AI-driven Innovation, Neuroentrepreneurship and and the Story of Chris Freeman
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Below you’ll find your weekly dose of fresh ideas in our ‘Weekly Science Selections 📚’ and the fascinating story of Chris Freeman from ‘The Bluelist 📘’. Share this newsletter to receive exclusive content!
Bluelist 📘: Chris Freeman: the entrepreneur who created the concept of ‘innovation studies’
After our deepdive into the story of Ted Levitt last week, we’ll dive into the extraordinary story of Christopher Freeman (1921 - 2010) this week. By many renowned for his substantial conributions to the academic field of innovation, and as such named a ‘social sciences entrepreneur’ (Fagerberg, Fosaas, Bell and Martin, 2011), Chris Freeman was an expert at the intersection of economics and innovation. His legacy included many ‘firsts’, such as being the first director of SPRU - the Science Policy Research Unit at the University of Sussex -, the first Frascati manual (1962), the first studying ‘technology gaps’ (1960s), the first editor of Research Policy and the author of the first textbook on innovation, ‘The Economics of Industrial Innovation’. His contributions to theory also included works on Industrial Waves and Disruption, National Innovation Systems and The Economics of Change. Freeman had a significant contribution to schumpetarian thinking about disruption.
Background
Christopher Freeman was born in Sheffield in the United Kingdom. He was raised with liberal ideas: his father Arnold worked for the Webb’s whose ‘Fabian Society’ shaped reformist-socialist left-wing views on democracy. His father later on pioneered with ‘Workers' Educational Association’ and as such also heavily impacted his son’s radical ideas. Christopher Freeman “was educated at the progressive Abbotsholme School in Staffordshire, where he founded a cell of the Young Communist League” (Independent, 2010). He started studying at the London School of Economics (LSE) in 1941, continued in Cambridge to study economics, which he interrupted to join the Royal Military Academy, after which he returned to LSE to graduate in 1948. At LSE he was part of an extraordinary cohort, which included Norman MacKenzie, Claus and Mary Moser and Marion Stern, the mother of Nicholas Stern, an economist and well-known ambassador of taking early action on climate change. Nicholas later said that his passion was largely due to the discussions that he had been part of when his parents, Freeman and other classmates in his early childhood (Stern, 2017). This also forms the main line in Freeman’s career: on the one hand he followed the line of thinking of Schumpeter, popularizing Schumpeter’s - now widely accepted - idea of creative destruction and the fact that there no boundaries to growth, and on the other hand a critical acclaim to capitalism, claiming that a more institutional approach to innovation systems - an approach that is now classified as neo-schumpeterian economics, which takes ingredients from different economic schools such as the austrian school, lausanne school and keynesiasism.
His ideas and early career expertise on innovation policy, led to one of his most famous contributions to the academic world: the notion of innovation systems, and later on also his work on national systems of innovation (Guardian, 2010). He also argued that science plays an important role in establishing industries, much in line with Bernal’s work on the science-based industry and science policies (Fagerberg et al, 2010). As such, he is widely recognized for being ‘an entrepreneur’ in science, developing innovation science as a separate field of study alongside economics, management and entrepreneurship - which led to him being the first director of SPRU - the Science Policy Research Unit at the University of Sussex. As an academic he supervised many scholars, wrote many articles and books and as such had a lasting impact on the science, economics and industry of innovation.
Key Ideas
The Economics of Industrial Innovation: Freeman adopted a dynamic perspective on capitalism, heavily influenced by Marx and Schumpeter. He viewed capitalism as a system characterized by continuous interaction between technological progress, capital accumulation, and social and institutional conditions. Drawing from that, Freeman emphasized the role of technological competition between firms as a driving force behind capitalist development. He focused on understanding the dynamics of technological change within firms and its implications for economic growth and competitiveness. Freeman argued that traditional economic theories often failed to adequately account for the role of research and development (R&D) in driving technological progress and economic development. He highlighted the importance of R&D activities within firms and advocated for policies and management strategies that promote innovation.
National Innovation Systems: Freeman, together with i.e. Lundvall, was instrumental in developing the concept of national innovation systems, which emphasizes the interconnectedness of various actors, institutions, and policies within a country that contribute to innovation and economic development. He advocated for a holistic approach to understanding innovation processes, beyond the traditional focus on individual firms or sectors. He emphasized the role of institutions, including government policies, research organizations, universities, and industry associations, in shaping national innovation systems. He argued that effective innovation policies require a deep understanding of the institutional framework within which innovation occurs (Freeman, 1995). In his own words:
“Sectoral systems, regional systems are all very constructive and helpful. (…) You can point to the success of Pakistan in medical instruments or Brazil in boots or shoes or whatever (...) and if you point out the role of innovation in all those micro level studies, that’s very useful. And if you point out certain regions of countries are more innovative, and the north of Italy has contributed more to the growth of the country than Sicily, that’s all very useful. But I don’t think you’ll change the main paradigm of neoclassical economics, I think you have to attack it head on in the centre (…) Most of the people working on innovation systems prefer to work at the micro-level. They are a bit frightened still of the strength of the neoclassical paradigm at the macroeconomic level. But I think that’s where they have to work. You have to have an attack on the central core of macroeconomic theory. It is happening but not happening enough.” (Unpublished interview with Sharif, 2003)
Impact
Public impact: Freeman highlighted the importance of knowledge diffusion and learning mechanisms within national innovation systems. He emphasized the role of networks, collaborations, and knowledge spillovers in facilitating innovation and technology transfer. Freeman's work on national innovation systems had significant policy implications. He advocated for policies that promote collaboration between government, industry, and academia, as well as investments in education, research infrastructure, and technology transfer mechanisms. His ideas contributed to the design of innovation policies aimed at enhancing the competitiveness and resilience of national economies (Fagerberg et al, 2011).
Industrial impact: Freeman emphasized the importance of fostering a culture of innovation within industries. He highlighted the role of research and development (R&D) activities, technological competition, and dynamic interactions between firms in driving innovation. By advocating for policies and management strategies that support innovation, Freeman encouraged industry leaders to prioritize investments in R&D, technology development, and knowledge creation.
Academic Impact: Under his leadership, SPRU became a global center for innovation research, attracting scholars, policymakers, and industry practitioners from around the world. This collaborative environment facilitated knowledge exchange, interdisciplinary research, and the co-creation of innovative solutions to industry challenges.
Key take-aways
Cross-Disciplinary Collaboration: Embrace collaborative efforts across disciplines to gain comprehensive insights into innovation dynamics.
Emphasize a Systems Approach: Consider the historical, economic, and systemic dimensions of innovation to develop a nuanced understanding of its complexities.
Tap into the Academic Community: Foster an inclusive academic environment that encourages knowledge exchange and inspires new avenues of inquiry in innovation studies.
Explore Macro-Level Analysis: Delve into macroeconomic perspectives to discern broader implications of innovation on national and regional innovation ecosystems.
Weekly Science Selections 📚
Every week, this section contains newly published scientific articles in the field of innovation & entrepreneurship. This section contains the #EditorsChoice and a list of articles grouped into #MustReads, #ShouldReads and #CouldReads.
#EditorsChoice: Machine learning with real-world HR data: mitigating the trade-off between predictive performance and transparency (Heidemann, Hülter & Tekieli, 2024) Researchers have decoded the enigma of Machine Learning (ML) in Human Resource Management (HRM). Their groundbreaking study reveals a crucial trade-off: as ML algorithms get smarter, they become less transparent. But fear not! Enter post-hoc explanatory methods, shedding light on ML's inner workings without sacrificing accuracy. What does this mean? HR teams can now make informed decisions, harnessing the power of ML while maintaining clarity. From reducing turnover rates to empowering public sector organizations, the possibilities are endless in this new era of HRM.
#MustRead: Complex Problem Solving as a Source of Competitive Advantage (Veríssimo et al, 2024): The study emphasizes the increasing importance of problem-solving skills in today's complex business environment. Solving complex problems is identified as a crucial skill that can enhance organizational success and competitiveness. Understanding the value of problem-solving and incorporating it into organizational strategy is essential for achieving sustainable competitive advantage in today's dynamic business landscape.
#MustRead: Heterogeneous university funding programs and regional firm innovation: An empirical analysis of the German Excellence Initiative (Krieger, 2024) In a revealing study, researchers unveil the hidden power of university funding in driving regional innovation. Their findings reveal that targeted investment in Excellence Clusters turbocharges firms' ability to innovate, particularly in regions with a robust cluster presence. However, the impact of Graduate Schools or University Strategies remains underwhelming. This discovery underscores the pivotal role of strategic funding in shaping the innovation landscape, sparking vital discussions on optimizing investment strategies to supercharge regional growth.
#MustRead: Neuroentrepreneurship: state of the art and future lines of work (Juarez-Varón, Zuluaga & Recuerda, 2024) Neuroentrepreneurship, a field at the intersection of neuroscience and entrepreneurship, has gained traction since 2009, illuminating how brain function influences business decisions. Despite a growing body of literature, a unified understanding of the field remains elusive. This paper addresses this gap by examining key themes in neuroentrepreneurship literature and refining definitions to provide clarity. Understanding the neural mechanisms behind entrepreneurial behavior offers practical insights for decision-making and opportunity recognition. By leveraging biometric techniques like EEG and GSR, entrepreneurs can gain a deeper understanding of risk perception and response. This review not only consolidates existing knowledge but also provides a framework for future research and practical applications in enhancing entrepreneurial decision-making processes.
#ShouldRead: Middle Managers’ Relational Dynamics in the Context of Acquisitions: Balancing Strategic Interdependence and Organizational Autonomy (Birollo, Rouleau & Wolf, 2024): Mergers and acquisitions (M&A) pose a challenge in balancing the need for strategic interdependence with the preservation of organizational autonomy. Middle managers (MMs) are identified as key players in this balancing act. Intersubjectivity refers to the mutual understanding and shared meaning that arises between individuals through interaction, enabling effective communication and collaboration. In mergers, intersubjectivity is crucial as it facilitates middle managers' ability to navigate complex integration tasks by considering the perspectives and goals of both acquiring and acquired organizations, fostering smoother transitions and alignment of objectives. Similarly, in innovation, intersubjectivity fosters a collaborative environment where diverse perspectives and insights can converge, leading to the co-creation of novel solutions and the maximization of creative potential within teams and across organizational boundaries.
Figure 2: A process model of actionable intersubjectivity as a crucial ability for balancing strategic interdependance and organizational autonomy (Birollo et al, 2024)
#ShouldRead: Age and entrepreneurship: Mapping the scientific coverage and future research directions (Syed et al, 2024) Research interest in understanding the relationship between age and entrepreneurship has surged in recent years, driven by the recognition of age as a significant factor influencing entrepreneurial behavior and career decisions. Various studies have explored the motivational factors shaping self-employment decisions, revealing age's nuanced impact on entrepreneurial intentions and actions. While younger individuals may exhibit greater enthusiasm for entrepreneurship due to their ambitious nature and future income potential, older individuals leverage their extensive experience and social capital to navigate entrepreneurial ventures successfully. However, age-related preferences, influenced by factors such as cultural views and opportunity costs, also play a role in shaping entrepreneurial pursuits.
#ShouldRead: The Double-Edged Sword of Exemplar Similarity (Majzoubi et al, 2024) Ever wondered how your firm's image relative to industry leaders affects investor perception? New research spills the beans! Aligning with category exemplars boosts your firm's visibility and initial screening success. But beware: it also triggers comparisons that might not always work in your favor. The key? Understanding your industry's landscape and positioning strategically. Dive into the study for practical insights to finesse your firm's approach and ace those investor evaluations!
#CouldRead: Evaluating the impact of individual and country-level institutional factors on subjective well-being among entrepreneurs (Gashi et al, 2024): This study explores the relationship between subjective well-being (SWB) and entrepreneurship. Stimuli of well-being are: fostering political stability, reducing bureaucratic hurdles, and promoting economic prosperity to support entrepreneurial ventures and enhance overall satisfaction. The study also offers practical suggestions for entrepreneurs to improve their well-being, such as self-care, meaningful engagement, building strong support networks, prioritizing health, and finding purpose in their work.
#CouldRead: Financial stress and quit intention: the mediating role of entrepreneurs’ affective commitment (Kleine, Schmitt & Wisse, 2024) This paper delves into how financial stress impacts entrepreneurs' desire to quit their businesses, focusing on the emotional connection entrepreneurs have with their ventures. The findings suggest that when entrepreneurs face financial stress, they're more likely to consider quitting, especially when their emotional attachment to the business decreases. Essentially, the stronger the emotional bond with their venture, the more likely they are to persist through tough times. These insights can guide consultants and decision-makers to support entrepreneurs effectively. For instance, if a business has potential, efforts to boost the entrepreneur's emotional commitment could increase motivation to overcome challenges. Conversely, if closure seems inevitable, strategies to help entrepreneurs emotionally detach from the business may prevent further losses. Overall, understanding and addressing entrepreneurs' emotional ties to their ventures can inform practical strategies to navigate financial difficulties and plan for the future effectively.
If you have a suggestion on unique, special or impactful people in the field of innovation who I can highlight in one of my next updates, let me know!