"Why America Needs Both Startups and Big Firms to Innovate" w/ Prof Sharon Belenzon

*Professor Sharon Belenzon examines how the U.S. innovation ecosystem became fragmented and why large firms still have a role to help solve today's technological challenges* How should the United States organize its innovation ecosystem to solve the biggest scientific and technological challenges? According to Professor Sharon Belenzon, the answer depends not only on funding research, but also on how different organizations—from universities to startups to large corporations—work together to translate science into products. In this episode of Duke Fuqua Insights Podcast, Belenzon, a strategy professor at Duke University's Fuqua School of Business and a Research Associate at the National Bureau of Economic Research, discusses the mechanics of government procurement alongside ideas from his forthcoming book, Inventing Prosperity, on the past 150 years of American innovation. He argues that understanding today's innovation challenges requires understanding how the U.S. innovation system has changed, from one in which large firms carried out many stages of innovation to one in which specialized organizations perform different tasks.  Belenzon explains that this more specialized model has produced important successes in some sectors, particularly the life sciences, where different organizations can efficiently contribute their expertise. But he argues that other fields—including materials science, battery technology, and clean energy—may require a greater degree of vertical integration, with large firms serving as anchors of the innovation ecosystem. His research on government procurement offers a complementary example of how organizational structure influences innovation, showing that under specific conditions, government procurement contracts can create incentives for firms to pursue ambitious technological challenges. A central takeaway is that firms with both research and manufacturing capabilities can, in certain circumstances, organize innovation more efficiently than separating those activities across different organizations. As Belenzon puts it, "Some problems cannot be solved by startups alone," and policymakers should avoid treating all large firms the same. Instead, they should identify those that serve as anchors for scientific and technological progress.  For business leaders, the conversation offers a framework for thinking about innovation beyond R&D spending alone. Organizational design, incentives, and the relationships among firms, universities, investors, and government all shape whether scientific discoveries become technologies with broad economic impact.  Duke Fuqua Insights features digestible conversations with our faculty about the most impactful research from their careers, including studies they teach in Fuqua classes. New episodes every other week in season. For more from Duke Fuqua, visit us on LinkedIn, Instagram, Facebook, Bluesky, and the Duke Fuqua Insights newsletter.