The growth dynamics of technology-based firms in Scotland

In recent years high growth firms (HGFs) undertaking rapid, transformative growth, have been identified as important contributors to economic growth (Acs et al, 2008; Anyadike-Danes et al, 2009; OECD, 2010). For a wide variety of reasons, notably their contribution to employment growth, high export intensity, strong contribution to productivity growth and innovation, HGFs have been hailed as vital drivers of economic competitiveness (Henrekson and Johansson, 2010). As a consequence, these firms (often referred to as 'gazelles'), have been accorded a central role in many economic development strategies at both national and regional levels, especially during a time of economic austerity where employment growth has been an overriding policy goal for many governments (BERR, 2008; NESTA, 2011; OECD, 2010; Scottish Enterprise, 2011). Yet despite the strong policy focus on the promotion of HGFs in recent times, much remains unknown about these organisations and how best to support them (Henrekson and Johansson, 2010; Anyadike-Danes et al, 2012; Mason and Brown, forthcoming). Scottish Enterprise recently commissioned research on Scotland’s population of HGFs (Mason and Brown, 2010). This was the first comprehensive analysis of these firms ever conducted in Scotland and some of the findings were published in this journal (Brown and Mason, 2010). One of the most significant conclusions from this study was that they are extremely heterogeneous in terms of their age, size, ownership and industry sector. Few fit the stereotypical ‘gazelle’ definition which refers to young high growth firms that are less than five years old. The vast majority are over 10 years old, with some significantly older (Mason and Brown, 2010). Furthermore, only a relatively small proportion of these firms are in high-tech areas of the economy. According to some scholars, there is ‘no evidence that Gazelles are overrepresented in high- technology industries’ (Henrekson and Johansson, 2010, p.240). Despite their strong prioritisation by policy makers, the reality is that the representation of technology based firms (TBFs) in the population of HGFs is roughly on a par with their proportion in the economy (Mason and Brown, forthcoming). In view of these twin priorities of promoting high growth in general and high tech firms in particular, Scottish Enterprise commissioned further research to explore HGFs, especially in high tech areas of the economy. The objectives of this paper are twofold: to provide an update on the level of HGFs in Scotland and to assess the population of TBFs in Scotland. The paper proceeds as follows. First, the terms high growth and technology-based enterprises are defined. Second, the methodology is outlined. Third, the aggregate evidence on the levels of HGFs in Scotland is presented. Fourth, the population of TBFs in Scotland, including analysis of high growth TBFs is profiled. Fifth, some of the key characteristics of high growth TBFs in Scotland are examined. Sixth, some of features of these firms which were captured during the qualitative part of this research process are summarised. The paper finishes with some brief conclusions and issues for further research

Board control and corporate innovation: an empirical study of small technology-based firms

This paper follows a behavioural perspective on boards and governance in exploring the influence of board control on corporate innovation in small technology-based firms. An analysis of 135 Swedish technology-based firms suggests that board involvement in decision control may influence corporate innovation. The empirical results show that board involvement in strategic decision control is positively associated with process innovation, while board involvement in financial decision control is positively associated with organizational innovation. No association is found between board involvement in decision control and product innovation. Overall, the findings suggest that board involvement in decision control may promote corporate innovation but that different kinds of decision control influence different forms of innovation.boards of directors; corporate innovation; decision control; technology-based firms; small firms

The regional variation of new technology based firms in Austria

During the last two decades the role of new business start-ups has gained a growing interest both from regional economics as well as from (regional) economic policy. It was recognized that not only the large Galbraithian enterprise is the driving force in processes like employment growth or structural economic change, but also small and often new or young firms are playing an active role. In the 1980s so called new technology based firms (NTBFs) gained considerable attention. It has been argued that the Schumpeterian entrepreneur is an important force for the implementation of new ideas into the market place, often via the formation of NTBFs. In our paper we analyse the structure and the regional variation of new business formation in the high technology sector in Austria. Using a definition based upon the OECD we differentiate the high tech sector in (i) top technology, (ii) higher technologies and (iii) technology orientated services. We demonstrate the relative importance of these groups for the total population of new business start-ups in Austria in the time period ot 1990-1994 as well as for certain sub-populations like manufacturing and services. The main part of our paper discusses the regional variation of NTBFs using the framework of the well known urban incubator hypothesis. It is expected that metropolitan and urban regions have a higher orientation towards high tech (what means the proportion of NTBFs) than the rural or hinterland regions. An additional part of our paper deals with the question wether NTBFs play an important role in the process of structural change of regional economies as has been postulated by various authors during the last couple of years.

Knowledge-based entrepreneurship in Central and Eastern Europe: myth and reality

This paper summarises results of a survey of 304 knowledge based firms in six central and east European (CEE) countries. Knowledge-based entrepreneurs in CEE are not ‘gazelles’ (i.e., fast growing new technology based firms which have the potential to reshape the industrial landscape). They consist of distinct types of companies, of which new technology based firms (NTBFs) are only one. The key factor in KBE firms’ growth is most often firm specific capabilities which do not always involve R&D. Based on factor analysis we develop several taxonomies of KBEs which all point to a specific nature of knowledge based entrepreneurship in CEE. The networks of KBEs are broader and more frequently involve innovation system actors, including professional networks. For different types of KBEs different networks are important

Technology strategy and new technology based firms

A study of the competitive advantage in successful New Technology Based Firms found that their technology strategy played a key role for making these companies improve their competitive advantage. We appealed to the grounded theory as a qualitative strategy to build theory, and to the exploratory case-study methodology to effectively understand this phenomenon in specific contexts as the one represented by small entrepreneurial firms in comparison with large established firms. A suitable comprehension of the different contexts required of a view of technology strategy that is more dynamic than those typically available. We build an explanatory model which integrates and groups the propositions previously developed. We view the study as exploratory to a class of studies aimed at understanding the technology strategy process in new ventures.Postprint (published version

Technology Strategy and New Technology Based Firms

A study of the competitive advantage in successful New Technology Based Firms found that their technology strategy played a key role for making these companies improve their competitive advantage. We appealed to the grounded theory as a qualitative strategy to build theory, and to the exploratory case-study methodology to effectively understand this phenomenon in specific contexts as the one represented by small entrepreneurial firms in comparison with large established firms. A suitable comprehension of the different contexts required of a view of technology strategy that is more dynamic than those typically available. We build an explanatory model which integrates and groups the propositions previously developed. We view the study as exploratory to a class of studies aimed at understanding the technology strategy process in new ventures.A study of the competitive advantage in successful New Technology Based Firms found that their technology strategy played a key role for making these companies improve their competitive advantage. We appealed to the grounded theory as a qualitative strategy to build theory, and to the exploratory case-study methodology to effectively understand this phenomenon in specific contexts as the one represented by small entrepreneurial firms in comparison with large established firms. A suitable comprehension of the different contexts required of a view of technology strategy that is more dynamic than those typically available. We build an explanatory model which integrates and groups the propositions previously developed. We view the study as exploratory to a class of studies aimed at understanding the technology strategy process in new ventures.A study of the competitive advantage in successful New Technology Based Firms found that their technology strategy played a key role for making these companies improve their competitive advantage. We appealed to the grounded theory as a qualitative strategy to build theory, and to the exploratory case-study methodology to effectively understand this phenomenon in specific contexts as the one represented by small entrepreneurial firms in comparison with large established firms. A suitable comprehension of the different contexts required of a view of technology strategy that is more dynamic than those typically available. We build an explanatory model which integrates and groups the propositions previously developed. We view the study as exploratory to a class of studies aimed at understanding the technology strategy process in new ventures

The Familiarity of Small Technology-Based Business Owners with Sources of Capital: Impact of Location and Capitalization

This paper examines issues related to the acquisition of capital by a sample of 142 small technology-based firms. Specifically, the study investigates the relationship between owners of small technology-based firms\u27 familiarity with the alternative sources of capital and (I) location of the business and (2) amount of capital raised by the business. The results show that familiarity with alternative sources of capital is affected by the location of the business and amount of capital raised by the company. The results have several implications affecting small business owners, providers of capital, and policy-makers. First, many small business owners are relatively unfamiliar with many sources of capital that are used to fund growth. Second, owners of small technology-based firms indicate low familiarity with government financing programs. Third, owners of small technology-based firms in smaller communities are less familiar with sources of capital commonly used to finance growth. Fourth, owners of small technology-based firms are relatively unfamiliar with methods of bootstrap financing

INNOVATION IN NEW TECHNOLOGY-BASED FIRMS IN FRIULI-VENEZIA GIULIA

This paper discusses the results of a research project on new technology-based firms. The aim of the project is to analyze the innovation activity of new technology-based firms. The focus is on the process of knowledge creation that fuels innovation. The analysis is based on an empirical research which regards the new technology-based firms located in Friuli-Venezia Giulia, more precisely in Area Science Park - the multisectorial science parks in Trieste - and in the Technological Innovation Centre of Agemont (Agency for Economic Development of Mountains), which is in Amaro (UD).Innovation, New technology-based firms, Knowledge creation

Financing Early Staged Technology Based Firms in Malaysia

The establishment of various agencies to support and finance researches in universities and research institutes capable to grow Technology Based Firms was due to the Malaysian government’s recognition of Technology Entrepreneurship as an avenue to develop the economy industrially. Technology Based Firms (TBFs) have been widely accepted as a key influence in the economic development, wealth generation, employment and creation of new innovations. Although, despite huge investment in Research and Development and other public support from government to these group of firms, they still encounter difficulty in accessing the right and adequate amount of investment capital required to grow their firms to successful and global companies. The objective of this particular research is to find out the financing sources for early staged firms in Malaysia. The researchers interviewed 28 Technology Based Firms and 19 Venture Capital Firms in Malaysia through a qualitative approach to data collection. The data collected was transcribed, analyzed and coded with the aim of identifying the emergent themes relevant for the theme development for the study. This study finds that certain agencies of government are dedicated to supporting the growth requirements of young firms until they are capable to stand alone as independent companies

New Technology-Based Firms' Persuit of SBIR Funds

This paper presents the results of a study that investigated the relationship between characteristics of firms and their experience with applying for Small Business Innovation Research (SBIR) funding.  The basic issues investigated are (1) the relationship between firm characteristics and the decision to apply for SBIR funding, and (2) the relationship between firm characteristics and whether the SBIR application was successful. The results of the study demonstrate that local efforts to promote the SBJR program  by encouraging firms to apply and by increasing the visibility of workshops can lead to a greater number of firms to apply for SBIR funding. Efforts directed at firms in small communities may be even more effective than efforts directed towards firms in large communities. The results also suggest that organizations that provide SBIR assistance may consider screening potential clients according to the business goals of firm’s owners. Owners of "life-style" firms may need extra encouragement and, perhaps, assistance to apply for SBJR funding. Finally, the results also imply that firms that are smaller (as compared to larger firms), have more limited experience raising capital, and serve a smaller market may need greater assistance in pursuing SBIR funding