The Evolution of a New Industry traces the emergence and growth of the Israeli hi-tech sector to provide a new understanding of industry evolution. In the case of Israel, the authors reveal how the hi-tech sector built an entrepreneurial culture with a capacity to disseminate intergenerational knowledge of how to found new ventures, as well as an intricate network of support for new firms. Following the evolution of this industry from embryonic to mature, Israel Drori, Shmuel Ellis, and Zur Shapira develop a genealogical approach that relies on looking at the sector in the way that one might consider a family tree. The principles of this genealogical analysis enable them to draw attention to the dynamics of industry evolution, while relating the effects of the parent companies' initial conditions to their respective corporate genealogies and imprinting potential. The text suggests that genealogical evolution is a key mechanism for understanding the rate and extent of founding new organizations, comparable to factors such as opportunity structures, capabilities, and geographic clusters.

It once took two decades to replace one-third of the Fortune 500; now a subset of new firms are challenging and displacing this elite group at a breathtaking rate, while armies of startups come and go within just a few years. Most new jobs are, in fact, coming from small firms, reversing the trend of a century. David Audretsch takes a close look at the U.S. economy in motion, providing a detailed and systematic investigation of the dynamic process by which industries and firms enter into markets, either grow and survive, or disappear. He shapes a clear understanding of the role that small, entrepreneurial firms play in this evolutionary process and in the asymmetric size distribution of firms in the typical industry.Audretsch introduces the large longitudinal database maintained by the U.S. Small Business Administration that is used to identify the startup of new firms and track their performance over time. He then provides different snapshots of the process of industries in motion: why new-firm startup activity varies so greatly across industries; what happens to these firms after they enter the market; the extent to which entrepreneurial firms account for an industry's economic activity and why that measure varies across industries; how small firms compensate for size-related disadvantages; and who exits and why.Audretsch concludes that the structure of industries is characterized by a high degree of fluidity and turbulence, even as the patterns of evolution vary considerably from industry to industry. The dynamic process by which firms and industries evolve over time is shaped by three fundamental factors: technology, scale economies, and demand. Most important, the evidence suggests that it is the differences in the knowledge conditions and technology underlying each specific industry -- key elements in innovation -- that are responsible for the pattern particular to that industry.

A new approach to the analysis of technological process, emphasising the tailoring of formal modelling to historical context.

What is this mysterious activity we call entrepreneurship? Does success require special traits and skills or just luck? Can large companies follow their example? What role does venture capital play? In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams. Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few. This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.

How do markets evolve? Why are some innovations picked up straightaway whilst others take years to be commercialized? Are there first-mover advantages? Why do we behave with 'irrational exuberance' in the early evolution of markets as was the case with the dot.com boom?Paul Geroski is a leading economist who has taught economics to business school students, managers, and executives at the London Business School. In this book he explains in a refreshingly clear style how markets develop. In particular he stresses how the early evolution of markets can significantly shape their later development and structure. His purpose is to show how a good grasp of economics can improve managers' business and investment decisions. Whilst using the development of theInternet as a case in point, Geroski also refers to other sectors and products, for example cars, television, mobile phones, and personal computers.This short book is an ideal introduction for managers, MBA students, and the general reader wanting to understand how markets evolve.

This book contains the most sustained and serious attack on mainstream, neoclassical economics in more than forty years. Nelson and Winter focus their critique on the basic question of how firms and industries change overtime. They marshal significant objections to the fundamental neoclassical assumptions of profit maximization and market equilibrium, which they find ineffective in the analysis of technological innovation and the dynamics of competition among firms. To replace these assumptions, they borrow from biology the concept of natural selection to construct a precise and detailed evolutionary theory of business behavior. They grant that films are motivated by profit and engage in search for ways of improving profits, but they do not consider them to be profit maximizing. Likewise, they emphasize the tendency for the more profitable firms to drive the less profitable ones out of business, but they do not focus their analysis on hypothetical states of industry equilibrium. The results of their new paradigm and analytical framework are impressive. Not only have they been able to develop more coherent and powerful models of competitive firm dynamics under conditions of growth and technological change, but their approach is compatible with findings in psychology and other social sciences. Finally, their work has important implications for welfare economics and for government policy toward industry.

An Insightful Model for Understanding Industry Change From Xerox to K-Mart to Sotheby's, great companies have failed to translate extraordinary innovation into better profitability. Why does this happen? Anita M. McGahan argues that great companies fail to profit from investments in innovation when they break their industries' rules for how change can take hold. In this book, she shows how to develop a strategy that is aligned with the rules of industry change. By understanding and operating within the rules, executives can better appreciate the tradeoffs that are unique to each company's evolutionary path-and consequently improve performance by making smarter, more profitable strategic bets. How Industries Evolve is based on extensive statistical studies of 700 global industries and more than twenty-five case studies. McGahan identifies four models of industry evolution-progressive, creative, radical, and intermediating-and shows how a company can diagnose which model most closely describes the trajectory of change in its industry. The book then explains how company strategists can use their understanding of this model to carefully coordinate choices about R D, alliances, internal venturing, leadership style, compensation, modularization, and time-to-market. By supporting executives' efforts to recognize and respond to shifts in industry structure, this book will ultimately help companies to achieve and sustain superior performance.