Growth-Oriented Small Firms and the Nature and Extent of Local Embeddedness: The Case of a Traditional Metalworking Cluster

Clusters now form a central element in many regional economic development policies. Location within a cluster of related industries is thought to increase a firm's competitive advantage resulting in higher output and productivity growth rates than in similar firms located beyond the cluster. This study focuses on owner-managers operating small firms within a traditional cluster of metalworking industries and empirically examines the relationship between growth-orientation and the extent and nature of cluster embeddedness. The results indicate only a limited number of differences in growth-orientation given variations in levels of cluster embeddedness. Contrary to conventional wisdom, many of the most growth-oriented entrepreneurs focus their activities "outside" the cluster, especially in terms of market-based linkages. However, those firms with more advanced process technologies do tend to show above average within cluster linkages. Copyright 2004 Gatton College of Business and Economics, University of Kentucky..

The impact of 'incubator' organizations on opportunity recognition and technology innovation in new, entrepreneurial high-technology ventures

The increasingly important role of SMEs in both regional and national economic development has been widely acknowledged in the economic and entrepreneurship literature.The development of an economic and policy environment supporting new, high-growth, high-technology ventures has become common strategy adopted by many policy makers, as a critical means of promoting future economic growth and job creation. Many of these high-technology, economic development programmes embrace enabling technologies, such as micro- and nanotechnology- based firms.Although nascent entrepreneurs have numerous sources of advice and support as they embark on the venture creation pathway, aspects of an entrepreneur's past and present experience exert a central and often pivotal influence on their ability to engage effectively in opportunity recognition and exploitation of innovative new product technologies.This article argues that the professional/social environment in which an entrepreneur lives and works has a fundamental impact upon their ability to recognize and exploit opportunities.The work explores the innovation process in young high-technology firms and focuses upon the long-term impact of previous employment, in 'incubator' organizations, in influencing opportunity recognition and product innovation processes. Findings suggests that incubator organizations fundamentally shape entrepreneurs' technical and commercial experience of markets, strongly influence their attitudes to risk and personal achievement, help develop an intricate network of social capital and resources and, finally, provide critical knowledge of the existence, availability and applicability of technology solutions in new and emerging markets. Issues are explored through in-depth interviews in 31 companies in Aberdeen, Scotland, and Ottawa, Canada, cities with established strengths in technology development in academic, commercial and government research organizations, and a history of successful high-technology firm creation. Implications for theory and policy are discussed, with particular reference to the lessons to be learned to assist the development of sectors based upon newly emerging technologies