Two economists at the Brookings Institution argue that "new firms rather than existing ones have accounted for a disproportionate share of disruptive and thus highly productivity enhancing innovations in the past-the automobile, the airplane, the computer and personal computer, air conditioning, and Internet search, to name just a few."
a. Why might new firms be more likely than older firms to introduce "disruptive" innovations?
b. Assuming these economists are correct about the most important source of productivity enhancing innovations, what are the implications for the future of the U.S. economy of recent trends in the formation of new businesses?