Social Science and Technology Seminar Fall 2018
Seminars take place in the 3rd Floor Conference Room, John A. and Cynthia Fry Gunn Building at 366 Galvez Street unless otherwise noted.
Day and time: Tuesdays 4-5:30pm
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Chuck Eesley, Associate Professor, Management Science & Engineering, Stanford Technology Ventures Program
Riitta Katila, Professor, Management Science & Engineering, Stanford Technology Ventures Program
Tim Bresnahan, Professor, Department of Economics
Woody Powell, Professor, Department of Education
September 27, 2018
Jax Kirtley (University of Pennsylvania)
What is a Pivot? Explaining When and How Entrepreneurial Firms Decide to Make Strategic Change and Pivot
Practitioners often characterize entrepreneurial strategy change as a “pivot” with scant attention to strategic change research, which has focused on strategic renewal in established firms. When and how do entrepreneurial firms engaged in innovation decide to make strategic change? With a longitudinal field study of seven entrepreneurial firms developing innovations in energy and cleantech, we examine 93 strategic decisions at risk for change. Decision makers only chose to change their strategy when a trigger conflicted with or expanded their beliefs. A pivot, or a strategic reorientation, was not achieved with a single decision, but by incrementally exiting or adding strategy elements, eventually accumulating into a pivot. We contribute an empirically grounded definition of what constitutes a pivot and explain when and how entrepreneurial firms pivot.
October 9, 2018
Kristina McElheran (University of Toronto)
Economies before Scale: Learning, Survival and Performance of Young Plants in the Age of Cloud Computing
Young firms are central to productivity and job growth, yet they fail at high rates. This dynamic can be understood as an outcome of high uncertainty early in life combined with costly learning about the productivity of irreversible investments. Recent advances in how firms access information technology (IT) - in particular, cloud computing – have dramatically lowered the costs of learning about productivity-enhancing IT. Using detailed Census Bureau data from 2006 to 2014, we explore whether this technological change has altered young-firm dynamics in the U.S. manufacturing sector. We find that young plants enjoy a roughly 5% lower annual failure rate on average due to IT services expenditure, while traditional IT capital investment increases the chance of failure. Conditional on survival, young plants exhibit much higher productivity from recent advances in IT services than do older plants. Detailed mechanism tests support technology-driven shocks to learning: older plants benefit from new IT services only if they are in high-uncertainty industries, and new establishments of existing firms benefit only if they operate outside their parent firm’s primary industry. Young, small plants benefit the most, though we find no evidence for a financial-frictions mechanism. This study provides the first large-scale evidence concerning the magnitude and mechanisms of how recent advances in IT are changing how young firms survive and thrive before they achieve significant experience and scale of their own.
October 17, 2018
Hila Lifshitz-Assaf (NYU)
What is Your Problem? The Importance of Problem Storming for Crossing Knowledge Boundaries
We have long believed that the way a problem is formulated is crucial to the way it is solved, and that innovative solutions often stem from reframing a problem. However, since problem formulation and problem solving are two intertwined phases that have been all but impossible to tease apart, our knowledge of problem formulation proper has hardly advanced in the last few decades. The recent rise of distributed model of innovation, such as crowdsourcing, decouples the problem formulation process from the problem solving one. This presents an opportunity to shed light on the problem formulation process and investigate its true impact on problem solving. I have conducted two studies in this direction. The first was a longitudinal inductive research project exploring the process of solving strategic R&D problems at NASA when using simultaneously the distributed crowdsourcing model and the standard organizational one. I find that some hard scientific and technological problems were solved through a process of “problem storming” in the distributed model. This process included questioning the current formulation of the problem and reformulating it in a way that can be solved by to other disciplines, professions and solution heuristics, outside usual knowledge boundaries. Problems that went through “problem storming” had more successful solutions. My second study was a field experiment with multiple R&D managers from various companies to investigate the impact of distributing the “problem storming” process to make it more impactful for organizations. I will share the results from these studies in my upcoming talk.
November 13, 2018
Mary Benner (University of Minnesota)
Room: Doll 320
Changing the Channel: Digitization and the Rise of “Middle Tail” Strategies
Prior research on digitization finds growing consumer interest in a “long tail” of existing products, while other research exhorts firms to create “blockbusters.” Using unique data on movie characteristics, we examine whether the reduced costs of movie production and new digital distribution channels spur movie producers to create products aimed at smaller audiences versus intended blockbusters aimed at mass appeal. We find growth in both blockbuster and long tail products, but also importantly, the rise of a “middle tail;” movies distributed via digital channels, with characteristics that suggest they are targeted to smaller audiences and not intended for theater distribution. The new middle tail is largely due to newcomers rather than major movie studios. We employ a flexible and transparent empirical approach relying largely on graphs to document the changes unfolding with digitization.
November 28, 2018
Sabrina Howell (NYU)
LOCATION AND TIME CHANGE! This week we will be meeting in Doll 320 over lunch.
Entrepreneurial Spillovers from Corporate R&D (joint work with Tania Babina)
Theory suggests that innovative output from corporate R&D investment can cross the firm boundary to benefit other firms. Employee departures to entrepreneurship may be a powerful source of these R&D spillovers; human capital is inalienable and portable, and startups are crucial to economic growth. Using U.S. Census data, this paper documents that R&D increases employee entrepreneurship. R&D is instrumented with its tax credit-induced cost. R&D-driven startups are much more likely to receive venture capital. The ideas spilling into entrepreneurship seem to be riskier, benefiting from focused, high-powered incentives, and also appear to be poor complements to the firm’s assets.