Steven Klepper, the Arthur Arton Hamerschlag Professor of Economics and Social Science at Carnegie Mellon University, died Monday, May 27, at age 64. A renowned teacher and researcher, Klepper’s pioneering work integrated elements of traditional economic models with evolutionary theory, bridging gaps between the study of entrepreneurship and mainstream economics.
"Steven Klepper was a brilliant researcher. His work challenged generations of young economists and entrepreneurs to look beyond traditional assumptions. He was an equally devoted educator and countless students were inspired by his introductory course, which became known as 'Kleppernomics.' His contributions were astounding, and he leaves behind a lasting legacy," said CMU Provost and Executive Vice President Mark S. Kamlet.
Klepper, who joined the CMU faculty in 1980 and had appointments in the Dietrich College of Humanities and Social Sciences and Tepper School of Business, studied the evolution of industries, particularly the role new companies play in innovation and economic growth. His research explored why innovative industries experience shakeouts and end up dominated by a small number of producers, and why some industries become clustered geographically, such as the concentration of semiconductor producers in Silicon Valley. He argued that geographic clustering is promoted by employees spinning off from established firms to set up competing firms in the same industry, which resembles a biological process of reproduction and inheritance. Klepper stressed that the most important education institutions in the U.S. are not necessarily schools but firms, and public policy needs to be structured to facilitate the formation of spinoff.
“Steven Klepper exemplified the unique multidisciplinary and innovative culture of Carnegie Mellon,” said John Lehoczky, dean of the Dietrich College. “His research into the nature of technological change and entrepreneurship was groundbreaking and challenged conventional wisdom on competitive market structures, monopolies and startups. Steven was also an extraordinary teacher who influenced generations of students. His passing is a huge loss to his family, his students and his faculty colleagues.”
In addition to his research contributions, Klepper was instrumental in establishing Carnegie Mellon as a top institution for the study of entrepreneurship and innovation management. In 2006, he created a university-wide minor in entrepreneurship and innovation. He also directed CMU’s Institute for the Study of Entrepreneurship, Innovation and Technological Change, which serves as the university’s hub for education and research on related topics.
In 2011, Klepper was recognized for his influential research contributions to the understanding of the birth and growth of new industries when he was awarded the esteemed Global Award for Entrepreneurship Research, widely regarded as the most prestigious entrepreneurial research honor.
Klepper was a dedicated teacher and professor. His introductory undergraduate economics class was famously dubbed “Kleppernomics” and was known to breathe life into the subject matter through spirited debate. Klepper taught economic theories through scenarios that would have the students selling imaginary commodities. At the end of the semester, the students entered a competition for cash prizes based on how much they earned in imaginary profits.
“Steven brought an amazing degree of passion and excellence to his teaching and research,” said John H. Miller, head of the Department of Social and Decision Sciences. “A legendary teacher, he taught thousands of CMU students ‘Kleppernomics,’ a variant of economic principles infused with insights and applications. His research combined the elegance of thoughtful economic theory, the archival skills of a historian, and the adept application of statistical analysis, to formulate new insights into, and a deeper understanding of, the true drivers of innovation and economic activity.”
Miller added, “As a teacher, scholar, colleague, leader, mentor and friend, he represented the best of CMU.”
In 1997, Klepper received the William H. and Frances S. Ryan Award for Meritorious Teaching, CMU’s highest teaching honor. He also received a Lifetime Teaching Award from the Tepper School of Business in 2001 and the Dietrich College’s Elliot Dunlap Smith Award for Distinguished Teaching and Educational Service in 1984.
In 1993, Klepper initiated an international gathering of advanced graduate students and faculty in strategy, innovation, and the economics of technical change. Known simply as the CCC, doctoral students present their research in a friendly pedagogical forum. The CCC has prepared hundreds of students to compete in the academic job market, has served to sharpen their analytic skills, and brought them into a global network of scholarship in Klepper’s areas of expertise. At the March 2013 Kauffman Foundation for Entrepreneurship meeting in Kansas City, Mo., the CCC celebrated Steven Klepper Day with presentations devoted to his scholarly oeuvre and recognition of his unique training body that has endured and thrived thanks to him.
“Steven Klepper’s scholarly work was known — and praised — throughout the world for his approach to rigorous science, for his application of Occam’s Razor in building models that explained quite simply very complex economic and business phenomena, for his dogged development of databases that took him deep into historical and often-obscure trade literature, for his brilliance in econometrics, and for his excellence in teaching, whether in first-year introductory economics or with advanced graduate students,” said David A. Hounshell, the David M. Roderick Professor of Technology and Social Change. “Students at all levels, including his closest colleagues and collaborators, knew what it meant to be ‘Klepperized’ after a face-to-face session with this master teacher and economist. He set incredibly high standards for himself and expected students and colleagues to get on board. CMU will never find another economist, scholar, teacher, and human being like Steven Klepper.”
Klepper received his bachelor’s degree, master’s degree. and Ph.D. in economics, all from Cornell University. He edited two books, “Innovation Economic Development” and the “Evolution of Industry and Economic Evolution, Learning and Complexity,” and authored or co-authored more than 70 published research papers.
Klepper is survived by his wife, Florence Rouzier, and their two children, Arielle and Julian. A memorial service will be held Wednesday, May 29, at the Homewood CemeteryNondenominational Chapel at 1599 South Dallas Avenue, Pittsburgh, PA, 15217; visitation will be from 11:30 a.m. – 12:30 p.m., and the service will begin at 12:30 p.m.