Entrepreneurial Risk-Taking in Sustainable Energy: University Spin-Off Firms and Market Introduction in Northwest Europe

Razieh Nejabat,Marina Van Geenhuizen

doi:10.3390/su11246952

Abstract

Universities are cradles of innovation, with many start-ups involved in sustainable energy solutions. The extent in which such solutions reach the market and the kind of risk-related factors young firms encounter, are hardly known and understood. We aim to clarify market introduction and focus on the empirics of firms’ risk-taking behavior related to strategic choices, competences, and interactions with (national) ecosystem conditions. We use a unique dataset of almost 110 university spin-off firms and a small selected sample from this set. A total of 60% of spin-offs are able to reach the market, most of them in the first five years of spin-offs’ lives. Wind energy provides the best chances, as compared to such things as solar photovoltaics (PV) and advanced biomass. In-depth results suggest the high probability of quick market introduction in ‘Innovation Leader’ countries, like Sweden and Denmark, if combined with employing rich collaborative networks. A second set of favorable influences includes a practical mindset and accessing substantial investment capital. In contrast, strong risks tend to be connected to activity in fundamental inventions, highly specialized technology, weakly developed (sub) markets, poorly built networks, and short refunding time of substantial investment. This study provides a unique contribution to understanding the market introduction of sustainable energy solutions and risk-taking in this effort by young high-tech firms, among others, connected to differences between countries.

Highlights

Fighting climate change, in particular greenhouse gas emissions, has become a pressing issue in recent years in the European Union, country governments, cities, universities, and businesses, as evidenced by various assessment reports and long-term strategic visions (e.g., [1,2,3,4])
The questions we address can be detailed as follows: what are the patterns of market introduction, and what is the influence of risk-related factors connected to firms’ strategic choice, competence, and broader interaction with business ecosystems? In addition, what may be the implication of market introduction for scaling-up the innovation?
Among young university spin-off firms in Northwest Europe, market introduction of energy inventions is accomplished by a small majority (60%) and in most cases before the age of six

Summary

Introduction

In particular greenhouse gas emissions, has become a pressing issue in recent years in the European Union, country governments, cities, universities, and businesses, as evidenced by various assessment reports and long-term strategic visions (e.g., [1,2,3,4]) Technology, both existing and emerging, is an important source of solutions, alongside knowledge on practical applications. High-tech start-up firms are increasingly seen as important actors in the (transitional) change of energy systems, as evident from the growing publication of (inter)national lists of such firms (e.g., [5,6]) Due to their involvement in developing and introducing new technology, high-tech start-ups are acknowledged for their ability to develop disruptive innovations due to their willingness to ‘cross borders’, adopt flexibility, idealistic orientation, creativity, responsiveness, and a forward-looking attitude, and overall to take various risks that are mitigated through dynamic networking with large firms.

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Conclusion