Innovation and small firms
Choice Reviews Online · 1991 · 1.6K citations · 0 references
EntrepreneurshipInnovation ManagementEconomic GrowthIndustrial OrganizationSmall Business EconomicsProductivityCorporate InnovationManagementMarket StructureTechnological InnovationTechnology TransferEconomicsInnovation EconomicsManufacturing InnovationVenture CapitalStrategic ManagementInnovationSmall FirmsZoltan AcsBusinessBusiness Strategy
Small firms are increasingly pivotal for technological innovation and the U.S. economy, as shown by a rich empirical analysis using unique data. The study aims to identify how small and large firms contribute to innovation and how market structure and firm‑size distribution respond to technological change. The authors employ two large SBA data sets and traditional industrial organization theory to test hypotheses about small‑firm innovation, comparing static and dynamic viability measures and examining R&D, productivity, technology regimes, and government roles. Findings show that small firms are prevalent, enter manufacturing, grow, adopt flexible technology, and display mobility across firm sizes.
Utilizing a unique data set, Zoltan Acs and David Audretsch provide a rich empirical analysis of the increased importance of small firms in generating technological innovations and their growing contribution to the U.S. economy. They identify the contributions made by both small and large firms to the innovative process and the manner in which market structure, and the firm-size distribution in particular, responds to technological change. The authors' analysis relies on traditional theories of industrial organization and tests existing hypotheses, many of them previously untested due to data constraints.Innovation and Small Firms brings together two large data bases recently released by the U. S. Small Business Administration - one directly measuring innovative activity for large and small firms, the other providing a detailed census of economic activity for all manufacturing firms and plants across a broad spectrum of industries.Acs and Audretsch describe and evaluate the data bases in the context of the literature on innovation, market structure, and firm size. They present their findings on the presence of small firms, small-firm entry in manufacturing, small-firm growth and flexible technology, and mobility and firm size. They compare static and dynamic measures of small-firm viability and address the relationships between R&D, innovation, and productivity, and analyze the interaction between technological regimes and the role of government in innovation.Zoltan Acs is an Associate Professor of Economics at the Merrick School of Business, the University of Baltimore. David Audretsch is a Research Fellow at the Wissenschaftszentrum Berlin fur Sozialforschung in West Berlin.