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Social push and the direction of innovation

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  • Einiö, Elias
  • Feng, Josh
  • Jaravel, Xavier Laurent

Abstract

Innovators are intrinsically-motivated individuals who use ideas to create new goods and services. This raises the possibility that their social backgrounds may affect the direction of their innovative activity. Consistent with this "social push" channel, we document that innovators create products that are more likely to be purchased by customers similar to them along observable dimensions including gender, age, and socioeconomic status, both across and within detailed industries. Next, we provide causal evidence that social experience affects the direction of a person's innovative activity. Specifically, being exposed to peers from a lower-income group increases an entrepreneur's propensity to create necessity products, without affecting her rates of entrepreneurship and entrepreneurial income. We incorporate this channel into a general equilibrium model to assess its implications for cost-of-living inequality and long-run growth when there is unequal access to the innovation system.

Suggested Citation

  • Einiö, Elias & Feng, Josh & Jaravel, Xavier Laurent, 2022. "Social push and the direction of innovation," LSE Research Online Documents on Economics 117951, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:117951
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    References listed on IDEAS

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    Cited by:

    1. Fons-Rosen, Christian & Gaule, Patrick & Hrendash, Taras, 2023. "Why Has Science Become an Old Man's Game?," IZA Discussion Papers 16365, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    innovators social background; social push;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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