Knowledge-Intensive University Spin-off Firms in South Africa: Fragile Network Alignment?

Abstract

This paper analyses the conditions for sustaining spin-off firms from university-based research in South Africa through follow-up case studies of three high-technology networks, using a ‘network alignment’ approach. Commercialization failed in the first case because of a lack of interactive capability and an absence of networks between the university and the industrial sector. Initial success was short-lived for the second case, given misalignment between firm and market conditions and in the coordination of key functions in the firm. In the third and most successful case, there was misalignment between the firm and a key global supplier, impacting on networks between firm and market and threatening turnover and future viability. The degree of alignment in the South African national system of innovation is fragile, in that networks may exist but not sufficiently widely across the system, or they may not function effectively. Hence, as the empirical evidence suggests, it is difficult to sustain competitive spin-off firms.