Scholars and practitioners have long been interested in the role that new entrepreneurial firms play in creating new technology innovations. Schumpeter (1934) identified entrepreneurs as the source of “creative destruction” that had the potential to transform industries and create severe challenges for established firms. New venture formation has been linked to important economic outcomes like GDP and employment growth and is often identified as a major driver of national competitiveness (Audretsch, 2007; Caves, 1998; Sutton, 1997). As a result, understanding how to foster entrepreneurial innovation is of great importance to economic and social welfare. To do this, we must first identify successful entrepreneurial innovation strategies.
Since there are large variations across industries, it is likely that successful innovation strategies might differ in response to market characteristics. Research thus far has generally linked industry structure, intellectual property policy, and financing conditions to rates of entrepreneurship (Gans et al., 2001; Gompers & Lerner, 1999; Teece, 1996). We believe we can contribute to that research by empirically identifying differences in the successful innovation strategies used by entrepreneurs that are driven by differences in the markets they enter. Until now, there are have been no large-scale settings which contain enough comparable data on entrepreneurship across many different markets to conduct this kind of investigation. The many categories of apps in the mobile apps ecosystem provides an opportunity to empirically explore entrepreneurship in a way that informs us about the larger variation across all economic markets.
We propose to study the mobile apps ecosystem popularized by Apple iPhone/iPad and Google’s Android devices. We chose this setting because of the explosive growth in smartphone applications, which have created opportunities for entrepreneurial firm foundings (Bresnahan et al., 2014). Both Apple’s App Store and Google Play have over 1 million applications as of January 2014, with a January 7, 2014 press release from Apple reporting $10 billion in revenue for the App Store for 2013. Mobile apps are the latest of a series of important applications of ICT and thus are central to a broad concern with national competitiveness and economic growth.
We have already developed a large database of the population of developer firms and products for the past 3.5 years. We have the most complete, non-commercial collection of Google Play and App Store time-series data at the near-daily level. This proposal seeks support to fund continued collection of app store data, a detailed inductive, field research in 10 firms, and survey research of a large sample of the population to identify founding team structures and organizational design choices.
There is urgency to the survey and case data collection, as much of it will disappear if it is not collected in real time, and the changes recorded during this early industry evolution are critical to identifying the experiments, successes and failures in organizational institutions, entrepreneurship, and the economics of platforms that are playing out currently. Evidence for the basic research nature of this data lies in the danger that if academics do not collect this unique, detailed data, it will not be gathered by industry data sources, since they have little financial incentive in this fast-paced industry. Our data management plan outlines how we will release the data we collect into the public domain, with the NBER patent database as our model. We are certain this will create a huge public good for further scholarship in economics, innovation, organizations, and entrepreneurship.