Knowledge plays a critical role in economic development, still our understanding of how knowledge is created, diffused and converted into growth, is fragmented and partial. The neoclassical growth models disregarded the entrepreneur and viewed knowledge as an exogenous factor. Contemporary current knowledge-based growth models have re-introduced the notion of the entrepreneur, however stripped of its most typical characteristics, and the diffusion of knowledge is kept exogenous. It implies that the predictions and policy conclusions derived from these models may be flawed. This paper reviews the literature that addresses the issues of knowledge creation, knowledge diffusion and growth, and the role attributed the entrepreneur in such dynamic processes. I will explore how these insights can be integrated into existing growth models and suggest a more thorough microeconomic foundations from which empirically testable hypotheses can be derived.
Entrepreneurship, Knowledge and Economic Growth provides an understanding of the forces that underpin the creation of knowledge, its diffusion and commercialization, and the role of the entrepreneur in these dynamic processes. The main objective is to identify the microeconomic foundation of growth, the extent to which contemporary models fail in that respect, and suggest improvements. Entrepreneurship, Knowledge and Economic Growth is organized into four parts: The theoretical aspects of entrepreneurship, knowledge, growth at the regional and national levels, and the implications of agglomerated structures on growth. It draws on the advances made in the fields of economic geography and endogenous growth, together with findings in evolutionary, entrepreneurial, institutional and regional economics. The empirical findings, emphasizing the interfaces between entrepreneurship, knowledge and growth. The policy implications are reviewed with a view to understanding how policies should be designed to jointly foster knowledge accumulation, its diffusion and growth. A separate section is devoted to defining some of the most urgent knowledge gaps that need to be addressed by future research.