The Inventor’s Role: Was Schumpeter Right?
37 Pages Posted: 8 Oct 2020
Date Written: 2007
According to Schumpeter, the creative process of economic development can be divided into the three distinguishable stages of invention, innovation (commercialization) and imitation. Following this theory, invention and innovation require different skills. This paper tests whether the invention and innovation stages should be undertaken by different agents. We also show why there is a rationale for the Schumpeterian entrepreneur to also include the inventor in the innovation process. Merging the two enhances the possibilities of successful commercialization since the inventor may further adapt the innovation to customer needs, transmit information and reduce uncertainty. This serves to expand the market opportunities for the entrepreneur. The empirical analysis is based on a survey covering Swedish patents granted to individuals and small firms. The results show that profitability increases by 21 percent when the patent is licensed or sold to an entrepreneur, or if the inventor is employed in an entrepreneurial firm, as compared to commercialization undertaken by the inventor. Another important result is that, irrespective of commercialization mode, an active involvement of the inventor is shown to have a positive impact on performance.
Keywords: entrepreneur, inventor, innovations, commercialization
JEL Classification: 031, 032, M13
Suggested Citation: Suggested Citation