Entrepreneurship, Opportunity, and Growth

This papers contrasts "invention-to-growth" policies derived from macroeconomic models with "opportunity-to-growth" policies suggested by consideration of microeconomic fundamentals. I focus on the effectiveness of opportunity exploitation by entrepreneurs relative to established incumbents - in particular, how the relative "price of entry" depends on the magnitude of interaction costs, which I define as the sum of conventionally defined transactions costs and additional costs of validation and search attributable to asymmetries of information. I further emphasize the manner in which new tools of communication and collaboration are rapidly changing interaction costs, with implications for the intensity and direction of entrepreneurial effort.