Study of the environment of start-ups in the technological software industry

The objective of this bachelor thesis is to investigate the current status of the software start-up industry in Spain, and to dive deeper into the characteristics of the environment that shape their performance. More precisely, we are interested in determining which factors (namely demographic, economic, political and legal) might hinder their success. To do this so we first embark on a literature review, in order to figure out the elements of the environment that interact with start-up companies. At this point we rely on the traditional PESTEL framework to characterize the environment. Also, we use the triple helix model, which serves as well to illustrate how start-ups are neither alone nor act in isolation, rather, they are part of a bigger ecosystem and consequently, interact with incumbents, the public administration and with the institutions responsible to create new knowledge, i.e., the universities. Based on these two analyses we determine and characterise a set of factors that might affect start-ups operating in the software industry. In order to investigate the relevance of each of these factors, an empirical analysis is proposed. Specifically, we gather data from the case of Spain. Using multiple regression analysis we suggest two complementary approaches. First, we consider the region as the unit of analysis. That is, we aggregate the observations at the company level by territories (autonomous communities) and investigate the effect of the specific characteristics of the region where the start-ups are located. Second, we adopt an alternative approach and consider the start-up as the unit of analysis. The results of both approaches are reported and discussed. At this point it should be noted that to better approximate what it is meant by “performance” we use different proxies. In a final stage, the results were confronted with an expert in the field. By means of an interview we shared with him the findings from the empirical analysis, being able to link our results with the theory of the clusters of innovation. The main conclusion is that the most important traits of a region in order to host and boost the creation of successful start-ups are easiness of access to finance, a high concentration of talent, market size and being highly innovativ