Semiconductor Startups and The Exploration of New Technological Territory

Abstract

Why are small firms important? The answer to this question often points to the critical role played by small firms in innovation. Research conducted by small firms has, after all, been shown to be more productive than that conducted by larger firms (Bound, Cummins, Griliches, Hall, and Jaffe, 1984). For instance, Acs and Audretsch (1990) find that small firms produce innovations with twice the productivity of larger firms. However, this superiority of small firms in research productivity has not been supported universally. The higher productivity of small-firm research is evident only in some industries and is more conclusive for the United States than for other countries (Scherer, 1984).