Intrapreneurship - An international study

This paper presents the results of a novel international study of intrapreneurship ( i.e., employees developing new business activities for their employer), carried out in eleven countries in the framework of the Global Entrepreneurship Monitor. At the individual level, it is found that intrapreneurs are much more likely to have intentions to start a new independent business than other employees. However, at the macro level�the study finds a negative correlation between intrapreneurship and independent entrepreneurship. One explanation for these contrasting outcomes is�a diverging effect of per capita income on intrapreneurship (positive effect) and early-stage entrepreneurial activity (negative effect). �

Creative Destruction and Regional Competitiveness

New firms stimulate competitiveness via market selection and competitive pressures, by forcing less efficient incumbents to exit or to improve their productivity. This way, both the creation and destruction of firms (turbulence) may improve competitiveness. In this paper the effect of turbulence on regional competitiveness (measured as total factor productivity and employment growth) is analysed in 40 regions in the Netherlands over the period 1988-2002. Our analyses suggest that turbulence leads to productivity growth in services but not so in manufacturing. Employment growth appears to benefit from firm dynamics in manufacturing.

Entrepreneurial intentions subsequent to firm exit

While a large literature has emerged focusing on nascent entrepreneurship, the propensity for exentrepreneurs to consider re-entering into entrepreneurship, or what we term here as renascent entrepreneurship, has been generally overlooked. This paper suggests a different view of learning, where the entrepreneur can utilize her capacity to absorb and learn from the initial entrepreneurial experience, thereby augmenting her initial endowment of entrepreneurial skills.

Entrepreneurship, Dynamic Capabilities and New Firm Growth

This paper applies the dynamic capability framework to the study of new firm growth. Using a longitudinal database of 354 firms over their first ten years, we provide an explanation of new firm growth in terms of new product development, R&D, inter-firm alliancing, and exporting, activities that have been identified as denoting dynamic capabilities. In addition, an overview of empirical studies on employment growth in new firms is provided. The empirical evidence for this study shows that general firm resources have a much stronger effect on growth than the dynamic capabilities measured here (mainly inter-firm alliancing). High levels of human capital of the entrepreneur or resourcemunificence of the firm does not improve the value of dynamic capabilities for growth. Environmental dynamism ? a supposed boundary condition of the dynamic capability approach ? is not revealed to be a moderating factor on the effect of dynamic capabilities on new firm growth.

Unraveling the Shift to the Entrepreneurial Economy

A major shift in the organization of developed economies has been taking place: away from what has been characterized as the managed economy towards the entrepreneurial economy, or what Kirchhoff (1994) has called dynamic capitalism. In particular, the empirical evidence provides consistent support that (1) the role of entrepreneurship has significantly increased, and (2) a positive relationship exists between entrepreneurial activity and economic performance. However, the factors underlying this observed shift have not been identified in a systematic manner. The purpose of this paper is to suggest some of the factors leading to this shift and implications for public policy. In particular, we find that technological change is a fundamental catalyst underlying the shift from the managed to the entrepreneurial economy. However, it was not just technological change but rather involved a multitude of factors, ranging from the demise of the communist system, increased globalization, new competition for multinational firms and higher levels of prosperity. Recognition of the causes of the shift from the managed to the entrepreneurial economy implies a shift in public policy directions. Rather than to focus of directly and exclusively on promoting new firms and small firms, it may be that the current approach to entrepreneurship policy is misguided. The priority should not be on entrepreneurship policy but rather a more pervasive and encompassing approach, policy consistent with an entrepreneurial economy.

Creative industries

Creative industries are nowadays central in many policies to stimulate the economic development of cities, regions and advanced capitalist economies in general. This paper contributes to the� creative industries literature in two respects. First, we empirically explore if high shares of creative industries in regions go together with one particular aspect of regional economic development, namely firm entry rates. Drawing on Dutch trade register data over a six-year period, it is concluded that at the level of municipalities there is indeed a connection between the share of creative industries and firm entry, even after controlling for the sizes of municipalities, and no matter if creative industries are defined broadly or narrowly. Second, the paper analyses if firms in creative industries are heterogeneous in terms of business processes and their contribution to regional firm entry. Drawing on previous work four creative domains are identified: arts, media and entertainment, creative business services and, at the periphery, knowledge intensive business services. After analysing survey data of 4,746 Dutch SMEs, we find that firms across these domains are distinct in their use of the surveyed business practices: innovation, strategy and marketing, and human resources practices. Especially knowledge intensive services firms are deviant. For the connection with firm entry rates, it appears that high shares of firms in the arts and knowledge intensive business services are significantly connected with regional firm entry rates, while media and entertainment and creative business services remain insignificant. Implications for practitioners and future research are discussed. �

Entrepreneurial exit in real and imagined markets

Entrepreneurs exit their business due to selection pressures experienced in the market place, i.e. business failure. Next to this well known ex-post decision to exit, entrepreneurs select exantewhether they are willing to pursue an entrepreneurial career at all, or to give up theseentrepreneurial intentions. Hardly anything is known about the latter selection process in imagined markets that precedes the variety creation and selection process in real markets. This paper explores and explains the prevalence of these two selection processes using survey data on 20,000 individuals in 27 European countries and the US in 2007. We distinguish business failures from exit by sell-off. Results indicate that individuals in the US are less likely to exit imagined markets, and are more likely to have exited the real market (especially by selling their business) than Europeans. Individuals in a Corporatist welfare state regime have relatively high chances to exit imagined markets. Business owners in urban environments are more likely to fail, while individuals with a high risk tolerance, a high education and self-employed parents are less likely to exit in imagined as well as in real markets (via business failure). This study shows that exit in real and in imagined markets is differently affected by competition and institutions. These selection environments have differential effects on entrepreneurial aspirations and actions of individuals, and provide evidence for the dissimilar nature of exit in real and exit in imagined markets.

Innovation barriers for small biotech, ICT and clean tech firms:Coping with knowledge leakage and legitimacy deficits

Innovative high-tech small and medium sized enterprises (SMEs) are thought to be drivers of economic renewal and growth. However, due to their limited size, SMEs face two fundamental innovation barriers: the risk that other organizations appropriate the returns to the newly created knowledge by SMEs (knowledge leakage), and a lack of understanding and recognition of their business on the part of potential stakeholders (legitimacy deficits). Based on a panel study of 196 SMEs this paper shows that biotech, ICT and clean tech firms choose different strategies to deal with knowledge leakage and legitimacy deficits. To prevent knowledge leakage, high-tech SMEs are very selective in choosing their R&D partners and collaborate with basic rather than applied technology developers. Furthermore, to gain organizational legitimacy, high-tech SMEs pursue activities that focus not only on product development but also on generating awareness and understanding of their technologies. �

Employment Growth of New Firms

This paper provides an overview of empirical studies on employment growth in new firms and offers a systematic analysis of new empirical data to address the methodological issues identified. Using a longitudinal database of 354 firms over their first ten years, we examine factors associated with new firm growth in terms of R&D, inter-firm alliancing, new product development, and exporting; these are activities that have been identified as denoting dynamic capabilities. The empirical evidence gives some evidence for the positive association between dynamic capabilities and new firm growth. Inter-firm alliancing is the only indicator of dynamic capabilities that has a positive effect on new firm growth. No moderating effect on dynamic capabilities and growth could be seen to be exerted by the level of human capital and/or firm resources. Environmental dynamism – assumed to be highly relevant in the dynamic capability approach – is not revealed to be a moderating factor affecting the relationship between dynamic capabilities and new firm growth.