One of the crucial questions confronting strategy and entrepreneurship scholars continues to be: where do new industry sectors come from? Extant literature suffers from a supply-side “skew” that focuses unduly on the role of heroic figures and celebrity CEOs, at the expense of demand-side considerations. In response, the purpose of this paper is to examine societal demand for entrepreneurial innovations. Employing historical data spanning nearly a century, the author assess more completely the role of latent demand-side signaling in driving the quantity and diversity of entrepreneurial innovation.
Applying the methods of historical econometrics, this study employs historical artifacts and cliometric models to analyze textual data in drawn from three distinctive sources: Popular Science Monthly magazine, from its founding in 1872 to 1969; periodicals, newsletters, club minutes, films and radio transcripts from the Science Society, from 1921 to 1969; and programs and news accounts from the US National High School Science Fair, from 1950 to 1969. In total, 2,084 documents containing 33,720 articles and advertisements were coded for content related to pure science, applied science and commercialized science.
Three key findings are revealed: vast opportunity spaces often exist prior to being occupied by individuals and firms; societal preferences play a vital role in determining the quantity and diversity of entrepreneurial activity; and entrepreneurs who are responsive to latent demand-side signals are likely to experience greater commercial success.
This study intentionally draws data from three markedly different textual sources. The painstaking process of triangulation reveals heretofore unobserved latencies that invite fresh perspectives on innovation discovery and diffusion.
This paper constitutes the most panoramic investigation to-date of the influence wielded by latent demand-side forces in the discovery and commercialization of innovation.
