Chapter 8 The Epistemology of Entrepreneurship

Entrepreneurs have two advantages over credentialed experts. They “know” less of what is false, and they (informally) know more of what is true. They know less of what is false because they are either ignorant of, or willing to ignore, the currently dominant theories. They know more of what is true by having more informal knowledge (whether local, tacit, or inchoate). Funding of projects by firms or governments will rely on expert judgments based on the currently dominant theory. So breakthrough innovations depend on innovative entrepreneurs being able to find funding independent of the insider incumbent institutions, usually self-funding.