,While there may be many companies that are ready to have IPOs, they may be simply waiting for a more opportune time which may not necessarily be a period of high prices but of low volatility.,The public policy prescription is clear: if IPOs are to be encouraged, then regulatory policies should be constructed with the aim of reducing volatility.,This study is the first (to the authors’ knowledge) to argue that it is not the realized volatility which most affects the IPO decisions of executives, entrepreneurs and investors.

The impact of personal income tax rates on the employment decisions of small businesses

Abstract: Small businesses file taxes in accordance with the personal income tax code because they are considered flow-through entities. Thus, personal income tax reforms directly affect the incentives small business owners face regarding employment and operations. The paper aims to discuss these issues.,The authors use the changes in personal income tax rates during the 1993 and 2001-2003 reforms and micro-level data to estimate the effect of statutory tax rate changes on small business employment decisions.,The authors add two contributions to the current literature: first, the author allow for intertemporal tax planning and second, the author allow the firm’s decision to employ labor to be correlated with the firm’s wage bill decision. Estimation of a Heckman selection model for wage bills shows that the probability that a business will employ labor is 1.18 percent higher when current tax rates increase by one percentage point and 0.70 percent lower when future rates are expected to increase by one percentage point. Among firms that already employ labor, the median wage bill elasticity with respect to current tax rates is −0.64. These estimates are larger than those reported in previous research because my model includes future taxes and allows for correlation between the firm’s employment and wage bill decisions. Omitting the intertemporal tax responses biases the estimates of previous researchers upwards, whereas assuming the two firm decisions are independent biases estimates towards zero.,This paper has been cited in publications published in Journal of Entrepreneurship and Public Policy.

Assessing growth in occupational licensing of low-income occupations: 1993-2012

Abstract: Purpose The purpose of this paper is to document the changes in low- and moderate-income occupational licensing over time. Design/methodology/approach Using US state level data, the authors document the rise in occupational licensing for low- and moderate-income occupations over the 1993-2012 period. Findings States averaged 32 additional low- and moderate-income occupations licensed over this period. Louisiana added the most licenses with 59 new licenses for these occupations, while Oklahoma and Kentucky only added 15 licenses for these low- and moderate-income occupations. Originality/value These data have not been documented before and should provide useful for future research into occupational licensing.

Domaine Pas de Choix: government intervention in the Champagne market

Abstract: Subsequent to the First World War, the French Government regulated the Champagne industry, and locked the status of protected (and excluded) grapes into the new Appellation d’Origine Controlee system, forever altering the incentives and output of wine producers. The paper aims to discuss these issues.,As a result, some indigenous varietals have disappeared entirely from the region – and a handful remain only in the vineyards and bottles of a few bold entrepreneurs, constituting less than 1 percent of Champagne production.,The authors assess several traditional explanations (from taste and preferences to agricultural resilience)-and dismiss them as unconvincing. Instead, the authors adopt a public choice framework of regulatory capture to explain the puzzle of thwarted entrepreneurship and consumer choice.,This paper is original.

The Schumpeterian shock at General Motors in the 1920’s

Abstract: The purpose of this paper is to examine the link between Joseph Schumpeter’s economics and the rise of General Motors (GM).,The paper uses regression analysis and time series analysis of market synchronization.,There is a strong link between GM rise to dominance of the domestic automobile industry and nuanced features of Schumpeterian economics.,The paper furthers the examination of the role of information economics on marketing channel performance.,Information helps in production decisions by synchronizing production with consumer demand.,Economic efficiency enhances the human welfare for better forecasting, lower inventories and greater profits.,This topic has been explored before but methodology used in this paper is innovative. The paper uses Granger causality.

Selling yourself: a preliminary analysis of political candidates as marketers and entrepreneurs

Abstract: Purpose The purpose of this paper is to view political candidates as products in a market competing over quality via advertising. Consequently, the Austrian argument against restrictions on product advertising can be applied to political markets as well. The foremost conclusion is a disproportionately negative effect of campaign finance restrictions on lesser-known incumbents and third-party candidates. A counterargument is also presented that campaign finance restrictions may solve a prisoner’s dilemma. Design/methodology/approach The author provides an initial test of these hypotheses with data from US Senate races occurring before and after the passage of the McCain-Feingold Act of 2002. Findings Empirical results show a strong incumbency advantage, but no disproportionate harm to lesser-known candidates or third parties from the passage of the act. Originality/value The paper provides a new perspective on the role of the political candidate and purpose of campaign advertising. The first pass empirics suggest, however, that only a major revision in campaign advertising rules could significantly alter the predictors of challenger vote shares.

On business short-termism: the case of CVS’s discontinuing tobacco sales

Abstract: Purpose The purpose of this paper is to examine the effect of CVS’s decision to stop tobacco sales on the company’s share price. Design/methodology/approach The paper uses event study methodology to examine the same day effect of CVS’s announcement and the one-year later effect of CVS’s announcement. Competing pharmacy retail chains’ stock performance is included for comparison purposes. Findings CVS’s shares fell by about one percentage point on the day of the company’s announcement while competitors’ share prices increased. A year later, however, CVS’s share price had increased by about twice as much as competitors’ share prices. Originality/value The finding that a company can make a decision that harms its short-run share price in exchange for a long-run share appreciation suggests that short-termism may not be as significant a concern as some critics of corporate management suggest.

The new intellectual property race: Run, walk, or sit it out? Entrepreneur perceptions of the America Invents Act

Abstract: Purpose The purpose of this paper is to investigate how entrepreneurs are reacting to the recent change in patent priority rules under the America Invents Act (AIA). The authors sought to examine the relationship between a significant change in policy concerning a class of intellectual property (IP), patents in this case, and resulting perceptions and attitudes among entrepreneurs. Design/methodology/approach The authors designed a survey and collected data from 36 practicing entrepreneurs in the upper Midwest. The survey respondents completed either a paper hard-copy survey that was available at a regional entrepreneurship and innovation conference, or an electronic version of the survey (administered through QuestionPro.com). The survey included questions about entrepreneurship experience, area of expertise, IP use history and knowledge, risk tolerance, and demographics. Findings The empirical findings suggest that entrepreneur practitioners have not thoroughly reviewed FTF, but they are seeking legal advice. Also, entrepreneurs disagree with the notion that they are more likely to innovate under FTF. With regard to entrepreneurial knowledge, speaking with an attorney had a significant impact on entrepreneurs’ attitudes toward FTF, leading them to worry more about how they might compete with larger firms and about sharing their ideas. Finally, after controlling for demographics, the authors find that attitudes toward FTF have already significantly impacted recent past and future intended entrepreneurial behavior. Originality/value While the literature is rich with information about the AIA, the history of IP and patenting in the USA, and the merits and challenges of first-to-file vs first-to-invent patenting policy, little has been done to study entrepreneur attitudes and perceptions regarding the implementation of AIA and its policy provisions. Understanding entrepreneur perspectives concerning AIA is a critical component in assessing impacts regarding the critical area of innovation and new venture creation.