Complications Of Entrepreneurship And Entrepreneurial Opportunities

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Register to read the introduction… The created knowledge may be exploited by the knowledge-producer or by other organizations; therefore, knowledge flows are crucial. These other organizations may be other existing firms in the same industry, related or different industries or disciplines, or individuals who decide to leave their current employer to start their own venture. In order to …show more content…
Studies on spin-offs have found that the reasons that cause individuals to leave their employer and to create their own firm are mainly frustration with their current employer and the expectation of greater financial rewards. It was found that, in particular, incumbent firms with abundant underexploited knowledge represent seed beds for spin-offs. Many radical innovations have been introduced by new firms rather than by incumbents. Especially in high-tech industries, employee mobility and spin-offs are an important mechanism for knowledge diffusion. In these industries, a high share of the new ventures is started by employees from incumbent firms by using some of the technological know-how of their former employer. It was proposed that existing firms characterized by technological know-how and continuous innovation provide a training ground for future entrepreneurs. Therefore, it can be expected that new firms in knowledge or technologyintensive industries are highly relevant for a region s economic growth. Firms in knowledge and technology-intensive industries tend to be more innovative and to be of higher quality than other entrants, and these characteristics are conducive to economic growth. Innovative start-ups may greatly challenge incumbent firms, thereby, securing their efficiency and enhancing structural change. Due to their innovativeness, these start-ups are most likely to amplify innovation and increase product variety. It was also found that found that higher technological know-how positively affects the survival chance of entrants in the disk drive industry between 1977 and 1997. New firms recognize entrepreneurial opportunities that may arise from underexploited knowledge. Underexploited knowledge may emerge if incumbent firms chose not to commercialize the created knowledge to full extent because they do not want to take the risk combined with new products or processes

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