New venture internationalisation and the cluster life cycle: insights from Ireland’s indigenous software industry

The internationalization of new and small firms has been a long-standing concern of researchers in international business (Coviello and McAuley, 1999; Ruzzier et al., 2006). This topic has been re-invigorated over the last decade by the burgeoning literature on so-called ‘born globals’ (BG) or ‘international new ventures’ (INV) – businesses that confound the expectations of traditional theory by being active internationally at, or soon after, inception (Aspelund et al., 2007; Bell, 1995; Rialp et al., 2005). Until quite recently, this literature had not really considered how the home regional environment of a new venture might influence its internationalization behaviour. However, a handful of recent studies have shown that being founded in a geographic industry ‘cluster’ can positively influence the likelihood of a new venture internationalizing (e.g., Fernhaber et al., 2008; Libaers and Meyer, 2011). This chapter seeks to build on these recent contributions by further probing the relationship between clusters and new venture internationalization. Specifically, taking inspiration from recent work in the thematic research stream on clusters (which spans the fields of economic geography, regional studies and industrial dynamics), the chapter explores how the emergence and internationalization of new ventures might be affected by the ‘cluster life cycle’ context within which they are founded. This issue is examined through a revelatory longitudinal case study of Ireland’s indigenous software cluster. The study investigates the origins and internationalization behaviour of ‘leading’ Irish software ventures but, in contrast to many existing studies, it seeks to understand these firms within the context of the Irish software cluster’s emergence and evolution through a number of ‘life-cycle’ stages

The State, Venture Capital and Domestic High-Tech Start-Ups in a Late-Developing Economy - Ireland

Ireland, the “Celtic Tiger” economy of today, had for decades been one of the poorest of the Western European economies. This paper analyses the three-pronged approach of the Irish authorities in promoting successful high-tech start-up firms. An investment climate conducive to the emergence of such firms was first created. Emerging firms were then offered substantial public support in developing their capabilities. Finally, the authorities played a significant role in promoting the emergence of a dynamic venture capital industry. Such interventionist policies would have been highly unlikely to succeed in the absence of strong institutional capacity.

The electronics industry in central and eastern Europe: an emerging production location in the alignment of networks perspective

This paper analyses the emergence of central Europe as a new location for the production of electronics. The main factors that drive integration in the region into global production networks are also analysed, as well as prospects for upgrading the industry by using network alignment perspectives. Foreign investment is the primary vehicle of integration of CEE electronics firms into global production networks, and Hungary has moved furthest along this path, positioning itself as a major low-cost supply base in the region. Czech and Polish electronics industries are connected, in smaller, but increasing, degrees to international electronics production networks. Networks that are being built in CEE in electronics are usually confined to subsidiaries with still limited local subcontracting; they are export-oriented and are expanding. Local subsidiaries have mastered production capabilities and several subsidiaries in Hungary are European mandate suppliers in their respective lines of business. EU demand is the main pull factor, which gives cohesion to the actions of MNCs as well as to the action of local and national governments in CEE. The layer of local firms is still very weak with very limited capabilities in core technologies. This is the key weakness which prevents further alignment of networks in CEE electronics. Local governments play an important role in working jointly with foreign investors in establishing industrial parks and new capacities

Understanding Entrepreneurship Process and Growth in Emerging Business Ventures under Market Socialism in China

Objectives: This paper aims to provide an insightful view of the entrepreneurial process and growth in different types of Chinese entrepreneurial enterprises under market socialism in China. This issue is explored by examining the organisational characteristics of three emerging business ventures under market reforms and institutional changes. It addresses the interactive effect of key contingency factors in entrepreneurship process and explains its impact on growth or failure outcomes in a particular ‘China type’ of market economy. Prior work: China’s hybrid economic system represents a mixed political economy with both socialist and capitalist characteristics (Lichtenstein, 1992; Morphy et al, 1992; Opper, 2001). Despite a growing body of research on Chinese small business practices alongside the economic reforms (Shen, 1994; Child, 1994; Naughton, 1994; Schlevogt, 2001; Warner, 2004; Yang, 2007; Kshetri, 2007; Yang and Li, 2008), more empirical studies are required to provide a critical insight into the emerging business practices. This research adopts a contingency model of entrepreneurship(Wickham, 2006) to examine entrepreneurship process and growth in different types of business venture. It reveals the interactive relationships among key variables such as strategy, ownership, culture and management process. Approaches: This research is undertaken through the empirical analysis of three case study companies in the textile industry. This fieldwork was conducted in 2006 and 2009 respectively. Multiple sources of data were collected including 21 open-ended interviews of owners and key managers in three case study companies. Results: The study offers an explanation on how entrepreneurship takes different forms and features in different organisational contexts. Empirical evidence supports four hypotheses: (1) The type of ownership is a key contingent factor that moderates particular entrepreneurial outcomes. (2) Leadership and knowledge accumulation capability are critical factors in learning process, significantly affecting the strategic choices in either high value or low value added products strategy. (3) The broadening of product portfolios and increased production capacity will improve survival chances and increase the likelihood of firm growth. (4) Management capability and consistency have greater impact on the outcome of entrepreneurship process than the resource and strategy factors. Implications: The findings have significant implications for a conceptual understanding of Chinese entrepreneurship dynamics. It addresses important considerations on government policy making and promotion strategies for entrepreneurship development in different forms of business venture. Value: The textile sector has pioneered the government reforms in restructuring and creating entrepreneurial enterprises. It offers a perfect case for assessing the entrepreneurship processes in a rapidly changing market environment. It emphasizes the important ownership effect on entrepreneurial outcomes. Drawing upon Wickham’s contingency model of entrepreneurship, it provides an improved understanding of this concept under particular circumstance and different contexts

The Growth of Knowledge-intensive Entrepreneurship in India, 1991-2007

There is enough consensus to show that India's economic performance since 1991 is a direct result of the economic liberalization measures that have been put in place. One of the outcomes of this improved performance is the growth of innovations in the country. This was accompanied by or caused by the emergence of a number of technology-based enterprises. This paper takes a critical look at the available quantitative evidence on the growth of knowledge or technologybased entrepreneurship. It then looks at five facilitating factors for the emergence of this phenomenon in terms of the existence of increased market opportunities, availability of financial support schemes in the form of venture capital funds, existence and enlargement of a number of government programmes, a number of private sector initiatives and education, and training leading to the supply of technically trained personnel. The paper concludes with certain policy suggestions for the continued sustenance of this activity.knowledge-intensive entrepreneurship, knowledge process, outsourcing venture capital, angel financing, business incubators

Corporate political activity and location-based advantage: MNE responses to institutional transformation in Uganda’s electricity industry

We examine how multinational enterprises (MNEs) employ political strategies in response to location-based, institutional transformations in new frontier African markets. Specifically, we explore the heterogeneous corporate political activities of advanced and emerging market MNEs in Uganda’s electricity industry, as they respond to and influence locational advantage using diverse political capabilities. We argue that, in institutionally fragile, new frontier markets, Dunning’s OLI paradigm is more theoretically robust and managerially relevant when combined with a political perspective. Effective MNE political strategies in these markets rely on nonmarket capabilities in political stakeholder engagement, community embeddedness, regional understanding, and responsiveness to stages of institutionalization

California Dreaming? Cross-Cluster Embeddedness and the Systematic Non-Emergence of the 'Next Silicon Valley'

The importance of social embeddedness in economic activity is now widely accepted. Embeddedness has been shown to be particularly significant in explaining the trajectory of regional development. Nonetheless, most studies of embeddeddness and its impacts have treated each locale as an independent unit. Following recent calls for the study of cross-cluster social interactions, we look at the consistent failure of numerous localities in the United States with high potential to emulate Silicon Valley and achieve sustained success in the ICT industry. The paper contends that the answer lies in high-technology clusters being part of a larger system. Therefore, we must include in our analysis of their social structure the influence of cross-cluster embeddedness of firms and entrepreneurs. These cross-clusters dynamics lead to self-reinforcing social fragmentation in the aspiring clusters and, in time, to the creation of an industrial system in the United States based on stable dominant and subordinate (feeder) clusters. The paper expands theories of industrial clusters, focusing on social capital, networks, and embeddedness arguments, to explain a world with one predominant cluster region. It utilizes a multimethod analysis of the ICT industry centered in Atlanta, Georgia, as an empirical example to elaborate and hone these theoretical arguments.

Dynamic cities and creative clusters

The author focuses on how urban policies and the clustering of creative industries has influenced urban outcomes. The set of creative industries include those with output protectable under some form of intellectual property law. More specifically, this sub-sector encompasses software, multimedia, video games, industrial design, fashion, publishing, and research and development. The cities that form the basis for the empirical investigations are those where policy-induced transitions have been most evident, including Boston; San Francisco; San Diego; Seattle; Austin; Washington, D.C.; Dublin (Ireland); Hong Kong (China); and Bangalore (India). The key research questions are: 1) What types of cities are creative? 2) What locational factors are essential? 3) What are the common urban policy initiatives used by creative cities? The author explores the importance of the external environment for innovation and places it in the larger context of national innovation systems. Based on a study of development in Boston and San Diego, he isolates the factors and policies that have contributed to the local clustering of particular creative industries. In both cities, universities have played a major role in catalyzing the local economy by generating cutting-edge research findings, proactively collaborating with industries, and supplying the needed human capital. In addition, these two cities benefited from the existence of anchor firms and active industry associations that promoted fruitful university-industry links. Many cities in East Asia are aspiring to become the creative hubs of the region. But their investments tend to be heavily biased toward infrastructure provision. Although this is necessary, the heavy emphasis on hardware can lead to underinvestment in developing the talents and skills needed for the emergence of creative industries in these cities.Public Health Promotion,ICT Policy and Strategies,Health Monitoring&Evaluation,Decentralization,Agricultural Knowledge&Information Systems,ICT Policy and Strategies,Health Monitoring&Evaluation,Agricultural Knowledge&Information Systems,Educational Technology and Distance Education,Agricultural Research

Placing the Networks on the Web: Challenges and Opportunities for Managing in Developing Asia

Placing the networks on the Web poses a fundamental challenge, but also provides new opportunities for managing in Developing Asia. There is a huge efficiency gap between the region's manufacturing systems and the management of complementary, knowledge-intensive support services. The challenge is to reduce this gap as quickly as possible by embracing the Internet as a core business function, despite a weak base of accumulated knowledge of how to manage IT-based information systems. Asian companies, even the best, lag substantially behind their American and European counterparts. There is a potential vicious circle that needs to be broken: a belated transition to IT-based information systems has prevented the accumulation of knowledge, through trial-and-error, of how to design and implement an appropriate IT organization that reflects the peculiar strengths and weaknesses of diverse Asian management systems. Limited resources prevent any attempt to address these problems in a big leap forward. This implies that in-house efforts need to be supplemented with outsourcing of IT services. There is also a need for strategic partnering with major suppliers of Internet software and networking equipment. The opportunity is that the Internet provides almost unlimited opportunities for the outsourcing of mission-critical support services, such as ERP (enterprise resource planning), HRM (human resource management). Furthermore, fierce competition among major producers of Internet software and networking equipment has created a buyers' market - placing Asian firms in a reasonably strong bargaining position. These developments are generally not well covered by existing studies, which are primarily focused on developments in the U.S. and Europe. The paper tries to fill this gap, and explores how placing global production networks on the Web affects managing in Developing Asia. A conceptual framework is introduced in parts 1 to 3. That framework is then applied to one of the role models of managing in Asia, Taiwan's Acer Group. Part 1 introduces a taxonomy of expected benefits from Internet-enabled transformations of business organization. In part 2, we argue that the real issue is to analyze how the Internet reshapes the organization of global production networks. In part3, we access conflicting claims on how an increased use of the Internet to manage global production networks affects international knowledge diffusion. In part 4, the example of Taiwan's Acer Group is used to describe the challenge for Asian firms to embrace the Internet as a key management function. And in part 5, we ask what Acer's experience tells us about Developing Asia's opportunities.