High-technology Entrepreneurs Research Articles

Transformative change in higher education: entrepreneurial universities and high-technology entrepreneurship

ABSTRACT Public policies focusing on the higher education landscape often pursue a paradigm shift among universities that may ultimately lead to the transformation towards entrepreneurial universities. The purpose of this paper is to examine whether a higher education policy-induced transformation significantly influenced regional high-technology entrepreneurship. We thereby focus on the German Excellence Initiative, a higher education policy intervention designed to foster and support the transformative change of German universities towards an entrepreneurial paradigm. Our results reveal that the German Excellence Initiative had a positive and significant impact on regional high-technology entrepreneurship. Our results further show that the higher the interaction with industry, the more conducive universities become for regional high-technology entrepreneurship. In addition, universities’ overarching scientific focus decisively affects regional high-technology entrepreneurship. Based on our results, we conclude our paper by outlining implications for policy makers, high-technology entrepreneurs and university managers as well as present future avenues for research.

International high-technology entrepreneurs: hybrid identities and entrepreneurial activities

International entrepreneurs operating in the context of globalisation provide an opportunity for scholars to study and better understand the entrepreneurial process under dynamic conditions. Borrowing from Bhabha's postcolonial lens, we offer hybrid identities as a new way to conceptualise entrepreneurial selves under conditions of globalisation as, hitherto, the approaches to the study of international entrepreneurs have relied on static concepts of self and culture emanating from Western philosophical traditions. We believe our framework can be used to understand the novel ways in which international entrepreneurs understand themselves and others, conduct their businesses, and make sense of the 'rules of the game' in the ever-changing socio-cultural and institutional contexts in which they are situated. Qualitative analysis of interviews conducted with international entrepreneurs in Silicon Valley and Turkey illuminate this phenomenon and the usefulness of the hybrid identity concept, specifically, and postcolonial theoretical framework, more broadly, to research in international business and entrepreneurship.

Three Essays on Product Form Choice

Innovators and high-technology entrepreneurs have three principal options for transforming their innovations into viable business models and deriving value from their innovations. They may: market intellectual know-how (via licensing and/or proof-of-concept), market intermediate products (i.e., sell components/sub-systems), or market end-products (i.e., sell complete systems/solutions). In this dissertation, I aim to contribute to the organizational design and marketing strategy literature with three separate essays that study these fundamental strategy alternatives, which are called “product form choice.” In the first essay, I explore product form choices in the context of early-stage and established firms engaged in new product development projects, and generate a theoretical framework that shows (a) how technology, market, and enterprise-resource related factors systematically impact this choice, and (b) how the enterprise coordinates with other actors in its “eco-system” to design, produce, and market effective products/solutions based on the core innovation. The other two essays use two different methodologies and contexts to systematically test some key refutable predictions from the framework developed in Essay 1. In particular, in the second essay, I use simulated experimental scenarios and ordered-choice models to investigate explore product form choices in the context of early-stage ventures seeking angel investor funding to examine the effect of technology, marketing, and firm-level factors on product form decisions. In the third essay, I use primary survey data obtained from executives from firms selling industrial equipment in four industry sectors to study how coordination and safeguarding motives, in conjunction with a firm’s unique set of product development resources impact their product form decision.

The Causes and Consequences of Churn in Entrepreneurs’ Personal Networks

This study examines the causes and consequences of churn in technology entrepreneurs’ (ego) core personal networks. Churn refers to the change in the composition of an entrepreneur's core personal network due to the entry of new network contacts (alters) or exit of existing network contacts. We draw on recent research describing networking styles to examine how a focal entrepreneur's networking actions affects churn in his/her core personal network and thereby increases his/her venture's portfolio of exchange partners. We find that entrepreneurs whose networking actions involve establishing greater interpersonal knowledge when interacting with strangers or relationally embedding ties with existing alters experience lesser network churn. In contrast, entrepreneurs whose networking actions involved greater time pacing of interactions with existing alters experienced greater network churn. The longitudinal empirical analysis on a sample of Indian high technology entrepreneurs operating business‐to‐business ventures provides support for our theoretical framework. We contribute to the entrepreneurial networks literature by systematically examining the dynamics of technology entrepreneurs’ core personal networks and their venture‐level consequences. Copyright © 2012 Strategic Management Society.

Sense and sensibility: The role of business incubator client advisors in assisting high-technology entrepreneurs to make sense of investment readiness status

For high-technology entrepreneurs, attaining an appropriate level of investment to support new ventures is challenging as substantial investment is usually required prior to revenue generation. Consequently, entrepreneurs must present their firms as investment ready in the context of an uncertain market response and an absence of any trading history. Gaining tenancy within a business incubator can be advantageous to this process given that placement enhances entrepreneurial contact with potential investors whilst professional client advisors (CAs) use their expertise to assist in the development of a credible business plan. However, for the investment proposal to be successful, it must make sense to fund managers despite their lack of technological expertise and product knowledge. Thus, this article explores how incubator CAs and entrepreneurs act in concert to mould innovative ideas into plausible business plans that make sense to venture fund investors. To illustrate this process, we draw upon empirical evidence which suggests that CAs act as sense makers between venture fund managers (VFMs) and high-technology entrepreneurs, yet their role and influence appears undervalued. These findings have implications for entrepreneurial access to much needed funding and also for the identification of investment opportunities for VFMs.

High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey

We offer description and analysis of the 2008 Berkeley Patent Survey, summarizing the responses of 1,332 U.S.-based technology startups in the biotechnology, medical device, IT hardware, software, and Internet sectors. We discover that holding patents is more widespread among technology startups than has been previously reported, but that the patterns and drivers of holding patents are industry and context specific. Surprisingly, startup executives report in general that patents are providing relatively weak incentives for core activities in the innovation process. Our analysis uncovers that the drivers of startup patenting are often associated with capturing competitive advantage, and the associated goals of preventing technology copying, securing financing, and enhancing reputation - although again these and other motives depend on firm and industry factors. We also find substantial differences in the roles played by patents for startups in the biotechnology and medical device sectors - where patents are more commonly used and considered important - as compared to those operating in the software and Internet fields - where they are less useful. Interestingly, venture-backed IT hardware startups tend to resemble those in health-related fields in terms of their use of and motives for patenting. We generally find a wide disparity between the patenting behavior of venture-backed technology startups and those that are not funded with venture capital. We also discover that, when choosing not to patent major innovations, startups often cite to cost considerations, although again the motives to forgo patenting differ according to firm and industry characteristics. The respondents to our survey also generally report that checking the patent literature and licensing patents from others is reasonably common, although there too results differ according to the context. Other findings are discussed.

Financing the entrepreneurial decision: an empirical approach using experimental data on risk attitudes

This paper empirically examines the role of personal capital in the entry decision for US high-technology entrepreneurs. Our innovative approach utilizes both survey data and data from economics-based field experiments, which enables us to elicit and control for the risk attitudes of individual entrepreneurs in the study. Empirical findings suggest that (1) Small Business Innovation Research (SBIR) grants, (2) credit cards, and (3) earnings from a salaried job are among the most important sources of funds for entrepreneurs in their decision to start up a firm. Our findings support Evans and Jovanovic (Journal of Political Economy 97(4):808–827, 1989) in that wealth appears to have a positive impact on the probability of starting up a firm, even when controlling for risk attitudes; however, risk attitudes do not appear to have a strong role to play in the entry decision overall. Policy implications suggest that firm start-ups are dependent on access to capital in both initial and early stages of development, and that government funding, including SBIR grants, is an important source of capital for potential and nascent high-technology entrepreneurs.

High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey

We offer description and analysis of the 2008 Berkeley Patent Survey, summarizing the responses of 1,332 U.S.-based technology startups in the biotechnology, medical device, IT hardware, software, and Internet sectors. We discover that holding patents is more widespread among technology startups than has been previously reported, but that the patterns and drivers of holding patents are industry and context specific. Surprisingly, startup executives report in general that patents are providing relatively weak incentives for core activities in the innovation process. Our analysis uncovers that the drivers of startup patenting are often associated with capturing competitive advantage, and the associated goals of preventing technology copying, securing financing, and enhancing reputation - although again these and other motives depend on firm and industry factors. We also find substantial differences in the roles played by patents for startups in the biotechnology and medical device sectors - where patents are more commonly used and considered important - as compared to those operating in the software and Internet fields - where they are less useful. Interestingly, venture-backed IT hardware startups tend to resemble those in health-related fields in terms of their use of and motives for patenting. We generally find a wide disparity between the patenting behavior of venture-backed technology startups and those that are not funded with venture capital. We also discover that, when choosing not to patent major innovations, startups often cite to cost considerations, although again the motives to forgo patenting differ according to firm and industry characteristics. The respondents to our survey also generally report that checking the patent literature and licensing patents from others is reasonably common, although there too results differ according to the context. Other findings are discussed.

Creativity: A key link to entrepreneurial behavior

While entrepreneurial creativity is a desired behavior in most firms, it is difficult to understand both how this complex phenomenon occurs and how to increase its rate of occurrence. Understanding and increasing managerial creativity is important not only in developed economies, but also in developing economies, where the research discussed herein was conducted. This article argues that a solid knowledge base, a well-developed social network, and a strong focus on identifying opportunities are all necessary inputs toward entrepreneurial behavior. High-technology entrepreneurs that we interviewed in Hong Kong, however, indicated that creativity also plays a critical and important role in the entrepreneurial process. Attesting to this, they credited the competence with their being able to make the associations and bisociations needed to develop new products, which led to their entrepreneurial success.

High Technology Entrepreneurs versus Small Business Owners in Israel

In recent years there has been growing interest in the psychology of managers and entrepreneurs. Yet, few studies have compared the two, and the literature often treats them interchangeably. This exploratory study focused on two types of entrepreneurs: high technology entrepreneurs (HTEs) and small business owners (SBOs) who were assumed to be more similar to managers. An attempt to identify psychological similarities and differences between them was made. Twenty-five HTEs and fifty SBOs were interviewed with respect to their family and professional backgrounds, self-perception and work attitudes. Results revealed a number of similarities (high involvement, optimism, energy, independence and initiative) as well as differences (HTEs' higher level of education, higher military rank and greater leadership experience as compared to the SBOs' greater realism, greater love of management and greater likelihood of having a father who was also an entrepreneur). These differences were interpreted within a psychoanalytic framework that focuses attention on SBOs' positive identification with both parents as compared to the HTEs' negative identification with father and greater identification with work. Practical implications of these differences for the management of HTEs' and SBOs' organisations or businesses and for public policy were drawn.

Exploring the pre-entrepreneurial careers of high-technology entrepreneurs

The encouragement of high-technology entrepreneurship is an increasing focus of enterprise agency activities in growing numbers of developed economies. Universities are playing a role in the development of entrepreneurial capital through a range of initiatives and programmes targeted at enhancing levels of enterprise awareness and skills at undergraduate and postgraduate levels. The effectiveness of such programmes is sometimes judged by the number of students starting a business when they graduate. This paper argues that such an approach fails to understand the nature of the pre-entrepreneurial career. Evidence is presented from a study of entrepreneurs in the electronics and software sectors, which demonstrates that sizeable numbers of firms are established by those in mid-career, after a significant time working as an employee. During this period, the entrepreneur gains knowledge and develops skills and networks, which facilitate the establishment of well-conceived and sustainable ventures. This paper suggests that secondary and tertiary education and workplace-based learning are complementary components in the development of would-be entrepreneurs, and that the numbers of individuals able to embark directly on an entrepreneurial venture will be very limited.

Prior knowledge, bisociative mode of thinking and entrepreneurial opportunity identification

The purpose of this paper is to examine the relationships among prior knowledge, bisociative thinking mode and entrepreneurial opportunity identification in a sample of 197 technology-based entrepreneurs. Results indicate that bisociative thinking mode of an entrepreneur mediates the relationship between prior knowledge and entrepreneurial opportunity identification. In addition, the relationship between prior knowledge and entrepreneurial opportunity identification is stronger for high-technology entrepreneurs. Implications for research and practice are also discussed.

Who Adds Value to Ventures? Understanding the Roles and Relative Contributions of Key Advisors in High-Technology Startups

During the process of starting and growing a company, entrepreneurs seek help from their key advisors, which include its directors, advisory board members, financiers, as well as others informally affiliated with the venture. This paper examines how the various groups add value to a venture and assesses the relative value of their contributions. Through a survey of high technology entrepreneurs, we find that directors, advisory board members and informal advisors add significant value by offering their expertise in various fields. Surprisingly, investors add relatively little value, even in such key areas as strategic planning and finance. While professional venture capitalists add more value than private investors, even the venture capitalists' contribution was perceived lower than those of the other advisors in key areas. Our results suggest that the contributions of investors may have been overestimated in conventional literature.

Are Universities Playing a Role in Nurturing and Developing High-Technology Entrepreneurs? The Administrators' Perspective

This is a study of the administrators' perspective on entrepreneurship education: for example, the extent of, and their support for, entrepreneurship course offerings, and formal and informal initiatives for venturing students. Sixty per cent of the 134 deans in the survey offered entrepreneurship courses in their faculty (that is, 100% of business, and 36% of humanities and social science deans). Relatively few deans of medical sciences, science and engineering and graduate studies offered entrepreneurship courses, although many deans in these faculties were supportive of their faculty offering courses. For informal programmes, 66% of those that offered courses also had ‘non-credit’ programmes to support venturing students, but only 48% of those with no courses had these programmes. Findings show that universities in Canada are not optimizing opportunities to nurture high-technology entrepreneurs.

The Making of Israeli High-technology Entrepreneurs: An Exploratory Study

Israel has an unusually large number of high-technology entrepreneurs and companies. The influence of high-technology start-ups on the Israeli gross national product is enormous, with no proportion to its relative size in the local or international context. The phenomenon of Israeli high-technology entrepre neurs raised great curiosity worldwide but very little academic research attention. In this exploratory study, in-depth interviews were conducted with twenty-five Israeli high-technology entrepreneurs, focusing on their personal as well as professional backgrounds. Results suggest that the median successful Israeli entrepreneur is male, in his mid-forties, with technical education, a technical profession and an academic degree, who served in the army as an officer in either combat or technical position and is the first born in a small family of two or three children. The interview material revealed most poignantly the influence of service in the army on the career development of these entrepreneurs. Six cases are provided as a demonstration of this influence.

Does money matter?: Wealth attainment as the motive for initiating growth-oriented technology ventures

Does money matter?: Wealth attainment as the motive for initiating growth-oriented technology ventures

Trust and the acquisition of knowledge from non‐executive directors by high technology entrepreneurs

This paper examines the role of trust in the process of learning and acquisition of knowledge by high technology entrepreneurs in their relationship with external directors. It examines the literature on organisational learning which showed the importance of social agency and trust as necessary elements of learning and knowledge management. In particular it identified dimensions linked to trust in competence of external advisers, situations of crisis and the necessity of trust but also the development of trust fostered by group identification. The paper also examines the literature on external directors to show that as open systems they present an appropriate case for investigating the dimensions of trust pertaining to knowledge and learning. The overall findings are that trust and relationships have an impact on the process of learning. In particular it was found that external directors have competence which brings value added benefits to growing small firms. It was also found that trust in situations of crisis was required. Finally, the long‐term involvement and the development of relationships between external directors and entrepreneurs fostered group values and trust based identification.

Factors influencing Japanese entrepreneurs in high-technology ventures

In this study reporting on a survey of the founders of Japanese high-technology firms, various factors affecting the entrepreneurial event are examined. The sample was drawn from the Nikkei Press Group, which publishes, in Japanese, an annual directory of over 1,700 “high-technology” venture business firms. A close examination of this directory reveals that there are only between 100 and 200 firms that are both high technology and less than 10 years old. From this list, 100 firms were selected for a single mailing of a Japanese-language questionnaire. Forty-six completed questionnaires were returned. The survey consisted of eight questions, six of where were multipart questions. While the “push” of a displacing event seems to be relatively unimportant among Japanese high-technology entrepreneurs, there appears to be a strong relationship between social marginality and entrepreneurs with a perception that they “had no alternative” but to form a new venture. The “pull” of opportunity was mostly related to a specific deal or a niche ignored by former employers. The importance of friends in the decision to launch a venture appears to be quite strong, reflecting the strong group spirit of Japanese society. The dominant element in the motivation of high-technology entrepreneurs in Japan seems to be related to a drive for self-actualization. The following five variables generated the strongest affirmative reactions: • Create an opportunity for myself • Create an organization that reflects my values • Reached a critical point in my life • Create an opportunity to grow and develop my talent • Unable to exercise my full creativity in previous position This may reflect that basic human needs are well met by the Japanese economy and the centuries of Japanese social and ethnic continuity. It is not entirely clear from this study where Japanese high-technology entrepreneurs find “role models.” Only a few had fathers who were entrepreneurs, although 43% had fathers who were either entrepreneurs, farmers, or otherwise self-employed. Observing colleagues or others form companies played only a limited role. However, 83% of the founders acknowledged that their firm was a “spin off” from their previous employer. The founders of these “spin-off” ventures were predominantly employed in R&D and sales and marketing. Holding a position of authority was strongly associated with spin-off ventures in Japan. About as many high-technology entrepreneurs came from large companies (over 1,000 employees) as from small (250 employees or less) firms. While it is commonly perceived that the cultural environment of Japan restrains entrepreneurship, most of these entrepreneurs saw their environment as favorable, which may reflect the Japanese will to endure hardship or a universal optimism among entrepreneurs.

Technological innovation in Canada: A comparison of independent entrepreneurs and corporate innovators

This paper compares a sample of 124 independent high technology entrepreneurs with 112 corporate entrepreneurs (intrapreneurs) involved in developing and introducing high-tech innovations across Canada. The study investigates the general management and technical problems faced by these entrepreneurs and contrasts their approach to such issues as market research, financing and production. The approaches used by the two groups in analyzing their markets and in planning and financing of innovations are compared and contrasted. In general, the independent entrepreneurs were technically trained, usually possessing engineering training but no general management training or experience, neither themselves nor members of their management team. Corporate entrepreneurs were as likely to come from management backgrounds as technical, or else supported their lack of general management skills by adding people to their team with skills in marketing, finance, and manufacturing. Their problems were more often defending their ideas to management within the corporation, obtaining funding and other resources within the firm, and finding a corporate mentor to assist them in such areas as fighting political battles, providing rewards and incentives for team members, and creating the proper overall environment or culture for innovation within the corporation. The lack of general management training and experience by the independent entrepreneurs led them to rate various marketing problems as the most serious difficulties in rating the obstacles to launching their innovations. The innovations of the independent entrepreneurs were all new products, while some of the corporate innovations were new systems or processes, often installed within the corporation. So the markets for these innovations were also within the corporation and required less of a marketing effort. Corporations were also much better prepared to handle problems in the marketing, planning, and operational areas, but they had more problems of an interpersonal nature, such as the unwillingness to consider alternative approaches. The most significant difference in the obstacles encountered was that independent entrepreneurs listed their five most important problems as marketing difficulties in launching their new products. Corporate entrepreneurs also rated imperfect market analysis as their most important problem, but it was closely followed by the lack of entrepreneurial talent within the company. These obstacles lead to the primary recommendation of cooperative agreements of partnerships between large and small firms to solve some of these difficulties. Corporate responses indicated significant difficulty in gaining support within the corporation, while independent entrepreneurs did not have to justify their efforts to a corporate hierarchy.