Two-Way Streets: The Role of Institutions and Technology Policy in Firms’ Corporate Entrepreneurship and Political Strategies

Abstract

Technology policy influences the incentives and opportunities firms have to innovate and adapt to changing environments and thus has important implications for strategy and entrepreneurship. However, to date, strategy and entrepreneurship scholars have paid insufficient attention to technology policy. We underscore the importance of two dimensions of technology policy: (1) state funding for research and (2) state protection of intellectual property (IP). We then illustrate how interactions between these two dimensions of technology policy influence (1) the corporate entrepreneurship (CE) strategies through which firms innovate and adapt and (2) the political strategies through which they attempt to influence and secure the benefits of technology policy. Given differences in the goals, incentives, capabilities, and relative power among the various players affected by technology policy, our discussion contributes to a more thorough understanding of the dynamic interplay between government institutions and firms, the potential complementarity (and substitutions) between firms’ CE and political strategies, and interdependent effects of state funding for research and IP protection across different international environments.