Defining the inventor-entrepreneur in the context of established typologies

Some 25 years ago while developing his type of entrepreneur and type of firm classification system. Smith (1967) thought he had identified a subtype of entrepreneur that did not fit either his craftsman or his opportunistic models. The data at that time were too sparse to be sure, but it appeared that there were certain entrepreneurs whose major concern was to develop an organization, not as an end in itself as with the opportunistic type, but rather as a vehicle to allow the invention and production of various products. This research now provides much more convincing evidence that the inventor-entrepreneur does indeed exist, using a sample of 147 National Science Foundation grant applicants who are also entrepreneurs. This sample was deemed particularly likely to contain large numbers of inventor-entrepreneurs. The support for Smith's (1967) early speculations turns out to be rather amazing. The inventor-entrepreneurs are located exactly where Smith (1967) expected them to be in the type of entrepreneur versus type affirm matrix. As anticipated, inventor-entrepreneurs, like other entrepreneurs, are more likely to head growing companies to the extent that they themselves are of the opportunistic type and their firms are of the adaptive type; there is nothing in the inventor-entrepreneur concept alone that calls for company growth. Also as hypothesized, the presence of a large number of inventor-entrepreneurs in a sample tends to dilute the usual finding of a strong positive correlation between type of entrepreneur and type of firm measures; among inventor-entrepreneurs it is not necessarily true that opportunistic entrepreneurs tend to head adaptive firms and craftsman entrepreneurs head rigid ones. There was one unexpected finding, however. Smith (1967) originally associated the inventor-entrepreneur with a proclivity for taking out patents. Although this association is supported by this research, it is dwarfed by another factor. What is really indicative of inventor-entrepreneurship is a strong commitment to a company strategy of new product development. Although not established by this research, it would appear that increasingly those who invent are dissuaded from seeking patents by the costs involved, the time delays, and the prospect in many new industries that patents will provide very little protection. It seems likely that patents will continue to decline in popularity among inventor-entrepreneurs, and that rapid market entry with new products to become a market leader will be the preferred strategy of the future. This assumes of course that inventor-entrepreneurs have access to sufficient capital to pursue this new product development strategy effectively. Investors should recognize, however, that the real importance of the inventor-entrepreneur stems not so much from immediate profit potential and the prospects for asset growth, although these are there, as from the contributions these individuals make to an expanding economy and the well-being of society.