Research and teaching

Sampsa Samila and Olav Sorenson

We find that the enforcement of non-compete clauses significantly impedes entrepreneurship and regional growth. Based on a panel of metropolitan areas in the United States from 1993 to 2002, our results indicate that, relative to regions in states that enforce non-compete covenants, an increase in the local supply of venture capital in states that restrict them has significantly stronger positive effects on (i) the number of patents, (ii) the number of firm starts, and (iii) employment. We address potential endogeneity issues in the supply of venture capital by using endowment returns as an instrumental variable. Our results point to a strong interaction between financial intermediation and the legal regime in promoting entrepreneurship and growth.

Management Science, 57 (2011): 425-438

Sampsa Samila and Olav Sorenson

We find that public research funding and venture capital have a complementary relationship in fostering innovation and the creation of new firms. Based on a panel of metropolitan areas in the United States from 1993 to 2002, we find that the positive relationships between government research grants and the rates of patenting and firm formation in a region become more pronounced as the supply of venture capital in that region increases. Our results remain robust to estimation with an instrumental variable to address potential endogeneity in the provision of venture capital. Consistent with perspectives that emphasize the importance of an innovation ecosystem, our results therefore point to a strong interaction between private financial intermediation and public research funding in promoting entrepreneurship and growth.

Research Policy, 39 (2010): 1348-1360

Science, social networks and spillovers

August 7th, 2009 | Posted by admin in 2007 - (0 Comments)

Olav Sorenson and Jasjit Singh

Although prior empirical research has established an association between science and the widespread diffusion of knowledge, the exact mechanism(s) through which science catalyses information flow remains somewhat ambiguous. This paper investigates whether the knowledge diffusion associated with science-based innovation stems from the norm of openness and incentives for publication, or whether scientists maintain more extensive and dispersed social networks that facilitate the dissemination of tacit knowledge. Our analysis supports the first mechanism: we track the movement of knowledge with patent citations, and find that science-based innovations diffuse more rapidly and widely, even after controlling for the underlying social networks of researchers as measured using information on prior collaborations. We also find that publication and social networks act as substitutes in the diffusion of knowledge.

Industry and Innovation, 14 (2007): 219-238

Complexity, networks and knowledge flow

August 7th, 2009 | Posted by admin in 2006 - (0 Comments)

Olav Sorenson, Jan W. Rivkin, and Lee Fleming

Because knowledge plays an important role in the creation of wealth, economic actors often wish to skew the flow of knowledge in their favor. We ask, when will an actor socially close to the source of some knowledge have the greatest advantage over distant actors in receiving and building on the knowledge? Marrying a social network perspective with a view of knowledge transfer as a search process, we argue that the value of social proximity to the knowledge source depends crucially on the nature of the knowledge at hand. Simple knowledge diffuses equally to close and distant actors because distant recipients with poor connections to the source of the knowledge can compensate for their limited access by means of unaided local search. Complex knowledge resists diffusion even within the social circles in which it originated. With knowledge of moderate complexity, however, high-fidelity transmission along social networks combined with local search allows socially proximate recipients to receive and extend knowledge generated elsewhere, while interdependencies stymie more distant recipients who rely heavily on unaided search. To test this hypothesis, we examine patent data and compare citation rates across proximate and distant actors on three dimensions: (1) the inventor collaboration network; (2) firm membership; and (3) geography. We find robust support for the proposition that socially proximate actors have the greatest advantage over distant actors for knowledge of moderate complexity. We discuss the implications of our findings for the distribution of intra-industry profits, the geographic agglomeration of industries, the design of social networks within firms, and the modularization of technologies.

Research Policy, 35 (2006): 994-1017

Science and the diffusion of knowledge

August 7th, 2009 | Posted by admin in 2004 - (0 Comments)

Olav Sorenson and Lee Fleming

Scientists, social scientists and politicians frequently credit basic science with stimulating technological innovation, and with it economic growth. Despite a substantial body of research investigating this general relationship, relatively little empirical attention has been given to understanding the mechanisms that might generate this linkage. This paper considers whether more rapid diffusion of knowledge, brought about by the norm of publication, might account for part of this effect. We identify the importance of publication by comparing the patterns of citations from future patents to three groups of focal patents: (i) those that reference scientific (peer-reviewed) publications, (ii) those that reference commercial (non-scientific) publications; and (iii) those that reference neither. Our analyses strongly implicate publication as an important mechanism for accelerating the rate of technological innovation: Patents that reference published material, whether peer-reviewed or not, receive more citations, primarily because their influence diffuses faster in time and space.

Research Policy, 33 (2004): 1615-1634

Science as a map in technological search

August 7th, 2009 | Posted by admin in 2004 - (0 Comments)

Lee Fleming and Olav Sorenson

A large body of work argues that scientific research increases the rate of technological advance, and with it economic growth. The precise mechanism through which science accelerates the rate of invention, however, remains an open question. Conceptualizing invention as a combinatorial search process, this paper argues that science alters inventors’ search processes, by leading them more directly to useful combinations, eliminating fruitless paths of research, and motivating them to continue even in the face of negative feedback. These mechanisms prove most useful when inventors attempt to combine highly coupled components; therefore, the value of scientific research to invention varies systematically across applications. Empirical analyses of patent data support this thesis.

Strategic Management Journal, 25 (2004): 909-928

Lee Fleming and Olav Sorenson

This paper develops a theory of invention by drawing on complex adaptive systems theory. We see invention as a process of recombinant search over technology landscapes. This framing suggests that inventors might face a ‘complexity catastrophe’ when they attempt to combine highly interdependent technologies. Our empirical analysis of patent citation rates supports this expectation. Our results also suggest, however, that the process of invention differs in important ways from biological evolution. We discuss the implications of these findings for research on technological evolution, industrial change, and technology strategy.

Research Policy, 30 (2001): 1019-1039