Knowledge Economy, Information Technologies and Growth

Luigi Paganetto

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351154543
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This volume focuses on the Information and Communication (ICT) revolution and its impact on economic growth. Even though the emergence of the knowledge economy is at the center of attention by media and is often a subject of economic policy debate, economic research on the issue is still relatively underdeveloped and many aspects of it are still awaiting proper theoretical and empirical scrutiny. One important question is whether, as many economists and opinion leaders maintain the knowledge economy and the new information technologies have fostered the birth of a 'new economy' which by inducing a strong productivity growth in most sectors, is behind the impressive growth of GDP experienced by the US economy. Empirical research has in fact been unable to provide a conclusive answer to this question. This book debates this issue and provides the opportunity to discuss the economic and social effects of the ICT revolution. It also focuses on the functioning and the micro-economic structure of the ICT sector, as well as on its impact on various industries, on the financial system and on the labor market. It analyses the role of the ICT revolution on regional development and it addresses important policy issues such as its consequences for antitrust legislation and government regulation.

Part I

Chapter 1
Technology-based Entrepreneurs: Does the Internet Make a Difference?

Massimo G. Colombo and Marco Delmastro

1 Introduction

In the 1990s, growing attention has been devoted by economists and policy makers to entrepreneurship and new technology-based firms (NTBFs). The reason may be traced to the evidence that small and new firms account for a substantial share of the new jobs created in those countries such as the US that have displayed a strong employment record.¹ In addition, the view has been rapidly gaining ground that high-growth start-ups, especially those operating in high-tech industries play a crucial role for the renewal of the economic system. In particular, they are believed to provide the US with an innovation-based competitive advantage in key sectors of the so-called ‘new economy’ such as software, e-commerce and communication equipment. Such view is corroborated by the success stories of Microsoft, Oracle, Cisco, America-on-line, Yahoo!, and other Internet outfits.

The concern that Europe is a laggard in the NTBF sector triggered a policy-oriented research effort aimed at analysing factors that favour or inhibit the birth of NTBFs and influence their post-entry performances (see EC, 1996a and 1996b). In particular, a conspicuous body of new evidence was developed on the characteristics of high-tech entrepreneurs in numerous European countries (for a survey see Storey and Tether, 1998a).

One of the objectives of the present chapter is to supplement the evidence provided by such studies with comparable data relating to Italian founders of NTBFs. Note that Italy is a very interesting case. On the one hand, propensity towards entrepreneurship is especially high in Italy (see, for instance, Blanchflower and Oswald, 1999) and small firms account for a disproportionately high share of total employment.² On the other, Italy exhibits a poor performance in high-tech industries, with the ratio of research expenditures to GNP being close to 1 per cent, that is less than half the value of France or the UK.

Moreover, it is important to emphasize that the evidence provided by previous studies on the characteristics of high-tech entrepreneurs mainly concern manufacturing industries. This work aims to extend such evidence to service industries which are related to or have been rejuvenated by the development of Internet. For one thing, as was said earlier, sectors such as e-commerce, other Internet services, software and multimedia content are at the core of the ‘new economy’ and are presently dominated by young, highly successful US firms, even though there is evidence that Europe is catching up.³ What is even more interesting, Internet involves a technological revolution which is likely to have quite disruptive consequences on established technical knowledge and consolidated business models. In addition, markets for Internet services still are in the very early stage of the life cycle, especially in Italy which so far has been a latecomer in the diffusion of the new technology. So arguments inspired by evolutionary theories of technical change suggest that the characteristics of Internet entrepreneurs may differ from those of founders of NTBFs in other industries. In this paper, we intend to address empirically such research question. This would provide some initial insights into whether policy measures that are traditionally considered as suitable to support NTBFs also apply to Internet start-ups.

For this purpose, we consider a sample composed of 241 entrepreneurs which between 1984 and 1999 established 116 new firms that operate in ICT manufacturing and service industries and are located in Northern Italy. We analyse entrepreneurs’ age at foundation of the start-up,...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• List of Contributors
• Foreword
• Introduction
• PART I
• PART II
• PART III
• PART IV
• Index