The relationship between innovation and risk is a matter of some debate. Economists
like Schumpeter (1934) and Kirzner (1973) conceptually distinguish between
entrepreneurs and capitalists, and do not see risk-taking as an important issue in
innovation. Still they agree with Knight (1971) that innovation is risky in the sense
that innovative actions aimed at the future always confront uncertainty. In reality,
acting under conditions of uncertainty always entails more or less tangible risks, as
the innovator stands to gain or lose things like waged capital, corporate promotion,
social standing, or self-esteem (cf. Brockhaus, 1980; MacCrimmon and Wehrung,
1986).1 How risk is conceived will thus influence what innovative actions are
taken.