New Technology-based Firms Research Articles

Factors and circumstances affecting the business performance of firms based on new technologies

New technology-based firms (NTBFs) invent, develop, and commercialize original technologies whose research, development, and commercial success is highly uncertain and risky. Their growth is lengthy and often insufficient, but investors’ growth expectations are high. The study aims to determine factors and circumstances that affect the growth of new technology-based firms. The source of knowledge is a personal experience from a guided interview with the founder, which is recorded in the questionnaire. The research sample includes 67 NTBFs doing business in Slovakia. The respondents’ statements were analyzed using critical discourse analysis (CDA) with the support of artificial intelligence. The results are the factors that influence the business performance of the investigated companies. The performance of companies that show a long-term loss is affected by very limited access to financial resources, restrictive regulations, and a lack of qualified employees. The performance of companies that show a long-term profit is influenced by favorable access to external capital, effective management of human resources, optimization of internal processes, and improvement of marketing. The order of the identified factors expresses their importance in the thematic group. The secondary results are the accompanying circumstances of the growth of the investigated companies, namely the reasons for the establishment of NTBF and entry into business, commercialization of new technology, and cooperation with investors and banks. The combination of limited access to finance and a lack of qualified human resources creates a complex set of obstacles to the business performance of NTBFs. AcknowledgmentThis work was supported by the Scientific Grant Agency of the Ministry of Education of the Slovak Republic and Slovak Academy of Sciences (VEGA) under the grant “Accelerating the growth of innovative enterprises - scaling up scale-ups and new technology-based firms (NTBFs)”, number 1/0006/22.

Impact of initial business model on the growth trajectory of new technology-based firms: a path dependency perspective

AbstractOur study explores links between the initial business model design and the post-founding development of new technology-based firms (NTBFs) through a selection of recently established NTBFs across Sweden, Finland, and France (481 firms). The trajectory of these firms’ performance has been observed and analyzed over the span of five years. The study examines the long-term effects of NTBFs’ initial business model design on their development and the path dependency of these designs on future firm performance. Our results indicate that high-growth and stable NTBFs have distinct initial designs, implying that new firms’ founders and their business design decisions have important consequences for subsequent NTBF development. Specifically, our study examines how business model characteristics impact the growth trajectory of NTBFs by empirically differentiating between the foundational characteristics of high-growth and stable NTBFs. We find that maintaining stable activity is linked to a low level of uniqueness, less demanding business objectives, and a lack of risk while high-growth is related to a larger early access to resources. We propose an explanation using path dependency literature, arguing how early business model choices predetermine long-term growth paths. Our research also provides valuable insights for stakeholders in designing targeted strategies for sustainable development.

The influence of entrepreneurial culture and organizational learning on entrepreneurial orientation: the case of new technology-based firms in Iran

PurposeThis paper explores how entrepreneurial culture (EC) and organizational learning (OL) determine the entrepreneurial orientation (EO) of new technology-based firms (NTBFs). These NTBFs are located in Isfahan Science and Technology Town (ISTT), Iran. These entities face substantial challenges in a highly-sanctioned economy, which makes adopting, acquiring or transferring new technologies daunting.Design/methodology/approachThis paper analyzes a sample of 200 NTBFs. The participants were trained chief executive officers and observed by applying pre-test and post-test designs. As a final step, empirical data were collected using questionnaires and analyzed accordingly. The structural equation modeling (SEM) with the partial least squares (PLS) approach was used by the SmartPLS2 software.Findings OL was found to mediate the relationship between EC and EO in the studied NTBFs. Additionally, the indirect effect of EC on EO and the direct impact of OL on EO were significant (=1.96). Therefore, this study focuses on selected NTBFs within Iran's particular and distinctive context.Research limitations/implicationsThis study has several limitations. These were the time consuming nature, the lack of cooperation by managers and the COVID-19 pandemic-related challenges. Nonetheless, the findings offer several important implications for practitioners, scholars and policymakers.Originality/valueThe paper sought to explore how EC and OL determine EO in Iranian NTBFs. It, thus, investigates the case of a highly-sanctioned context during the coronavirus pandemic, which imposed several basic and technological limitations on their practices.

A capacidade absortiva e a difusão da inovação em NEBTs e startups: Um estudo no Distrito Federal brasileiro

Purpose: To verify the contribution of the Absorptive Capacity (ACAP) to the diffusion of innovation in New Technology-Based Firms (NTBFs) and startups in the Brazilian Federal District. Method: In-depth interviews study with 20 innovative firms, 12 (twelve) startups and 8 (eight) NTBFs. The results are discussed in two items of analysis: Analysis of the profile of the firms and the Analysis of the Descending Hierarchical Classification (DHC) and of the content, in a comparative perspective around 14 thematic categories. Findings: The development factors associated with the Potential of Absorptive Capacity (PACAP) were observed as the antecedents of the diffusion of innovation. On the other hand, factors related to the Realized Absorptive Capacity (RACAP) are involved directly in the diffusion of innovation, with emphasis on the ability to generate innovation results through channels of market introduction, adoption of new technologies and financial investments. Theoretical/methodological contributions: The study contributes to the theoretical field, still lacking in production, especially regionally, on the relationship between the constructs investigated in the context of innovative firms. Supporting programs, can gain insights to improve the advanced support that facilitates access to knowledge to be adopted and conversion into innovation. Relevance/originality: The research extends the understanding of the relationship between ACAP and the diffusion of innovation, involving the absorption of knowledge and the dynamics of these constructs through the integration of critical factors in specific contexts still little investigated, such as in NTBFs and startups involving regional innovation ecosystems. Management/Social Contributions: The empirical investigation and factors addressed provide managerial implications for the practices of these firms when developing innovations, as well as for planning, developing or strengthening innovation programs and policies.

Developing Young Science and Technology Parks: Recent Findings from Industrial Nations Using the Data-Driven Approach

Science and technology parks (STPs) are curated locations where new technology-based firms (NTBFs) and other SMEs and firms can conglomerate and promote a culture of innovation. Overall, the aim is to construct a sustainable high-value tech entrepreneurship ecosystem, and to this end we present here some recent and novel concepts derived from approaches using a data-driven statistical foundation. This paper considers studies on the organic growth of young start-up science and technology parks by authors who have used big data, econometric analyses, panel data and computer simulations. The results and concepts are derived from industrialized countries, notably Sweden and the UK, and may well be applicable to many regions and emerging economies. The findings are of interest to regional development, technology entrepreneurs considering choosing an STP to inhabit, as well as those in STP central teams, specializing in management and enterprise development, including the sustainable growth of new parks.

Entrepreneurial networks, geographical proximity, and their relationship to firm growth: a study of 241 small high-tech firms

Start-up firms in high-tech sectors normally engage in networking to overcome their lack of resources, knowledge, and competence constraints. A newly established firm’s network can provide a source of social capital, which may enhance its growth prospects. In this study, 241 new technology-based firms (NTBFs) in Sweden are studied during their early formative years to investigate how entrepreneurial networks and the geographical proximity to actors in these networks affect the early performance of these firms in terms of growth. Three underlying factors are identified in the analysis: geographical proximity and professional and consultative networks. This study finds that professional networks have a positive and significant effect on NTBFs’ growth, which indicate that utilizing these networks benefit the growth of both young and growing firms. NTBFs in initial stages can acquire business opportunities by constructing professional networks. In addition, several formal links positively affect growth, such as regional business partners, incubator networks, and links to universities.

The influence of founders’ human capital on the performance of new technology-based firms in China, South Korea and Japan: an exploratory study

ABSTRACT Western-based research suggests a modest influence of founders’ human capital on the business performance of new technology-based firms (NTBFs). Our exploratory, longitudinal study of 40 NTBFs in China, South Korea and Japan reveals that the human capital of their founders helps them to acquire executive talent, finance and customers, and thereby strongly enhances business performance. Furthermore, we find that East Asian NTBF founders leverage their human capital through networks with former colleagues and business partners in order to access key resources. These findings can be explained by cultural background factors such as social stratification and relational orientation.

Disruptive Innovation at the Base-of-the-Pyramid: Negotiating the Missing Links

The disruptive innovation framework has become a topical issue in recent years. Despite its popularity, as well as the perceived strategic advantages it bestows on entrant firms, little is known about the disruptive innovation capability of new-technology-based firms (NTBFs) in the South African context. This article explores the contextual factors that influence disruptive innovation capability in South Africa’s base-of-the-pyramid (BoP) environment and how, given the specifics of this operating environment, entrepreneurs strategize for disruptive innovation capability. Following the development of a conceptual framework, we used a grounded theory approach to conduct in-depth interviews with purposefully selected stakeholders in the NTBF incubation sector. Our findings show that South Africa has the catalytic socio-economic dynamics to encourage the development of disruptive innovations. However, despite having fairly robust institutions in the entrepreneurial ecosystem, these fall short of enabling the innovation capability of NTBFs, owing to the poor-quality linkages between and among institutions within the ecosystem. On the strength of these findings, we synthesised a framework of disruptive innovation capability in BoP environments that highlights the contextual factors that influence disruptive innovation capability. Specifically, we demonstrate how the quality of linkages in the entrepreneurial ecosystem influences the innovation outcomes for innovators.

Sustainability-Oriented Innovation Foresight in International New Technology Based Firms

Rapid technological advances give rise to the development of New Technology-Based Firms (NTBFs) which are focused on technology-based business models. One of the concerns is the changing pace of technology adoption and its impact on shortening the life cycle of goods and services based on technology. Technology tends to create more integration among communities, businesses, goods, and services. This integration can be seen in the substantial increase of firms, especially NTBFs, striving to improve international relations. In this regard, addressing the sustainability dimensions in light of technological change is of universal interest. Some studies highlight the role of technology in terms of its environmental impacts, whereas others describe technology as the main driving force of businesses towards innovation, which can lead to sustainability. This paper aims to examine international NTBFs to determine the factors, key drivers, and uncertainties impacting sustainability-oriented innovations concerning their encounter with technology and ultimately plan future scenarios for international NTBFs based on sustainability-oriented innovations. The description of the scenarios shows the importance of innovation development in digital technologies and the expansion of international relations, which is realized by using digital platforms. In addition to accelerating knowledge and innovation development to gain more key partners, we would observe target market expansion, cost reduction, and sustainability growth for international NTBFs. Identifying drivers and uncertainties and the future-oriented approach of this research provide insight to International NTBFs owners into realizing sustainability-oriented innovation by increasing their awareness of the opportunities and interventions to build capacity at the conceptualization and project management levels.

The early bird catches the worm: The role of regulatory uncertainty in early adoption of blockchain’s cryptocurrency by fintech ventures

ABSTRACT Regulatory uncertainty about a technology confronts new technology-based firms (NTBFs) with questions of whether or not to adopt this technology. Following institutional theory, NTBFs are expected not to adopt a technology until regulatory uncertainty has been reduced. However, following the resource-based view, NTBFs are expected to adopt the technology under regulatory uncertainty due to limited or no regulation, as this provides them with an opportunity to secure competitive resources. We investigate whether regulatory uncertainty enabled or inhibited 108 fintech ventures in adopting blockchain’s core application, cryptocurrency, in a time when governments were still considering potential regulation. Our findings indicate that regulatory uncertainty has a positive effect on NTBFs’ adoption of technology. We extend our knowledge on the role of regulatory uncertainty in technology adoption and we shed light on the boundary conditions of both the resource-based view and institutional theory. Further, we reflect on regulating the “winds of change.”

Leveraging the value from digitalization: a business model exploration of new technology-based firms in vertical farming

PurposeThe purpose of this paper is to investigate how new technology-based firms (NTBFs) overcome established notions of scale and scope through business model innovation, leveraging the value from digitalization.Design/methodology/approachThe study adopts an exploratory research design, drawing on a novel data set of 50 publicly available interviews with vertical farming (VF) industry leaders and insiders who represent 36 different organizations from North America and Europe.FindingsThe study develops a framework showing how NTBFs leverage the value from digitalization via a paradoxical approach combining both efficiency and novelty value drivers.Originality/valueThe study extends current theorizing on the desirability of a combined business model approach leveraging both efficiency and novelty from digitalization. Furthermore, the study is among the first to investigate the unique and highly technological context of VF.

The Emergence and Performance of New Technology-Based Firms in Nigeria

New Technology-Based Firms (NTBFs) are one of the key actors within the National System of Innovation. They are firms/businesses based on the exploitation of an invention and they play crucial roles in the processes of bringing new ideas or innovations to the market and by extension, contributing to economic growth. This paper provides empirical evidence on the emergence and performance of NTBFs in Nigeria. A survey design was used to collect data from NTBFs in the selected Technology Incubator Centres (TICs). Data were analysed using both descriptive statistics and the ordinary least square technique. The research results show that research and development (R&D) activities are vital for the growth and development of NTBFs, but this activity is still at a very minimal level. Product price, the number of employees, research and development, access to credit facilities, and the cost of raw materials are statistically significant in explaining the performance of NTBFs. The recommendations for ensuring the improved performance of NTBFs in Nigeria include the increased collaboration among NTBFs, universities, and research institutes, firms to spend at least 40 percent of their profit on research and development that relates to the improvement of their products, and the improvement in the level of the production process to enhance productivity and competitiveness.

Mobilising finance and achieving early growth in new technology-based firms: a legitimacy perspective

PurposeThis study investigates a mediational model between legitimated elements, financial resource mobilisation and subsequent early firm growth among New Technology-Based Firms (NTBFs) using conformity and control perspectives of legitimacy.Design/methodology/approachTo test the hypotheses, a longitudinal database of 303 NTBFs from Sweden, Finland and France is used. The ordinary least square regression analysis method is applied, and the proposed mediation relationships are studied by employing the four-step approach developed by Baron and Kenny (1986).FindingsThis study finds that based on the conformity principle, two out of three legitimated elements (business plan and incubator relationship, but not start-up experience) have an impact on financial resource mobilisation, which in turn, is associated with early growth in NTBFs based on the control principle. Thus, financial resource mobilisation positively mediates the relationships among the two legitimated elements and early growth in NTBFs.Research limitations/implicationsThis study has several limitations, which also generate promising pathways for future research. Future research should study the relationship between the three legitimacy elements and financial resource mobilisation and early growth across a wider range of firms and settings. The questionnaire was also based on a single point in time and could not capture the evolving nature of the legitimacy elements and fundraising. Hence, future research can examine the multidimensionality of these processes; longitudinal qualitative studies can be a complement, allowing for a better understanding of the impact of legitimacy on NTBFs.Practical implicationsThe findings offer implications for managers of NTBFs because developing legitimacy is critical to NTBFs early growth and development. The findings indicate that NTBFs' founders must systematically develop business plans and that incubators help enhance legitimacy through a signalling.Social implicationsIt is believed that the study meaningfully contributes to the collective understanding of the role of legitimacy in driving the development of NTBFs. Given the importance of NTBFs in our economies, coupled with the lack of attention given to the role of mobilisation of external resources in explaining NTBF early growth, it is believed that the study is both timely and important.Originality/valueThe findings meaningfully contribute to the collective understanding of NTBF growth. While there are studies that have examined the antecedents of growth and finance separately, this study proposes a novel mediational model that integrates both and tests it empirically.

Technology Opportunity Discovery using Deep Learning-based Text Mining and a Knowledge Graph

To capture emerging technologies in the fast-changing technology market, use of information concerning new technology-based firms (NTBFs) is strongly encouraged, in addition to the information about the technology itself. Especially, NTBFs rapidly respond to technological change, and their investment information is a significant criterion of technology valuation. Therefore, this study proposes a new technology opportunity discovery (TOD) framework that exploits text mining by deep learning and a knowledge graph (KG) by using three data sources: technology, NTBF, and investor data. First, a technology-classification model was developed using technical text data acquired using Doc2vec and logistic regression, and then this model assigned highly-relevant technology fields to NTBFs using NTBFs’ investor relation text data. Next, a KG that considers technology, NTBF, and NTBF’s investor was constructed to represent their relations for TOD by using the results of previous steps. Lastly, considering inter-connectivities of such factors, a TOD index that measures the potential of technologies was proposed. The accuracy and validity of the methods were demonstrated empirically, and an evaluation of emerging technologies identified by the analysis was provided. Our framework will be of great significance as a useful alternative to provide new insights for emerging technologies in the industry and market.

Young entrepreneurs and skills mismatch in school-to-work transition: empirical evidence from innovation processes managed in Italian NTBFs

PurposeDiversity in entrepreneurship has become a noteworthy topic of research since consistent differences – and few similarities, if any – exist among entrepreneurial profiles. The present paper aims to compare different entrepreneurial profiles managing innovation processes in new technology-based firms (NTBFs). In particular, attention is focussed on young entrepreneurs who are in a critical phase of their lifelong learning, the school-to-work transition.Design/methodology/approachStatistical elaborations are based on data retrieved from Italian Ministry of Economic Development in January 2021 and carried out through stochastic frontier analyses. Respectively, 1,699 young entrepreneurs, 1,079 female entrepreneurs, 205 ethnic entrepreneurs and 8,224 stereotyped entrepreneurs are considered.FindingsFactors affecting the performance of innovation processes managed in NTBFs are the same for stereotyped and female entrepreneurs, but they consistently differ for young and ethnic entrepreneurs. Achieved results are not in the position to offer a complete analysis of the phenomenon but – hopefully – can corroborate a very interesting and up-to-date research path that merits further development. In particular, young entrepreneurs disclose an unexpected skills mismatch that should be investigated in-depth.Originality/valueMost contributions offer a narrow view of entrepreneurial profiles since they focus on one profile per time. The present paper, instead, considers four entrepreneurial profiles and compares them. Moreover, young entrepreneurs reveal an unexpected skills mismatch that underlines the relevance of specific activities of on-the-job training and apprenticeships in order to try to overcome it and improve the results achievable by young entrepreneurs.

Influences of university-industry alliance portfolio depth and breadth on growth of new technology-based firms: Evidence from China

In emerging economies, new technology-based firms (NTBFs) often engage in multiple alliances with universities and research institutes simultaneously to access external knowledge and resources crucial for their survival and growth, thus forming university-industry alliance portfolios (UIAPs). However, little scholarly attention has been paid to this phenomenon. Using panel data of 549 firm-year observations from 149 manufacturing NTBFs listed on Chinese Growth Enterprises Market (GEM) Board, we develop a set of multi-level fixed-effect liner regression models to investigate effects of UIAP relational-dimension configurations on NTBF growth along with the moderating effects of government subsidies. Results reveal negative effects of UIAP depth on firm growth and positive impacts of UIAP breadth on firm growth. Furthermore, results show that government subsidies weaken the negative relationship between UIAP depth and NTBF growth, along with the positive relationship between UIAP breadth and NTBF growth. Contributing to previous research on alliance portfolios, university-industry collaborations, and firm growth, this study provides some practical implications for both industry practitioners and policymakers in emerging economies.

The Value of PhDs: How the Presence of PhDs in Founding Teams Increases the Attractiveness of Startups for Corporate Investors

The creation and development of new technology-based firms (NTBFs) is at the core of national prosperity, and constitutes a key activity of the innovation policies of advanced and developing economies. Many of these companies are founded by postgraduates that hold a doctorate (PhDs). Governments foster the creation of NTBFs by PhDs to take advantage of the stock of knowledge which exists in universities and research centers. It is assumed that founders with a high level of specialization and knowledge, such as PhDs, will bring strong competitive advantages to the companies they found. The literature in this regard, however, is scarce and inconclusive. We have studied the role of PhDs in founding teams of NTBFs in a specific kind of entrepreneurial process: corporate venturing. Our conclusions suggest that companies with PhDs are significantly more attractive to corporate venture capital. Corporate venturing has a higher propensity to invest in NTBFs with PhDs in the founding teams, and these companies concentrate a higher number of corporate investors, in a kind of accumulative effect.

Influence of information and communication technologies on customer satisfaction and increase in the number of customers

PurposeInformation and communication technologies (ICT) play an important role in business management today. However, there is little information on how the uses of ICT within firms create positive results regarding service. The purpose of the study is to know the degree of influence of ICT on customer satisfaction and increase in the number of customers.Design/methodology/approachThe sample consisted of 102 Colombian new technology-based firms (NTBFs) located in business incubators and technology parks, selected through a non-probabilistic, purposeful sampling. To perform the statistical analysis, structural equation modeling was used.FindingsThe results indicated a good fit of the proposed model, where ICT have a positive and significant influence with a medium effect on customer satisfaction and a large effect on increase in the number of customers. The findings showed that the implementation of ICT in the different internal processes of NTBFs favors external processes, to improve and innovate the quality of their service, reflecting in a positive perception of customers.Originality/valueInfluence of ICT on the performance of firms has not been widely studied in non-economic results. The internal processes of the firms are the use of internet technologies, collaboration, management, decision-making support, search and data management. Meanwhile, external processes involve services directly visible to customers. Previous research does not consider the impact of ICT on internal processes that have repercussions on external processes.

THE INFLUENCE OF INITIAL BUSINESS MODELS ON EARLY BUSINESS PERFORMANCE: A STUDY OF 589 NEW HIGH-TECH FIRMS

The initial business model of start-ups affects the performance and development of new ventures. Therefore, new technology-based firms (NTBFs) must choose a suitable initial business model to survive, perform, and grow. We propose a measurement framework comprising of nine elements described using 16 variables for NTBFs’ initial business models. We test our framework by surveying 589 young manufacturing and knowledge-intensive high-tech firms established in 2013 in Sweden, Finland, and France. We identify differences between the business models across countries and measure sales growth during 2014–2016. We find significant differences between high-tech manufacturing firms and high-tech knowledge-intensive firms regarding key partners, activities, and resources, as well as value propositions and the ranking of elements. In the second part of the analysis, we apply correlation and regression tests for the nine elements regarding early business performance (sales growth) for the manufacturing and knowledge-intensive high-tech firms.

The failure of new technology-based firms (NTBF): a reading by entrepreneurial marketing (EM)

Une meilleure compréhension de l’échec entrepreneurial des JETI (jeunes entreprises technologiquement innovantes) représente un enjeu – économique et social – crucial compte tenu de leurs perspectives de développement en cas de succès. Utilisant le modèle de Morris, Schindehutte et Laforge (2002), cette recherche s’interroge sur la pertinence d’une lecture de l’échec des JETI par le marketing entrepreneurial (ME). Ses objectifs sont tout d’abord d’étudier le ME d’une JETI de façon exploratoire pour ensuite déterminer si cette perspective apporte une contribution nouvelle à la connaissance du phénomène de l’échec des JETI. Les résultats montrent que le ME constitue une grille de lecture pertinente et amènent à la formulation de propositions concernant la lecture de l’échec entrepreneurial des JETI par le ME.