Knowledge that Transforms

What role do differences in founders' occupational backgrounds play in new venture performance? Analyzing a novel dataset of 2998 founders creating 1723 innovative startups in biomedicine, we find that the likelihood and hazard of achieving a liquidity event are lower for academic than for non-academic startups. However, academic startups produce as many patents and receive as much funding as non-academic startups, suggesting that the observed differences in achieving a liquidity event are not driven by differential invention performance. Exploiting heterogeneity among academic startups, we also find that differences between professor and student startups do not explain academic startups' comparatively low performance on the exit market vis-a-vis non-academic startups. Yet, startups founded by superstar professors perform similarly to non-academic startups on the exit market for new ventures, and better than startups founded by highly productive professors but without external certification.

Governmental venture capital funds (GVCs) are created by policymakers around the world to support young innovative companies (YICs) with the aim of “bridging the equity gap”. In this paper, we study the heterogeneity in the design of GVC programs in Europe and identify the design features that are most effective in achieving the desired outcomes of this policy. Specifically, we focus on the probability that GVC-backed companies will receive additional funds from private venture capital investors and, ultimately, changes in their growth and innovation outcomes. We find that the choices of location, colocation, syndication and industry focus of a GVC program substantially influence the extent to which it is able to achieve such goals. Important policy implications are discussed.

A large academic consensus exists on the idea that successful innovative processes are geographically bounded within regions. Nevertheless, the ability of regions to capture and re-use external knowledge is also regarded as a fundamental element to sustain and refine the local profile of specialisation and competitiveness. The present article combines these views to investigate the sources of the regional innovation process, by analysing data on Italian regions over the period 2007–2012. We define global networks based on all the local firms identifiable as global ultimate owners and their foreign subsidiaries. Our main results suggest that both the internal specialisation and the regional external linkages can generate indigenous innovation, but the role of the networks varies substantially according to its density, its degree of complementarity with the specialisation profile, its geographical spread and the specific location of the foreign subsidiaries. Our results, then, support a view of the regional innovation as an interactive process whereby valuable knowledge resources are not only generated within the reach of the local economy, but they are also integrated with external inputs. This contrasts with recent anti-globalisation views according to which the increase in the foreign operations of national companies impoverishes the local economy.

Recent studies have identified that employees can be lead users of their employing firm's products, and valuable sources of product innovation, residing within organizational boundaries. We extend this line of thought by recognizing that employees can be lead users with regard to internal work processes. We define work process-related lead userness (WPLU) as the extent to which employees experience unsatisfied process-related needs ahead of others, and expect high benefits from solutions to these needs. We hypothesize a positive association with user innovation in the workplace, evidenced by the development of tools, equipment, materials and methods. We test a moderated mediation model delineating how and when WPLU is related to user innovation within organizational boundaries. Drawing on survey data from 104 employees and 13 supervisors in a forensic services organization, we find that WPLU contributes to user innovation via engagement in innovative work behavior, especially when employees have higher self-efficacy (perceived capability to overcome obstacles) and lower job autonomy (situational constraints on the job).

Incentives affect the ways in which scientific research is disseminated and translated into practice. From 1936 to 1972, approximately fifty thousand lobotomies were performed in the US, with the majority occurring during the late 1940s and early 1950s. Curiously, the lobotomy's popularity coincided with a consensus within the medical community that the procedure was ineffective. To explain this paradox, we follow the framework developed by Tullock (2005) to examine how financial incentives within the scientific community affected how scientific research is used in practice. We argue that government funding for public mental hospitals and asylums expanded and prolonged the use of the lobotomy, despite mounting scientific evidence. We demonstrate that the lobotomy was used less in private mental hospitals and asylums. This paper provides an explanation for the use of scientifically discredited procedures due to the lack of responsiveness of government funding agencies. The results have implications for the dissemination and translation of scientific knowledge in practice.