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1 December 2009, Foreign Policy Research Institute

Innovation and the World Economy

Entrepreneurs are the engine to innovation. Through history we have seen the important role they play in fueling economic growth by creating new innovative technologies, thereby creating more jobs and better products. This trend must continue to enhance economic growth in today’s globalized world

Why it is that we consider entrepreneurship so important? It’s because, when you look through history, entrepreneurs are the source of the most radical, disruptive innovations that have made modern life what it is. Just think about it—the car, the airplane, computers, computer software, air conditioning have changed the world. All of these break-through radical innovations were developed by individuals—by entrepreneurs — and not by large, existing enterprises. (Of course, there are some exceptions, like the transistor, created at Bell Labs, but these are far and few between.)

It’s the entrepreneur who commercializes the innovation and makes it real, and brings its benefits to the rest of society. That’s the reason Ewing Marion Kauffman founded his Foundation, where I now have the privilege to work. He (and now we) want more high-growth or “scale” entrepreneurs doing more radical innovations that lead to economic growth, because ultimately, it is through innovation and growth that our living standards advance.