Scientific Paradigms, Entrepreneurial Opportunities and Cycles in Economic Growth.

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

In this paper I present a model of economic growth that combines insights from endogenous growth theory, the field of entrepreneurship research and the philosophy and economics of science. The model is built on three relatively standard assumptions and a Kuhnian approach to scientific knowledge accumulation. I assume that innovation generates economic growth, that opportunity driven entrepreneurship is an important source of innovation, that entrepreneurial opportunities increasingly arise out of scientific knowledge creation and that science follows Kuhnian paradigm shifting dynamics. The model then generates opportunity driven cycles in entrepreneurial activity that in turn cause waves of innovation and cycles in economic growth. This result is highly relevant and fills a gap in all three literatures as ‚traditional’ endogenous growth models typically generate constant growth rates in the steady state, entrepreneurship research keeps the origin of entrepreneurial opportunity exogenous and the literatures on the philosophy and economics of science ignore the important downstream economic implications of the non-profit driven institutional framework that governs scientific knowledge accumulation. This paper contributes by identifying scientific institutions and entrepreneurial activity as prerequisites for economic growth and it offers a tentative explanation for the rise and fall in the levels of scientific, entrepreneurial and economic activity over the Kondratieff-cycle.
Original languageEnglish
Pages (from-to)339-354
Number of pages16
JournalSmall Business Economics
Volume28
Issue number4
DOIs
Publication statusPublished - 1 Apr 2007
Externally publishedYes

Keywords

  • Economic development
  • Entrepreneurship
  • Managerial economics
  • Economic activity
  • Paradigm (Theory of knowledge)
  • E32
  • endogenous growth theory
  • entrepreneurship
  • L26
  • M13
  • O11
  • O31
  • O41
  • paradigms
  • scientific institutions

Cite this