The use of knowledge in technology entrepreneurship: A theoretical foundation

Abstract

While technology entrepreneurship has been widely recognized as a driver of economic growth, there exists little in the way of a unified framework for understanding technology entrepreneurship and assessing its value proposition, particularly when network externalities and information are involved. In this paper we bring together several strands of literature and identify the components that form a foundation for understanding modern technology entrepreneurship. In particular, technology functions as a capital good that embodies knowledge about performing productive tasks, and the value of this knowledge depends on how well it is able to utilize decentralized local knowledge and spontaneous orders.

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Notes

  1. 1.

    Note the similarity to other private collective action problems providing incentives for participation. For example, the Audubon Society, which solicits donations to advance environmental goals, attempts to overcome this problem by giving calendars and other similar products with a donation. Similarly, the Red Cross has utilized free cookies to reward blood donors, significantly impacting participation rates of potential donors [Reaman (1996)].

  2. 2.

    See, for example, Clarke (1980) for an in-depth treatment of this issue.

  3. 3.

    See Surowiecki (2004) for a good summary of this literature.

  4. 4.

    See Alesci and Trafecante (2015).

  5. 5.

    See De Lea (2016) and Ellis (2016) for examples.

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Correspondence to J. R. Clark.

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Sobel, R.S., Clark, J.R. The use of knowledge in technology entrepreneurship: A theoretical foundation. Rev Austrian Econ 31, 195–207 (2018). https://doi.org/10.1007/s11138-017-0380-5

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Keywords

  • Entrepreneurship
  • Technology venturing
  • Embodied knowledge
  • Local knowledge
  • Truthful revelation
  • Reputational information and technology
  • Spontaneous order
  • Network effects
  • Path-dependence

JEL classification

  • O31