New Technology‐based Firms in the New Millennium (Volume 8)

Citation

Jungbae Roh, J. (2013), "New Technology‐based Firms in the New Millennium (Volume 8)", Management Decision, Vol. 51 No. 2, pp. 451-453. https://doi.org/10.1108/00251741311301911

New technology is the major source of successful entrepreneurship. It enables venture firms to innovate in terms of developing new processes and products and improving existing ones and to find competitive advantages with which to outdo the competition. Methods and insights have gradually evolved, and remarkable progress has been made in researchers' efforts to build solid paradigms of entrepreneurship based on new technology. Government policy plays an important role in spurring and guiding entrepreneurship based on new technology, and yet much research is needed to shed light on the processes that support invention and innovation. The book New Technology‐based Firms in the New Millennium, volume 8 (2011), edited by Oakey, Groen, Cook, and van der Sijde, brings together the best papers presented at the annual international High Technology Small Firms Conference held in Manchester in May 2007. The book consists of 14 chapters, organized under four themes: “Promoting entrepreneurship through university‐based programs,” “The financing of new technology‐based firms,” “Start‐up strategies” and “Drivers of superior performance.”

The first three studies fall under “Promoting entrepreneurship through university‐based programs.” The first study in chapter 2, by Hogan and Zhou introduces the theme by defining the different types of spin‐offs and assessing the advantages and drawbacks of the different types of spin‐off systems. The second study in chapter 3, by Arroyo‐Vandquez, van der Sijde, and Saez, discusses the reorientation of the university to entrepreneurship. The authors demonstrate the need for support, for the setting up of an appropriate culture, and for the development of entrepreneurship by presenting an integrated model of entrepreneurship in the university setting. The third study in chapter 4, by Dahlstrand and Berggren, deals with how best to promote entrepreneurship in the university. Comparing and contrasting two groups of students, this study found that designing and implementing a certain type of entrepreneurship program exerts a significant influence on future entrepreneurship behavior. For example, students whose studies included entrepreneurship courses showed a greater interest in starting a business after graduation. The study shows the importance of the entrepreneurship education of students to build a robust future for business start‐ups.

The next four studies tackle the second theme of the book: “The financing of new technology‐based firms.” Financing is one of the most challenging aspects of starting a company. It is also an area where governments and various financial institutes are involved in setting up proper incentives for promising firms to take a lead in business. The empirical study of the Irish software industry by Hogan and Huston, in chapter 5, finds that the conventional stage model does not adequately apply to software firms suffering from a funding shortage not at start‐up but in the commercialization stage. Ganotakis, in chapter 6, investigates whether or not human resources factors have anything to do with the external financing of a start‐up company. His study finds that highly educated entrepreneurs tend to apply for external finance, and entrepreneurial teams with a large and established team base pursue such finance more actively. Other human resources factors, however, did not turn out to have any significant influence on the receipt of finance. An extensive survey by Norrman and Klosfsten, in chapter 7, discovers that the public sector is supportive of funding new venture development but that the amount of capital falls short of the requirement for new production development and commercialization in the market place. The study adds to the literature that presents the challenges associated with finding sources of finance for new venture developments. Chapter 8, the fourth study in this section, by Weinberg, Minshall, and Garnsey, tackles an important phenomenon: the fact that high‐technology‐based firms are often acquired by their counterparts. Although the occurrence of this phenomenon is often analyzed from the buyer's perspective, there is a dearth of studies that investigate such important occurrences from the small firm's viewpoint. The study aims to fill this research gap by building a new theory, and as a first step it proffers a research framework that introduces core dimensions and variables.

Chapters 9 to 11 are organized under the theme of “Start‐up strategies.” In chapter 9, “Entrepreneurs' communicative behavior in technology‐based versus service‐based business – A resource dependence perspective,” Ulvenblad shows that there is a difference in the pattern of communicative strategy between technology‐ and service‐based start‐ups. Technology‐based start‐ups put more weight on creating “the appearance of a substantial and competent business,” because they are faced with difficulties in drawing capital at an extended product development stage. On the contrary, the service start‐ups choose networking as their primary communication interface. Chapter 10 introduces Englis, Englis, Groen, and van der Sijde's work, “Knowledge‐intensive entrepreneurship and the voice‐of‐the‐consumer.” The study emphasizes integrating the voice of consumers into product development and launching. Start‐ups may focus only on the conventional technology‐push approach, but case studies show that the successful launching of products hinges on identifying and delivering consumer benefits. Covino, Romano, and Spadafora, in chapter 11, present a successful case to show how small high‐technology companies may avail themselves of financial resources in their tight start‐up processes: going public. An Italian research‐intensive firm successfully went public and obtained the necessary capital by overcoming three challenges: ensuring the credibility of the firm, convincing stakeholders of the need to go public, and resisting the fear of loss of control.

The final theme, “Drivers of superior performance,” has always been a debated issue, especially in new technology‐based firms. Chapters 12 to 14 address this issue. Instead of Standard Industrial Classification (SIC) codes, Sims and O'Regan, in chapter 12, present an input‐based index of a high‐tech firm based on expenditure on R&D, the use of innovation, creativity, and capabilities. A survey of 197 small‐ to medium‐sized firms reports that the high‐tech sectors tend to exhibit higher scores in the input‐based index and also higher profitability. In chapter 13, Minshall, Mortara, and Napp explore the issues in tying operational issues together with strategic issues in the context of open innovation. Via a literature review and ten case studies, the authors lay out the strategic and operational issues that multinational companies underwent while adopting an open innovation system in conjunction with high‐technology small firms. The issues boil down to three broad problems: “Intellectual property management,” “expectation management,” and “skills development,” and the study suggests the skills necessary for effective collaboration between multinational firms and high‐technology small firms. Petzold‐Dumeynieux, in chapter 14, discusses the different patterns of market orientation displayed in 101 young, French high‐technology small firms. A cluster analysis based on four factors results in the four types of market orientations in the firms.

The 13 contributions in Volume 8 of New Technology‐Based Firms in the New Millennium continue to display the hallmark of the series – innovative work by scholars around the world on essential questions concerning entrepreneurship in technology‐intensive industries. In particular, the study results from European firms shed light on the current status of entrepreneurship in the region. This book will be of interest to researchers, policymakers, and practitioners interested in taking a deeper look at the current trajectory of high technology‐based firms.