The peculiarities of new industries make them particularly favorable to the creation of new ventures. The ventures arise from among those parties that have access to Information about the new product, a community that expands over time. But certain activities of the creation process—especially Information gathering and fundraising—stop many ventures from continuing. Moreover, these constrictions In the process are Influenced by past levels of success of the process Itself. This sets up feedback mechanisms that regulate creation rates In various patterns, but eventually lower them to near zero, completing the familiar cycle of new industry entries.
Get full access to this article
View all access options for this article.
References
1.
CavesR., & PorterM. (1977). From entry barriers to mobility barriers.Quarterly Journal of Economics, 91, 241–261.
DosiG. (1982). Technological paradigms and technological trajectories.Research Policy, 11, 147–162.
4.
EtzioniA. (1963). The epigenesis of political communities at the international level.American Journal of Sociology, 68, 407–421.
5.
GartnerW. B., & ThomasR. J. (1988). An exploration of methods used by new firms to estimate future sales. In KirchoffB. A., LongW. A., MullanW. E., VesperK. H., & WetzelW. E. (Eds.), Frontiers of entrepreneurship research 1988, pp. 461–476. Wellesley, MA: Babson College.
6.
GarudR., & Van de VenA. (1989). Technological innovation and industry emergence—The case of cochlear implants. In Van de VenA. H., AngleH. L., & PooleM. S. (Eds.), Research on the management of innovation.New York: Harper & Row.
7.
GoreckiP. (1975). The determinants of entry by new and diversifying enterprises in the UK manufacturing sector 1958-1963: Some tentative results.Applied Economics, 7, 139–147.
8.
GreenbergerD. B., & SextonD. L. (1988). An interactive model of new venture initiation.Journal of Small Business Management, 26(3), 1–7.
9.
HamiltonR. T. (1985). Interindustry variation in gross entry rates of independent and dependent business.Applied Economics, 17, 271–280.
10.
HendersonR. (1990). Underinvestment and incompetence as responses to radical innovation: Evidence from the photolithographic alignment equipment industry. Unpublished paper, Sloan School of Management, M.I.T., Cambridge, MA, May 1990.
11.
HinesH. H. (1957). Effectiveness of ‘entry’ by already established firms.Quarterly Journal of Economics, 71, 132–150.
12.
KatzJ., & GartnerW. B. (1988). Properties of emerging organizations.Academy of Management Review, 13, 429–441.
13.
KnightK. E., DowlingM. J., & BrownJ. B. (1987). Venture survivability: An analysis of the automobile, semiconductor, vacuum tube and airline industries. In ChurchillN. C., HornadayJ. A., KirchoffB. A., KrasnerO. J., & VesperK. H. (Eds.), Frontiers of entrepreneurship research 1987, pp. 138–153. Wellesley, MA: Babson College.
14.
KnightR. M. (1988). Spin-off entrepreneurs: How corporations really create entrepreneurs. In KirchoffB. A., LongW. A., MullanW. E., VesperK. H., & WetzelW. E. (Eds.), Frontiers of entrepreneur-ship research 1988, pp. 134–149. Wellesley, MA: Babson College.
15.
LaneS. (1989). Entry and industry evolution: The ATM manufacturers’ market. Unpublished Working Paper, Boston University School of Management.
16.
LearnedK. E. (1991). What happened before the organization? A model of new venture creation. Paper presented to the 1991 Babson Entrepreneurship Research Conference, University of Pittsburgh, Pittsburgh, PA.
17.
LemelinA. (1982). Relatedness in the patterns of interindustry diversification.Review of Economics and Statistics, 64, 646–657.
18.
NeiswanderD. K., & DrollingerJ. M. (1986). Origins of successful start-up ventures. In RonstadtR., HornadayJ-A., PetersonR., & VesperK. H. (Eds.), Frontiers of entrepreneurship research 1986, 482-488.Wellesley, MA: Babson College.
19.
OrrD. (1974). The determinants of entry: A study of the Canadian manufacturing industries.The Review of Economics and Statistics, 16, 58–66.
20.
RappaM. A. (1989). The emergence of a new technology: The case of neural networks. Unpublished Working Paper #3031-89-BPS, Sloan School of Management, M.I.T., Cambridge, MA, June 1989.
21.
RobertsE. B., & BerryC. A. (1985). Entering new businesses: Selecting strategies for success.Sloan Management Review, Spring, 3–17.
22.
RomanelliE. (1989). Organization birth and population variety: A community perspective on origins.Research in Organizational Behavior, 11, 211–246.
23.
RonstadtR. (1983). The decision not to become an entrepreneur. In HornadayJ. A., TimmonsJ. A., & VesperK. H. (Eds.), Frontiers of entrepreneurship research 1983, pp. 192–212. Wellesley, MA: Babson College.
24.
SchwalbackJ. (1987). Entry by firms into German industries.International Journal of Industrial Organization, 5, 43–49.
25.
ShapiroD., & KhemaniR. S. (1987). The determinants of entry and exit reconsidered.International Journal of Industrial Organization, 5, 15–26.
26.
ShaverK. G., GatewoodE. J., & GartnerW. B. (1991). Attributions for new venture creation: An experimental comparison. Paper presented to the 1991 Babson Entrepreneurship Research Conference, University of Pittsburgh, Pittsburgh, PA.
27.
SahlmanW. A., & StevensonH. H. (1985). Capital market myopia.Journal of Business Venturing, 1, 7–30.
28.
StinchcombeA. L. (1965). Social structure and organizations. In MarchJ. G. (Ed.), Handbook of organizations.Chicago: Rand-McNally.
UtterbackJ. M. (1987). Innovation and industrial evolution in manufacturing industries. In GuileB. R., & BrooksH. (Eds.), Technology and global industry: Companies and nations in the world economy.Washington, DC: National Academy Press.
31.
UtterbackJ. M., & KimL. (1986). Invasion of a stable business by radical innovation. In Klein-dorferP. R. (Ed.), The management of productivity and technology in manufacturing.New York: Plenum Press.
32.
Van de VenA., & GarudR. (1987). A framework for understanding the emergence of new industries. Unpublished Discussion Paper #66, Strategic Management Research Center, University of Minnesota, February 1987.
