Abstract

Existing theories of technological innovation posit a split between the incremental innovations produced by large incumbents and the radical innovations produced by entrepreneurial start-ups. This study presents empirical evidence challenging this foundational assumption by demonstrating that entrepreneurs play a leading role, not a subordinate role, in sourcing incremental innovations through secondary inventions and design modifications. Among the 100 highest-ranked incremental innovations leading to the commercialization of the mechanized reaper and cloud computing services, nearly 90% were attributable to entrepreneurial start-ups. Paradoxically, however, an entrepreneurial start-up had only a one in fourteen chance of garnering returns from a reaper innovation and a one in nine chance of gains from a cloud computing improvement.

Share

COinS