What we do know and what we need to know about knowledge in the growth process

There is evidence for major positive effects of knowledge transfer and innovation diffusion on economic growth. Much research has addressed schooling, training, and other aspects of human capital accumulation, but less emphasis has been placed on the interaction between firms and other organizations as a key driver of the development of new knowledge and its economic use. There is an extensive body of literature that discusses various aspects of knowledge transfer and innovation diffusion between firms, and this literature may serve as a microfoundation for understanding the role of knowledge in the growth process. However, we need to understand the role of the entrepreneur as a missing link between knowledge and innovation. The purpose of this paper is to outline some foundations of endogenous (externally driven) growth models, and uses the knowledge spillover theory of entrepreneurship to propose a new model of latent and emergent entrepreneurship