Which Entrepreneurs Boost Productivity?

Ufuk Akcigit, Harun Alp, Jeremy Pearce and Marta Prato

No 20260105, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Why do some entrepreneurs drive economic growth while others do not? This piece discusses new work that studies entrepreneurs using a comprehensive dataset from Denmark. We study who becomes an entrepreneur, along with their hiring and business decisions, and find that a distinct minority are “transformative.” These individuals, who generate disproportionate productivity gains, tend to have high IQ scores, be well-educated, and hire technical (R&D) workers. The data support the idea of productivity growth being driven by the symbiotic relationship between transformative entrepreneurs and R&D workers. For policymakers, the lesson is that when an economy has more R&D workers and transformative entrepreneurs, they sustain higher long-run productivity growth.

Keywords: entrepreneurship; R&D; innovation; productivity growth (search for similar items in EconPapers)
JEL-codes: O31 O38 (search for similar items in EconPapers)
Date: 2026-01-05
New Economics Papers: this item is included in nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:102298

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DOI: 10.59576/lse.20260105

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