Creative Discovery: Reconsidering the Relationship Between Entrepreneurship and Innovation

Abstract

The severe recession of 2008–09 has brought to the fore deep concerns regarding the U.S. economy’s ability to continue to grow, let alone to keep pace with emerging nations such as India and China. The scale of job losses and the woes of sectors that are emblematic of the recession—particularly finance and automakers— have left many worrying about a bleak American economic future. Even those who expect a return to growth worry about the United States’ capacity to supply two essential ingredients: innovation and entrepreneurship. Such concerns have spurred increasing investment in broadband Internet connections, additional funding for research and development (R&D), and the largest-ever federal investment in public education—all steps meant to help build a new foundation for economic growth. Public-sector efforts of this type are nothing new in U.S. history. They date back at least to the Morrill and Hatch acts in the late 1800s and continue through the massive expansion of federal investment in R&D after World War II. 1 Such actions are generally credited with helping to ignite bursts of innovation and maintain steady rates of economic growth. In its renewed efforts today, the United States joins Singapore, the European Union, and others in forming deliberate strategies to provide what are considered semipublic goods: the knowledge and the people necessary for productive firms to innovate, create jobs, and boost economic growth. 2 It’s far from clear, however, whether the phenomena of innovation and entrepreneurship are adequately understood for these entities to be making such large commitments. Over the past several years, the work of the Kauffman Foundation has focused on understanding these phenomena and thereby seeking to create more successful entrepreneurs in the United States. During that time, the Foundation has conducted extensive research and developed mechanisms, such as the iBridge Network, to increase the pace of entrepreneurship. 3 Now, with lingering questions about the U.S. economy’s capacity to grow, concerns over the one to two billion people who remain in poverty around the world, and increasing interest in different types of entrepreneurship and innovation, the Foundation has embarked on a newly ambi