DANCEST 805 Lecture Notes - Lecture 15: Disruptive Innovation, Competition Law, Virtuous Circle And Vicious Circle
Document Summary
Chapter 2 - the economics of entrepreneurship and public policy. The growth of small firms can be seen as the triumph of the free market and the success of the enterprise culture" promulgated by politicians like ronald raegan and margaret thatcher. Traditional industrial economist would explain the growth of new firms in terms of industry profitability, growth, barriers to entry and concentration. Studies show that entry by small, primarily new, firms is not the same as entry by large firms and that the birth of small firms is lower in highly concentrated industries and ones where innovation plays an important part. Knight"s and kirzner"s works were based on the general equilibrium or neoclassical model of economics which focused on optimizing existing resources within a stable environment and treated any disruptions as. Innovation seems to generate growth that cannot be accounted for by changes in labour and capital.
