Discovering Entrepreneurial Opportunities in the Creation of New Firms in Italy

Abstract

Nowadays, in an uncertain, competitive, and dynamic environment, companies must be able to manage complex value chains, and they should be aware of their BM (Business Model) to react quickly to the emerging needs of the global consumers. In this paper the main BMs of the new firms, born in Italy after 2,000, are examined. The new firms considered belong to three industries: life-science, engineering and services - Knowledge Intensive Business Service (KIBS). Data were collected through telephonic interviews, selecting a sample of 504 firms (reduced to 495 once we add the financial indicators extracted from AIDA database) within a universe of 2341 newly founded firms located in the North of Italy in the years 2000-2006 (source Cerved-Chamber of Commerce) . The results obtained trough cluster analysis show the emergence of 3 specific business models, strongly connected with the 3 specific sectoral context. In cluster 1 engineering firms dominate, and the specific competitive factors are related to focusing on product quality, technological competences, speediness, customization, and green innovation. Striking enough new firms are not connected with new products or new markets but their entry is explained by an initial strategy based on slightly improved products in existing markets: thus the driving force of cluster 1 is the presence of low-cost innovation. Cluster 2 is mainly populated by KIBS. Competitive factors of these firms are: speediness, reliability, and customization. ICT competences support the migration of services towards the on-line modality. Firms inserted in cluster 3 are the most innovative part of the sample. The majority of firms are life science companies. They are clearly focused on R&D, innovation, new products development for new or emerging markets, and product quality. Summing up, only a small part of Italian new firms emerges as “canonical” innovators. New firms seems to have elaborated more sophisticated BMs, for instance characterized by low-cost innovation, green innovation, customization, and a special effort to improve quality and “velocity”. These dominant competitive behaviors in all the 3 clusters identified, characterize the emergence of real efficient BMs, because they are associated to a higher level of profitability (ROA and ROS), if we compare, in each sector, firms associated by the methodology of cluster analysis to a specific cluster, with firms of the same sector which were excluded.