Young, Restless and Creative:Openness to Disruption and Creative Innovations

This paper argues that openness to new, unconventional and disruptive ideas has a Örstorder impact on creative innovationsó innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of di§erent ages and human capital are sorted across di§erent types of Örms, we provide cross-country, Örm-level and patent-level evidence consistent with this pattern. Our measures of creative innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). Our main proxy for openness to disruption is manager age. This variable is based on the idea that only companies or societies open to such disruption will allow the young to rise up within the hierarchy. Using this proxy at the country, Örm or patent level, we present robust evidence that openness to disruption is associated with more creative innovations