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'Venturesome Economy' Benefits From Research Produced Abroad, Holds Key to Continuing American Prosperity

Author Presented Findings at International OECD Working Party on Small and Medium-Sized Enterprises and Entrepreneurship Conference

KANSAS CITY, MO, Oct 30, 2008 (MARKET WIRE via COMTEX) -- Even as the turmoil in America's financial markets provokes fear and anxiety over our economic future, a new book, "The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World," asserts a contrasting view. By taking advantage of innovation abroad, the United States can better weather economic volatility, according to the book's author, Amar Bhide. Based on research funded by the Ewing Marion Kauffman Foundation, Bhide shows that innovation abroad, rather than posing a threat, actually enhances U.S. prosperity.

Bhide, the Glaubinger Professor of Business at Columbia University, conducted extensive interviews with chief executive officers of venture-capital-backed businesses to examine how technology really advances in modern economies. He concludes that, because innovation continues despite economic ups and downs, it is the key to long-term American prosperity.

Bhide presented his findings as part of a panel discussion at the Special Statistical Session on Globalisation, Entrepreneurship and SMEs held by the Working Party on Small and Medium-Sized Enterprises and Entrepreneurship on October 28, 2008, in Paris. The Kauffman Foundation is one of the event's sponsors.

For more details about the book, visit www.bhide.net.


Why an Economic Crisis Could Be the Right Time for Companies to Engage in 'Disruptive Innovation'

Published: November 12, 2008 in Knowledge@Wharton

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2086

...Paul J.H. Schoemaker, research director for the Mack Center for Technological Innovation, suggests that, for some companies, the economic crisis can actually provide an innovation platform. "The crisis has multiple impacts," Schoemaker says. "Loss of revenue and profit will at first instill a cost cutting mentality, which is not good for innovation. But if the patient is bleeding you need to stop that first. Then, however, a phase starts where leaders ask which parts of their business model are weak (and perhaps unsustainable) and that, in turn, can lead to restructuring and reinvention."

He also cautions against too much caution -- over-reliance on incremental innovation versus transformative, or "disruptive," innovation. In innovation circles, the two have come to be differentiated as "little i" and "Big I" innovation. "The largest gains in business come from more daring innovations that challenge the paradigm and the organization," Schoemaker says…

It may be that the locus of much really radical innovation is shifting outside of the large organizations to small start-ups.