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Occupational Choice: The Influence of Product vs. Process Innovation

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Abstract

Prior studies have found that knowledge gained from work experience is a way to gather insights for business opportunity recognition. However, little is known about the specific types of knowledge that lead to business founding. Utilizing concepts from knowledge spillovers and from the opportunity recognition literatures, this paper argues that an organization’s technological innovation activities can help its employees develop specialized knowledge that provides them with the entrepreneurial opportunities to found new businesses. Besides highlighting the positive relationship between technological innovation activities in organizations and the propensity of individuals leaving the organizations to start new businesses, this paper also provides a more fine-grained explanation of the types of technological innovation activities that can lead to business founding. We argue that knowledge acquired through product innovations is more easily adopted by individuals for commercial uses, while knowledge acquired through process innovations must be integrated with other parts of the organization to be valuable. This study proposes that product innovation activities in an organization, more so than process innovation activities, are related to new business founding. Implications for opportunity exploitation and ways to exploit knowledge spillovers are discussed.

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Authors and Affiliations

  1. Business School, National University of Singapore, Singapore, 118412, Singapore

    Poh Kam Wong

  2. National University of Singapore, Block E3A, Level 6, 10 Kent Ridge Crescent, Singapore, 119260, Singapore

    Lena Lee

  3. Leeds School of Business, University of Colorado at Boulder, 419 UCB, Boulder, 80309-0419, Colorado

    Maw Der Foo

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  1. Poh Kam Wong
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  2. Lena Lee
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  3. Maw Der Foo
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Correspondence to Poh Kam Wong.

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Wong, P., Lee, L. & Foo, M. Occupational Choice: The Influence of Product vs. Process Innovation. Small Bus Econ 30, 267–281 (2008). https://doi.org/10.1007/s11187-006-9044-8

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  • DOI: https://doi.org/10.1007/s11187-006-9044-8

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