ABSTRACT
Technological changes have long been recognized, from Marx to Schumpeter, as the primum mobile of social and economic progress. Arguable, however, it is entrepreneurial activities that provide the crucial linkage between technological changes and the evolution of capitalist institutions. Entrepreneurial institutions distinguish themselves from established incumbents not only by being new but also by being organizationally different. The success of an entrepreneur depends on his ability to find the most effective and efficient way to organize activities for the purposes of (1) translating i l l - defined technologies into technically and commercially feasible innovations (Rosenberg, 1976) and (2) capturing the maximum value from those innovations (Teece, 1986). The viability of a new organizational form derives from its compatibility with the new technological regime and market conditions (Hannan and Freeman, 1989). It is in this sense that the Schumpeterian concept of ‘creative destruction’ may be reinterpreted as destruction of the existing forms, structures and routines, as well as those non-adaptive, established institutions themselves.
