We argue that scholars in the Austrian tradition of economics should incorporate the notion of a collaborative innovation bloc into their study of spontaneous market orders. We demonstrate how successful entrepreneurship depends on an innovation bloc of this kind, a system of innovation that evolves and within which activity takes place through time. The innovation bloc consists of five pools of economic skills from which people are drawn or recruited to form part of a collaborative team, which is necessary if innovation-based venturing is to flourish. The five skills are entrepreneurs, early- and later-stage-financiers, key personnel, and customers. Through real-world examples, we show how the application of the collaborative innovation bloc perspective could help make Austrian economics more concrete, relevant and persuasive, especially in regard to policy prescriptions.
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The EOE perspective shares many features with the more recent literature on entrepreneurial ecosystems (Stam 2015; Autio 2016) and the national system of entrepreneurship approach (Acs et al. 2014), but we can trace its roots back to the works of Swedish economists Johan Åkerman and Erik Dahmén; see Erixon (2011) and Dahmén (1970). While the other perspectives offer valuable insights, they seldom make a clear distinction between actors and institutions, and “the institutional variables that are used, such as technology absorption, gender equality, R&D spending, and depth of capital markets, are not institutional variables; they are outcomes resulting from the evolution of the economic system in a given institutional setup” (Braunerhjelm and Henrekson 2016, p. 101).
Even the holders of knowledge in the skill structure may be unaware that they possess it or be unable to articulate it – even when they are able to use it in the right circumstances (cf. Pongracic 2009, pp. 55–56).
Intertemporal coordination – producing the right consumer goods at the right time – is facilitated by the market’s price system, which communicates the time-preferences of consumers to entrepreneurs, helping to inform their decision of how to allocate resources intertemporally.
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We are grateful for useful comments and suggestions on earlier drafts from Niclas Berggren, Dan Johansson, Henrik Jordahl, and Victor Ahlqvist. We acknowledge financial support from the Jan Wallander and Tom Hedelius Foundation and the Marianne and Marcus Wallenberg Foundation.
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Elert, N., Henrekson, M. The collaborative innovation bloc: A new mission for Austrian economics. Rev Austrian Econ 32, 295–320 (2019). https://doi.org/10.1007/s11138-019-00455-y
- Austrian economics
- Schumpeterian entrepreneurship
- Spontaneous order