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Research in Entrepreneurship

Kauffman Research Awards

Thirty-one professors from various departments on UC Berkeley's campus have received funding through the Lester Center for their research on entrepreneurship. The Lester Center received this funding from the Ewing Marion Kauffman Foundation of Kansas City in order to investigate the causes and consequences of entrepreneurship in the United States. Originally led by the late Prof. John Freeman, the Center's Director of Research and Helzel Professor of Entrepreneurship, "The Causes and Consequences of Entrepreneurship in the United States" project supports professors in the Political Science, Sociology, Economics, and City and Regional Planning Departments as well as the Schools of Public Health and Public Policy and Boalt Law School and the Haas School of Business in their research on entrepreneurship. The project is currently headed by Jerome S. Engel, Executive Director of the Lester Center, and David Teece, Director of the Institute of Management, Innovation, and Organization. The Kauffman Foundation supports the four-year project with $1.2 million in grant funds. The Lester Center thanks the Kauffman Foundation for this opportunity to engage in basic research leading to the improvement of the entrepreneurial climate in the United States.

The following is a list of the projects that are currently funded by the Kauffman grant:

• Philip Tetlock: Exploring the Decisions Processes of VC's
  
  
• James Lincoln: Venture Capital Portfolio Diversification
  
  
• David Mowery: High-Tech Firm Formation by Women and Minorities
  
  
• Christopher Ansell: Entrepreneurship and Social Network Leverage
  
  
• Bronwyn Hall: Entrepreneurial Firms & Patents
  
  
• Michael Hout: Assessing Ethnic Economies: Effects of Immigrant Entrepreneurship in the US and the UK
  
  
• Lauren Edelman: Legal Consciousness and Aspirations toward Entrepreneurship
  
  
• AnnaLee Saxenian: Cross-Border Start-Ups
  
  
• Susanne Scotchmer: Venture Capital: Choosing the Best Investments
  
  
• David Teece: The Functions of the Entrepreneur and the Functions of the Executive
  
  
• Chang-Tai Hsieh: Sources and Barriers of Entrepreneurial Growth
  
  
• Robert Merges: The Value of Patent Protection for Technology Entrepreneurship
  
  
• Jesse Fried: Governance Study of Venture-Backed Start-ups
  
  
• Thomas Rundall: Drivers of Electronic Record Adoption Among Physician Organizations
  
  
• Jennifer Chatman: Organizational Growth and Cultural Dilution: A Necessarily Inverse Relationship?
  
  
• John Zysman: Services and Regions: The Algorithmic Revolution, Corporate Strategy, and Regional Growth
  
  
• Pino Audia: Industrial Agglomerations and Entrepreneurship
  
  
• Heather Haveman: Founding of American Magazines, 1741-1860
  
  
• Waverly Ding: Individual and Organizational Social Capital in the New Biotech Firms
  
  
• Neil Fligstein: Entrepreneurs and the Development of Securitization in America
  
  
• Sandra Susan Smith: Explaining Racial & Ethnic Differences in Rates of Ethnic Entrepreneurship
  
  
• Alice Agogino: Fostering Innovation and Entrepreneurship in New Product Development: A Longitudinal Study
  
  
• Ulrike Malmendier: With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship
  
  
• David I. Levine: Experimental Evidence on the Causal Effect of Cal-OSHA Inspections on Entrepreneurial Ventures
  
  
• Clair Brown: Serial Entrepreneurs and Venture Performance: Evidence from Venture-Backed Semiconductor Firms
  
  
• Charlan Nemeth: Connecting the Dots between Innovation and Entrepreneurship
  
  
• Robb Willer: The Role of Entrepreneurship in Freecycle: An On-Line, Altruistic Community
  
  
• Brian D. Wright, Stuart J.H. Graham, Ted M. Sichelman:
  A Comprehensive Patent Litigation Dataset for Empirical Research
  
  
• Rui J.P. de Figueiredo, Jr.: The Perfromance Effects of Genealogy in Hedge Fund Entrepreneurship
  
  
  
  

  Philip Tetlock Prof. Tetlock is the Mitchell Professor of Leadership at the Haas School. He has also been a Professor of Psychology and of Political Science. He has given the National Academy of Sciences Award for Behavioral Research Relevant to the Prevention of War in 1999. Prof. Tetlock has written nine books and dozens of articles. Prof. Tetlock has a Ph.D. in Psychology from Yale University.

  Exploring the Decision Processes of Venture Capitalists: Individual Differences in Strategies of Learning from Experience New venture survival is precarious at best, but those enterprises backed by venture capitalists have substantially higher survival rates than those that do not receive such backing. The proposed research will determine whether individual differences in cognitive styles documented among experts in other lines of work can be replicated and extended into a population of venture capitalists. The research should have direct implications for how venture capitalists structure their deliberation process.

  
  
  

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  James Lincoln James Lincoln has been a professor at Haas since 1988. He holds the Warren E. and Carol Spieker Chair in Leadership. He has received numerous honors, grants, and awards for his research and scholarship. Prof. Lincoln has a PhD. in Sociology from the University of Wisconsin, Madison.

  Venture Capital Portfolio Diversification This project will be questioning to what degree venture capital firms recognize and exploit opportunities for portfolio diversification via serendipitous leads from existing network contacts and/or strategic management of syndicate investor networks. Are venture capital firms best characterized as rationally-acting portfolio diversifiers or socially-influenced network investors? A more general question to be answered is how much intent is exhibited by organizations in constructing their networks.

  
  
  

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  David C. Mowery Prof. Mowery is the Hasler Professor of New Enterprise Development at Haas as well as the Deputy Director of the Institute for Management, Innovation, and Organization. He is also a Research Associate at the National Bureau of Economic Research. Prof. Mowery has a Ph.D. in Economics from Stanford.

  High-Technology Firm Formation by Women and Minority Entrepreneurs The "spawning" of new firms by established firms has historically been an important source of regional agglomeration in high-technology industries. This project will consider whether the "spawning" phenomenon of high tech firms in Silicon Valley has played a role in the formation of high-tech start-ups by women and indigenous minority entrepreneurs. What is the role of women or indigenous minority populations in establishing high-technology firms?

  
  
  

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  Christopher Ansell Christopher Ansell is an Associate Professor in the Department of Political Science. He has served as a consulting editor for the American Journal of Sociology and the section representative of the methods & theory/social networks section of the Social Science History Association. He has a Ph.D. in Political Science from the University of Chicago.

  Entrepreneurship and Social Network Leverage Prof. Ansell will utilize social network analysis to determine how entrepreneurs identify their most beneficial social contacts and use those contacts to leverage the resources needed for their enterprise. The purpose in developing this network leverage framework is to help identify where in social structure entrepreneurship will emerge and the types of network strategies available to entrepreneurs.

  
  
  

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  Bronwyn Hall Bronwyn H. Hall is Professor of Economics and a Research Associate of the National Bureau of Economic Research, and the Institute for Fiscal Studies, London. She is also the founder and partner of TSP International, an econometric software firm. She received her Ph.D. in economics from Stanford University in 1988.

  Entrepreneurial Firms and Patents: Entry Deterrence or Entry Assistance Using data available for the biotechnology sector, Dr. Hall and her team will examine opposition proceedings for European Patent Office patents and challenges to the validity of US patents and resulting patent strategies to determine whether the resulting environment makes it difficult for small and new firms to compete in an increasingly international arena.

  
  
  

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  Michael Hout Prof. Hout is a Professor of Sociology and the Chair of the Joint Program in Demography and Sociology. He has been elected to the American Academy of Arts and Sciences and the National Academy of Sciences. He has written 3 books, most notably Inequality by Design: Cracking the Bell Curve Myth, and numerous articles. Prof. Hout has a Ph.D in Sociology from Indiana University.

  Assessing Ethnic Economics: Effects of Immigrant Entrepreneurship in the United States & the United Kingdom Both conventional wisdom and previous research suggest that immigrant-run businesses provide an important springboard for recent immigrant arrivals. Some questions that will be examined are: What proportion of self-employed immigrants actually employ their workers? Does a high rate of entrepreneurship among co-ethnics give an immigrant better chances of having and keeping employment? To what extent are ethnic economy effects attributable to (or counteracted by) differences in firm size and unionization between ethnic and mainstream economies?

  
  
  

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  Lauren B. Edelman Prof. Edelman is currently a Professor of Law and Sociology and the Director of the Center for the Study of Law and Society at Boalt. She received her J.D. in 1986 from Boalt Law and a Ph.D in Sociology at Stanford in the same year.

  Legal Consciousness and Aspirations Towards Entrepreneurship Given the complex web of legal regulation that surrounds the establishment and operation of businesses today, legal consciousness- or the meanings that people attach to law and legal rights- may encourage or constrain entrepreneurial activity. This project will study the legal consciousness of high school students and staff and see how those ideas affect educational practices, performance, and behavior.

  
  
  

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  AnnaLee Saxenian Prof. Saxenian is a professor in the Department of City and Regional Planning and the Dean of the School of Information Management and Systems. She has a Ph.D in Political Science from Massachusetts Institute of Technology and an MCP from UC Berkeley.

  Cross-Border Start-Ups Cross-border start-ups-- firms that originate with activities in more than one economy-- are now a well established phenomenon in US technology industries. It is not uncommon for a start-up to set up headquarters and research in Silicon Valley while simultaneously establishing a development team in China or India. This research will focus on these start-ups to addess the causes and scale of this phenomenon as well as its implications for our understanding of the process of entrepreneurship.

  
  
  

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  Suzanne Scotchmer Prof. Scotchmer has been a Professor of Economics since 1995, as well as a Professor of Public Policy since 1989. She has been a visitng professor at universities in Paris, Moscow, Florence, Helsinki, and other cities around the world. She has a Ph.D. in Economics from UC Berkeley.

  Venture Capital: Choosing the Best Investments Among the defects of intellectual property as an incentive system is that an innovator must fund the research up front. Since researchers are often liquidity constrained, this is a real impediment. One major way to overcome liquidity constraints and minimize the need for self-finance is venture capital and contract research. This project attempts to understand why VCs fund research in rounds, and how those rounds of funding should be structured.

  
  
  

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  David J. Teece Prof. Teece is the Mitsubishi Bank Professor of International Business and Finance and the Director of the Institute of Management, Innovation, and Organization at Haas. He has a Ph.D. in Economics from the University of Pennsylvania.

  The Functions of the Entrepreneur and the Functions of the Executive Prof. Teece has teamed with Emeritus Prof. James G. March of Stanford University for this project. This project will compare and contrast the functions of the executive and the functions of the entrepreneur. By comparing and contrasting these two functions, they hope to advance the understanding of how leadership, entrepreneurship, and strategic management taken together create value and the dynamic processes by which firms obtain profit and market share.

  
  
  

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  Chang-Tai Hsieh Prof. Hsieh is an Associate Professor of Economics. H e was awarded the Alfred P. Sloan Foundation Research Fellowship in 2004. He has a Ph.D. in Economics from UC Berkeley (1998).

  Sources and Barriers of Entrepreneurial Growth There are two critical questions that will be examined in this project. First, along which dimensions do successful firms grow and less successful firms contract? Second, what are the barriers facing entrepreneurs in the US?

  
  
  

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  Robert P. Merges Prof. Merges is the Wilson Sonsini Goodrich & Rosati Professor of Law and Technology and the Director of the Berkeley Center for Law & Technology. He is also currently a Visiting Professor at the UC Davis School of Law. In addition to teaching and research projects, Merges also serves as a special consultant to the U.S. Department of Justice, Antitrust Division, and is a member of the Department's Task Force on Intellectual Property.

  The Value of Patent Protection for Technology Entrepreneurship The research will investigate how patent protection facilitates technology entrepreneurship. This study will shed light on how patent protection facilitates entrepreneurship by examining how the existence and strength of patent protection affects the behavior of partners in an alliance and how it affects the strategy entrepreneurs take in commercializing technological innovations. The study will be an empirical analysis of technology development alliances in the biotech/pharmaceutical industry.

  
  
  

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  Jesse M. Fried After graduating from Harvard Law School in 1992, Jesse Fried worked as an associate at the Boston law firm Sullivan & Worcester practicing tax law and litigation. In 1995 he began a two-year John M. Olin research fellowship at Harvard Law School, and in 1997 he joined the Boalt faculty. He is also the Co-Director of the Berkeley Center for Law, Business, and Economy.

  Governance Study of Venture-Backed Startups This will be a study of California-based entrepreneurial (startup) companies that were financed with venture capital and later acquired by other firms. This project will focus on how conflicts between different classes of shareholders are resolved in venture-backed start-ups. The parties' varying cash flow rights can lead to disagreement about how to govern the start-up, especially when the start-up is neither a complete failure nor an amazing success. The project will try to understand how such conflicts are resolved.

  
  
  

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  Thomas Rundall Prof. Rundall is the Henry J. Kaiser Professor of Organized Health Systems in the Doctorate Program at the School of Public Health and a tenured professor at UC Berkeley. Since1987 Dr. Rundall has served three terms as Chair of the Department of Health Policy and Management at UC Berkeley. Prof. Rundall has a Ph.D. in Sociology from Stanford University.

  Drivers of Electronic Medical Record Adoption Among Physician Organizations Electronic medical records (EMRs) have great promise for improving patient safety and the quality of care provided by physician organizations. Innovation and entrepreneurship are key characteristics of the market for health information technology. This research will estimate the percentage of relatively large physician organizations that have adopted EMRs and examine the effects of eight organizational and market-related characteristics on the adoption of EMRs in physician organizations.

   

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  Jennifer Chatman Prof. Chatman is the Paul J. Cortese Distinguished Professor of Management at the Haas School of Business and the faculty director of the Haas School of Business Ph.D. Program. Before joining Haas, she was a faculty member of the Kellogg Graduate School of Management from 1987 to 1993, and she received her Ph.D. from UC Berkeley.

  Organizational Growth and Cultural Dilution: A Necessarily Inverse Relationship? Managers of young, fast growth organizations, while committed to such growth, often mourn the loss or dilution of their original organizational culture, the one that was in place at their founding and to which they often attribute their success. Prof. Chatman’s research will systematically examine the extent to which organizational growth is associated with culture dilution and the mechanisms underlying this relationship.

   

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  John Zysman Prof. Zysman is a professor of political science at UC Berkeley and co-director of the Berkeley Roundtable on the International Economy. He has written extensively on European and Japanese policy and corporate strategy. He received his B.A at Harvard and his Ph.D. at MIT.

  Services and Regions: The Algorithmic Revolution, Corporate Strategy, and Regional Growth As functions become digitally automated, there will be potential for emerging growth sectors and ways to organize business structures efficiently. This research will consider implications of the service sector transformation facilitated by information technology tools on competitive dynamics and entrepreneurial options on the one hand and the logic of regional growth and growth strategies on the other hand.

   

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  Pino Audia Prof. Audia is an Assistant Professor of Organizational Behavior in the Haas School of Business. He is also a member of the Editorial Board of Journal of Management and Journal Behavior and Education as well as a member of the Academy of Management. He received his MBA from Bocconi University and his Ph.D. from the University of Maryland.

  Industrial Agglomerations and Entrepreneurship Industrial agglomerations are concentrations in space of firms making similar products. Recent empirical evidence has begun to cast doubt on the idea that agglomerations benefit constituent firms. Prof. Audia’s research will examine whether or not industrial agglomerations have negative effects on entrepreneurship. His research will also examine the potential negative effect of industrial agglomerations on other industries.

   

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  Heather Haveman Prof. Haveman is a Professor of Sociology and Business at the University of California, Berkeley. During the 2006-2007 academic year, she is also a Professor of Management at Columbia University's Graduate School of Business and in the Department of Sociology. She received her MBA at the University of Toronto and her Ph.D. in organizational behavior and industrial relations at UC Berkeley.

  Founding of American Magazines, 1741-1860 New kinds of organizations emerge and expand in numbers, size, and variety. By studying the foundings of one kind of productive organization - magazine publishing companies - Prof. Haveman hopes to offer insights in the current magazine industry's challenges and the novel organizational and technological forms of internet publishing. She also addresses the effects of such increasing amounts of magazine production on population.

   

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  Waverly Ding Prof. Ding is currently an Assistant Professor of Organizational Behavior and Industrial Relations in the Haas School of Business. She attended Beijing Foreign Studies University where she earned an MA in English and New York University where she earned an MA in Sociology. Prof. Ding also received her MBA and Ph.D. in Business at the University of Chicago.

  Individual and Organizational Social Capital in the New Biotech Firms New firms were created by individual entrepreneur(s), who mobilized resources to deploy their business plans. In this process, they use their network relations to access resources necessary for organizational building. Not much is known about the transition between individual network ties and organizational network ties and its effect of new venture performance. This project investigates the mechanisms that facilitate or impede the transfer of individual network ties to organizational network ties, and how the rate of success of transfer of social capital from individuals to the firm can affect survival and performance of the new venture.

   

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  Neil Fligstein Prof. Fligstein is currently the Director of the Center for Culture, Organization, and Politics at the Institute of Industrial Relations. His main research interests are the fields of economic sociology, organizational theory, political sociology, and the sociology of work. Prof. Fligstein received his Ph.D. in Sociology at the University of Wisconsin-Madison.

  Entrepreneurs and the Development of Securitization in America Investigation of the development and dispersion in of the idea and techniques associated with the process of asset securitization in America since 1970. The research will focus on how a series of entrepreneurs built on a set of financial innovations and understandings to contribute to economic innovation and change. Analysis on the source of new inventions and the role of a succession of actors who interpret and extrapolate that innovation for new purposes.

   

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  Sandra Susan Smith Prof. Smith is currently an Assistant Professor in the Department of Sociology at the University of California, Berkeley. Her research interests include urban poverty, joblessness, race and ethnicity, social networks and social capital, and intra-group processes. Prof. Smith received a B.A. in History-Sociology from Columbia University and a Ph.D. in Sociology from the University of Chicago.

  Explaining Racial & Ethnic Differences in Rates of Ethnic Entrepreneurship Racial and ethnic differences in rates of entrepreneurship have been attributed to opportunity structures and to group characteristics by self-employment scholars. Prof. Smith’s research plans to provide a systematic empirical examination of the different “ethnic strategies” that ethnic groups have deployed to confront problems of typical entrepreneurship. To what extent do ethnic strategies explain racial and ethnic differences in entrepreneur rates, and what weight should be given to each of the seven strategies that entrepreneurs must employ to stay viable?

   

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  Alice Merner Agogino Prof. Agogino is the Roscoe and Elizabeth Hughes Professor of Mechanical Engineering and affiliated faculty at the Haas School of Business in their Operations and Information Technology Management Group. She received a M.S. degree in Mechanical Engineering from the University of California at Berkeley and Ph.D. from the Department of Engineering-Economic Systems at Stanford University.

  Fostering Innovation and Entrepreneurship in New Product Development: A Longitudinal Study The project conducts a longitudinal assessment of learning outcomes from a graduate-level, multidisciplinary course at UC Berkeley titled Managing the New Product Development Process. The project aims to better understand what former students, who are now working in industry, value from a a course on design, innovation and entrepreneurship. In addition, they will explore entrepreneurial ventures that have grown out of the NPD class and study the enablers of their entrepreneurial success.

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  Ulrike Malmendier Prof. Malmendier is currently an Assistant Professor in the Economics Department at the University of California, Berkeley. She currently serves as associate editor for the Journal of Financial Intermediation and the Economic Journal. Prof. Malmendier received her PhD in Business Economics from Harvard University, and her PhD in Law from theUniversity of Bonn.

  With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship The dramatic levels of entrepreneurship in regions such as Silicon Valley have led to speculation that powerful peer effects are at work in the decision to become entrepreneurs. Prof. Malmendier’s research explores peer effects in entrepreneurship in a particularly promising setting, the Masters of Business Administration (MBA) program at Harvard Business School. It exploits the fact that the representation of students with entrepreneurial backgrounds varies considerably across sections to evaluate the impact of peers on the decision to become an entrepreneur, as well as on entrepreneurial success.

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  David I. Levine Prof. Levine is the Eugene E. and Catherine M. Trefethen Professor of Business Administration at the Haas School of Business at the University of California, Berkeley. He is also Chair of the University’s Center for Health Research and Chair of the Advisory Board for Scientific Evaluation for Global Action. Prof. Levine was an undergraduate at Berkeley, and has taught at the Haas School since receiving his Ph.D. in Economics from Harvard University.

  Experimental Evidence on the Causal Effect of Cal-OSHA Inspections on Entrepreneurial Ventures Lobbyists for small business frequently claim that the Divison of Occupational Safety and Health, better known as Cal-OSHA, and other regulatory agencies substantially raise costs, and that these costs are disproportionately high for small and entrepreneurial business. The proposed study will utilize some of the randomized inspections to provide the best estimates of the causal effects of Cal-OSHA inspections on workers and employers. Importantly, the research will examine how these effects differ according to company size and (for start-ups) company age.

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  Clair Brown Dr. Clair Brown is a Professor of Economics and Director of the Center for Work, Technology, and Society, IRLE at the University of California, Berkeley. Prof. Brown has published research on many aspects of the labor market, including high-tech workers, labor market institutions, firm employment systems and performance, the standard of living, wage determination, and unemployment. She received a B.A. in Mathematics from Wellesley College and a Ph.D. in Economics from the University of Maryland.

  Serial Entrepreneurs and Venture Performance: Evidence from Venture-Backed Semiconductor Firms Prof. Brown’s study will examine the effect of prior firm-founding experience on subsequent startup firm’s probability of survival, which is an often-used measure of firm performance. Estimates of this relationship take into account self-selection by founders into serial entrepreneurship and two roles of venture capitalists – evaluating start-up quality and mentoring. Because of the importance of learning-by-doing, experienced founders are expected to have an advantage over first-time entrepreneurs in their subsequent ventures, and this advantage should manifest in terms of firm survival at an early stage when the skill set of the founder is most relevant.

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  Charlan Nemeth Prof. Nemeth is a Professor in the Department of Psychology at the University of California, Berkeley. She has numerous publications on influence processes, decision making and creativity in small groups, and managing innovation in organizations. Prof. Nemeth holds a Ph.D. in Psychology from Cornell University.

  Connecting the Dots between Innovation and Entrepreneurship There is considerable research on "who" is creative, how they think, and the organizational cultures that foster both the generation and application of creative ideas. This research will examine management styles and how successful entrepreneurs create corporate climates that encourage groups with passion, energy and creativity. It will attempt to bridge the gap between such research literatures and successful entrepreneurial activity.

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  Robb Willer Prof. Willer is an Assistant Professor in the Sociology Department at the University of California, Berkeley. He is also the Director of the Sociology Department's new Laboratory for Social Research, a member of the Greater Good Science Center’s Executive Committee, and a Senior Consultant for The Breakthrough Institute. Prof. Willer earned a B.A. in Sociology (minor in English) from the University of Iowa and received his M.A. and Ph.D. in Sociology from Cornell University.

  The Role of Entrepreneurship in Freecycle: An On-Line, Altruistic Community “Freecycle” is the name for a network of altruistic communities in the U.S. and several other countries. Organized through e-mail listserves, participants post advertisements for objects they wish to give away, or request for objects they wish to receive, without any direct reciprocity. The research will study entrepreneurship in Freecycle communities to better understand what variables shape successful entrepreneurship in traditional business settings, how community entrepreneurs motivate participants to invest time and resources without compensation, and the role of entrepreneurship in a whole new economic domain.

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  Brian D. Wright Prof. Wright is a Professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley. Stuart J.H. Graham Prof. Graham is the Assistant Professor of Strategic Management at DuPree College of Management at the Georgia Institute of Technology. Ted M. Sichelman Prof. Sichelman is a faculty member of the Berkeley Center for Law & Technology at the University of California, Boalt Hall School of Law.

  A Comprehensive Patent Litigation Dataset for Empirical Research Empirical examinations of the patent litigation “explosion” – and attendant calls for patent reform – have been hampered by a paucity of accessible data. Moreover, there is lack of any detailed understanding of how patent litigation is being used by and against start-up and early-stage companies in the United States. To inform these important questions, the research plans to collect, organize, and provide data on the characteristics of litigated patents, characteristics of litigating parties, and characteristics of the litigation itself, all in one dataset.

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  Rui J.P. de Figueiredo, Jr. Prof. Figueiredo is an Associate Professor at the Haas School of Business. He was a visiting scholar at the Federal Reserve Bank of Minneapolis. His research interests include game theory, methodology and econometrics, non-market strategy and institutions and organizations. Prof. Figueiredo holds a Ph.D. in Political Science from Stanford University.

  The Perfromance Effects of Genealogy in Hedge Fund Entrepreneurship This project explores the determinants of successful entrepreneurial ventures in the hedge fund industry. The hedge fund industry is a fertile ground for studying the nature of innovation and entrepreneurship in industries in which investment in physical assets is minimal. The industry is rife with entrepreneurial activity, with existing firms changing frequently from one strategy to another, and entrepreneurs starting new firms at a rapid pace.

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