Why Entrepreneurs, not Bureaucrats, Drive Innovation. December 16, 2021


Private enterprise has long been recognized as the driver of innovation, economic growth, and improvements in the quality of life. More recently, however, academics, journalists, and politicians have heralded “The Entrepreneurial State,” the idea that government planners, not entrepreneurs and private investors, are the real heroes of the new economy.

In this lecture, entrepreneurship scholar and teacher Peter Klein builds on the latest research on innovation to show that government intervention largely stymies, not promotes, entrepreneurship, innovation, and economic growth. Attempts by  government planners to pick firms, technologies, and industries largely fail as planners lack the knowledge, competence, and incentive to mimic the role of entrepreneurs and capitalists.

The argument is illustrated with classic and modern examples, including President Biden’s “Build Back Better” initiative.

Peter Klein

Peter G. KleinPeter G. Klein is W. W. Caruth Endowed Chair, Professor of Entrepreneurship, and Chair of the Department of Entrepreneurship and Corporate Innovation at Baylor University’s Hankamer School of Business.

He is Adjunct Professor of Strategy and Organization at the Norwegian School of Economics and Carl Menger Research Fellow at the Mises Institute.

He serves as Co-Editor of Strategic Entrepreneurship Journal and the 2020-21 Chair of the Entrepreneurship Division of the Academy of Management.

He is author or editor of six books and author of over 130 scholarly articles, chapters, and reviews on issues in strategy, organization, and public policy.

He holds a B.A. from the University of North Carolina, Chapel Hill and a Ph.D. in economics from the University of California at Berkeley. He taught previously at the University of Missouri, Washington University–St. Louis, Copenhagen Business School, and the University of Georgia and was a Senior Economist with the Council of Economic Advisers.