The Role of Innovation and Entrepreneurship in Economic Growth.

• Author: Andrews, Michael
• Position: NBER Books

We live in an era in which innovation and entrepreneurship seem ubiquitous, particularly in regions like Silicon Valley, Boston, and Research Triangle Park. But many metrics of economic growth, such as productivity growth and business dynamism, have been at best modest in recent years. The resolution of this apparent paradox can be found in dramatic heterogeneity across sectors, with some industries experiencing robust innovation and entre-preneurship and others stagnation.

By construction, the impact of innovation and entrepreneurship on overall economic performance is the cumulative impact of their effects on individual sectors. Understanding the potential for growth in the aggregate economy depends, therefore, on understanding the sector-by-sector potential for growth. This insight motivates the 12 studies...