Tom Nicholas

William J. Abernathy Professor of Business Administration

Tom Nicholas is a Professor in the Entrepreneurial Management Group of Harvard Business School. He holds a doctorate in Economic History from Oxford University. Prior to joining HBS, he taught Technology Strategy at MIT's Sloan School of Management and technology and finance courses at the London School of Economics. He was also an economics consultant in San Francisco where he performed economic analysis for environmental and antitrust litigation including Sun Microsystems v. Microsoft. At HBS he has taught the first year course, The Entrepreneurial Manager, and he currently teaches in Executive Education programs on entrepreneurship and intellectual property as well as two second year elective courses: The Coming of Managerial Capitalism, which examines entrepreneurship, innovation and business development in the United States over the past 230 years; and Venture Capital in Historical Perspective (with Felda Hardymon), which focuses on the changing organizational structure of the venture capital industry and its impact on entrepreneurship and innovation over time. He has received theFaculty Teaching Award in both the Required Curriculum and the Elective Curriculum and the Charles M. Williams Award for teaching excellence.

His research focuses on the historical foundations of entrepreneurship and wealth accumulation in Europe, and on the organizational structure and incentives for innovation in late nineteenth and early twentieth century America, Britain and Japan. His work shows how the foundations of new technology formation across countries can only be understood by examining the coexistence of large corporations, formal R&D establishments and independent inventors operating outside the boundaries of firms. It also highlights that alternative mechanisms to patents—specifically prizes—can exert a powerful influence on the rate and direction of technological change. He has also constructed historical real estate price indices for Manhattan from the 1890s through to the Great Depression in order to understand the relationship between real estate and stock market cycles.​

  1. Scale and Innovation During Two U.S. Breakthrough Eras

    by Tom Nicholas

    The effect of scale on innovation is central to traditional endogenous growth theory and to new theoretical approaches that focus on variability in innovation outcomes within the firm size distribution. Using new data on 11,514 U.S. R&D firms active during the interwar and post-WWII periods, this paper examines long run effects. Although the level and quality of innovation scaled strongly with firm size, innovation novelty was considerably more invariant to firm size across both breakthrough eras. While there is some evidence of firm-level heterogeneity as a determinant of the scale effect, the new data highlight the importance of variability in the nature of technological discovery.
  2. The Organization of Enterprise in Japan

    by Tom Nicholas

    Recent research reveals that the joint stock corporation was not a superior form of business organization in many countries historically. In Japan, however, it played a more fundamental role. Between 1896 and 1939 joint stock enterprises accounted for 44 percent of registered businesses and 80 percent of total capital. From 1922 to 1939 joint stock enterprises outperformed limited and unlimited partnerships by ROE and generated 94 percent of aggregate profits. External finance factors, Japan’s development phase, industrial structure, public policy and culture determined high joint stock usage. When the private limited liability company was introduced in 1938, it did not displace the joint stock form.