Entrepreneurial Propensity of Innovation Systems

This paper develops an analytical framework, namely the concept of entrepreneurial propensity of innovation systems by integrating knowledge intensive entrepreneurship (KIE) andinnovation system (IS) concepts. It first uses a composite index methodology to measure knowledge intensive entrepreneurship and entrepreneurial opportunities at the national level. It then assesses the influence of the system’s complementary activities on the emergence of KIE by OLS regressions and structural equation modeling (SEM). We argue that KIE is asystemic feature of IS and that new knowledge, innovation and entrepreneurship are inseparable elements of a dynamic IS.The results show that countries with more developed EO tend to have a high correlation between KIE and entrepreneurial opportunities (EO) reflecting the systemic feature of this relationship. This paper develops conceptually and empirically the notion of the entrepreneurial propensity of innovation system and provides empirical evidence that institutions affect entrepreneurial experimentation not only directly but more via technology and markets.