Young, Restless and Creative: Openness to Disruption and Creative Innovations

Abstract

This paper argues that openness to new, unconventional and disruptive ideas has a …rstorder impact on creative innovations-innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of di¤erent ages and human capital are sorted across di¤erent types of …rms, we provide crosscountry , …rm-level and patent-level evidence consistent with this pattern. Our measures of creative innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). Our main proxy for openness to disruption is manager age. This variable is based on the idea that only companies or societies open to such disruption will allow the young to rise up within the hierarchy. Using this proxy at the country, …rm or patent level, we present robust evidence that openness to disruption is associated with more creative innovations.

CEO's age and the performance of closely held firms

“…Innovators and top scientists are found to be more creative early in their careers (Galenson & Weinberg, 2000Jones & Weinberg, 2011;Weinberg & Galenson, 2005). Further, using the sample of the U.S. publicly traded firms, Acemoglu, Akcigit, and Celik (2014) show that younger CEOs tend to work with younger inventors; thus, the effect of a CEO's age may not be confined to his or her individual contribution. Also, team creativity appears to be enhanced by young members (Packalen & Bhattacharya, 2015).…”

The Allocation of Scientific Talent*

“…There is a large body of literature examining the determinants and efficiency consequences of the allocation of talent to different tasks and professions. 6 Closest to my paper are Acemoglu et al (2014) and Vandenbussche et al (2006). In Acemoglu et al (2014), managers can pursue either radical innovation or incremental innovation.…”

“…6 Closest to my paper are Acemoglu et al (2014) and Vandenbussche et al (2006). In Acemoglu et al (2014), managers can pursue either radical innovation or incremental innovation. In Vandenbussche et al (2006), skilled and unskilled workers can be employed either in innovative activities (i.e., pushing the knowledge frontier) or in the adoption of new technology (i.e., reducing the distance to the knowledge frontier).…”

Industry Evolution and Entrepreneurship:StevenKlepper's Contributions to Industrial Organization, Strategy, Technological Change, and Entrepreneurship

“…The relationship between age, pre‐entry experience, and entrepreneurial (or managerial) success discovered in Braguinsky et al . () suggests that more studies could be fruitfully conducted on the relationship between individual ability, age, and the pace of technological change (see for example, Acemoglu, Ufuk, and Celik, ). The individual level of analysis remains an important area of research, as does examining similarities and differences in factors that cause employee mobility versus entrepreneurship.…”