Beyond Innovation: The Composition and Dynamics of Technology-Enabled Entrepreneurship

Abstract

Using data on nearly all U.S. business registrations since the turn of the twentieth century and 860 technologies which emerged over this period, we study entrepreneurial activity around new innovations. We find a large and varied entrepreneurial economy rooted in innovation, where the vast majority of startups are not high-growth technology entrepreneurs but rather local, low-growth firms engaged in complementary, value-adding activities. The composition of this firm creation varies over the technology lifecycle, growing more dispersed across sectors over time and shifting at the mean from upstream activities (e.g., production) to downstream (parts and service). We use this evidence to propose a formal conceptualization of technology-enabled entrepreneurship and discuss insights for entrepreneurial strategy, business ecosystems, and industry dynamics.

Keywords: entrepreneurship, innovation, ecosystems, industry dynamics, value chain