From independent inventor to inventor entrepreneur: an application of the knowledge spillover theory of entrepreneurship

This study builds on the knowledge spillover theory of entrepreneurship to examine the factors that influence the decision of latent entrepreneurs to move from opportunity recognition to opportunity exploitation and emergent entrepreneurship. Using data on independent inventors from 1975 to 2010, we examine how social, geographic, and industry knowledge spillovers influence the likelihood of technological entrepreneurship. We find that social and geographic knowledge spillovers promote independent inventors' transition to entrepreneurship, while industry knowledge spillovers may result in deterrents that inhibit their hazard of forming a new venture. Spillovers play a strong role in entrepreneurial processes, but are not always positive influences. While social and geographic spillovers can lead to emergent entrepreneurship, industry ties can hold back latent entrepreneurs. This helps answer the question: where do new firms come from? In this study, we explore the entrepreneurship process of independent inventors to understand what prompts these latent entrepreneurs to transition from creating a new technology to launching a new business. Our focus is on "knowledge spillovers," the sharing of ideas across regions, social networks, and industry. We find that social and geographic spillovers increase the likelihood of inventors becoming entrepreneurs. Additional findings reveal that industry spillovers may limit entrepreneurship, especially for those with personal financial resources, suggesting that affiliations can be both a source of knowledge and a constraint on entrepreneurial pursuits. This insight reveals the complex interplay of knowledge-sharing in shaping the entrepreneurial process of independent inventors.