Highlights from the 2016 REER Conference
At the beginning of November, entrepreneurship scholars convened at the University of Georgia Tech to kick off the annual Roundtable for Engineering Entrepreneurship Research (REER) Conference. The conference is one of the more interesting and relevant entrepreneurship conferences I have attended this year, and I want to share the highlights of several papers presented.
1. Non-Competes in the Labor Force
Norman Bishara, JJ Prescott, Evan Starr
Topic: What is the landscape of non-compete agreements among employees in the U.S.? How does enforcement of non-compete agreements affect individuals?
- The paper analyzes a national survey of employees to uncover the propensity of employees to sign non-compete agreements.
- The results by state show that even banning non-competes does not decrease their usage. In California, where non-competes are famously banned barring extreme circumstances, individuals still sign the agreements at rates similar to other states where the agreements are legal.
- The authors emphasize the “chilling effect” non-compete agreements have been shown to have on employees, where simply the threat of legal action changes behavior and reduces labor mobility.
- The paper questions whether optimal non-compete policy ought to be based on the stringency of enforcement of the agreements, or whether the presence of the agreements in the first place is the critical factor.
Next steps for research: The discussant and audience was careful to advise the authors to tune their findings to avoid simplifications such as, “getting rid of non-competes will turn states into new Silicon Valleys.” This work also provided a rare snapshot of the non-compete environment and its widespread presence. In addition, more data efforts to illuminate where and how non-competes are used would be valuable.
2. Entrepreneurial Adaptation and Social Networks: Evidence from a Randomized Experiment on a MOOC Platform
Charles Eesley (Kauffman Dissertation Fellow, 2007), Lynn Wu
Topic: Does a planning or adaptive entrepreneurial mindset matter? How do entrepreneurs with planning or adaptive approaches to entrepreneurship fare in entrepreneurship courses and during the initial years of their startup?
- Eesley and Wu examined how the mindset of an entrepreneur and the specific skillset of their mentor affects their ability to succeed, both in an entrepreneurship classroom (a Stanford Massive Open Online Course) and in the initial stages of their business.
- The authors categorized an entrepreneur’s mindset as planning or adaptive, based on whether or not they were willing to change their vision, and the mentors as either providing a diverse network or a specific network.
- The authors found that an adaptive approach, where an entrepreneur is flexible in their vision, produces inferior results to a planning approach in the short term (class completion and success), unless paired with a mentor with a diverse network. However, this reverses in the longer term, as an adaptive approach is associated with more revenue and better firm survival rates.
Next steps for research: The discussant accurately identified that the direction of the effect is not definitive. This experiment could be showing the impact of a diverse mentor on an adaptive strategy or the impact of an adaptive strategy on an entrepreneur with a diverse mentor. This work provides 1) initial evidence about the relationship between entrepreneurs and mentors and 2) how those mixes lead to more successful entrepreneurship. There remain a number of different variables on which to categorize entrepreneurs and mentors to more deeply explore how mentors shape successful entrepreneurs.
3. Entrepreneurship and the School of Hard Knocks: Evidence from China’s Great Famine
Junhong Chu, Ivan P.L. Png, Junjian Yi
Topic: Does economic hardship spur more entrepreneurship? If so, how?
- Using data collected during the Great Famine in post-war China (1959-1961), the authors examine how a short period of economic difficulty affected self-employment efforts in China.
- In counties where the effects of the famine were most severe, evidence suggests that subsequent entrepreneurship by future generations increased, and increased the most for those in their formative years (ages 7-12) during the famine.
- The authors explore whether the result is due to selective mortality or conditioning and find more support for an increase due to greater risk tolerance but not for other personality traits commonly associated with entrepreneurs.
Next steps for research: This work complements a popular psychological theory of entrepreneur development known as “the school of hard knocks.” The results from this quasi-experiment lend support to the idea that from dire conditions, entrepreneurs emerge, due to increased risk tolerance. While there is some support that entrepreneurs succeed in challenging environments and more evidence that risk tolerance predicts more entrepreneurship, understanding whether and how particular personality traits influence entrepreneurial propensity and success deserves more work.
REER has become one of my favorite conferences to attend. The quality of the research presented was high throughout the weekend and covered a number of topics beyond the ones mentioned here, including cumulative innovation, the speed of technology adoption, and the career path of STEM talent. As well, this group of researchers understands the necessity for their work to extend beyond the classroom and academic journals to improve the world.
We highlighted last year’s conference as well. Click here to check out last year’s summary of the conference.