Innovation Advantage

The topic of innovation garners a great deal of interest, but it is most salient to the new venture context. Zoltan Acs and David Audretsch compared data from numerous studies that assess innovation and found that small firms contribute about two and a half times more innovations per employee than large firms. Despite the large firms' reputation, resources, and expertise, it is in the new venture context that the majority of innovations in society are created. Whereas entrepreneurs are recognized as a leading source of innovation, they may also be unique in the nature of innovations they systematically introduce.

History shows that technology evolves through periods of incremental change that are then punctuated by breakthroughs that either enhance or destroy [Page 260]the competence of existing firms ...