IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/8947.html
   My bibliography  Save this paper

Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up

Author

Listed:
  • Michael R. Darby
  • Lynne G. Zucker

Abstract

Most firms achieve perfective progress, incrementally improving commodities or productivity. But technological progress is concentrated in a few firms achieving metamorphic progress: forming or transforming industries with technological breakthroughs (e.g., biotechnology, lasers, semiconductors, nanotechnology). Unless congruent with incumbents' science and technology base, metamorphic progress promotes entry. Scientific breakthroughs embodied in discovering scientists, protected by natural excludability, and transferred by learning-by-doing-with at the bench generally drive metamorphic progress. Embodied knowledge is rivalrous and leads to entry and industry dominance by star-scientist-linked firms. Incorporating this scientific-entrepreneurial process is essential to improving - if not transforming - endogenous growth models.

Suggested Citation

  • Michael R. Darby & Lynne G. Zucker, 2002. "Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up," NBER Working Papers 8947, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8947
    Note: PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w8947.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Jensen & Marie Thursby, 1998. "Proofs and Prototypes for Sale: The Tale of University Licensing," NBER Working Papers 6698, National Bureau of Economic Research, Inc.
    2. Stigler, George J., 2011. "Economics of Information," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 35-49.
    3. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    4. Stephan, Paula E & Everhart, Stephen S, 1998. "The Changing Rewards to Science: The Case of Biotechnology," Small Business Economics, Springer, vol. 10(2), pages 141-151, March.
    5. Wooldridge, Jeffrey M., 1991. "On the application of robust, regression- based diagnostics to models of conditional means and conditional variances," Journal of Econometrics, Elsevier, vol. 47(1), pages 5-46, January.
    6. Maximo Torero, 2000. "Analyzing the Spillover Mechanism on the Semiconductor Industry in the Silicon Valley and Route 128," Econometric Society World Congress 2000 Contributed Papers 0090, Econometric Society.
    7. Zucker, Lynne G & Darby, Michael R, 2001. "Capturing Technological Opportunity via Japan's Star Scientists: Evidence from Japanese Firms' Biotech Patents and Products," The Journal of Technology Transfer, Springer, vol. 26(1-2), pages 37-58, January.
    8. Klevorick, Alvin K. & Levin, Richard C. & Nelson, Richard R. & Winter, Sidney G., 1995. "On the sources and significance of interindustry differences in technological opportunities," Research Policy, Elsevier, vol. 24(2), pages 185-205, March.
    9. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    10. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
    11. repec:fth:harver:1473 is not listed on IDEAS
    12. Richard R. Nelson, 1959. "The Economics of Invention: A Survey of the Literature," The Journal of Business, University of Chicago Press, vol. 32, pages 101-101.
    13. Gary P. Pisano & Richard M.J. Bohmer & Amy C. Edmondson, 2001. "Organizational Differences in Rates of Learning: Evidence from the Adoption of Minimally Invasive Cardiac Surgery," Management Science, INFORMS, vol. 47(6), pages 752-768, June.
    14. Michael R. Darby & Lynne G. Zucker, 2002. "Going Public When You Can in Biotechnology," NBER Working Papers 8954, National Bureau of Economic Research, Inc.
    15. Harberger, Arnold C, 1998. "A Vision of the Growth Process," American Economic Review, American Economic Association, vol. 88(1), pages 1-32, March.
    16. Jerry G. Thursby & Marie C. Thursby, 2002. "Who Is Selling the Ivory Tower? Sources of Growth in University Licensing," Management Science, INFORMS, vol. 48(1), pages 90-104, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:wvu:wpaper:06-05 is not listed on IDEAS
    2. Bao, Xiaolu & Johan, Sofia & Kutsuna, Kenji, 2016. "Do political connections matter in accessing capital markets? Evidence from China," Emerging Markets Review, Elsevier, vol. 29(C), pages 24-41.
    3. Michael R. Darby & Lynne G. Zucker, 2006. "Innovation, Competition and Welfare-Enhancing Monopoly," NBER Working Papers 12094, National Bureau of Economic Research, Inc.
    4. Ouimet, Paige & Zarutskie, Rebecca, 2014. "Who works for startups? The relation between firm age, employee age, and growth," Journal of Financial Economics, Elsevier, vol. 112(3), pages 386-407.
    5. John V. Duca & Mine K. Yücel, 2002. "An overview of science and cents: exploring the economics of biotechnology," Economic and Financial Policy Review, Federal Reserve Bank of Dallas.
    6. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    7. Lynne G. Zucker & Michael R. Darby, 2009. "Star Scientists, Innovation and Regional and National Immigration," Chapters, in: David B. Audretsch & Robert E. Litan & Robert Strom (ed.), Entrepreneurship and Openness, chapter 6, Edward Elgar Publishing.
    8. Jeff S. Armstrong & Michael R. Darby & Lynne G. Zucker, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
    9. Kalcheva, Ivalina & McLemore, Ping & Pant, Shagun, 2018. "Innovation: The interplay between demand-side shock and supply-side environment," Research Policy, Elsevier, vol. 47(2), pages 440-461.
    10. Wang, Ning & Hagedoorn, John, 2014. "The lag structure of the relationship between patenting and internal R&D revisited," Research Policy, Elsevier, vol. 43(8), pages 1275-1285.
    11. Andrea Bonaccorsi & Daniele Biancardi & Mabel Sanchez Barrioluengo & Federico Biagi, 2019. "Study on Higher Education Institutions and Local Development," JRC Research Reports JRC117272, Joint Research Centre.
    12. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2003. "Universities, Joint Ventures, and Success in the Advanced Technology Program," NBER Working Papers 9463, National Bureau of Economic Research, Inc.
    13. Srikant Devaraj & Marcus T. Wolfe & Pankaj C. Patel, 2021. "Creative destruction and regional health: evidence from the US," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 573-604, April.
    14. Pedro Aceituno-Aceituno & Joaquín Danvila-del-Valle & Abel González García & Carlos Bousoño-Calzón, 2018. "Entrepreneurship, intrapreneurship and scientific mobility: The Spanish case," PLOS ONE, Public Library of Science, vol. 13(9), pages 1-20, September.
    15. Chava, Sudheer & Oettl, Alexander & Subramanian, Ajay & Subramanian, Krishnamurthy V., 2013. "Banking deregulation and innovation," Journal of Financial Economics, Elsevier, vol. 109(3), pages 759-774.
    16. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2004. "Joint Ventures, Universities, and Success in the Advanced Technology Program," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 145-161, April.
    17. Stefano Colombo & Luca Grilli, 2017. "Should I stay or should I go? Founder’s decision to leave an entrepreneurial venture during an industrial crisis," Industry and Innovation, Taylor & Francis Journals, vol. 24(2), pages 97-121, February.
    18. Russell S. Sobel & Andrea M Dean, 2008. "Has Wal‐Mart Buried Mom And Pop?: The Impact Of Wal‐Mart On Self‐Employment And Small Establishments In The United States," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 676-695, October.
    19. Amir Tabarzad & Ali Asghar Ghaemi & Shahrokh Zand-parsa, 2016. "Barley Grain Yield and Protein Content Response to Deficit Irrigation and Sowing Dates in Semi-Arid Region," Modern Applied Science, Canadian Center of Science and Education, vol. 10(10), pages 193-193, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael S. Lawlor, 2003. "Biotechnology and government funding: economic motivation and policy models," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 131-146.
    2. Malcolm Gillis, 2003. "Harnessing new technologies for the 21st century," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 63-75.
    3. John V. Duca & Mine K. Yücel, 2003. "Science and Cents: Exploring the economics of biotechnology: an overview," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 3-10.
    4. Jeff S. Armstrong & Michael R. Darby & Lynne G. Zucker, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
    5. Frank R. Lichtenberg, 2003. "The benefits to society of new drugs: a survey of the econometric evidence," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 43-59.
    6. Rebecca S. Eisenberg, 2003. "Reaching through the genome," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 105-115.
    7. Timothy F. Howe, 2003. "Financing biotechnology research: a firsthand perspective," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 119-130.
    8. C. Thomas Caskey, 2003. "The convergence of disruptive technologies enabling a new industrial approach to health products," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 77-84.
    9. Henry G. Grabowski, 2003. "Patents and new product development in the pharmaceutical and biotechnology industries," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 87-104.
    10. Lynne G. Zucker & Michael R. Darby, 2009. "Star Scientists, Innovation and Regional and National Immigration," Chapters, in: David B. Audretsch & Robert E. Litan & Robert Strom (ed.), Entrepreneurship and Openness, chapter 6, Edward Elgar Publishing.
    11. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2003. "Universities, Joint Ventures, and Success in the Advanced Technology Program," NBER Working Papers 9463, National Bureau of Economic Research, Inc.
    12. Zucker, Lynne G & Darby, Michael R, 2001. "Capturing Technological Opportunity via Japan's Star Scientists: Evidence from Japanese Firms' Biotech Patents and Products," The Journal of Technology Transfer, Springer, vol. 26(1-2), pages 37-58, January.
    13. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2014. "Superstar inventors—Towards a people-centric perspective on the geography of technological renewal in the multinational corporation," Research Policy, Elsevier, vol. 43(4), pages 669-682.
    14. Grazia Cecere & Sascha Rexhäuser & Patrick Schulte, 2019. "From less promising to green? Technological opportunities and their role in (green) ICT innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    15. Colombelli, Alessandra & Krafft, Jackie & Quatraro, Francesco, 2013. "Properties of knowledge base and firm survival: Evidence from a sample of French manufacturing firms," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1469-1483.
    16. Michael R. Darby & Lynne G. Zucker, 2006. "Innovation, Competition and Welfare-Enhancing Monopoly," NBER Working Papers 12094, National Bureau of Economic Research, Inc.
    17. Steven Buccola & David Ervin & Hui Yang, 2009. "Research Choice and Finance in University Bioscience," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 1238-1255, April.
    18. Hyun Ju Jung, 2020. "Recombination sources and breakthrough inventions: university-developed technology versus firm-developed technology," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1121-1166, August.
    19. Dushnitsky, Gary & Lenox, Michael J., 2005. "When do incumbents learn from entrepreneurial ventures?: Corporate venture capital and investing firm innovation rates," Research Policy, Elsevier, vol. 34(5), pages 615-639, June.
    20. Zucker, Lynne G. & Darby, Michael R. & Furner, Jonathan & Liu, Robert C. & Ma, Hongyan, 2007. "Minerva unbound: Knowledge stocks, knowledge flows and new knowledge production," Research Policy, Elsevier, vol. 36(6), pages 850-863, July.

    More about this item

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:8947. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.