Knowledge sources of entrepreneurship: Firm formation by academic, user and employee innovators

Value Creation Tradeoff in Business Ecosystems: Leveraging Complementarities While Managing Interdependencies

Complementary assets play an important role in shaping an innovation’s commercialization success. In this paper, we broaden the locus of complementarities to examine the role of complementary technologies residing in the business ecosystems that are becoming an important source of value creation for innovating firms. We argue that, on one hand, complementary technologies help innovations create more value for their users. On the other hand, they can also limit the focal innovation’s value creation by exposing them to performance bottlenecks as the underlying technological architecture of the ecosystem evolves. We further extend the notion of specialization of complementary assets to ecosystems by considering complementary technologies that are specialized to a focal ecosystem and those that are available across multiple ecosystems. We highlight that, although the complementary technologies that are specialized to an ecosystem facilitate greater value creation, they are more likely to subject the focal innovation to performance bottlenecks. Evidence from 244,034 apps launched by software developers for Apple’s iPhone ecosystem during 2008–2015 offers strong support for our framework. In summary, the study sheds light on the value creation tradeoff for firms innovating in business ecosystems—the opportunities associated with leveraging complementarities and the challenges associated with managing technological interdependencies.

The Primordial Soup: Exploring the Emotional Microfoundations of Cluster Genesis

Previous research on the genesis of industrial clusters has focused on macrolevel (e.g., agglomeration economies and institutions) or mesolevel explanatory factors (e.g., serial entrepreneurship, spin-offs). Less studied are the microfoundations of cluster genesis, intended as the individual- and group-level processes underlying such macrolevel outcomes. Yet, microfoundations are key to understanding the “primordial soup” of cluster genesis—that is, the processes unfolding in the early moments of cluster formation, before the first emergence of commercial activity. Through a historical case study of the British Motorsport Valley (1911–1970s), we trace back the primordial origins of this cluster to the casual leisure activities of groups of amateur motorsport enthusiasts who then prompted the professionalization of motorsport racing and its transformation into the business at the core of the industrial cluster. We theorize that clusters emerge through the layering of different domains (casual leisure, serious leisure, and business), each made of three elements (actors, activities, and artifacts), which interact via two microlevel mechanisms: (1) localizing passion, a shared emotional energy by which people become affectively attached to the spaces where they carry out activities that they enjoy; (2) domain repurposing, the shift of a configuration of actors, activities, and artifacts toward a new purpose, originating a new domain. Whereas domain repurposing induces the transformation of activities from leisure to business (thus originating the industry at the core of a cluster), localizing passion anchors the activities to the same geographical area (clustering the industry). Our key contribution is to explore the emotional microfoundations of cluster genesis.

Top management team heterogeneity and economic performance: a micro-foundations perspective of academic business venturing

Purpose

This research focuses on the relationship between Top Management Team heterogeneity (TMT) and University Spin-Offs (USOs) economic performance according to a micro-foundational perspective. The purpose consists in exploring whether a high academic representation in TMTs may improve USOs’ performance and how their competencies and backgrounds affect USOs’ economic success.

Design/methodology/approach

The authors employed data from the Italian platform Netval to identify the entire population of USOs in southern Italy. They selected both pure and hybrid spin-offs that had at least one academic member on the TMT. Applying these conditions to our sample selection, the authors came to a population of 136 firms. They applied a hierarchical regression analysis to test the hypotheses.

Findings

Our main findings reveal that the USOs’ economic performance improves with more academicians in the TMT and even in the same scientific field. Our data also shows that CEO duality has a negative impact on economic performance.

Originality/value

This work takes for the first time a micro-foundational perspective to analyze individual-level factors that affect USOs’ performance. The authors tried to bridge a research gap in the USO literature, shedding light on the relationship between TMT composition and new venture performance, considering some significant interactions between team members. Our expected findings also contribute to the general literature on entrepreneurial teams in new ventures and suggest a means to reconcile some inconsistent literature results on TMT heterogeneity and USO performance.

When Does the Pre-entry Experience of New Entrants Improve Their Performance? A Meta-Analytical Investigation of Critical Moderators

Although pre-entry experience is widely regarded as a critical asset that positively influences new entrant performance, empirical support is mixed. To address this inconsistency, we conduct a meta-analysis of the empirical findings in 272 papers. We draw theoretically on the organizational learning literature to argue that the pre-entry experience–new entrant performance relationship is contingent on the characteristics of pre-entry experience, the environmental context of the new entrant, and the interaction between the two. In particular, we examine the effects of two levels of pre-entry experience (firm and founder), four types of founder-level pre-entry experience (entrepreneurial, managerial, industry, and functional experience), and two types of environments (industry and institutional). The meta-analysis results show a significant and positive correlation between founder-level pre-entry experience and economic performance of 0.07. Likewise, the failure rates of spinouts and diversifying entrants are 11% lower than that of start-ups. The moderating analysis results show that the correlation of founder-level pre-entry experience and economic performance is lower in knowledge- or technology-intensive (KTI) industries and higher in low-KTI manufacturing and service industries. The correlation is also higher in institutional environments with high power distance and individualism. These findings provide compelling new evidence for the importance of pre-entry experience and advance our understanding of the boundary conditions on the pre-entry experience–new entrant performance relationship.

Roles of Multiple Entrepreneurial Environments and Individual Risk Propensity in Shaping Employee Entrepreneurship: Empirical Investigation From China

While prior literature has widely acknowledged that the entrepreneurial environment significantly fertilizes entrepreneurship, the impact of workplace receives limited attention, and the vital role of organizations in linking social entrepreneurial environment and employee entrepreneurship has been largely ignored. Therefore, this study aims to unfold how multiple entrepreneurial environments (i.e., social, organizational, and interpersonal factors) shape employee entrepreneurship and then further reveal how such relationships vary with employees’ risk propensity. Drawn on the theoretical lens of mindsponge process, which offers an explanation of why and how organizations and individuals adopt new values through the cost-benefit analysis, we proposed a research model to explain the influence mechanisms of the social entrepreneurial environment on the cost-benefit analysis of both organizations and individual employees. Specifically, given that organizations deeply embedded in the society need to balance the costs and benefits under the pressure of the social entrepreneurial environment, the social entrepreneurial environment affects the organizational entrepreneurial environment (i.e., organizational hostility toward employee entrepreneurship). Similarly, employees’ cost-benefit analysis under the pressure of organizational hostility will influence their entrepreneurial intentions. Through analyzing the data collected from a two-wave survey with 220 employees, we showed that organizational hostility toward employee entrepreneurship plays a mediating role between social entrepreneurial environment and employees’ entrepreneurial intentions. In addition, such mediation relationship is moderated by coworkers’ unethical behaviors during their entrepreneurship and employees’ risk propensity, which are expected to influence organizations’ and employees’ cost-benefit analysis, respectively.

Spinoffs’ alliance network growth beyond parental ties: performance diminishing, then performance enhancing

Spinoff firms are a common phenomenon in entrepreneurship where employees leave incumbent parent firms to found their own. Like other types of new firms, such new spinoffs face liabilities of newness and smallness. Previous research has emphasised the role of the initial endowments from their parent firm to overcome such liabilities. In this study, we argue and are the first to show, that, in addition to such endowments, growing an alliance network with firms other than their parents’ is also critical for spinoff performance. Specifically, we investigate the performance effect of alliance network growth in newly founded spinoffs using a longitudinal sample of 248 spinoffs and 3370 strategic alliances in the mining industry. Drawing on theory based on the resource adjustment costs of forming alliances, we posit and find a U-shaped relationship between the alliance network growth and spinoff performance, above and beyond the parent firm’s influence. We further hypothesise and find that performance effects become stronger with increased time lags between alliance network growth and spinoff performance, and when spinoffs delay growing their alliance networks. Implications for theory and practice are discussed.

Evolutionary Approaches to Innovation, the Firm, and the Dynamics of Industries

We examine the progress of the evolutionary research on innovation, the firm, and the dynamics of industries in the last four decades. The paper acknowledges that the themes related to knowledge and technological regimes, the evolutionary processes leading to innovation, and the long-term dynamics of technologies have generated, and still remain, relevant research trajectories. The same can be said for the research trajectories on organizational and dynamic capabilities, evolutionary strategies, vertical integration, diversification, niche construction, and authority and power in organizations. Important progress has also been made in understanding the evolutionary trajectories of industries, the link between industry architecture and industry dynamics, the types of knowledge of entrants, the role of focal and vertical spinouts, the relevance of institutions and sectoral innovation systems in industry dynamics, and the catch-up process by firms from latecomer countries. We argue that future developments in the evolutionary camp should continue to be characterized by eclecticism and multidisciplinarity, as well as by the integration of different methodologies from cases to stylized facts, quantitative analyses, appreciative theorizing, and formal modelling. We conclude with an analysis of the main methodologies used by evolutionary scholars and a discussion of the road ahead.

Immigrant Entrepreneurship: The Effect of Early Career Immigration Constraints on New Venture Formation

We examine how institutional factors may affect microlevel career decisions by individuals to create new firms by impacting their ability to exercise entrepreneurial preferences, their accumulation of human capital, and the opportunity costs associated with new venture formation. We focus on an important institutional factor—immigration-related work constraints—given that technologically intensive firms in the United States not only draw upon immigrants as knowledge workers but also because such firms are disproportionately founded by immigrants. We examine the implications of these constraints using the National Science Foundation’s Scientists and Engineers Statistical Data System, which tracks the careers of science and engineering graduates from U.S. universities. Relative to natives, we theorize and show that immigration-related work constraints in the United States suppress entrepreneurship as an early career choice of immigrants by restricting labor market options to paid employment jobs in organizational contexts tightly matched with the immigrant’s educational training (job-education match). Work experience in paid employment job-education match is associated with the accumulation of specialized human capital and increased opportunity costs associated with new venture formation. Consistent with immigration-related work constraints inhibiting individuals with entrepreneurial preferences from engaging in entrepreneurship, we show that when the immigration-related work constraints are released, immigrants in job-education match are more likely than comparable natives to found incorporated employer firms. Incorporated employer firms can both leverage specialized human capital and provide the expected returns needed to justify the increased opportunity costs associated with entrepreneurial entry. We discuss our study’s contributions to theory and practice.

The Impact Mechanism of Entrepreneurial Team Expertise Heterogeneity on Entrepreneurial Decision

Under the background of economic globalization and industrial revolution, team entrepreneurship has drawn increased attention. Team entrepreneurship is considered to be advantageous in its capability of integrating more abundant resources and of sharing knowledge, information, and complementary skills among members of the entrepreneurial team, enabling entrepreneurial enterprises to successfully adapt to the highly uncertain entrepreneurial environment. In recent years, the relationship between the heterogeneity of the entrepreneurial team and its decision-making quality has attracted much attention in the management research field. However, the research results on such topic are quite inconsistent. Based on the information processing theory, the greater the market uncertainty the entrepreneurial team faces, the stronger information integration ability a team will be required to possess. This study investigates the mechanism and boundary conditions of the impact of expertise heterogeneity of the entrepreneurial team on entrepreneurial decision-making. It points out that team knowledge integration and team reflexivity have significant impacts on the relationship between entrepreneurial team expertise heterogeneity and entrepreneurial decision-making. This study adopts the multi-source design approach and collects data from 419 academic entrepreneurial teams in the University Science and Technology Park in Zhejiang Province. Hierarchical regression and bootstrapping methods are also employed for data analysis. The results show that team knowledge integration mediates the relationship between entrepreneurial team expertise heterogeneity and entrepreneurial decision-making, whereas team reflexivity moderates the relationship between entrepreneurial team expertise heterogeneity and team knowledge integration. In the final part, the practical implications for entrepreneurial team are discussed.

Innovative Culture and Firm Performance of Medical Device Companies: Mediating Effects of Investment in Education and Training

This research explored the mediating effect of investment in education and training relating to the innovative culture and organizational performance of medical device companies. We used the Human Capital Corporate Panel data provided by the Korea Vocational Competency Development Institute. In the industrial classification system of panel data, the industries related to medical devices were extracted and conclusively analyzed for 8629 workers and 368 companies. The independent and dependent variables were innovative culture and corporation performance, respectively. Investment in training and education was a mediating variable between the independent and dependent variables. Quantitative data were analyzed using SPSS software. A higher level of organizational satisfaction emerged in an innovative culture. Innovative culture positively affected organizational satisfaction. Further, investment in education and training to promote an innovative culture positively affected organizational satisfaction. Medical device companies should improve their performance by creating an innovative culture.

Performance drivers in knowledge-intensive entrepreneurial firms: a multidimensional perspective

Purpose

The purpose of this paper is to offer a comprehensive perspective on different facets of knowledge management and their effects on the performance of knowledge-intensive entrepreneurial ventures.

Design/methodology/approach

The empirical setting involves small and medium-sized enterprises located in the State of São Paulo, Brazil. Primary data for 223 knowledge-intensive entrepreneurship (KIE) firms was obtained through questionnaires applied to ventures which applied to the innovative research in small business program, a small business innovation research-like initiative run by the São Paulo Research Foundation. Econometric results assessed the drivers of competitiveness in terms of firm growth, research and development intensification and technology transfer.

Findings

Results highlight the complexity involved in establishing effective knowledge management processes in terms of driving KIE performance. Notwithstanding, some interesting insights on the moderation effects of strategic knowledge management (SKM) systems over technical skills could be identified with particular emphasis for the case of academic spin-offs. Ecosystem drivers present a good explanation power for technology transfer practices but fall short in providing answers for firm-level growth dynamics. It is also noteworthy that public and private investments in KIE firms are similarly associated with positive impacts – contrary to the view that private investors perform better than governmental sources in picking promising small ventures.

Originality/value

The assessment has provided novel evidence for a sample of KIE ventures concerning the appraisal of performance drivers associated with three dimensions of knowledge management, namely, technical knowledge, SKM and ecosystem features. Firms’ outcomes were addressed from a multidimensional perspective, thus providing a comprehensive perspective of the events under scrutiny.

Pre-Entry Experience, Postentry Adaptations, and Internationalization in the African Mobile Telecommunications Industry

We study the evolution of the African mobile telecommunications industry from its effective beginning and explore the sources of ownership advantages among indigenous firms, by assembling historical qualitative and quantitative firm-level data. Our historical qualitative findings suggest that a few start-ups gained industry-specific knowledge through their pre-entry experience, directed their postentry development of capabilities toward adaptations to challenging market and operational conditions, and leveraged their adaptive capabilities to enter and compete in other African countries. Using our quantitative panel data, we show that these firms successfully internationalized across the continent. In particular, compared with other start-ups, they had higher rates of foreign entry in African countries that had relatively weaker rule of law, and greater market reach in African countries that had relatively larger low-income consumer segments. These patterns corroborate that their capabilities for overcoming the industry’s challenging market and operational conditions were their key ownership advantages. Through our triangulated analysis, we show that inherited industry knowledge provides a foundation for postentry capability development, and entrepreneurial leadership guides this process to create ownership advantages for regional internationalization.

Health-tech startups in healthcare service delivery: A scoping review

BACKGROUND

An efficient and affordable healthcare service delivery to everyone is a prerogative of the national governments. Such delivery is quite exacting, and gaps remain. In this regard, startups are trying to disrupt the market with innovative solutions and reach the underserved market. Though anecdotal evidence remains, a rigorous literature review is missing. This paper attempts to understand the status of health-tech startups in healthcare service delivery.

METHODS

We scanned a total of 110 journals - Financial Times top 50, top ten information systems journals listed by the Australian Business Dean Council, and the top 50 Scopus indexed journals in health informatics and health information management. We followed a systematic process for this scoping review - reading of titles, abstracts, and then full papers for final analysis based on inclusion and exclusion criteria.

RESULTS

A total of 76 articles met the inclusion criteria. Only five studies portrayed the status of health-tech startups in healthcare service delivery. To capture the overall startup ecosystem, we continued with a scoping review of all the 76 articles.

DISCUSSIONS

The identified five themes are Technology adoption, Electronic health services, Business planning and framework, Psychographics, and Regulations. There is evidence of technology adoption in service delivery and its nature in the businesses undertaken by startups. Very few studies represented the patterns of the existing business model. The acceptance of the services is dependent on service effectiveness and affordability. The challenges are licensing, policies, data privacy and security, and inadequate technology access among healthcare seekers.

CONCLUSIONS

Albeit the feasibility potential, research concerning the impact of health tech startups in healthcare service delivery is emerging but incipient. The review indicates that research on startups is inadequate, especially related to entrepreneurship, business frameworks, and regulations. Future research should explore the same.

Perceptions of Green User Entrepreneurs’ Performance—Is Sustainability an Asset or a Liability for Innovators?

User entrepreneurs rely on regular consumers when starting their business, for example, when raising creative and financial support. This research examines regular consumers’ opinions with regard to the future business performance of green vs. non-green user entrepreneurs. We build on previous consumer behavior research on consumers’ performance perceptions. Specifically, consumers perceive products that use green, environmentally friendly technologies as having inferior performance compared to products that use traditional technologies. We investigate whether this so called “sustainability liability” effect can also be found in consumers’ perceptions of green user entrepreneurs’ performance. We ran an online scenario experiment with regular consumers who assessed the business performance of several (green vs. non-green) user entrepreneurs. Results reveal a “sustainability asset” effect for perceptions of green user entrepreneurs, such that consumers with strong environmental values perceived the business performance of green user entrepreneurs as superior compared to non-green user entrepreneurs. Consumers with weak environmental values perceived green and non-green entrepreneurs as equally performant. We discuss possible explanations of our findings. Furthermore, we propose potential consequences of our results both for consumers’ intentions to support user entrepreneurs as well as for user entrepreneurs’ motivation to engage in green innovations.

Attention to Exploration: The Effect of Academic Entrepreneurship on the Production of Scientific Knowledge

We study how becoming an entrepreneur affects academic scientists’ research. We propose that entrepreneurship will shift scientists’ attention away from intradisciplinary research questions and toward new bodies of knowledge relevant for downstream technology development. This will propel scientists to engage in exploration, meaning they work on topics new to them. In turn, this shift toward exploration will enhance the impact of the entrepreneurial scientist’s subsequent research, as concepts and models from other bodies of knowledge are combined in novel ways. Entrepreneurship leads to more impactful research, mediated by exploration. Using panel data on the full population of scientists at a large research university, we find support for this argument. Our study is novel in that it identifies a shift of attention as the mechanism underpinning the beneficial spillover effects from founding a venture on the production of public science. A key implication of our study is that commercial work by academics can drive fundamental advances in science.

Participation in Group Companies as a Source of External Knowledge in Obtaining and Making Profitable Radical Innovations

In the context of potential absorptive capacity, the present work analyzes sources of knowledge through the adjustment between the typology of sources and innovative results. Different external sources can condition the later phases of knowledge absorption. In relation to external sources of knowledge, we enrich their treatment by considering other companies in the same group as deeper relationships. In addition, we analyzed the results regarding the generation of radical innovations with impact on income. The results show that company groups can reduce costs in the exchange of technological knowledge, not only to develop radical innovations but also to improve their economic performance. Furthermore, membership in a group allows a company to obtain a greater economic return when combined with assimilation resources.

The influence of regional institutional setting on the performance of innovative entrepreneurship

Purpose

Two types of institutional constraints, namely, institutional voids and policy uncertainty, have been recognised and elaborated, including their influence on new venture performance. However, not enough attention has been paid to the multidimensional attribute of institutional transformation. By hinting at a relatively underexplored third type of institutional constraints, i.e. institutional fragility, this paper aims to build a comprehensive framework of institutional constraints to analyse how innovative start-up performance is influenced by institutional constraints.

Design/methodology/approach

Using Chinese manufacturing firms as the empirical sample, the authors use an econometric method to test the relationship between institutional constraints and the performance of innovative start-ups.

Findings

On the basis of a uniquely constructed database from 2005 to 2007, the authors find that institutional constraints are negatively associated with innovative start-up performance proxied by return on assets, sales growth and new product sales.

Originality/value

The study offers researchers and practitioners a detailed view of institutional constraints and innovative start-up performance.

Institutional Factors for Academic Entrepreneurship in Publicly owned Universities in Japan: Transition from a Conservative Anti-industry University Collaboration Culture to a Leading Entrepreneurial University

The establishment of university spin-offs differs across schools as a result of the interactions among different intuitional settings. This study examines the role of institutional factors in the context of state-controlled universities, which are the majority in East Asia, but have not been the focus of the existing literature. The University of Tokyo experienced a significant shift from an anti-industry university collaboration culture to a leading entrepreneurial university in the mid-2000s. This study proposes a chronological investigation of the policies and culture of this state-owned top research university and addresses its significant efforts to create an entrepreneurial environment. First, despite the regulatory constraints, the university has established an incubator and early-stage investment resource, benefiting from prior experimental experiences in an independent research centre. Second, it opened a special non-degree entrepreneurship education programme for students and postdoctoral researchers. These facts show the importance of an organisational initiative even in a state-controlled context. Regarding the reasons why such changes did not cause internal cultural conflict, our case studies suggest that the academic and commercial bicultural system introduced by the University of Tokyo balanced the fulfilment of traditional academic roles with the drive for innovation.

How User-Innovators Pave the Way for a Sustainable Energy Future: A Study among German Energy Enthusiasts

The existence of user-innovators in the household sector is undeniable. Prior research provided evidence on the vast scope of product developments by household sector users and documented a large set of individual user-innovator characteristics to explain their behavior. What has largely been neglected as a potential source of user innovation activities are product- and technology-specific factors. This study aims to fill this gap by identifying and analyzing user-innovators in Germany. On the basis of the results of a large-scale survey on German energy enthusiasts, we find dissatisfaction with existing products and time-consuming implementation as the main drivers of user innovation in our setting. The results show a negative correlation between data security concerns and the likelihood of becoming a user-innovator, pointing towards the maker culture among user-innovators. As an implication of our work, we provide a roadmap for all stakeholders aiming to harness the potential of user-innovators for future open innovation eco-systems.

ARE PUBLIC FINANCING SCHEMES BENEFICIAL FOR UNIVERSITY SPIN-OFFS AND THE TECHNOLOGY TRANSFER OF INNOVATIONS?

We investigate the effectiveness of public financing programmes for university spin-offs (USOs) in their seed stage. These ventures often identify groundbreaking innovations which are not commercialised due to financing problems. USOs show characteristics which expose them even more to the typical financing gap ventures face and for which public programmes aim to provide relief. We test on a sample of 127 German USOs whether these ventures’ characteristics increase the selection for public programmes and whether these positively affect the ventures’ development. The results indicate that only certain characteristics of USOs are decisive for receiving public support. However, the supported spin-offs have an increased likelihood of facing financial difficulties after the phase of support and do not have a higher investment readiness for finding an external investor.