abstracts 13th nordic conference

Abstracts 13th Nordic Conference on

Small Business Research June 10–12, 2004

FROM FRENCH VENTURE TO EUROPEAN LEADER WITHOUT LOSS OF ENTREPRENEURIAL CONTROL:

A CASE HISTORY OF STERIA (1969-2003) Pier A. Abetti

Lally School of Management and Technology Rensselaer Polytechnic Institute

Troy, NY 12180-3590, USA Tel + 1-518-276-6834 Fax + 1-518-276-8661 Email: [email protected]

March 2004

Steria, a leading information systems and services company, was created with the vision that it would be owned by employees of all ranks. Founded in 1969 with French Francs 400,000 (US $80,000) initial capital and eight employees, Steria achieved its initial public offering (IPO) in 1999 and in 2002 had sales of €1018 million (US $1000 million), 8300 employees. Steria’s strategy was driven by the entrepreneurial control imperative. While the founder-entrepreneur gradually relinquished control in favor of new employees, Steria was wary, almost paranoid, in ensuring its independence from takeovers by other companies. With the IPO, the control of Steria by the employees was assured through a complex legal structure (Societé en Commandite) with two classes of stockholders. However, Steria was strictly a French company, with 82 % of revenues originating from France and an all-French management team. Steria’s new strategy became driven by the European expansion imperative. Through lengthy and often contentious negotiations, Steria acquired in 2001-2002 the European service subsidiaries of Bull (Integris) for only 11% of its capital, doubling sales. Steria is now among the top ten European IT companies, with 60% revenues from outside France. Perhaps more important, Steria’s management team is now European, with executives from France, Sweden, Norway, the United Kingdom, and English is the official company language in addition to French. We discuss the five stages of growth of Steria, separated by four internal crises, and how these crises were resolved through the statesmanship of the founder-CEO and his successor. We analyze the key factors that contributed to the success of Steria during its 34 years and conclude with some considerations that may be useful to entrepreneurs and strategic planners who want to evolve their businesses from national to international, while maintaining control, rapid growth, and profitability.



OPPORTUNITY RECOGNITION AND PRIOR KNOWLEDGE: A STUDY OF EXPERIENCED ENTREPRENEURS

Gry Agnete Alsos Nordland Research Institute

Norway E-mail: [email protected]

Virpi Kaikkonen University of Kuopio

Finland E-mail: [email protected]

May 2004

ABSTRACT This study investigates how opportunity generation is related to the prior knowledge base of experienced entrepreneurs. The paper explores how prior knowledge is used in the process of opportunity generation and whether this varies dependent on how opportunities come into existence. Opportunities may be the result of serendipity or deliberate search, and may be (objectively) discovered or (subjectively) created. Combining these two axes gave four types of processes: opportunity discovery, opportunity search, opportunity creation, and opportunity occurrence. Based on interviews of farm-based entrepreneurs in Finland and Norway, it is detected that different processes of opportunity generation related to the situations of the entrepreneurs, their former experiences, and their social networks.



ENHANCING ICT COMPETENCE IN SMALL & MEDIUM SIZED BUSINESSES

Barbro Anell Center for Regional &

Tourism Research [email protected]

Jesper Manniche Center for Regional &

Tourism Research [email protected]

Stefania Testa University of Genoa

Department of Communication [email protected]

May 2004

Abstract It is often assumed that increased ICT proficiency in small and medium sized companies (SMEs) will help them survive and prosper. In a paper to the 12th Nordic conference on Small Business Research, we discussed the status of ICT usage in SMEs and why the adoption level and the adoption rate seemed slow, in comparison with levels and rates among large firms. In this paper, we will discuss ways of enhancing ICT-competence in SMEs. The discussion is based on the results of a concrete development project, aiming at qualifying SMEs to use their existing ICT facilities better. The project was part of a Danish governmental programme to support socioeconomic development on the island of Bornholm through increased and improved use of ICT in SMEs. In the project, suppliers of ICT hard- and software acted as teachers and facilitators for a selected group of their local customers. The activities, however, were also designed to help the ICT suppliers to develop a better understanding of their clients’ situation and problems in order to encourage local networking and product development, and thereby supporting a pos itive regional development. The results of the intervention project showed that the effects were beneficial for the partic ipants. The majority of the participating small businesses were satisfied with the project. So were the involved suppliers. The participants gained better understanding of the functiona lities of their ICT systems, and enhanced their competences to exploit the possibilities. Also some changes in routines had taken place, which might be interpreted as an indicator of organizationa l learning. It is, however, too early to evaluate the effects on profitability and, in the long run, on regional development. In the first part of the paper, we will discuss some theoretical models for understanding small businesses’ processes of ICT adoption and learning. After this we will describe the project in focus and its results, and finally some concluding remarks will be made.



WORKING FROM THE MARGINS TO INFORM THE CENTRE

Marilia Angove Welsh Enterprise Institute University of Glamorgan

Business School

[email protected]

Caryl Cresswell Innovation, Creativity &

Enterprise Centre Department of

Business & Management University of Wales College

Newport [email protected]

Brychan Thomas Welsh Enterprise Institute University of Glamorgan

Business School

[email protected]

Rubina Akhtar

Cyfenter Development Partnership

Welsh Development Agency Cardiff

[email protected]

Justine Rolfe Cyfenter Development

Partnership Welsh Development Agency

Plas Glyndwr Cardiff

[email protected]

David Brooksbank Welsh Enterprise Institute University of Glamorgan

Business School

: May 2004

Abstract This paper describes the Cyfenter Development Partnership action research programme primarily aimed at under-represented entrepreneurs in Wales. The Welsh Development Agency and the EQUAL stream of the European Social Fund (ESF) support the programme to inform and develop inclusive policies, strategies and practices within mainstream enterprise support in Wales. In these terms the Partnership is seen as addressing and informing multiple marginal aspects such as areas in receipt of regional selective assistance (Objective 1, ERDF) and outreaching to under-represented groups. Key players in enterprise support are brought together by Cyfenter including policy makers, experienced equalities and enterprise practitioners as well as those groups who are currently under-represented in enterprise. These are women, lone parents, young people, over 50’s, ethnic minorities, refugees, disabled people and Welsh speakers. This methodology allows the partnership to work and actively engage with the under- represented groups and debate potential solutions to the barriers which are experienced when setting up, sustaining and growing their businesses. The Partnership facilitates access to key policy makers in order to ameliorate the marginality of these groups. Through the empowerment of excluded entrepreneurs to express and suggest potential solutions it is anticipated that policies and practices can be leveraged where enterprise support can become more relevant and appropriate for all groups in society. It is antecipated that this will lead to an increase in economic and entrepreneurial activity and enable an increased proportion of under-represented entrepreneurs to access mainstream enterprise support. Four thematic areas have been identified as barriers for action based research and these are benefit/grant dependency, sustainability and growth, design for diversity and access to finance.The paper describes the methodology used to identify the typical needs of under -represented groups when establishing a business and barriers to the start-up process. This will inform policy makers of the solutions which are needed to remove existing barriers. The methodology has been developed for an inclusive strategy to reach out and engage the under-represented entrepreneurs who are often found in “hard to reach” groups. Underpinning the action research programme are project activities linked to the six key principles of EQUAL (Equal Opportunities, Empowerment, Transnational Activities, Innovation, Mainstreaming and Dissemination). Conclusions are drawn and recommendations made to enhance and improve the mainstream enterprise support available to under



represented entrepreneurs and inform policies which affect entrepreneurial strategies in marginal areas.



INTENTIONS, CHARAKTERISTICS AND CONSTELLATIONS CONNECTED TO FAMILY INTERNAL AND EXTERNAL SUCCESSION

– A DISCRIMINANT ANALYSIS APPROACH

Klaus Ballarini & Detlef Keese Institut für Mittelstandsforschung

University of Mannheim Germany

E-mail: [email protected] E-mail: [email protected]

March 2004

In 2002 the Institute for Research on Small and Medium Sized Enterprises in Mannheim accomplished a study on succession in SME´s in the state of Baden-Wurttemberg. 10.000 questionnaires were sent to a representative stratified sample of enterprises according to branches. In focus of this study was, on one hand, a precise estimation how many enterprises were or will be involved in succession process within the decade from 1997 to 2007. On the other hand, detailed analysis of special aspects, such as problems during the succession process, demands on consultation and the financial situation in involved enterprises was requested. A remarkable result was found comparing the successions in the past five years to those to come within the next five years. While in the past 75% of the successions happened to be family internal and only 18% external, the result completely switched for the forthcoming successions. The share of family internals was decreasing nearly to 50%, while that of external increased up to more than 40%. For both periods, succession from inside the enterprise (as e.g. management buy out) are negligible (less than 10%). The data material is existing for four groups of protagonists: Predecessors and successors, who already had handed over respectively had taken over at the time of the enquiry and otherwise predecessors and successors where the handing over respectively taking over was still forthcoming. Out of the existing variables, which were describing intentions, characteristics of enterprises and persons and the respective constellations those should be identified which tightly and as possible as uniquely were connected to the family internal or external hand over resp. take over. This is equivalent to the problem of separating and identifying variables within the framework of a dicriminant analysis. Since it is not guaranteed that the involved variables follow a multivariate normal distribution it is only possible to apply non-parametric methods in the discriminant analysis. Unfortunately the data basis for the successors planning the take over is relatively small and moreover the number of successors from outside the family was of course relatively small too. The consequence was that we found no stable solution for the discriminant analysis. Therefore this group was not taken into consideration any longer. For the successors who had taken over already the year of foundation of the enterprise, the economic situation of the firm just before the take over, the behaviour of their banks, the number of difficulties during the take over process, the distribution of the competences during a possible common transition period with the predecessor and the education of the successor as well were selective variables. For the predecessors who were planning to hand over the situation was quite different. Hereby the intentions of avoiding family internal conflicts, the fair distribution of the heir, keeping the enterprise independent and the ongoing existence of the company were also relevant as the turnover and the situation of competition.



The turnover is also a separating variable within the group of predecessors who already had handed over besides the year of foundation and the economic situation of the enterprise. The question if another successor was already involved and if the liquidation was taken in consideration also play an important role differentiating the hand over sphere. This analysis may contribute to a more sensitive estimation of the situation of handing over resp. taking over with respect to consultation and support. Likewise it may serve as background information and do so more justice to family internal and external hand over.



SUPPORTING FEMALE ENTREPRENEURSHIP IN TRANSITIONAL ECONOMIES:

THE CROATIAN EXPERIENCE

Ivana Barkovic J.J. Strossmayer University in Osijek,

Faculty of Law in Osijek Croatia

E-mail: [email protected]

Djula Borozan J.J. Strossmayer University in Osijek,

Faculty of Economics in Osijek Croatia

E-mail: [email protected] March 2004

It has been more than a decade since commanded economies and communist governments of Central and Eastern European countries (CEEC) crumbled under the pressure of demands for economic and political freedom. The switch to market oriented economy has brought opportunities and challenges to their citizens, as well as hardships especially economy-wise. In addition, transitional economies are consequently opening more to the processes of economic integration and globalisation in the world that postulate new social and business paradigms of life. In such a context, women in CEEC are entering more and more the job market being driven by the conventional factors of economic conditions, a sense of devaluation of domestic role and a desire of self-fulfillment. New business start-ups and private sector growth have been recognized as imperatives to a successful transition to a free market economy. However, due to numerous historical and cultural factors, women's effort to engage more intensively in entrepreneurial ventures has been hindered. Even tough world demographic statistices reveal that women account for more than 50% of the world population, they are an economic minority, especially when it comes to the sector of small and medium-sized enterprises (SMEs). This paper is focusing on examining the role and potential of women as entrepreneurs in Croatia. Using data from intensive GEM (Global Entrepreneurship Monitor) research on SMEs in Croatia conducted in 2002, combined with the results of survey conducted in the second half of 2002 in the frame of the University Fellows International Research Consortium, international organization directed to research of business operations and other available statistics on women in business and society, this paper makes a case for a support of female entrepreneurship in transitional economies in general and in Croatia in particular, examines various attitudes that individuals could have towards career advancement explicitly and implicitly related to entrepreneurship as a career choice, and suggests organizational and government support for promoting female entrepreneurship in transitional economies. The purpose of this study is to promote women entrepreneurs and their businesses in order to enhance their position and influence in economic and public life in Croatia. A number of suggestions and measures identified in this paper to support female entrepreneurship may serve as a general guide for national or regional decision in promoting women entrepreneurs as an important human resource for economic development.



INNOVATION STRATEGY FOR UPPER LUSATIA – A BORDER REGION IN THE SOUTH-EAST OF GERMANY

Jürgen Besold Technologie- und Gründerzentrum Bautzen GmbH

Humboldtstraße 25 02625 Bautzen

Germany E-mail: [email protected]

May 2004

ABSTRACT Upper Lusatia is the eastern Part of Saxony – an European region in Germany with about 700.000 inhabitants. The area of Upper Lusatia is a triangle between Germany, Poland an the Czech Republic. There is a long entrepreneurial tradition in Saxony. 200 years ago, especially in the eastern part of Saxony, textile manufacturing started to grow. Mechanical engineering followed in the 19th century. At the beginning of the 20th century typical products of the classic old economy like bicyc les, cars and trains were made in Upper Lusatia. After the Second World War East Germany’s private industry was nationalized. When Germany was reunited in 1989, big industrial units were divided into Small or Medium-sized Enterprises (SMEs) and a new economy had to rebuilt. In co-operation with partners the Bautzen Innovation Centre started to develop an innovation strategy for Upper Lusatia. We first analyse the potential of the region, using specific questionnaires and interview guidelines for technology-based and service companies, for academic institutions and for business advisors of the region. On the basis of this analysis we will propose the innovation strategy. It is also an aim of this project to intensify cross-border co-operation with companies and institutions in the Polish and the Czech border regions, which are developing innovation strategies for their future in the EU. The support for transnational co-operation is focused on the adjoining regions of Northern Bohemia in the Czech Republic and Lower Silesia in Poland. Key words: technological innovation, innovation strategy in an economic development, technology transfer, networks, cross-border co-operation



A THEORY OF MARKETING-IN-USE IN MICRO FIRMS - PRELIMINARY FINDINGS

Peter Björk & Lars-Johan Lindqvist & Karolina Poukkula

& Annika Ravald & Björn West & Sara Åhman Swedish School of Economics and Business Administration

Vasa, Finland E-mail: [email protected].

May 2004

Abstract The marketing context of micro firms is unique in comparison to the marketing reality of small, medium size and large firms, a discrepancy not thoroughly discussed in the literature. A great majority of existing marketing theories and models have been developed for large companies. The purpose of this paper is to present a preliminary theory of marketing-in-use in micro firms. Ten micro firms representing different types of businesses were studied by the means of a developed theory-in-use approach. Marketing-in-use in micro firms is about synchronizing and coordinating both tangible and intangible assets in order to create the needed energy/power for market development and hereby business continuity. The latent structure supporting market development consists of two essential functions, internal learning and gradually permeating the market. This phenomenon is defined as Germinal Marketing in this paper. Future studies will prove how well we have managed to depict the means entrepreneurs use to create business continuity.



BUILDING DYNAMIC CAPABILITIES FOR STRATEGIC ENTREPRENEURSHIP IN SMEs

Professor Odd Jarl Borch

Bodø Graduate School of Business Bodø


May 2004

Abstract This paper emphasizes the challenges of entrepreneurship within existing small and medium-sized enterprises. In turbulent markets small enterprises have to improve their business concept at a fast pace to meet changing market demands and avoid devastating competition from their larger counterparts. We build upon the resource-based view of the firm and the dynamic capability approach in our search for mechanisms that increase the capability for strategic entrepreneurship within SMEs. We discuss the routines and features facilitating the acquisition and linking of new and old resources and develop new strategic action paths. We elaborate on four different dynamic capabilities including entrepreneurial orientation, radical organizational learning capabilities, a virtual organizational form and an interactive strategic decision-making process. Key words : strategic entrepreneurship, competitive advantage, resource-base, dynamic capabilities.



PERCEIVED REASONS FOR THE LACK OF JOB CREATION IN SMMEs IN GAUTENG, SOUTH AFRICA - AN EXPLORATORY STUDY INTO

SMMEs AND THE EMPLOYMENT EQUITY ACT

M. C. Cant & C. Stanford University of South Africa

Pretoria, South Africa E-mail: [email protected]

E-mail: [email protected] May 2004

ABSTRACT

It is estimated that the South African economy has shed more than a million jobs since 1990. According to the Department of Labour the official unemployment rate for the country in August 2003 was 35% percent. The unofficial unemployment rate is however estimated at levels as high as 38 percent. To compound the problem, the demand for semiskilled labour in South Africa, as elsewhere in the world, has shown a consistent and drastic decline in the last decade. The objective of this paper is to investigate the possible reasons why job creation has not been successful in SMMEs in township areas in South Africa. The research will be conducted by investigating how long the selected SMMEs have been in business, whether the owners feel that there has been any growth in job creation or if they have in fact created any jobs through opening their own business. The adherence of the SMME to the Employment Equities Act will also be investigated.



WHO’S LISTENING? THE FUNCTION OF SMALL BUSINESS RESEARCH

Barbara Cornelius

School of Accounting and Finance University of Wollongong

Wollongong NSW 2500 Australia

E-mail: [email protected],

Olle Persson Inforsk Sociologiska institutionen

Umeå Universitet SE-901 87 Umeå

Sweden E-mail: [email protected]

May 2004

Apart from the most cynical among us, small business researchers believe that their work contributes to an understanding of and, consequently, the efficiency of, small firms and to their survival in the marketplace. This research was undertaken as a first step to assessing whether academic research makes the contribution that we, as academics, believe it does. An increasing proportion of academic research is funded by organizations outside of the university. This funding is provided to researchers for a variety of reasons that are usually stated in an organizations charter. It has been assumed that research undertaken in conjunction with a grant from a particular body has satisfied that organizations needs, i.e. it has been useful to the funding agency. We have also assumed that good academic research, regardless of funding source, will ultimately be published in an academic journal targeting those interested in the appropriate field. A selection of research published in leading academic journals in entrepreneurship over the past fifteen years (from approximately 1988) has been reviewed to determine whether there are any significant differences in research that has been funded by differing organizations. If significant differences do exist between funded and non- funded research, this would suggest that the relevance of our research could be improved by paying attention to the questions asked by those providing the funding. Alternatively, if such differences do not exist, we can be comfortable in our belief that our research can be accessed opportunely by those in need of it.



“SIGN, SEALED AND DELIVERED” – DEVELOPING ENTREPRENEURSHIP TEACHING STRATEGIES

Louise-Jayne Edwards & Elizabeth J. Muir

Welsh Enterprise Institute University of Glamorgan

Business School South Wales, UK


May 2004

Keywords: Enterprise Education, teaching strategies The ongoing political, social and economic drive to create an enterprise culture and expand the enterprising economy is forcing educational establishments, at all levels, to consider their roles and participation in such change. Thus over the past five years there has been an increase in the number of Entrepreneurship courses available at both Undergraduate and Postgraduate level. Whilst academic debate has progressed from ‘Can Entrepreneurship be taught’? to ‘Can entrepreneurship be learnt?’ one must give consideration to the students and establish what they hope to gain from their learning; which raises the question ‘Are they studying an entrepreneurship course to enable them to become ‘entrepreneurs’ or to gain new skills and become ‘enterprising people’ in whatever careers they choose to pursue? Thus in light of this, academics need to consider why and for whom are they developing Entrepreneurship courses? Whilst preparing documentation for new courses and presenting it for validation consideration needs to be given to how the course will be delivered and what teaching strategies will be employed. However, the real test emerges in the classroom. This paper will provide an analysis of students studying entrepreneurship courses at the University Glamorgan in the year 2003 and qualitative data of two Postgraduate courses (MSc Entrepreneurship (Female Entrepreneurs) and the MSc Entrepreneurial Practice). Both courses are for entrepreneurship and attract students who wish to become entrepreneurs or entrepreneurial people; the paper will explore the teaching strategies engaged through both courses and discuss methods of delivery.



“TELL ME AND I’LL FORGET; SHOW ME AND I MAY REMEMBER; INVOLVE ME AND I’LL UNDERSTAND” –

DEVELOPING ENTERPRISE EDUCATION THROUGH THEORY AND PRACTICE

Louise-Jayne Edwards & Elizabeth J. Muir




May 2004

Keywords: Enterprise Education, theory and practice The essential contribution of higher education to the economic prosperity of Wales, and the need to increase the contribution, has been remarked upon for more than ten years. Following reports focusing upon the economic shape and demands of Wales in 2010, future skills requirements, the creation and utilisation of knowledge within and for the economy and the development of the Entrepreneurship Action Plan for Wales there can be little doubt that higher education has a growing responsibility to be involved in the education, motivation and support of individuals who are competent, capable and aspire to establish viable and sustainable enterprises. The establishment of entrepreneurship courses both at undergraduate and postgraduate levels have developed throughout the UK, which progresses the debate from “Can Entrepreneurship be taught?” to instead considering “Can it be learnt?” and the issue at the University of Glamorgan has been “How to make Entrepreneurship work for us?” This paper tracks the development and highlights the problems, discussions and debates that arose from creating both informal and formal entrepreneurial learning opportunities at differing levels. The paper explores the validity of the model that the University has adopted whereby such research feeds into theory and thus provides a cutting edge learning resource. Utilisation of such knowledge and understanding through formal and informal learning both stimulates and provides the opportunities for students to develop skills and to practice entrepreneurship. The teaching encourages and develops skills of reflective practice, thus enabling the students, as practicing entrepreneurs, to improve to levels of best practice. Integrated development, clear signposting and facilitated access to this range of formal and informal entrepreneurial learning opportunities has had beneficial outcomes. The beneficiaries are not just students at the University but a wider range of stakeholders involved in education and economic development.



GREEN CARE AS SUPPLEMENTARY BUSINESS FOR NORWEGIAN FARMERS

Torill Meistad and Elsa Fjeldavli

Centre of Rural research Norwegian University of Technology and Science (NTNU)

Trondheim E-mail: [email protected] E-mail: [email protected]

March 2004

In Norway there is a growing interest among farmers to combine production of food and fibre with production of services at the farm. “Green care” is among the new services, and today such services are offered at 4-500 farms nation-wide. Services called Green Care (or On the Courtyard) are for instance health care and cure, therapies, teaching, different kind of working, training, activities for old people etc. The respective public service departments buy these services and pay the farmer for organising and working the services out. Green Care services transform the role and the task of the farmer/farm, and develop possibilities for supplementary business and income, as well as the co-operation and partnership between the farmer and local government from a social economic perspective. The purpose of the paper is to present some results of a national survey of farmers offering Green care in Norway. The survey examines Green care as a strategy of small agricultural business and development. The paper presents how Green care farmers consider the possibilities for employment, growth, net income and long term contracts. Based upon these findings the paper will discuss how Green care farming in Norway can be characterised as business strategy.



BEING LOCAL AND ACTING INTERNATIONALLY: THE CHALLENGES OF THE OUTSKIRT MANAGER

Lene Foss Norwegian College of Fishery

Science University of Tromsø

9037 Tromsø

Anne Katrine Normann Norut Social Science Research

Ltd, Forskningsparken 9294 Tromsø

Kjell Grønhaug Norwegian School of

Economics and Business Administration 5045 Bergen

May 2004

Abstract

In this paper we explore the external ties of the middle and top management in two business organizations, related to the local and global context they operate in. Prior network research point to that organizations use hybrid interfaces and that these optimise an organization’s performance potential (Baker 1990; Uzzi 1997). Research in economic geography points to the significance of locality and how different mechanisms are conducive to creating viable clusters and industrial districts (Asheim 1994) and globalization for economic activity and community development (Asheim and Cooke 1998; Fløysand and Lindkvist 2001). There seem to be few contributions merging these types of literature and our aim is to do so in conducting a study of managers’ external ties in two companies, each in different branches within the fishing industry, white fish processing and shrimp processing respectively. They are both dependent on international markets and exposed to strong international and national competition. Key words : tie strength, local and global embeddedness



ASSESSMENT OF AN ENTREPRENEURIAL TRAINING

Christian Friedrich & Michael Frese Visiting professor University of the Western Cape

South Africa E-mail: [email protected]

May 2004 In surveys conducted in different African countries during the period of four years, we investigated why entrepreneurs in the same sector and during the same time period are not equally successful. From our investigations and the shortcomings of South African small scale entrepreneurs we have developed a new three day training program which deals primarily with the variables: Personal initiative, planning, goal setting and innovation. The training follows the action learning approach, which links learning to activity. The training is based on the assumption that competencies and behaviour patterns will be learnt. It is important that the trainees own the motivation for the process. In 2001 we selected a sample of 86 entrepreneurs of the Western Cape region in South Africa and conducted a standardised interview (T1). The group was randomly split into half. One half was the experimental group, which participated in the training, and the other half was the control group (no training). After 6 months we compared the results of the experimental group with the control group. We were measuring behavioural measures, learning, reactive measures, and business success measures. The results after 6 months showed that the training group had developed better in their business performance than the control group who had no training.



ENTREPRENEURIAL STRATEGIES IN MARGINAL AREAS

Elisabet S. Hauge Agder Research Foundation

N-4604 Kristiansand Norway


The objective of this paper is to discuss agglomeration economy and SMEs market strategies inspired by a neo-Schumpeterian approach. Firstly the paper aims at exploring the weaknesses concerning SME market strategies of the cluster theory. Secondly the paper aims at promoting in-depth knowledge on theories on how businesses in the cultural sector percept and react on new market opportunities. Thirdly the paper aims at illustrating in-depth knowledge by empirical and analytical findings from a research project on entrepreneurship in cultural business sectors. Black Metal music is the largest cultural export product from Norway. Most CDs are labelled “Norwegian Black Metal”, a label that customers identify as high quality. The artistic image is controversial and many members of different sounding boards have been surprised by the music viability and its commercial success. The research question is rooted in assumptions that cultural businesses react on market change in the same way as most enterprises do; they try to adjust their products according to market demand: How do Metal music producers’” perceptions of market opportunity” affect their “market strategy”?

Market structure and regional clusters The regional cluster theory is often criticised for being less concerned about how SMEs interpret and react on market change. We cannot predict changes in the market structure. Therefore one of the biggest challenges for economic theories is how to handle the market structure. Explanations of SME market development must therefore be dominated by the producer’s perception of economic life and assumption for production and market development. An important question is therefore how to implement the market structure in theories on regional innovation systems. To understand and explain regional development in a micro perspective it is necessary to include theory about the producer’s perception and reaction to market change. A neo-Schumpeterian approach on cluster theory will contribute to highlight path-breakers regarding innovation, growth and market opportunities. The neo-Schumpeterian approach is most closely associated with the work on innovation during the mid-80s and further on entrepreneurship during the 90s. Identifying and materializing new production and market opportunities are keywords for entrepreneurial acts. Instead of a bird’s-eye view, this study will go down to the substance (the band) to collect data of high value. The research process will therefore consist of doing band studies. Telling stories about entrepreneurship, or bands development, makes us able to see the meaning of chronological happenings.

Conclusion One main study conclusion is expected to be that those bands that have a “market strategy” are able to identify and realize new market possibilities. This conclusion is based on an enterprise perspective of economic development. The study will also highlight interesting aspects as if cultural businesses are market oriented, if they have a market strategy and export strategy etc. One study result could also be policy implications for how to promote economic development among cultural businesses.



GROWTH BEYOND START-UP: ENTREPRENEURSHIP AND FIRMS IN TRANSITION

Julian Lowe & Sam Henson

School of Business University of Ballarat

Australia E-mail: [email protected]


ABSTRACT The paper reports on the preliminary stages of a case-based study of regional, high-growth SMEs. The study explores the actions, activities and processes undertaken by the firms and their start-up entrepreneurs. A framework for growth is proposed, supporting the notion of the growth process as a complex, multidimensional construct. Tentative suggestions are made about the nature of “distributed entrepreneurship” within a small, rapidly growing firm and the issue of regional impacts is also addressed.



MANAGING A SMALL FAMILY BUSINESS: IMAGES OF UNIVERSITY BUSINESS STUDENTS

Ulla Hytti & Paula Kuopusjärvi

Turku School of Economics and Business Administration Small Business Institute

Turku, Finland E-mail: [email protected]


The traditionally important recruiters in the public sector and in large companies are gradually decreasing their share of employment creating a more important role for the SMEs in offering jobs for university business graduates. Thus, it is suggested that in the future business graduates will frequently engage in careers (either in management positions or as entrepreneurs) in the small business sector. However, many university students in technical or business universities still prefer to work in the large large multinational companies. Furthermore, in the coming years several thousands of entrepreneurs in Finland alone will retire from their businesses. The key question is if the younger generation willing to take over the company. We have applied the passive role -playing method (Eskola 1991, Eskola – Suoranta 1998) in order to investigate the images and perceptions of students with regard to managing a small business and a family business. In the data collection, we provided the students with a short frame story: ”You are a manager at a (typical) small business / family business. In one ordinary winter morning you arrive at your work place and start the daily activities. At the end of the day you discover the day having been fairly typical. Enter into the situation: Describe the company, its activities, the daily events and your own thoughts about your work and the work environment.” Then, we invited the students to write about a normal day at a typical small business taking the role of a manager in that business. The underlying assumption with the method is that individuals are able of imagining, observing, analys ing and interpreting different situations and realities although not having any direct experience of them. The stories written do not necessarily reflect the descriptions of reality but they represent possible stories, stories that may come to realise and what the different issues mean to the writer. The key element with the method is the variation in the stories and typically there is only one element that changes. In this sense the method is approaching experimental testing and the analysis focuses on the changes as a result of the variation in the stories. Our results suggest, firstly, the stories written portray rich, detailed and concrete images of everyday life and, secondly, the stories portrayed a positive image of a small business consisting of a lot of work and long hours, yet providing challenging and interesting work in a pleasant working environment. This was particularly interesting since most of the firms described represented traditional industries and firms (clothes’ stores, metal shops, etc.), i.e. firms not needing to be based on academic knowledge. The images of small businesses and family businesses that are provided may also be served as cases to be discussed in the classroom in order to create a learning environment that takes these images as the starting point in order to discuss the existing presumptions and views and to make the students face and reflect their perceptions as well as their career aspirations. Hence, in our view the task and challenges for the universities in promoting enterprise education deal with more than just providing entrepreneurship studies within the university curricula.



BOARD DECISION-MAKING CULTURE IN FAMILY BUSINESSES

Lise Haalien ([email protected]) Edle I Gjøen ([email protected]) Morten Huse ([email protected])

Cathrine Hansen ([email protected]) Pingying Zang Wenstøp ([email protected])

Norwegian School of Management BI

Box 580 N1302 Sandvika Norway

The recent corporate governance debate has mostly been focused on large corporations, and investor relations have been emphasized. This focus has detracted the attentions from governance problems that may have the most relevance for small and medium sized enterprises. This article is about boards in family businesses. We explore board decision-making processes in family businesses. There are calls for actionable knowledge in governance research, and through a survey of actual board behavior in 486 small and medium sized businesses, we meet some of these needs. The results show the impact of various aspects of the boards’ decision-making culture on actual board task performance. Six dimensions of the decision-making culture was used; cognitive conflicts, creativity, preparation and involvement, generosity and openness, critical attitude, and interaction and influence. We used fine-grained analyses of the board’s various control and service roles to measure board task performance. We found that various dimensions of the decision-making culture influenced the various board roles. Furthermore, these relations varied between family businesses and non-family businesses. The article contributes in various ways. Board processes and actual board behavior are explored, and it clearly shows how decision-making processes in family businesses vary from what takes place in other firms.

Key words : Boards, family business, decision-making, actual board behavior



SMES FOLLOW IN THE FOCAL COMPANY’S FOOTSTEPS

Päivi Iskanius & Vesa Pikka

University of Oulu Department of Industrial Engineering and Management

P.O. Box 4610 90014 University of Oulu



May 2004

Abstract Networking with a larger company provides both advantages and disadvantages for the success of SMEs. In this paper we concentrate on the business factors when SMEs follow in the focal company’s footsteps from the SME’s point of view. The study is done in the context of one Finnish steel product industry network. We try to find answers to the following research questions: 1) What are the benefits and downsides for SMEs when following in the focal company’s footsteps? 2) How do the SMEs, in order to be able to respond to global customer requirements, need to develop its co-operational functions? Firstly, we have studied networking as a development environment for the SMEs from theoretical perspective, and also by reviewing networking literature. Secondly, we discuss the success factors of the co-operation between the larger and smaller firm. Finally, we have identified the benefits and downsides, and the development improvements of SMEs in the case network.



NORWEGIAN SMES AND THE IPR-SYSTEM OR A SMALL COUNTRY’S SMALL COMPANIES IN AN INCREASINGLY BIG AND IPR INTENSIVE WORLD

Eric J. Iversen

NIFU STEP Center for Innovation Studies Hammersborg torg 3

N-0179 Oslo, Norway


May 2004

Abstract During the 1990s the volume of patent applications increased substantially in many countries. In Norway the rate of patent applications grew on the order of 30%. This paper starts from the observation that the growth of this measure of innovative output was in gross terms highest among the country’s many small and medium-sized enterprises. This suggests a rising tendency among this important population of the Norwegian economy to engage in risky innovative activities in the pursuit of commercially viable innovation. This appears to be good news, since such a tendency is expected to lead to a diversification of technological capabilities in the economy and ultimately to economic growth. But is this really an established tendency? What do we really know about this relationship between firm-size and patenting? This paper presents some results of a study on Norwegian SMEs done for the World Intellectual Property Organization (WIPO).



BETWEEN ARM'S LENGTH RESEARCH AND POLICY PRACTICES - INTERACTIVE APPROACHES IN ENTREPRENEURSHIP STUDIES

Bengt Johannisson

Växjö University SE-351 95 Växjö


May 2004 Abstract In this paper the entrepreneurship and small-business research that is base on arm's length methodologies is challenged and different interactive research approaches introduced: interpretative, developing action research, mobilising action research, provocative research and enactive research. The research approaches are described in a tentative comparative framework and illustrations from case research provided. Criteria for quality control are discussed and applied, underlining the ethical dimension.



THE SOCIAL CONSTRUCTION OF THE DISABLED AND UNFASHIONABLE FAMILY BUSINESS

Bengt Johannisson

Växjö University SE-351 95 Växjö


May 2004

Abstract In this paper some influential myths in the Scandinavian countries concerning firm growth and family business are challenged. Based on a sample of 553 fast-growing firms, so called 'Gazelles', this author argues that the myths concerning firm growth remain as constructs in the interest of public and corporate agents. Instead the features that are ascribed family businesses, explaining their alleged drawbacks, are shown to be generally associated with high growth.



MANIFESTATIONS OF INNOVATIVENESS IN RURAL MICRO FIRMS

Virpi Kaikkonen University of Kuopio

Department of Business and Management P.O Box 1627


May 2004

ABSTRACT

Adopting a broad definition of innovation this study discussed manifestations of innovativeness in rural manufacturing micro firms. A three-fold scale was developed, where the aspects were radicalness of the product or/and service, novelty aspect of the business strategy, and willingness/ability to form business networks. In the analysis of data, which consisted of interviews of owner-managers in 20 micro firms, were found three types of firms, diverged by their degree of innovativeness. Study showed that in rural areas there are manufacturing micro firms with low level of innovativeness, but also innovative firms who generate novel ways to benefit from local resources. The innovativeness of rural micro firms seems to manifest as a novel way to organize business operations, including customer-oriented flexible product development as well as building wide business networks with producers of raw material. The importance of social networks was emphasized; both as a source of new ideas and as a new way to organize business operations in order to gain competitive advantage.



THE INSTITUTIONALIZATION PROCESS OF BUSINESS PLANS IN NEW ORGANIZATIONS: THE CASE OF WRITTEN BUSINESS PLANS

Tomas Karlsson

Jonkoping International Business School Box 1026 SE-55111 Jonkoping Sweden

Tel 036-156221 Fax: 036-161069


May 2004 Abstract Business plans are important phenomena for managers of new ventures. They are a widely endorsed, institutionally expected, tools. Business plans are something most new business managers have to face in one way or another. In terms of research, the value of business plans for start ups is enigmatic. Research shows weak results between planning and performance among new businesses. Even so, teaching how to write business plans is a common subject in business schools world-wide. This study applies, to the field of entrepreneurship, a novel strategic institutional approach to the phenomena. The purpose of this study is to shed further understanding of the managerial process with respect to how nascent organizations deal with business plans. To capture the complexity of the phenomena, a combination of observations, interviews, and studies of actual business plans are necessary. Further, institutional pressures are traced from the new business owners to their sources, be they incubator coordinators, bankers, or external investors, through the organization. This is feasible only with a limited number of cases. Six nascent companies within a business incubator were selected for this study. Interviews and observations were conducted on an average once every half-year with different members of the nascent firms, during a period of three year. In total, this study encompasses the analysis of more than 1000 pages of observation notes, transcripts and documents. This paper reports on three findings. First, it reveals essentially normative underpinnings of perceived coercive pressure. While there in fact were no indication of actual coercive pressure for the new organizations to write business plans when attracting external capital, it was a widely spread belief that this was the case. This belief, rather than actual pressure lead to Acquiescence. Second, it highlights the importance of prepackaged easy to use and understand templates, and instructional books on a topic. A “business plan for dummies” would likely improve the spread of the business plan phenomena. Widely spread and extensively simplified recipes reduces search costs and decision costs. Under assumptions of bounded rationality, such recopies will be more likely to be positively evaluated. Third, initial strategy of acquiescence to institutional pressure gradually deteriorates into strategies of compromise and avoidance. While the behavior of the firms was easily recognized as acquiescence at the start of the planning, the planning gradually deteriorated, and the conforming companies became increasingly misaligned with the plan. This study contributes with in depth explanations to the enigmatically weak relationship between plans and performance in nascent organizations, often found in survey based studies. As such, it has implications for how business schools teach business plans. Further, it represents a novel application of institutional theory.



MANAGEMENT OF SUCCESSFUL AND INTERNATIONALLY

ACTIVE SMALL FIRMS

Anders Kjellman & Joachim Ramström Åbo Akademi University

Department of Business Studies Finland

E-mail: [email protected] E- mail: [email protected]

May 2004

Abstract Based on survey results from 411 internationally active Finnish small and medium sized enterprises (SME’s) we are trying to identify patterns behind successful international activity. Using a broad measure of successful international activity of SME’s we have found that there is significant differences between the successful and less successful internationally active firms. Our findings indicate that there are many crucial managerial issues behind successful internationalisation of SME’s, among them: The Managing Director is highly interested in internationalisation, and thus the role of international orientation of the management cannot be understated. Management of the SME is committed to doing international business. Personal selling is the key sales promotion element and thus the role of individual performance is significant. The small firms that succeed in an international environment are better educated and have more suitable personnel. Thee successful international SMEs are focused on satisfying customer needs, and capable of conducting after-sales activities. Our data and findings indicate that there exists a further need to study international management of SMEs. However, the ten factors we have identified seem to explain part of the puzzle behind the success of SMEs abroad. _________________ We gratefully acknowledge financial support from the Academy of Finland and constructive comments by Sami Saarenketo, Niina Nummela, Ann-Christin Sundnäs, Maria Elo, Sören Kock, Paul Wilkinson and Jarmo Larimo.



SOCIAL NETWORKS, FUNCTIONAL LINKS, AND SPATIAL PROXIMITY. FOUNDING PROCESSES AND EARLY DEVELOPMENT

OF KIBS START-UPS

Andreas Koch Institute for Applied Economic Research (IAW)

Ob dem Himmelreich 1D 72074 Tübingen


Thomas Stahlecker Fraunhofer Institute for Systems and Innovation Research (ISI)

Breslauer Str. 48 76139 Karlsruhe, Germany


Abstract Bridging a twofold gap in existing literature, this paper is situated at the interface between entrepreneurship research and studies about knowledge intensive business service firms (KIBS). On the one hand, in entrepreneurship research, there is a lack of studies examining explicitly the KIBS sector. On the other hand, most research dedicated to the study of KIBS does not consider processes of firm foundations. The present contribution highlights important elements of start-up processes in the KIBS sector by focussing on social networks of the founders and firms and on the relevance of relational and spatial proximity. We examine the subject by presenting the results of in-depth case studies of newly founded KIBS. On the basis of these studies it can be shown that relational proximity is of crucial importance within the founding process, and remains so in the course of the firm’s development. Spatial proximity, in contrast does not generally matter. It depends on the firm and the external characteristics whether linkages in the region of the firm play a decisive role. JEL-Classification: D21, D83, L19, L86, O31, R19 Keywords: Social Networks; KIBS; Entrepreneurship; Interviews; Spatial Proximity; User-Producer Interaction



VENTURE CAPITAL DECISION MAKING AFTER THE HIGH TECH DOWN-TURN – CONSIDERATIONS BASED ON GERMAN

E-BUSINESS INVESTMENT CASES

Tobias Kollmann & Andreas Kuckertz University of Kiel - Multimedia Campus Kiel


May 2004

Abstract

In the course of the tremendous downturn in global, public financial markets, upstream financial markets face new challenges as well. As a consequence, it has become significantly harder for newly founded ventures to receive venture capital funding. Especially ventures from the electronic business sector which focus heavily on harnessing internet technologies face never before experienced financing challenges. In order to understand how the changed economic situation has influenced the decision making of venture capitalists, ten case studies were conducted among German, Austrian and Swiss electronic business ventures. The central criterion for the selection of a particular case to explore was an investment decision dated after March 2000 when the speculative bubble in the stock market had reached its maximum. From a total of 32 offers we selected ten investment cases which took place from the beginning of 2000 to the end of 2002. For each case two interviews were carried out - one from the perspective of the investor and another from the perspective of the financed venture. By this the two central research questions of this paper were addressed: (1) How have the changed conditions on public financial markets influenced venture capitalists' decision making processes? And, from the perspective of the venture capitalist's counterpart, (2) have entrepreneurs modified their strategies for raising venture capital? If yes, in what way have they done this? The qualitative content analysis of this rich data set provides evidence of changes in managing the investment procedure as well as on the altered design of electronic business concepts.



MORE THAN MONEY?

KNOWLEDGE ENTERPRISES’ EXPERIENCE OF VENTURE CAPITAL*

OVE LANGELAND

Norwegian Institute for Urban and Regional Research (NIBR) P.O. Box 44 Blindern


May 2004

Abstract This paper focuses on how knowledge enterprises experience venture capitalists as investors and owners. It examines the capital market for early stage investments in knowledge-based businesses from the entrepreneurial or enterprise perspective. The aim is to gain a more comprehensive understanding of the importance of venture capital for financing entrepreneurship and innovation. Modern economies are said to be innovation-driven economies. Science, technology and innovation increasingly determine the performance of such economies as well as the competitiveness of industries. Venture capital is regarded as a main source for financing innovation, and especially enterprises based on new technology and radical innovation. The lack of early-stage financing is regarded as a main obstacle to entrepreneurship and innovation. However, enterprises in early stages not only need financial capital; strategic activities such as business administration experience, networking and monitoring activitie s are just as important. This paper examines the following three research questions: 1. How do knowledge enterprises finance their investments? 2. Do knowledge enterprises have financial problems? 3. How important are the strategic activities of venture capitalists? The paper is based on a survey conducted in 2002 and 2003 of 240 portfolio enterprises. The survey focuses on enterprises’ characteristics, financing, relations between enterprises and venture capitalists and the strategic activities of venture capitalists. * The paper is based on Gundersen, F. and Langeland, O. 2004: Mer enn penger? Kunskapsbedrifters erfaringer med venture og såkornkapital. NIBR-notat 2004: 109.



DO FAMILY RESPONSIBILITIES HINDER OR ENCOURAGE SELF-EMPLOYMENT? HOUSEHOLD CONFIGURATIONS AND WORKING SCHEDULES OF SELF-EMPLOYED

WOMEN IN GERMANY

Maria Lauxen-Ulbrich &René Leicht Small Business Research Institute

University of Mannheim D-68131 Mannheim


Abstract This study deals with the household configuration of self-employed women and female start-up entrepreneurs based on German Microcensus data. We asked whether the family status of these women differs from those women in dependent employment and from those of self-employed men. Our objective was to determine whether certain factors – such as having a partner and/or offspring - are conducive to or rather hinder entrepreneurial activity. Assuming that mainly women with children are looking for more flexibility through self-defined work arrangements, we examine the working hours and schedules of self-employed women in comparison with others. Descriptive statistics show that the household configurations of self-employed women differ only slightly from those of female wage and salary earners. Family work does not seem to have a negative influence on self-employment. On the contrary, self-employed women tend to have more and younger children than do female employees. Finally regression models – controlling for other/additional variables – confirm that economically active women are more likely to be self-employed (rather than in dependent employment) if they have pre-school children. Men’s tendency to become self-employed however is much less influenced by the presence and number of children in the household. Another question is how many women – under these circumstances - correspond to the image of the restless entrepreneur: the self-employed women do work longer hours than female employees but will not attain the working hours of self-employed men. Obviously, the time budget of a self-employed mother is limited by her family commitments. The younger the children the fewer the working hours. However, self-employed mothers do not take advantage of flexible work arrangements more often than self-employed women in general. We observed that a big share of self-employed women work “mainly” at home. Nonetheless, there is no evidence that self-employed mothers (compared to self-employed women without children) tend to work much more from home, or during evenings or on weekends. Therefore we can assume that other self-employed women take advantage of flexible work schedules to the same extent. This of course depends on the economic sector or the nature of the work where the person is involved. Our research project “Gender Specific Statistics” is part of the EQUAL-Development Partnership “Women Way of Entrepreneurship (WwoE)” that aims to establish a continuous reporting on women start-up entrepreneurs and female self-employment.



STORIES OF SUCCESS AND FAILURE: CASE ANALYSES OF INTERNATIONALIZATION PROCESS OF SMCS IN HIGH-TECH ENVIRONMENT

Ulla Lehtinen University of Oulu

Department of Industrial Engineering and Management P.O.Box 4610, 90014 Univeristy of Oulu


Abstract The study analyses the internationalisation process of small and medium sized Finnish high technology companies in the 1990s. First the intenationalisation process is discussed based on the literature. The case studies explore the creation, evolution, and expansion of two small high-tech firms. These companies are regarded as an example of a successful entry to global markets. This study describes the history, policies, and procedures of the case companies leading up to internationalisation, especially the entry to U.S. markets. The internationalisation process of the case companies is compered to the characteristics of Born Globals. Personal connections, networking, and careful planning were found very essential for case companies. In order to attain a global position with very limited resources the importance of partnerships are emphasised. The competitiveness is strongly based on technology know-how and value-added solutions for customers.



ENTREPRENEURIAL NETWORKS: A COMPARISON OF WESTERN AND CHINESE CONCEPT

Pansy Hon Ying LI The Hong Kong Polytechnic University

Department of Management and Marketing Hung Hom, Kowloon, Hong Kong

Ph: +852 27667404 Fax: +852 27650611


May 2004 Abstract The purpose of this research is to compare and contrast the western concept of social networks with its Chinese counterpart of social networks, that is, guanxi, in the field of entrepreneurship. I first identify the significance of networks in the entrepreneurial process and the different categorizations of network types as well as guanxi’s origin, meaning, functions and categories. From the social capital perspective, there is no great distinction between social networks in the West and guanxi in China as both of them form social capital and contribute to the entrepreneurial goal. Networks and guanxi are just etic and emic concepts. However, owing to cultural and structural factors, guanxi is something more than the sum of social networks as it involves normative obligations in interpersonal relationships. The practices of guanxi have not faded in modern China but their nature has become more utilitarian.



FACTORS RESPONSIBLE FOR THE GROWTH OF SMALL BUSINESS FIRMS: EMPIRICAL EVIDENCE

A. A. Ligthelm1

Bureau of Market Research University of South Africa

Pretoria South Africa


May 2004

ABSTRACT Entrepreneurial conduct holds the key to economic growth. However, entrepreneurship is often wrongly equated with small business development. It is maintained that entrepreneurship embraces only those businesses that show growth and development, implying that SMME policy initiatives should rather focus on those businesses with growth potential and not the small business sector as a whole. The human factor is considered to be the key factor that determines business prosperity. The success of a small business is therefore guided by the integration of the intentions of the owner, assisted by factors associated with the ability and opportunity of the specific business to grow. The aim of this article is to make use of a multiple linear regression model to determine the variables that impact positively on business growth. In addition to demand factors, it was established that smaller and younger businesses are the ones that grow faster. A successful business also shows a positive correlation between business management skills and entrepreneurial conduct.

1 The valuable contribution of Prof JA Döckel of the University of South Africa to this paper is acknowledged.



EXPLAINING PERFORMANCE OF HIGH GROWTH NEW FIRMS IN FINLAND

Hannu Littunen & Markku Virtanen

Department of Business and Management University of Kuopio FIN-70211 Kuopio


Abstract

This study examines the effects of the factors involved in the start-up situation and the first seven years’ development on the subsequent high growth of firms. On the basis of former literature and models of entrepreneurial behaviour three models of new firm performance will be tested with logistic regression method. First, new venture performance, measured by high growth of the firm, will be explained by entrepreneurial characteristics (entrepreneur’s personality, strategic control orientation and skills of entrepreneur). The second model explains relative growth by using entrepreneurial team and interaction between the firm and environment as explanatory variables. The third model combines these two models. Doubling of turnover will be used as the criterion of high growth. The longitudinal study follows up 200 SMEs from Finnish metal products manufacturing and business service firms established in 1990 up to the year 1997. The sample consists of 138 firms from the branch of manufacturing of metal products and 62 business service firms. At the seven-year-follow-up 86 firms which survived answered, 55 firms had closed down and 59 firms refused to participate the follow-up study. The study concentrates on the 86 firms which survived. About 52 % ( 45 firms) of these firms where identified as growing firms in relation to the whole sample of the study. The first two models that were tested both classified correctly a little bit less than 70 % of observations. In the first model the age of the entrepreneur was the only statistically signif icant variable. In the second model the explanation was slightly higher but altogether five variables - differentiation of the main product, motives for establishing firm ( 2 variables), style of management (2 variables) - were discovered to be statistically significant. The third model classified correctly over 76 % of observations, the age of entrepreneur, motives for establishing, main product and style of management being the statistically significant variables, as could be expected on the basis of the results of the former models. The analysis suggests that personality and skills of the entrepreneur or environmental factors do not themselves explain the growth performance of new ventures. However, the entrepreneurial skills and previous experience could influence both its ability to obtain resources (Eisenhardt & Schoonhoven, 1990), and the decision to which industry the firm will enter (Chrisman et al., 1999). Environmental factors combined with the personality, especially with the experience factor (age), classify correctly over three fourth of the observations. Age of the entrepreneur will probably reflect the importance of learning by doing in the entrepreneurial process. KEYWORDS: new firms, growth, environment



WOMEN’S ENTREPRENEURSHIP IN NORWAY: THE NEED FOR - AND ACCESS TO - NEW VENTURE CAPITAL

Elisabet Ljunggren

Nordland Research Institute N-8049 Bodø


Lene Foss Norwegian College of Fishery Science

University of Tromsø E-mail: [email protected]

March 2004 Entrepreneurship is viewed as a phenomenon contributing to wealth creation in society. As the degree of women entrepreneurs is low in the Nordic countries, women can be regarded as an unexploited reservoir of entrepreneurs necessary to actuate. This is not only true for nascent entrepreneurs but also for those who already have started a business. The potential for growth among women owned businesses is high and the reason for the lack of growth among women owned businesses is rather complex. One reason often mentioned in the debate about the lack of women entrepreneurs is the lack of access to venture capital. This makes the focus in this paper, where we in an exploratory study address the following research questions: a) What is the need (demand side) of new venture capital for women owned businesses in Norway? What is considered as the largest hurdles for business growth? b) What is the access (supply side) of new venture capital for women owned businesses in Norway? Recent research shows that Norwegian women are more inclined to use sole proprietorship than men, who are more inclined to use limited corporation as organizational form for their new business. Female entrepreneurs are in minority in 21 out of 23 main industry sectors and in majority in only two: textile industry and social services. Businesses started by female entrepreneurs are smaller than males’: 20 % of businesses started by women have only one or more employees, while the share for males are 31 %. In studying New Venture Capital (NVC) in Norway one has to divide between private and governmental venture capital organizations. We define private NVC organizations to be banks, business angles and private and semiprivate owned funding businesses. To our knowledge there have not been conducted any studies on gender and NVC in private sector, while some studies have been carried out on governmental NVC systems (see e.g. Alsos & Ljunggren, 1995; Bolkesjø, 1992; Pettersen et al., 1999; Sørbrøden & Aubert, 1998). The reason for the relative large number of studies on gender and NVC systems in governmental sector is the outspoken and legally established equality policy in Norway; evaluations of the systems are therefore carried out. The investment profiles of the private organizations are focused on different types of technology development within e.g. space technology, electronics, energy technology and ICT. Knowing that industries in Norway are gender segregated where women’s’ businesses are found within the service sector; one may conclude that women owned business are not the target group for the private NVC organizations. This lack of substantial knowledge when it comes to private NVC makes us focus on women and new venture capital funding in the private NVC organizations.



ESTONIAN MANUFACTURING SMEs INNOVATION STRATEGIES AND DEVELOPMENT OF INNOVATION NETWORKS

Rein Lumiste Tallinn Technological

University Kärberi 43-49

13919 Tallinn, Estonia E-mail: [email protected]

Rünno Lumiste

University of Tartu Arbu 12-6


Kaarel Kilvits Tallinn Technological

University Kopli 101


May 2004

Abstract The problems of innovation in Estonian manufacturing SMEs and development of innovation networks are connected with the specific character of Estonia as a transitional country and as a small country. The research is based on analysis of Estonian manufacturing enterprises using the statistics, databases (Innovation Survey) and literature available in this field. This paper discusses innovators: who they are, what factors have most contributed to the innovation activities, what kind of SMEs are more innovative, what are the networking and innovation strategies the companies use and what are the differences between SMEs and large enterprises, what needs to be done to raise the competitiveness of Estonian manufacturing SMEs, which are the strategic and organisational changes in SMEs and their influence on the competitiveness of SMEs. The authors analyse the implication of innovation measures for future development of entrepreneurship.



ENTREPRENEURSHIP IN THE KNOWLEDGE-INTENSIVE SECTOR: INFLUENTIAL FACTORS AT THE START-UP AND EARLY GROWTH

PHASE

Henning Madsen ([email protected]), Helle Neergaard ([email protected]), Sannie Fisker ([email protected]), John P. Ulhøi ([email protected])

The Aarhus School of Business 8210 Århus V

Denmark May 2004

Abstract The importance of SMEs for economic growth and employment has long been recognised, although the entrepreneurial activity in SMEs has not been understood all that well. In the light of this, a better understanding of entrepreneurs and their local environment might be helpful, since these are usually key factors in the discovery and exploitation of new opportunities. In order to research this situation into more details, a framework taking into account aspects of social, human and financial capita has been developed. Therefore, the purpose of this paper is to address the influence of these factors on the entrepreneurial process in technology based new ventures. Key words: Entrepreneurship; Financial Capital; Human Capital; Social Capital



RESOURCES, LONG-TERM ENTREPRENEURIAL ORIENTATION, AND FIRM PERFORMANCE

Einar Lier Madsen

Bodø Graduate School of Business &

Nordland Research Institute Norway


May 2004

Abstract Studies showing the possibility that the effect of entrepreneurship is long-term in nature are called for. The primary contribution of this article is that the entrepreneurial orientation (EO) employed here has a long-time effect on perceived performance. Another contribution, when controlling for past EO, is that this variable has implications for all three performance measures (perceived performance compared to competitors, relatively sales growth and relatively employment growth). As entrepreneurial posture tends to be resource-consuming these result are of interest for managers seeing that EO over time can contribute to value-adding activities. For scholars this result is encouraging when trying to gain new insight and knowledge about the intended effect of entrepreneurial activities. Surprisingly, the results only partly supported the importance of the seven resources tested; the manager’s education and experience, the use of organizational networks, the firm’s location, board, patented products/services and technology, and financial position, for performance. Hence, other resources have to be explored and tested.



PERSPECTIVES ON ENTREPRENEURIAL ACTIVITIES OF UK BASED SECOND-GENERATION SOUTH ASIANS

Mark McPherson

Middlesex University Business School The Burroughs

Hendon London, UK

E-mail: [email protected] March 2004 The impact of ‘generations’ and the entrepreneurial process as a result thereof, is not acknowledged within the mixed embeddedness model. Moreover, while the mixed embeddedness model gives a more comprehensive explanation of immigrant entrepreneurship than previous models, it nonetheless fails to explain the wide-ranging inter and intra-ethnic differences in entrepreneurial activity. In an attempt to bridge these gaps within the model, this paper (which is part of a wider study) follows an emerging line of enquiry, whereby it is suggested that theories of ethnic entrepreneurship must explain diverse, uneven and changing patterns of entrepreneurship, such as those evident in Australia. For that reason, therefore, investigation is needed into the changing group characteristics of different cohorts of ethnic entrepreneurs over time and how opportunity structures change in order to facilitate these cohorts. In essence, the focus of the paper is on key factors recognised within emergent theory as those being relevant to second-generation entrepreneurship. Such a perspective would of course aid the development our own understanding of second-generation South Asian economic activity in the UK.



FROM THE DAWN OF A MARKET ECONOMY TO THE MEMBERSHIP OF THE EUROPEAN UNION: THE MOTIVATIONS AND PERCEIVED ENVIRONMENT OF

ESTONIAN ENTREPRENEURS

Ahti Lehtomaa Lappeenranta University of

Technology Department of Industrial

Engineering and Management Finland

[email protected]

Asko Miettinen Tampere University of Technology

Industrial Management Finland

[email protected]

Kaisu Puumalainen Lappeenranta University of

Technology Department of Business

Administration Finland

kaisu.puumalainen @lut.fi

May 2004

Abstract Changes in start-up motivations and availability and use of support services are explored from the perspective of Estonian start-up firms in 1991 and 2000, respectively. This is motivated by the critical role of new entrepreneurs as shapers of economic decisions, actions and business performance. A structured interview based survey was conducted in recently established enterprises in Estonia. Owners/managers from 80 new enterprises participated in this study in 1991 and 58 in 2000. The results showed that there has been changes start-up motivations and use of support services of small firms in 1990s. In addition to several institutional changes, the business environment has ‘normalised’ from the market economy point of view: the competition has intensified, political instability decreased, access to customers has become more difficult etc. Availability of capital seems even more difficult than in the early 1990s. At the same time, there were somewhat easier access to market information, various advisory and training services, which were also more utilised than a decade earlier. This was not enough, however, and majority of Estonian entrepreneurs considered SME support policy and practice still rather weak and ineffective. Some new challenges after the recent membership of Estonia in the European Union with the special reference to the SME sector are further discussed.



SOCIAL CAPITAL AMONG THREE ENTREPRENEURIAL COMMUNITIES: BOON OR BANE?

BRUCE MITCHELL & MARY JESSELYN CO School of Economics and Management

University of KwaZulu-Natal Durban, 4041 South Africa

Tel: + 27 31 2603551; Fax + 27 31 2602169 Email: [email protected]

May 2004

ABSTRACT The purpose of this empirical study is to understand how entrepreneurs mobilise social capital. A survey of 325 entrepreneurs from the KwaZulu-Natal province of South Africa was conducted. Analysis of variance, factor analysis and discriminant analysis was performed on a 20-item scale on social capital variables. Results indicate that among the three ethnic groups of entrepreneurs studied, Europeans mobilised social capital better than their Indian and African counterparts. Europeans tend to favour more formal avenues of accessing social capital while Indian respondents tend to prefer informal means. The following six factors were also derived from the factor analysis-participation in community activities, proximity of network members, perceptions of ones contribution to society, attitude towards multiculturalism, perceptions of safety and trust, and access to and freedom to provide information. The discriminant analysis findings show that the social capital scale can accurately distinguish between the three ethnic groups.



MASTERING ENTREPRENEURSHIP – THE CHALLENGE OF EDUCATING ENTREPRENEUSES2

Elizabeth J. Muir & Louise-Jayne Edwards




May 2004

Track for submission: Gender perspectives on SMEs and entrepreneurship Keywords: Gender, Enterprise Education, theory and practice This paper explores the challenges of the successful establishment of a two-year, full-time, master’s degree course designed specifically for women as potential or practising entrepreneuses. Key areas analysed include the decision to establish a ‘for’ entrepreneurship course at postgraduate level; issues surrounding entrepreneurship education for women; and determining what constitutes ‘success’. The MSc Entrepreneurship (Female Entrepreneurs) is delivered at the University of Glamorgan and funded through the European Social Fund and so far involves two student cohorts, since January 2002. The study comprises group reflection by the delivery team, data from the student monitoring entry and exit questionnaires, a specifically designed questionnaire, and student feedback during group tutorials. The traditional academic perspective offers study where competence is measured in terms of knowledge and understanding of the subject together with academic skills such as critical analysis and debate. The first theme examines the tensions between this, where entrepreneurship is a subject, and the notion of learning ‘for’ entrepreneurship whereby the student is enabled to develop the knowledge and skills to effectively start and develop their own business. Herein lies the challenge of transforming such learning so that it is validated as appropriate for master’s level study. The second theme extends the feminist debate on women-only education into the field of entrepreneurship education by examining the availability of relevant material, selection of suitable educators and the contribution of women’s entrepreneurial experience. Thirdly a tentative model of ‘success’ is developed which goes beyond student completion and is inclusive of benchmarks such as business establishment, employment created, commitment to life-long learning as well as the student experience.

From these themes, in the context of entrepreneuse education, two main conclusions are formed. Firstly the design and delivery of courses should take into account cultural and experiential capital of potential students. Secondly, the course content and assessment should be flexible enough to enable the entrepreneurial aspirations of individual students to be achieved without compromising academic standards. Introduction This paper explores the challenges of the successful establishment of a two-year, full-time, master’s degree course designed specifically for women as potential and practising entrepreneuses3. Initially the

2 Entrepreneuse is the term used to describe a female entrepreneur, which will be discussed further in the paper.



key areas in the background debate focused upon the decision to establish a ‘for’ entrepreneurship course at postgraduate level; consideration of women-only entrepreneurship education; and determining what constitutes ‘success’ from the perspectives of the various stakeholders involved. The course in question, MSc Entrepreneurship (Female Entrepreneurs) is then described as a product of the University of Glamorgan. Tension arose when locating the course within the entrepreneurial epistemological continuum (Swedberg 2000: 38-39). This ‘for’ and ‘about’ debate is thus the first theme to be explored. Secondly, within the development, the challenges of addressing material content and pedagogical aspects of delivery are analysed. Once the course was running, various process and auditing events took place, which plot the progress of students from entry to alumni. These are then analysed and the third theme is developed which questions what constitutes ‘success’. In conclusion, this paper focused upon two key considerations for entrepreneuse education. Firstly the extent to which the design and delivery of such a course should and can take into account the cultural and experiential capital of potential students. Secondly, consideration is given to the extent to which the course content and assessment should and can be flexible enough to enable individual students’ aspirations to be achieved without compromising academic standards. Whilst these conclusions are based upon this specific course, it is believed that they have more general application to other courses, which may not be gender specific or necessarily related to enterprise education.

3 The word ‘entrepreneuse’ is used rather than the traditional ‘female entrepreneur’ or ‘woman entrepreneur’. It is intended to provide identification within a non-homogenous but gender specific group of entrepreneurial people within the entrepreneurial community. It does not endorse the notion of women as ‘other’ or different from the norm as the use of ‘female’ or ‘woman’ as an adjective describing something other than the norm, i.e. ‘male’ entrepreneur.



FIRM DEMOGRAPHY AND INDUSTRIAL RENEWAL STUDIED WITH MATCHED EMPLOYER-EMPLOYEE DATA –

METHODOLOGY AND RESULTS

Svein Olav Nås & Tore Sandven STEP Centre for Innovation Research

& SINTEF Technology Management



Abstract A central aspect in industrial policies in most countries concerns the ability to renew the industrial structure to sustain competitiveness and economic growth. A central issue related to this concerns new firm formation. The process of industrial renewal is a mixture of many different processes including spin-offs, spin-outs, Greenfield births, closures, etc., but their relative contributions are not sufficiently studied. This is partly due to lack of comparable data and proper methodologies to identify and classify the different kinds of changes and follow their development over time. In spite of the limited knowledge there seems to be great expectations to the contributions to renewal from some types of new firms, i.e. high-tech spin-offs. In this paper these issues are addressed drawing on the results from a recent Nordic project utilising time series matched employer-employee data to identify and classify new firms. The paper presents and discusses the methodology and the different types of changes that are identified. The paper goes on to analyse the contributions to industrial renewal from different kinds of new firms in the Nordic countries over the 6 year period 1995-2001. It argues that spin-offs make up a small proportion of new firms, and that they on average are small sized resulting in marginal effects on over all industrial structure. There are, however, clear differences in what kinds of dynamics that goes on in different industries, and the general trend is in the direction of expanding service industries. The methodology is considered to be well suited for this kind of analysis and it is recommended that it is further tested and utilised more broadly to understand industrial dynamics.



SUPPLY CHAIN MANAGEMENT: THE ROLE OF UNIVERSITIES IN EQUIPPING SMMES TO MANAGE THE PROCESS

JD Nel & Prof MC Cant University of South Africa

Box 392, UNISA Pretoria, 0003 South Africa


May 2004 Abstract In South Africa, the more traditional way of doing business is still applied to a large extent. An organisation buys from a supplier and sells to a customer. The relationships between the parties in this process are rather distant. This “silo” approach of doing business has changed over the last couple of years. Organisations are starting to include more parties within their supply chains in decision-making processes so that all these parties can mutually benefit from improved management of the supply chain. The supply chain includes all the activities associated with the flow and transformation of goods and services from the raw material stage through to the end user. This includes information flows. The perception, however is that many organisations do not understand or trust the concept of supply chain management (SCM). Many previously disadvantaged small, micro and medium-sized enterprises (SMMEs) only try to survive in a highly competitive business environment. It seems as though this problem can and should be addressed. If supply chain management can be implemented more successfully it will most certainly have a positive knock on effect on South Africa’s economy. The question now arises: How can the concept of SCM be introduced to SMMEs (and the supply chains they form part of) to ultimately increase productivity within supply chains and within South Africa’s economy. This paper endeavours to look at the role that universities can play in equipping SMMEs to manage the SCM process.



AGENCY CONTROL MECHANISMS AND INNOVATIVE EFFORT

Raquel Ortega-Argilés* & Rosina Moreno & Jordi Suriñach Caralt

Regional Quantitative Analysis Research Group (AQR) Department of Econometrics, Statistics and the Spanish Economy

University of Barcelona E-mail: [email protected]

May 2004

Abstract

This paper studies the relationship between different control mechanisms to palliate agency problems and R&D activity. Among the various control mechanisms to alleviate agency problems arising from the lack of identity between ownership and control in decision-making positions, we analyse those focusing on the inclusion of owners in the decision-making process, ownership concentration in a few hands, debt financing and foreign ownership. Using an unbalanced panel of Spanish manufacturing firms for the period 1994-2001, we analyse the role that these mechanisms may play in the decision to incur in R&D costs as well as their volume. Keywords: agency problems, ownership structure, research and development, panel data.

*Corresponding author. Address: Av. Diagonal 690, 08034 Barcelona, Spain. Phone: +34.93.4021010. Fax number: +34.93.4021821. E-mail address: [email protected]. Financial support from the DGICYTSEC2002-00165 is gratefully acknowledged.



PARTNERSHIP FOR INNOVATION WITH SMES: ENHANCING TECHNOLOGY TRANSFER FROM LARGE PUBLIC RESEARCH

INSTITUTES

Manfred Paier Department of Technology Policy

ARC systems research GmbH A-2444 Seibersdorf, Austria


June 2004

Abstract Innovation is increasingly recognised as a complex knowledge generation process that covers technological, organizational, financial and social dimensions. Small and medium sized enterprises (SMEs) often face substantial barriers to innovation. Large public research institutes (LPRIs), on the other hand, offer crucial assets that are able to improve the innovative performance of SMEs: Technological capacity, financial resources and essential networks. The paper presents the “partnership for innovation with SMEs”, a model for improving technology transfer from LPRIs to SMEs. The model is based on risk and revenue sharing between a research institute and an SME within a single co-operative innovation project, where the research institute offers easy access to R&D and technology and the partnering SME focuses on commercialisation. The respective funds within the research institute are generated through public start-up financing and will become self-sustained in the medium term. The paper focuses on the “experimental” approach that was employed in the design and validation of the model for a policy instrument. In a two-year pilot project supported by the Austrian Federal Ministry of Economics and Labour, the model was developed in the Austrian Research Centers (ARC), the largest non-university research organisation in Austria. Three single partnership projects were conceptualised, continuously evaluated and analysed with the support of an international advisory board of researchers, government officials and transfer practicioners. Thus, learning loops were incorporated on the project and the design levels, and a validated model for technology transfer from large public research institutes to SMEs could be generated for Austrian SME policy. Keywords: Technology transfer, risk sharing, co-operation, experimental policy design



THE PROBLEMS OF COMMERCIALIZATION IN SMALL AND MEDIUM-SIZED INFORMATION TECHNOLOGY FIRMS

Jarkko Pellikka

Department of Business and Management P.O. Box 1627

FIN-70211 Kuopio E-mail: [email protected]

Markku Virtanen Department of Business Management

P.O. Box 1627 FIN-70211 Kuopio


Abstract The business environment of small and medium-sized technology firms is characterized by the rapid change that can be seen in shorter product and market cycles, the rapid appearance of new markets as well as the appearance of new business opportunities. In order to operate successfully in this business environment, small and medium-sized technology firms need to concentrate further in the acceleration of the commercialization process of their new products. The achievement of a successful commercialization process in a turbulent business environment is a very critical factor behind the success of the small and medium-sized technology firms. However, the theory of commercialization is scarce when the deeper understanding is needed. This paper presents former research background and proposes a model of the problems of commercialization. The problems are empirically tested using case study method. The study demonstrates that these functional problems of commercialization are closely associated with the following: a) the environment of the commercialization, b) marketing, c) financing and d) internationalization. The model clearly emphasizes the major contribution related to internationalization. In addition, controlling the entity of business is vital for a successful commercialization process. It is also possible to build a relevant support and development mechanism for the technology-intensive SME’s by acquiring deeper understanding of the commercialization process. Keywords : Commercialization; Problems; Small and medium-sized technology firms; Information technology



NEW APPROACH TO COLLABORATION - REGIONAL BUSINESS ENABLING NETWORK

Vesa Pikka & Päivi Iskanius & Tauno Jokinen & Pekka Kess

Department of Industrial Engineering and Management University of Oulu




Abstract This paper presents the business enabling network–model and its theoretical base. The basic elements of the model are goal, trust, competence, infrastructure and continuity. The model has been tested in two case networks and the gained results show that the business enabling network -model is appropriate frame to analyse regional network. The business enabling network concept is more broaden than the traditional business network concepts by stressing the meaning of social networks and taking into account also non-commercial actors. The network definition in this paper is broad; A group of actors that work intentionally together to harness long term business capabilities of the network of participants and change information form the business enabling network. Between the actors there may exist formal economical relations or the relations can be only informal i.e. social relations.



FROM SMALL BUSINESS TO ENTREPRENEURSHIP IN THEORY AND PRACTICE - A JOURNEY INTO THE WILDERNESS

Dick Ramström

Mälardalen University Department of Business Studies and Information Studies


March 2004 The area of small business as a topic for research and higher education emanates in Sweden from the beginning of the 1970's. From the beginning the focus was on stressing the importance and the special characteristics of small business firms. Based on a number of empirical observations and ad-hoc assumptions - most of which still to be tested - the foundations for the purpose, nature and direction of research on small business was laid down. The primary study object was the independent family firm, mainly within production. Case studies were used as a main research tool, and a framework was laid down, stressing the specific advantages and disadvantages of small firms. Over the decades, up till today, a development has, quite naturally, taken place both in the direction of research and in the framework used for these studies. At the same time, changes have occurred in the Swedish industry and in the environment facing it, as well as in the number and kinds of minor firms operating on the market, their working conditions and their role in and importance for the Swedish economy as a whole. The paper to be presented may be regarded as a critical contribution for debate and ideas, questioning the realism and relevance of the ongoing research in this field, taking into account the actual developments that have occurred in "the real world". For testing these assumptions, empirical research will be carried out, focused upon literature reviews and analyses of significant contributions in the research field. Although the discussion in the following is mainly concentrated upon Swedish conditions, the general assumptions made will probably hold true also for other Nordic countries. The study will be concentrated on to what extent ongoing research takes into account the changes that have occurred in the firms and in their environment. Partly as a consequence of the long term effects of the introduction of the so called "new economy", we can see the development and growth of a new kind of minor firms, characterized by other ownership and leadership patterns and by other prevalent attitudes to risk-taking and long-term survival, as well as to their willingness for involvement in bigger chains of firms, e.g. through franchising and licensing agreements. The strength of the traditional regions characterized by a strong business climate, the so called "Gnosjö-spirit", also seems to be weekened, in comparison with the growth of firm clusters in major urban surroundings. Similarly, we shall focus upon to what extent changes in the research orientation for small business studies have their correspondence in actual changes in the operations of the firms and in their working conditions. During the last decade, there has been an ongoing shift from research on and teaching in the traditional topics of small business, such as accounting, finance, marketing and production, towards stressing the importance and characteristics of entrepreneurs and the prerequisites and mechanisms of entrepreneurship. This new orientation of research and teaching, which suffers of unclear definitions and delimitations, as well as a coherent theoretical framework, claims to form a new scientific discipline, mainly but not wholly concentrated upon the starting up of new firms. At the same time, we can however notice in Sweden a number of development trends which seem to give negative signals for the growth of entrepreneurship as a whole in the Swedish industry - the number of new firms created is low and diminishing, very few small firms grow into big companies and new



regulations, as well as diminished public and private sources for risk capital available create obstacles for entrepreneurship. If the assumptions made above hold true about the lag in theoretical and empirical research, compared with the actual developments that take place in Swedish industry, this may have serious consequences for the relevance and applicability of the research and teaching efforts made at the universities. Focus may be placed upon the wrong kind of firms and their activities and upon the prerequisites and strategies for effective operations. Especially, there seems to be a danger that the concentration on teaching for and research on entrepreneurship, which is now prevalent but the relevance and applicatory values of which are still to be proved, may lead to less importance being paid to the basic knowledge required for effectiveness in small business economics and organization, such as accounting, cost calculation, finance, production and marketing. A general assumption to be tested may be that, in most cases, it is quite possible to operate a firm effectively with a good such knowledge in small business operations without any exceptional entrepreneurial spirit, whereas the opposite cannot be taken for granted. As shown it the Swedish economy, we have in a number of spectacular cases related to information technology witnessed the growth and decline of firms certainly filled with entrepreneurial spirit but lacking basic knowledge in small business economics and organization.



SOME FEATURES OF GROWTH WILLING COMPANIES

Heikki Rannikko Finnish Employers’ Management Development Institute

Aavaranta Oitmäki, Finland

E-mail: [email protected] March 2004 Purpose of this explorative and empirical paper is to study the profile of a company that has high growth willingness. Dimensions of this profile are defined by help of factor analysis from a data set that consists of CEO opinions on various areas concerning company growth. Areas from which the dimensions are searched are: 1) motivations or reasons for having a growth target 2) internal strengths on which growth would be based 3) means of growth (co-operational behaviour and export orientation) 4) growth prohibiting internal factors 5) growth prohibiting external factors 6) growth supporting external factors Data set consists of 219 answers of Manufacturing SME’s (MSME’s) in Finland. 149 of the total are growth willing; that is they have annual growth target of more than 5% turnover growth. The data set is seen as sufficient for statistical analysis purposes to provide us with valid and reliable results. Research data was collected in 1998 by the Confederation of Finnish Industry and Employers (TT), which was in the middle of strong GDP growth period. In the questionnaire respondents were asked to provide information on the past three years’ growth and their growth target in the following three years and express their opinion on above-mentioned themes. Variables used, also new variables from the factor analysis are compared to those discussed in previous studies and their relevance is discussed according to existing theory and the variables’ statistical relevance. Reference literature used in comparing the outcome of the analysis includes the following: 1) Motivations or reasons for having a growth target Entrepreneurial orientation / (Wicklund 2003) Mental models on growth of growth motivation / (Autere2000) Davisson 2000) 2) Internal strengths Characteristics of fast growing firm / (Almus 2002) Core capabilities as predictors of growth / (Chaston & al 1997) 3) Means of growth (co-operational behaviour and export orientation) Networking / (Johannisson 2000) Case study on growth strategies / (Perry 1987) 4) Growth prohibiting internal factors Risk taking behaviour / (Blombäck, Wicklund 1999) 5) Growth prohibiting external factors Internal and external influences on the growth / (Ross & al 1996) 6) Growth supporting external factors Internal and external influences on the growth / (Ross & al 1996)



THE UNIVERSITY SPIN-OFF PROCESS

Einar Rasmussen

Bodø Graduate School of Business N-8049 Bodø

Norway Email: [email protected]

May 2004

ABSTRACT Academic research is seen as a source of new technology and knowledge with potential application in society. Universities are increasingly expected to engage in the process of transferring this knowledge to practical use through university based spin-off ventures. The focus in this paper is on the process of forming new businesses based on university research and knowledge. Previous studies of the university spin-off phenomenon are fragmented, and mainly descriptive. This paper is addressing the lack of common ground for studying this phenomenon by developing a model describing the process of commercializing university research by establishing new ventures. At the core of this process is the entrepreneurial action. The origin of the entrepreneurial action lies in the identification of an opportunity that can be developed into a business concept. The entrepreneurial action is performed by individuals or teams pursuing the opportunity within a context of operation. The model developed here centers around the business concept, the entrepreneur(s), and the university capabilities for facilitating the entrepreneurial action. These three critical elements and their role throughout the university spin-off process are discussed, previous studies of university spin-offs examined, and implications for policy makers and further research provided. Acknowledgement: This paper is developed as a part of a research project funded by the Research Council of Norway through the KUNI-program.



INNOVATIVE ENTERPRISES IN SCIENCE PARK: DIFFICULTY AND ROUTE OF GROWTH

Alessandra Ressico

Ceris-CNR Institute for Economic Research on Firms and Growth

Italian National Research Council Torino, Italia


In recent decades the importance of the numerous industrial areas formed of small and

sometimes very small companies for the economic development has become ever more evident. Often these firms work in an innovative sector as information technology, telecommunication, biotechnology and chemistry and they are able to compete in the global market. The need to create structures capable of supporting the development of innovative activities has led in many countries to the birth of science and technology parks, which have the objective of compensating for institutional shortcomings. This paper analyses two sets of enterprises operating within two important scientific and technological parks in Italy and France, “Area Science Park” in Trieste and “Sophia Antipolis” located between Nice and Cannes. Work has been carried out through direct interviews with entrepreneurs from a sample of companies selected in the STPs Key words: SMEs, Innovation, Science Parks, NTBFs Jel Classification: D21, L21; M13



INFORMAL INVESTORS: WHOSE MONEY ARE THEY INVESTING?

Rögnvaldur J. Saemundsson & Guðrún Mjöll Sigurðardóttir Centre for Research on Innovation and Entrepreneurship

Reykjavik University School of Business

Ofanleiti 2 103 Reykjavik

ICELAND E-mail: [email protected]


May 2004

Abstract

The purpose of this paper is to investigate the validity of the assumption that the funds provided by informal investors to new and growing businesses only come from their own savings. The analysis in the paper is descriptive and based on empirical data from the GEM adult population survey in Iceland carried out in May 2003. The results show that the assumption is not valid. Dept is frequently used and more out of necessity and without a clear understanding of the investment opportunity rather than as a mean for sizing opportunities. These findings should be taken into account when constructing policies for stimulating informal investments.



GLOBAL FEAR INTERACTING WITH LOCAL DEVELOPMENT – A CASE STUDY OF THE GLOCAL PERSPECTIVE IN A RURAL SETTING

Wilhelm Skoglund University of Stockholm


May 2004 Abstract

This article has its theoretical foundation in the concept of the glocal perspective, a neologism from the words global and local. A glocal perspective often refers to the possibility of a productive exchange between a global company and its different local settings. In this article, empirical studies of a rural community in northern Sweden, indicate alternative implications of the glocal perspective. In this community, the possibility of a positive exchange between the global company and the local development process instead has turned into conflict and a threat to the community’s future. The purpose of this article is to offer an alternative perspective and add to the already existing theoretical framework involving the glocal perspective and its potential benefits or downsides for the local community primarily, but also the global company.



POLICY SUPPORT FOR HIGH GROWTH START-UPS: SOME LESSONS FROM THE UK EXPERIENCE

David Smallbone & Robert Baldock

Centre for Enterprise and Economic Development Research (CEEDR) Middlesex University Business School

The Burroughs Hendon, UK


May 2004

This paper aims to contribute to the debate about policies for small business birth and growth. More specifically, it is concerned with some of the policy issues surrounding a programme to support high growth start-up firms in England, which was launched in 1998. The 1990s saw a growing interest in targeted support for small businesses in the UK, which was associated with a selective focus on growing firms and those with growth potential, linked in policy terms to the competitiveness agenda (DTI, 1995; 1997; 1998). For most of the 1990s, this targeting involved focusing the public policy support offered by Business Links in England on established firms. During this period, support for start-ups and microenterprises became increasingly fragmented (Johnson et al, 1998), although it is now seen as part of a more comprehensive approach to small business support offered by the Small Business Service1 (SBS, 2002). It is in this context that the paper considers some of the policy issues arising from the High Growth Start Up Programme2, which was the first new national start-up initiative since the Enterprise Allowance Scheme 3. Since the programme is now in the final year of its initial 3 year funding cycle, this is an appropriate time to review progress and draw any lessons from the programme. Aims of Paper The paper is based on the results of a national evaluation of the High Growth Start-Up Programme, commissioned by the Small Business Service in November 2001, and undertaken by CEEDR, working in partnership with Databuild Ltd4. The broad aim of the paper is to assess what the High Growth Start-Up Programme has achieved and what policy lessons may be drawn from the experience. More specifically, the paper will: Consider the distinctive ‘support needs’ of high growth start-up businesses, from existing literature Review the support provided under the initiative Review the characteristics of firms assisted

1 The Small Business Service was established in 2001, with responsibilities that currently include the delivery of business support to SMEs through Business Links. 2 Referred to initially as enhanced support for start-ups 3 The EAS operated through most of the 1980s to provide financial support for unemployed people seeking to become self-employed or start a new business. 4 It must be stressed that the views expressed in the paper are those of the authors and not necessarily those of the SBS.



Assess the extent to which the provision has added to the range of business support available and how well it is co-ordinated with other provision Assess how successful the Programme has been in supporting potential high growth start-ups in terms of the outcomes achieved Identify the implications for future policy development in this area



THE SME SECTOR IN ESTONIA AT THE TIME OF EU ACCESSION

David Smallbone Centre for Enterprise and Economic

Development Research Middlesex University Business School

Hendon, UK E-mail: [email protected]

Urve Venesaar

Tallinn Technical University Department of Business Administration

Tallinn, Estonia, E-mail: [email protected]

May 2004

1. INTRODUCTION This paper is concerned with the characteristics, strategies and development problems of Estonian SMEs, prior to Estonia's accession to the EU. Particular attention is paid to the constraints identified by entrepreneurs on their ability to develop their businesses, sources of finance and awareness and use of business services. It complements a paper presented at the previous Nordic Small Business Research Conference by the same authors, which was concerned with the threats and opportunities presented by EU Accession to SMEs in Estonia and some of the policy issues raised by this (Venesaar and Smallbone, 2002). It also complements previous papers that have included a review of institutional changes in Estonia relevant to SME development, which have emphasised supply side changes (Smallbone and Rogut, 2003). The present paper complements these earlier papers by presenting evidence of the current state of the SME sector, based on the largest business survey ever undertaken in Estonia. The paper draws on empirical evidence from a largescale telephone survey of 1912 SMEs, undertaken in December 2002, which was designed by David Smallbone and implemented by a market research company on behalf of the Estonian Ministry of Economic Affairs. To be eligible for inclusion in the survey, enterprises needed to be independently owned, employ less than 250 and operate in either the secondary or tertiary sectors. All sectors were included, except for those engaged in agriculture, fishing and forestry. Respondents were sampled from two databases of the Commercial Register (i.e. on businesses and sole proprietorships). A stratified random sampling design was used, with the actual results from the sample survey weighted to make them representative of the total population of SMEs in the country5, based on quotas for 28 cells (i.e. 4 size groups: 0, 1-9, 10-49, and 50-249 employees and 7 fields of activity based ion the NACE classification). Since the survey was designed to enable some comparisons to be made firstly with a previous survey of Estonian manufacturing enterprises, undertaken in 1998; and secondly, with the ENSR survey reported in the Sixth EU SME Observatory report, it is possible to assess the current state of SME development in Estonia, both historically and, to some extent, in comparison with existing EU member states. The assessment selectively uses survey results

5 The weighting was undertaken in 3 stages, taking into account size categories, fields of activity and regions.



with respect to manager's assessment of the constraints they face in developing their businesses, as well as their assessment of any competitive strengths; labour-related issues; access to finance; access to information; awareness and use of state programmes.



INTERNATIONAL EXPANSION OF SMALL- TO MEDIUM SIZED FIRMS: THE ROLE OF FINANCE

Jan Smolarski School of Business

Administration University of Stockholm

SE-106 91 Stockholm Sweden


Can Kut School of Business

Administration Stockholm University SE-106 91 Stockholm


Neil Wilner College of Business

Administration University of North Texas

Denton, TX 76203 USA


Abstract

Small- to medium-sized firms are expected to show international growth at an early stage. Several factors may affect the outcome of initial efforts to expand and internationalize. Our research examines how equity based venture funding methods affect SME expansion and internationalization. We divide venture capital financing into several categories: incremental financing where firms receive their venture capital funding in portions, lump-sum venture funding where firms receive their funding in one lump-sum and syndication where more than two external investors participate in a financing round. The results show that type of equity based venture capital financing affect internationalization. Incremental funding appears more appropriate for firms with international sales activities and firms that have more than two external investors have higher internationalization activity.



The internationalization of Born Global Internet Firms

Jo Håvard Borsheim & Carl Arthur Solberg•

Norwegian School of Management BI Sandvika, Norway


Abstract This paper analyses the internationalization process of four Born Global Internet firms. These firms follow a different pattern than the stepwise incremental process suggested by the Uppsala school. Although Internet technology is one of the enablers of an accelerated internationalization, the prediction of Internet as a completely borderless market place seems to be illusory. Becoming a global firm in a shorter time frame than what previously has been seen, seems however possible. The challenge then is to develop a theoretical framework concerning both the pace of internationalization and the most appropriate modes entry given the trade off between control and resource constraints. The different schools of incremental internationalization may still apply in that the learning process must be given time to have effect on the organization. The framework suggested by Petersen, Welch and Liesch (2000) may offer interesting avenues for further research. Other aspects of the traditional explanation – in particular that of the gradual geographic expansion – should however be revised. Other factors than psychic distance seem to guide the choice of markets of BGIs.

• Corresponding author: tel: -47 - 67 55 73 63; fax –47 – 67 55 76 76; e-mail: [email protected]



COOPERATION BETWEEN SMES: SOCIAL CAPITAL AND LEARNING PERSPECTIVE

Anne Katajamäki & Kirsti Sorama & Elina Varamäki

Department of Management University of Vaasa Seinäjoki, Finland


Multilateral cooperation between small and medium-sized enterprises has increased during the past decade in Finland, as well as in many other European countries. The limited resources for research and development, production, marketing, exports, financing and knowledge have forced SMEs to seek various forms of alliances to develop and sustain their competitiveness. The important role of social capital on the exchange of knowledge and on the economic performance of networking firms has been increasingly acknowledged in the literature. Firstly, social capital encourages co-operative behaviour increasing adaptation, learning, creativity, and ability to notice new business opportunities. Secondly, through adaptation and learning cooperating SMEs are seen to reach new organizational advantage for value creation together with their partners. The understanding of inter- firm networking phenomenon has accumulated year-by-year. Even the specific questions regarding learning have been addressed in numerous publications. However, despite the identification of different types of inter-firm networks with different developmental challenges, research has not been particularly successful in contextualizing learning into different governance structures of these networks. Additionally, understanding learning in inter- firm networks is still far from grasping the realities of the collaborating actors and their different organizational culture, which in turn affects the attitudes of the actors to share and exploit knowledge. The dynamics of learning involve the co-evolution of the firms and the network. The antecedents of organizational learning process, i.e. structural, cognitive, and behavioural level, have to be considered in the context of network. There is also a need to examine, how these antecedents are to be implemented in the processes of inter-firm networks. The objectives of the present paper are: (1) to review the previous literature dealing with network development, social capital, and learning, (2) to create a framework to analyse inter-firm network’s learning process as well as the networking process, (3) to illustrate the phenomenon and framework through a multi-case study, and finally (4) to discuss about practical implications. The research strategy of the present paper represents a qualitative and explorative approach. One of the key end results of network learning is network capital emerging and developing in a network. Network capital is composed of three subsystems in mutual interaction, which together form a system. Network values and culture reflect the mental state of the network through current faith, commitment, partnership values as well as interaction. The resource base of the network is made up of the individuals’ and the companies’ tangible and intangible



resources. The operations models of the network characterize the network actors’ ability to plan and to make the most of the different operations models of the network, based on elements and models of bilateral and multilateral joint actions. The two first elements form the basis for network capital and the third one the element generating profitable business activities out of this basis for the ne twork and, through it, for its members. The final formation of network capital depends on learning through results and activity, as well as both quantitative and qualitative deve lopment of the resources.



COMMERCIALISATION OF KNOWLEDGE – A CONCEPTUAL FRAMEWORK

Olav R. Spilling Department of Innovation and Economic Organisation

BI Norwegian School of Management P.O. Box 580

N-1301 Sandvika, Norway E-mail: [email protected],

STEP Centre for Innova tion Research

Hammersborg torg 3 N-0179 Oslo, NORWAY

May 2004

Abstract The purpose of this paper is to discuss a framework for analysing processes of commercialisation of knowledge and what are the most important barriers faced by involved actors in these processes. The concept of knowledge is related to research based knowledge, i.e. as developed in academic institutions like universities and research institutes. The paper is based on a recently started research project in which the main objective is to analyse processes of commercialisation of research based knowledge. Based on case analysis in two different industrial sectors, the project is aimed at identifying different factors that are important to facilitating or hampering these processes. The paper gives a review of relevant literature and suggests a conceptual framework for the project. Taking a stage model approach for commercialisation as its point of departure, the paper reviews the roles of different types of actors and how different types of commercialisation processes, i.e. spin-off processes, may occur. It is then discussed different types of barriers that may be relevant during the different stages of the commercialisation process. In the final part of the paper, the role of intermediary institutions are discussed briefly, and an integrated conceptual model is then summarised.



PART-TIME-ENTREPRENEURS JUST PARTLY ENTREPRENEURS?

Elisabeth Sundin Department of Management and Economics

Linköpings university &

The National Institute of Working Life Sweden

E-mail: [email protected] March 2004 In research in SMEs and entrepreneurship part-time entrepreneurs are neglected although the phenomenon is wide spread. Around 20% of the owner-managers in Sweden are part-timers. How can this neglect both in politics and research be explained? Most of the part-time-entrepreneur are also employed part-time. As part-timers they are not seen as “real”, sincere entrepreneurs in the industry-and-commerce policy and are not the top-priority for the labour-market-policy area either. The mental picture of a new owner-manager is a person taking a full step from a position as employed to a position as owner-manager emphasised by the regulations in the tax-system and the social security system. The discussion is elaborated in the paper starting with a presentation of the part-time-entrepreneurs as far as we know. The presentation builds on two investigations done by the authorities responsible for the statistics of Sweden. One has the aim to describe new firms in Sweden and the other how people earn their living. A combination of the two gives a fuller, but contradictionary, picture. From the investigations we know that the part-timers have a rather high education, are to a high extent working with commercial services, live all over Sweden, are rather satisfied with their situation and have different reasons for being part-time-entrepreneurs. The last part indicates that the main-picture is constructed of many different groups and individuals. Some of them are discussed more fully in the paper and used to create categories and hypothesis concerning the part-time-entrepreneurs. To understand the group, or rather groups, very different theoretical tools probably have to be used. The paper, and the research on the field, is still in an early stage demanding both more empirical work and theoretical elaborations. The results, so far, indicates that an analyses will show that the part-time-phenomenon could be connected to “the role of SMEs in a turbulent economy”, to “the role of universities and higher education in supporting knowledge based entrepreneurship”, to “entrepreneurial strategies in marginal areas” as well as to “gender perspectives on SMEs and entrepreneurship”.



ENTREPRENEURSHIP AND BUREAUCRACY. EXPLAINING ECONOMIC DEVELOPMENT

Fredrik Svensson

Mid Sweden University E-mail: [email protected]

March 2004

In this paper I suggest that national differences in the rate of economic development are explained by differences in economic behaviour, entrepreneurship, and the efficiency and size of the bureaucracy. I argue that this way of combining agency and structural variables is necessary to successfully explain economic development. Purely structural va riables; social capital, economic freedom etc. can not by itself explain differences in economic development. The same is the case for theories based purely on agency variables; human capital, individual behaviour etc. Using multiple regression and cross-national data I will show that a model including entrepreneurship and bureaucracy as independent variables will offer a new explanation of economic development and result in high explanatory values.



THE USE OF INFORMATION AND COMMUNICATION TECHNOLOGY AS A TOOL TO CREATE CAPABILITIES – A STUDY OF THE RELATION BETWEEN

USE OF ICT AND THE USE OF BEST BUSINESS PRACTICES IN MANUFACTURING SMES IN A REGION OF SWEDEN6

Ragnar Ahlström Söderling Dalarna University

Business Entrepreneurship & Technology Borlänge Sweden


Göran Land Dalarna University

Department of Economics & Social Sciences Borlänge Sweden


ABSTRACT The issue we address in this paper is if the use of ICT can be seen as a contributing factor in the process of the implementation and sustaining of practices as a mean to get competitive advantages? In addition we sought to determine whether there is some evidence that the contribution of use of ITC varies with the size of the firms.

6 WORK IN PROGRESS, not to be quoted without written permit from the authors! E-mail: [email protected]



ABSTRACT

DEVELOPMENT OF MANAGEMENT CONTROL SYSTEMS IN FAST-GROWING SMALL FIRMS

Kent Thorén & Terrence Brown

Stockholm School of Entrepreneurship KTH – Royal Institute of Technology Department of Industrial Management


E-mail: [email protected] March 2004 Small firms have received considerable interest from researchers during the past two decades. There is a new stream of this research that focuses on management control issues particularly as firms grow from small start-ups to young professionally managed firms. This transition is proposed to involve considerable formalization of structures, processes and systems. Surprisingly, until recently, few solid research contributions have been made. Furthermore, the process of control system evolution during that growth transition has been left relatively unexplored. This paper describes the result of a field study in a fast growing firm that covers the four-year period 2000 to 2003. Using a lever-of-control framework this research examines which control mechanisms have been introduced, at what point and why, during the growth process, as well as how these mechanisms were used. The empirical material was collected through participant observation, review of internal documents and a number of interviews with respondents at all organizational levels. Analysis was executed in two main steps. First, the empirical material was organized into themes in a descriptive presentation, which was summarized as means and ends of control. Second, using both deduction and induction, explanations were proposed on how the means and ends of control for various participants relate to growth. These proposed explanations were then tested on the empirical material for validity. There are three preliminary findings, two that corroborate the importance of including and distinguishing between different growth measures, and one that highlights some limitations in the theoretical control framework. First, organizational systems for integration was primarily initiated by employees - and are related to firm growth in terms of number of employees. In particular, geographical separation of sub-units seemed to be associated with problems concerning motivation, confusions and coordination because direct communication is unfeasible for individuals who are outside mutual proximity. This firm solved the problem by providing distant units with additional rich information channels (compared to the rest of the firm). Second, diagnostic control systems and formalization of work processes was in contrast driven by high- level managers attempting to enhance performance and reduce risks (defined in a broad sense). Both risks and performance was related to growth in sales, i.e. increasingly larger financial stakes to worry about as a consequence of business expansion. Third,



theoretical implications include a possible addition to the levers-of-control model; controls can be used interactively not only by firms following prospector/entrepreneurial strategies in dynamic environments as previously assumed - but also by firms operating in more stable environments following strategies with a relatively fixed business scope. However, the purpose of using controls interactively cannot be expected to be the same for these firms as for prospector/entrepreneurial firms, since they might have other strategic priorities. The paper also address implications for practice and make several suggestions for further research.



CLASSIFICATION OF IT-BUSINESS SERVICES: A CAPABILITY APPROACH

Irma Tikkanen

Department of Business and Management University of Kuopio

P.O. Box 1627 Kuopio, Finland

E-mail: [email protected] May 2004 ABSTRACT This paper constructs the classification of the information technology (IT) business services in Finland based on the capabilities. Most of the firms offering IT-business services are SMEs. IT-business services are both knowledge and capability intensive. The theoretical discussion (Hall 1993, Day 1994, Teece et al. 1997, Mulligan & Hall 2002) introduces the IT capabilities that are utilized as the determining dimensions in the classification. Empirical data consists of 173 different kinds of IT-business services, which were found in the literature, researches, newspapers, advertisements, catalogues, www-pages, etc. As a result, the classification with nine types of the IT-business services is proposed: IT Office services, IT Net services, IT Logistics services, IT Marketing services, IT Production services, IT Finance services, IT HRM services, IT Hardware and software services, and IT Management services. Those types of IT-business services have various roles in the business customer's business processes and in the IT-business service firms' business portfolio. The major tasks of the IT-business services are automation of manual procedures, delivery of information, and work flow management (Mulligan & Hall 2002). The levels of IT capabilities are either information management systems, network coordination systems, or enterprise management systems (Mulligan & Hall 2002). The needed capabilities are positional, functional and cultural capabilities (Hall 1993). Customer's business processes are mostly inside-out processes where the IT-business services are used. The purposes where the business customers use IT-services are both foundation and facilitating services. The needed customer industry specific capabilities vary from low to high. The value of the classification to the IT-business service firms is that they can build their business concept so that the offered services are based on the firm's capabilities. Also for the future business development, the firms can develop their capabilities by internal development, by hiring new employees, and by mergers or acquisitions including suitable capabilities. The firms buying IT-business services can benefit from the classification so that they can evaluate better the capabilities of the IT-business service providers when making IT-business service buying decisions.



The contribution related to the service marketing discussion is that we have described one industry specific service production element and the source of competitive advantage - capability - that is the core in the production of IT-business services. KEYWORDS. Business service, Capability, Classification, Competence, Finland, Information technology, IT-service.



EXPLOITATION OF VENTURE IDEAS IN FARMING BUSINESS

Margit Torkko, Researcher, University of Oulu Department of Industrial Engineering and Management

P.O. Box 4610, 90014 University of Oulu, Finland tel: +358 8 553 2992, fax: +358 8 553 2904

email: [email protected]

Kaarlo Paloniemi, M.Ed., Drs., University of Oulu Department of Management and Entrepreneurship P.O.Box 4600, 90014 University of Oulu, Finland

tel. +358 8 553 2983, fax +358 8 553 2906 email: [email protected]

Ulla Lehtinen, Professor, University of Oulu

Department of Industrial Engineering and Management P.O. Box 4610, 90014 University of Oulu, Finland

tel. +358 8 553 2934, fax +358 8 553 2904 email: [email protected]

MAY 2004 Additional businesses owned by farmers, are an important potential for development of small businesses in rural areas. In the year 2000, 27 % of all farms in Finland had an additional business besides their primary production. This additional business can be related or not to farming. The main purpose of this paper is to understand why some farmer chooses such a of mode of exploiting his new ideas of additional business which is taxed as commercial income (registered separately) and some other farmer chooses to exploit his idea as taxed as agricultural income. The data of this paper is based on two step study. In the first step the questionnaire survey was carried out in autumn 2002 among farmers located in Northern Ostrobothnia in Finland (Torkko 2004, Torkko & Lehtinen 2003a, 2003b). The results of the questionnaire allotted that farms’ additional business disparate each other. They can be categorized e.g. according to the method of taxation. The results of the questionnaire evoked the question, why some farmers choose additional business taxed as commercial income and some others taxed as agricultural income? The second step was telephone- interviews executed in spring 2004. Their aim was to find answer to the question, which came up in step one. From the perspective of entrepreneurship as processes of discovery and exploitation of new venture idea (Davidsson 2003) the study revealed that the existing resources, the characteristics of the new venture ideas, the expectations, and the scale of the business are affecting the decision of modes of exploitation of additional business besides primary production.



LOCAL TECHNOLOGY POLICY IN THE KUOPIO REGION: A SYSTEM OF INNOVATION PERSPECTIVE

Miika Varis & Jarkko Pellikka

Department of Business and Management University of Kuopio



Abstract Since its appearance in the scientific literature in the 1980s, the concept of system of innovation (SI) has become a popular approach as a framework for technology and innovation policy-making. Originating from the national level discussion, the SI approach has also found its way to the sub-national, i.e. regional and local level analysis. The main focus of this paper is on the policy implications deriving from the SI discussion, particularly in respect to creating effective public policies and support mechanisms for new technology-based firms (NTBFs). From this starting point, the technology policy and organizational support system for innovation within the Kuopio region in eastern Finland. In this region the welfare sector, broadly understood, has been the primary focus of technology and innovation policy efforts. A preliminary analysis of the results achieved, as well as the future prospects of the local system of innovation, is also provided. Keywords: Systems of innovation, local technology policy, local innovation policy, welfare sector, Kuopio region



TECHNOCRATS, ENTREPRENEURSHIP, AND THE DEVELOPMENT OF E-COMMERCE AS AN INDUSTRY:

EVIDENCE FROM THE APEC ECONOMIES

Chao-Tung Wen7 & Yi-Wen Chen8 & Jaclyn Chia-Pei Yang9 Graduate Institute of Technology and Innovation Management

National Chengchi University Taiwan


E- mail: [email protected]

May 2004 The Internet is probably one of the most exciting, significant marketing tools to emerge in many years. Internet technologies have created the opportunity for a variety of innovative products. You don't need a shop front, too many stocks or employees to trade in the virtual market place, so these enterprises tend to be small or medium sized. According to E-Marketer’s research, the total B2C e-commerce revenues in the APEC economic entities amounts to $50 billion in year 2000, and it is expected to grow to $233 billion in year 2004. The high potential of B2C e-commerce in the APEC entities is worth observing. There are inestimable start-up companies blooming at this moment, but few of the original firms remain and have influence on the digital society. This research divided the APEC economic entities into four regions10: North America and Oceania, The Greater China, Northeast Asia and Southeast Asia. We aimed at the start up background of e-business, including their prior experiences and knowledge. We will therefore compile and analyze the value to which e-commerce has created and investigate the contribution of the entrepreneurs and technocrats respectively. This research finds that technocrats and entrepreneurs play different roles in different regions, and take shape the digital society. In most economy however, they tend to modify the business model while adopting most of the technology. Whether the major driving force is an entrepreneur or a technocrat also varies in different regions. Keywords: APEC economics, e-commerce, entrepreneur, technocrat, digital society, prior experience, prior knowledge

7 Graduate Institute of Technology and Innovation Management, Professor? College of Commerce, Director of

executive MBA Program 8 Graduate Institute of Technology and Innovation Management, PhD Student 9 Texas Instruments Taiwan Limited, Subcon Planner 10 North America and Oceania :The United States of America, Canada, and Australia; The Greater China:

China, Hong Kong, and Chinese Taipei; Northeast Asia :Japan, Korea; Southeast Asia :Indonesia, Malaysia, and Singapore



EXPERIENCE AND COGNITION: DO NOVICE, SERIAL AND PORTFOLIO ENTREPRENEURS DIFFER?

Paul Westhead & Deniz Ucbasaran & Mike Wright

Institute for Enterprise and Innovation Nottingham University Business School

Nottingham, UK E-mail: [email protected]


May 2004

Abstract Policy-makers and practitioners are considering whether to allocate resources towards portfolio and serial entrepreneurs who have prior business ownership experience. To inform this policy debate, similarities and differences between novice, serial and portfolio entrepreneurs in Scotland are highlighted with regard to their experience and cognition. Portfolio entrepreneurs are associated with experience and cognitive mindsets that provide greater understanding surrounding why and how they own several businesses at the same time. A case for targeted support tailored to the aspirations and needs of novice, serial and portfolio entrepreneurs is presented.



FACTORS RELATED TO CAPITAL ACQUISITION IN YOUNG BIOTECHNOLOGY FIRMS

Lillian Waagø

Department of Industrial Economics and Technology Management Norwegian University of Science and Technology

Trondheim, Norway E-mail: [email protected]

May 2004

Abstract The aim of this paper is to increase the understanding of factors important in acquiring capital in young biotechnology firms. Biotechnology firms share a set of characteristics such as high research intensity where intellectual property is central, very long product gestation periods, strict regulative control of new products, dependence on university research. The firms are dependent on large amounts of external financing, often many years before a sale has been made. In recent years there has been an increasing amount of research dedicated to the unique characteristics of biotechnology firms where much of the focus has been directed towards development of the industry in different regions and the industry’s large use of strategic alliances. Relatively few have focused on issues related to obtaining external financing. This paper aims at identifying factors explaining some of the variation in the amount and type of capital obtained in the firm’s early phases. The four most common capital sources are private investors, venture capital, corporate investments and government grants, where venture capital makes out the bulk of the capital, but about half of the companies have received venture capital. The data is based on personal interviews of a member of the top management team in 115 biotechnology firms in Northern Europe and on the East Coast of the United States using a highly structured interview guide. Keywords: Biotechnology, biomedicine, venture capital, financing, start-ups



PATTERNS AND TRENDS IN ENTREPRENEURIAL NETWORK LITERATURE 1993-2003

Jialin Yue & Alistair R. Anderson & Douglas Cruikshank

Aberdeen Business School The Robert Gordon University

Garthdee Road, Aberdeen

E-mail: [email protected] E-mail: [email protected] E-mail: [email protected]

March 2004

This paper presents a structured review of the entrepreneurial networking literature in the decade 1993-2003. The purpose of the paper is to explore the literature to establish if there have been changes in the nature of the literature on networking. We first identify aspects of theory and methodology and relate this to the affiliations of the authors. The paper then turns to classify the content of the articles. We identify key variables such as the nature and structure of networks, with some emphasis on aspects such as trust; social capital and size. We attempt to relate these aspects to the style of the papers so that we can chart developments, change and continuity in the literature. We employ three major databases, Ebsco, Science Direct and Emerald, which include all the major journals which deal with entrepreneurial networking. Our technique is to use a selection of keyword searches, established by trial and error, to select appropriate articles. These are then categorised by content, method and affiliation. We then analyse by variable. It is hoped that the contribution of this study will be to show if, and how, the nature of research about entrepreneurial networking has developed over time. We hope to demonstrate the emergence of the field as academically rigorous, with increased understanding and appreciation of the importance of networking in the entrepreneurial process. Furthermore the outcome of our research should form a strong theoretical basis upon which several future directions of research may be undertaken.



COLLABORATION RELATIONSHIP AMONG TECHNOLOGICAL CENTRES AND FIRMS IN THE BASQUE COUNTRY:

PATTERNS OF INNOVATION MATTERS

Arantza Zubiaurre & Maite Astoreca & José Mari Guibert & Kristina Zabala Universidad Deusto

Mundaiz, 50 San Sebastián, Spain



May 2004 The concept of innovation system must to be understood by the complex relationship that prevail among different actors involved in technology generation processes. In the context of Basque Country –an autonomous region in the North of Spain- the key role into the system is driven for innovative firms and Technological Centres. The paper is based on data obtained through a survey of representative sample of innovative firms located in the region. The survey shows different patterns in organising innovative activities and, also, provides the evidence of different output-goals depending on each firm. However, based on a cluster anlysis it has been possible to find a typology of firms with six different categories: 1) big firms, 2) radical innovation based medium firms, 3)incremental innovations based firms, 4)product s radical innovation based small firm, 5) low innovators mediun firms and 6) small firms. The basis for this typology, as is seem, are seeked goals and size of the firms. After these findings our interest goes towards the study of other key actors of innovation’s system in the Basque Country: the Technological Centres, which are the major external providers of technology for the firms. These Centres –private institutions without profit self-interest- are the big bet of Technology Politic. The data from the survey allows us to evaluate their rol as technology providers. So in this way with this second section we intend to analyse in deep: • the demand of this kind of services and the barriers that firms have to face in order to

reach those services • how firms evaluate this services attending to: • technology transference processes • cost and revenues • level of commercial successes Finally, we try to evaluate the technology transference process towards the firms taken into account the characteristics of the process of innovation that is prevalent in the receiver firm. And the evidence shows that the relationship is clearly conditioned by the patterns of innovation carried out in the enterprise. In that sense the data reveals that those firms with



greater innovation capabilities – the big ones and also the radical innovation based firms- take more advantage in the technology transference processes.

abstracts 13th nordic conference

Documents