Realizing Potential: The Impact of Business Incubation upon the Absorptive Capacity of New Technology Based Firms

This article explores the potential of university technology business incubators to enhance the absorptive capacity of new technology-based firms. The research pursues three critical themes: it employs the absorptive capacity construct to analyse and evaluate the potential of incubation to strengthen the business model of new technology firms. It then explores the interaction between founders and incubator directors, mentors and business advisers to assess how this might enhance absorptive capacity. Finally, it indicates how such interactions can facilitate the transition from potential to realised absorptive capacity. The article interrogates the incubation process by using the absorptive capacity framework to evaluate how it might strengthen the business model of new technology firms. The qualitative findings suggest that where founders, advisers, mentors and incubator directors engage collaboratively to create an iterative dialogue which informs the development of a viable business model, the process by which potential absorptive capacity can be fully realised is substantially strengthened

University Spin-off Fundraising: The Impact of Entrepreneurial Capabilities and Social Networks Of Founding Teams during Start-ups

University spin-offs have increasingly received attention from academia, governments, and policymakers in studying the financing policies, venture capital investment decision making, the roles of venture capitalist in the development of new ventures, and the contributions of entrepreneur’s social capital to the fundraising activities. However, the limited number of studies in understanding of the contribution made by the entrepreneurial capabilities and social networks of a founding team to its fundraising ability still remains, especially within university spin-off context. Employing resource-based view theory and social networks approach, this paper enriches the knowledge by exploring university spin-offs in Spain. The results of this study empirically demonstrate that by exploiting social networks a founding team can improve its entrepreneurial capabilities, which in turn enhance its fundraising ability

The Performance of University Spin-Offs: The Impact of Entrepreneurial Capabilities and Social Networks of Founding Teams during Start-Ups

Objectives: University spin-offs have increasingly received attention from academia, governments, and policymakers because they not only generate new innovations, productivity, and jobs the regional economies but also significantly improve university productivity and creativity (Hayter, 2013, Urbano and Guerrero, 2013). However, a lack of understanding of the contribution made by a founding team to a spin-off’s performance still remains within current studies. Employing a resource-based view theory and social networks approach, this paper addresses this gap by exploring university spin-offs in Spain. Prior work: University spin-off studies have concentrated on analysing entrepreneurial business models (Ndonzuau et al., 2002, Vohora et al., 2004b, Bower, 2003, Mets, 2010) to understand how the commercialization of research is undertaken to create a university spin-off. University spin-offs were also been analysed from the perspective of a university’s capabilities (Powers and McDougall, 2005), or capabilities and social networks of an established spin-off instead of the founding teams (Walter et al., 2006). Moreover, Vohora et al. (2004a) and Shane (2004) have suggested founders need to build capable teams, which must have entrepreneurial capabilities and qualitative social networks, to create effective university spin-offs. Both entrepreneurial capability and social network theory have been studied in prior entrepreneurship research, but have received less attention within the context of the university spin-offs (Gonzalez-Pernia et al., 2013). Approach: Utilising an internet-based survey, this paper explores entrepreneurial capabilities and social networks of founding teams in Spanish university spin-offs using quantitative data analysis. Basing upon resource-based view theory of Barney (1991) to study entrepreneurial capabilities of the founding teams, the research employ entrepreneurial technology, strategy, human capital, organizational viability, and commercial resources (see Vohora et al., 2004a). To study social networks of a founding team, we employ the conceptual model of Hoang and Antoncic (2003) that divides networks into three components: structure, governance, and content. Results and implications: The results from an examination of the sample of 181 Spanish university spin-offs empirically demonstrate that by exploiting social networks a founding team can improve its entrepreneurial capabilities, which in turn enhance its spin-off’s performance. By employing the work of Vohora et al. (2004a) and Shane (2004), this paper constructs a model in which entrepreneurial capabilities play a mediate role between social networks and spin-off’s performance. Thus, the paper has implications for universities in training and policy development to support spin-off’s activity. Value: This study addresses some fundamental questions to contribute to the theory-based understanding of university spin-offs: How do entrepreneurial capabilities of founding teams influence the performance of university spin-offs? How do social networks of founding teams contribute to the process of the university spin-offs

Farming Systems in the Central West of NSW: An Economic Analysis

The objectives of this report have been to describe important farming systems in the Central West of NSW, to gain some insights into current financial performance and to examine in more detail the role of pastures in these farming systems at a time when the profitability of wool growing has been low relative to grain growing. While farms and farming systems vary considerably across the region, a majority can be broadly grouped into a mixed livestock and cropping category. Although there is also significant variability within this category, two representative farms and farming systems were developed for the region with the assistance from a small group of farmers and extension staff from NSW Agriculture. One represents the farms and farming systems east of Condobolin and the other represents the farms and farming systems to the west of Condobolin. Whole-farm budget models have been developed for each to provide a description of the farms in this region and an indication of their current profitability. They are useful to give an indication of how farm income might be altered by the introduction of some new technology, a new enterprise such a pulse crop, or an alternative management practice. This report presents some examples of their application but importantly it has provided a template for the development of additional whole-farm budgets for alternative farming systems in this and other regions. Using the whole-farm budget representing farms east of Condobolin, and a linear programming model, PRISM Condobolin, this report shows that the optimal length of pasture is fairly insensitive to changing market signals for both cropping and livestock commodities. It also shows that although length of pasture is insensitive, the optimal mix of enterprises does change, highlighting the importance of considering the interactions between enterprises in whole-farm analysis.Industrial Organization, Production Economics,

Start-up’s Performance: An Empirical Study on Dynamic Capabilities Under The Contributions of Bricolage and Social Capital

Objectives: Dynamic capabilities studies have emphasised how firms determine, integrate, build and reconfigure internal and external resources to adapt to rapidly changing business environment (Teece et al., 1997). Dynamic capabilities are described as routines to learn routines, resource integration consists of product development routines and strategic decision making, resource reconfiguration, and resource gain and release which include knowledge creation, alliance and acquisition routines (Eisenhardt and Martin, 2000). Lee et al. (2002), Zahra et al. (2006), Salunke et al. (2011) and Weerawardena et al. (2015) have proved that dynamic capabilities sustain competitive advantage, which in turn improves the performance of a new venture. However, our understanding of how a new venture builds and shapes dynamic capabilities is limited. This paper addresses the knowledge gap by empirically studying the contributions made by the bricolage and social capital of a management team on the dynamic capabilities of a start-up based upon data collected from new ventures in the UK. Prior work: In the study of Teece (2007), dynamic capabilities were disaggregated into the capability to sense and shape opportunities and threats, to seize opportunities, and to maintain competitiveness through enhancing, combining, protecting, and reconfiguring the business enterprise’s assets. To identify and shape opportunities, firms must constantly scan, search, and explore across technologies and markets through differential access to existing information and new knowledge. When the opportunity is ripe, firms will seize them by investing heavily in the particular technologies and designs most likely to achieve marketplace acceptance; the enterprises must identify when, where, and how much to invest, and select or create a particular business model implicating processes, incentives, and its alignment with the physical technologies with a commercialisation strategy and investment priorities. The dynamic capabilities of a new venture are determined by the firm’s abilities to identify, assimilate and exploit resources (Zahra and George, 2002; Lane et al., 2006). Various existing or ‘at hand’ resources will be effectively used and combined to find workable approaches to problems and opportunities through the process of bricolage (Baker, 2007). To facilitate those resource acquisitions, social capital promotes the flow of information and knowledge from diverse resources within the networks (Blyler and Coff, 2003). Thus, bricolage and social capital are respectively considered as method and catalyst to shape the dynamic capabilities of a new venture. The link between social capital and dynamic capabilities has been proposed by Blyler and Coff (2003), but has not been empirically tested by any scholar in both business and management fields. Furthermore, no study has considered bricolage as a method to exploit the existing resources in shaping the dynamic capabilities of a new venture. To address these knowledge gaps, this study will explore the British start-ups to construct a model in which bricolage and social capital shape dynamic capabilities, which in turn improve the performance of a new venture. Approach: By utilising an internet-based survey and quantitative data analysis method, this paper explores the bricolage, social capital and dynamic capabilities of management teams in British start-ups. Based upon the dynamic capability theory of Teece et al. (1997) and Teece (2007) this research constructs a new measurement to evaluate the dynamic capabilities of a new venture through sensing, seizing and sustaining dimensions. To study the social capital of a management team, this paper employs the studies of Tsai and Ghoshal (1998) to construct a new measurement for three components of social capital: Rational, structural and cognitive capital. Beside creating new measurements, this paper also employs instruments in the studies of Senyard et al. (2014) and Chandler and Hanks (1993) to measure the bricolage and performance of a new venture. To reduce common method bias, previously validated measurements were employed (Spector, 1987) and a pilot test on 38 new venture in the Dorset County undertaken which resulted in the survey being to avoid potential question confusion by respondents. Furthermore, to avoid measurement errors, the study conducted proper survey measures and used a construct validation test (the empirical indicators actually measure the construct) for validity (convergent and discriminant) and reliability. The results prove that research’s measurements are both valid and reliable. The exploratory factor analysis (EFA) is used to construct the research indicators. However, the EFA is not considered as a sufficient method to evaluate the dimensions because it cannot test the models with higher-order factors (Rubio et al., 2001). Therefore, in this study, we will utilize first-order confirmatory factor analysis (CFA) to construct the lower-order factors, and the second-order CFA to construct the higher-order factors by applying the AMOS program. By using structural equation modelling, this study constructs a robust model which shows how social capital, bricolage and dynamic capabilities influence the performance of a new venture. Results and implications: The results from an examination of the British new ventures empirically demonstrate that by using bricolage to exploit social capital a management team can improve dynamic capabilities which, in turn, enhance a new venture’s performance. This study addresses some fundamental questions to contribute to the theory-based understanding of start-ups: How do the dynamic capabilities influence the performance of a new venture? How do social capital and bricolage contribute to the process of shaping the dynamic capabilities of a new venture

Dynamic Capabilities of SMEs: The Contributions of Bricolage and Social Capital

Objective: Dynamic capabilities are defined as “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments” (Teece et al., 1997, p. 516). In doing so they create value, derived from the capacity of a management team to identify opportunities and threats and reconfigure a firm’s repertoire of resources and operations to address them (Teece, 2007). While there is agreement that dynamic capabilities facilitate a firm’s competitiveness; there remains a lack of clarity around the notion and complexity surrounding the way in which they evolve (Eriksson, 2014). This, in particular, has created difficulties in identifying valid measurement tools to appraise their creation and deployment leading to the extant literature to rely upon qualitative, often longitudinal, case studies to analyse the phenonoma (Wang and Ahmed, 2007, Barreto, 2010, Eriksson, 2014). While previous research has investigated the dynamic capability concept in relation to its antecedent factors, the characteristics integral to their implementation, potential outcomes and influences upon competitive advantage and performance of firms (Zott, 2003, Song et al., 2005, Zuniga-Vicente and Vicente-Lorente, 2006, Wang et al., 2015). There is limited evidence available that examines the contribution made by the bricolage and social capital of management teams to the generation and use of dynamic capabilities. Literature review: It is suggested that the dynamic capabilities of SMEs originate from the often ad-hoc approaches to problem solving (Winter, 2003) and learning that results from the need to reconfigure resources and routines to address challenges (Prashantham and Floyd, 2012). This activity supports the development of soft assets - values, culture and experience – that underpin a firm’s dynamic capabilities and inform future learning processes adopted by management teams (Corner and Wu, 2012). The process, therefore, is associated with a firm’s resource-based changes, which include the improvement of existing capabilities and the development of new capabilities (Prashantham and Floyd, 2012). As indicated this is often ad hoc and achieved through trial-and-error and improvisation (Ahuja and Lampert, 2001, Miner et al., 2001), such learning has the effect of embedding capabilities into the DNA of a firm (Teece, 2007, Argote and Ren, 2012, Prashantham and Floyd, 2012). Changes in the dynamic capabilities of firms are the result of the learning that takes place within a management team during the process of improvisation and experimentation within the existing resource base (Hambrick and Mason, 1984, Martin, 2011, Kor and Mesko, 2013). It is argued that social capital is one mechanism for acquiring, assimilating and exploiting external knowledge and resource to transform a firm’s capability over time (Zahra and George, 2002, Le Breton-Miller and Miller, 2006, Prashantham and Young, 2011). Although Nemanich et al. (2010) have argued that social capital can overload and delay processes that create solutions; we propose that the social capital of a management team positively influences the development and appropriation of a firm’s dynamic capabilities. Bricolage helps create new from old and “something from nothing” (Baker and Nelson, 2005, p. 357) that lead to the strategic development of diverse, non-specialized resources (Gurca and Ravishankar, 2016). Those redifined resources at hand are appropriated through learning processes that are both improvisational (performative) and experimental (ostensive) (Weick, 1998, Baker, Miner and Eesley, 2003, Kreiser, 2011); and the outcomes are integrated into building dynamic capabilities. Method: This study is distinct from previous research as it employs a quantitative method and constructs a new multidimensional dynamic capability measurement by aggregating definitions, analysis and suggestions from previous literature to establish and test hypotheses (Teece, 2014). This measurement is validated by using the confirmatory factor analysis method before being utilized to examine a research framework. While early literature perceived social capital to be a unidimensional concept (Burt, 1992) this paper takes a more multidimensional perspective as posited by Adler and Kwon (2002), and employs a three-dimension approach, measuring relational, structural and cognitive social capital; first introduced by Nahapiet & Ghoshal (1998); and validated in later works (Karahanna and Preston, 2013, Huynh, 2016). To measure the bricolage of a management team, we employ a measurement constructed and validated by prior researchers (Davis et al., 2013, Senyard, Baker, Steffens and Davidsson, 2014). Hypotheses are tested and findings presented using data drawn from 274 SMEs in the UK. Structural equation modelling (SEM) is used to test the research hypotheses. This entails a two-stage approach; a measurement model using confirmatory factor analysis (CFA) to examine the validity and reliability of measurements, and a structural model to test the relationships among latent variables (Byrne, 2010). Findings: The results indicate support for all hypotheses; the social capital of management teams has a significant positive impact on the dynamic capabilities of SMEs. There is a significant positive link between the bricolage of management teams and the dynamic capabilities of SMEs and the social capital of management teams has a significant positive influence upon the bricolage of management teams. The results show that the mutual connections between social capital and bricolage, bricolage and dynamic capabilities, and social capital and dynamic capabilities are significantly positive. Values: This study addresses the gap in the literature and examines the influence that the social capital and bricolage of management teams have upon the the development of dynamic capabilities witin SMEs. We build on insights into the antecedents of dynamic capabilities in the context of resource-constrained firms through the deployment of bricolage and social capital, (Nahapiet and Ghoshal, 1998, Baker and Nelson, 2005) and enhance this using fine-grained analyses to analyse how SMEs and their management teams learn through bricolage and each element of social capital contribute to the generation and appropriation of all three sub-sets of of dynamic capabilities; sensing, seizing and reconfiguring

What are the barriers to start-up and scale-up in R&D intensive firms?

R&D investments enhance knowledge, underpin innovation and facilitate the creation of new firms; this recognised source of economic development has become integral to government policy in many countries. While all firms face difficulties engaging in R&D, new and young firms are most affected, facing internal and external factors that inhibit investment or impede the process. A decision to invest in R&D often stalls due to concerns about appropriation and/or limited access to appropriate finance, but once engaged the barriers are found in the nexus of knowledge, networks and skills that underpin dynamic capabilities and the enhancement of a firm’s absorptive capacity. In particular, the emphasis placed in the beginning upon science/technology expertise, at the expense of managerial acumen, undermines a firm’s ability to recognise and exploit commercial opportunities. Accepting that knowledge, network and skills are significantly influenced from the imprint established at start-up; it is the opportunity to learn during the reconfiguring process, as the firm seeks to commercialise the opportunity, that underpins scale-up. Although it is possible to identify individual barriers, this fails to recognise how they coalesce to create complex problems that require bespoke solutions

Early-stage Financing of University Spin-offs: The Impact of Entrepreneurial Capabilities and Social Networks of Founding Teams during Start-Ups

University spin-offs have increasingly received attention from academia, governments, and policymakers in studying the financing policies (Wonglimpiyarat, 2006, 2013), venture capital investment decision making (Aouni, Colapinto, & La Torre, 2013), the roles of venture capitalist in the development of new ventures (Paik & Woo, 2013), and the contributions of entrepreneur’s social capital to the fundraising activities (Ozmel, Robinson, & Stuart, 2013). However, the limited number of studies in understanding of the contribution made by the entrepreneurial capabilities and social networks of a founding team to its fundraising ability still remains, especially within university spin-off context. Employing resource-based view theory and social networks approach, this paper enriches the knowledge by exploring university spin-offs in Spain. Utilising an internet-based survey, this paper explores entrepreneurial capabilities and social networks of founding teams in Spanish university spin-offs using quantitative data analysis. The results empirically demonstrate that by exploiting social networks a founding team can improve its entrepreneurial capabilities, which in turn enhance its fundraising ability. By employing the works of Vohora et al. (2004a) and Shane (2004), this paper constructs a model in which entrepreneurial capabilities play a mediate role between the social networks and fundraising ability of the founding team. Thus, the paper has implications for universities in training and policy development to support spin-off’s activities. Value: This study addresses some fundamental questions to contribute to the theory-based understanding of university spin-offs: How do the entrepreneurial capabilities influence the fundraising ability of founding teams? How do the social networks contribute to the ability of founding teams in fundraising activities

Co-production in business training in microfinance institutions: a conceptual approach

Recent developments in service literature highlight the importance of co-production between the firm and the client in order to create value. This paper presents a model of co-production within the context of microfinance provision and investigates the dyadic relationship between Trainers from microfinance institutions (MFIs) and the Owner Managers of micro and small enterprises (MSEs). The paper develops a model that identifies the factors that facilitate co-production between Trainers and Owner Managers. It also goes on to examine how these factors foster the outcomes that ensue for the businesses and MFIs concerned. The model offers researchers a framework for empirical studies in the microfinance setting. Furthermore, microfinance policy makers can use this model to formulate strategies that offer numerous benefits to both MFIs and Owner Managers

Farming Systems in the Pastoral Zone of NSW: An Economic Analysis

A ‘broad brush’ picture of farming in the pastoral zone of NSW is presented in this report. The pastoral zone of NSW is characterised by wide variations in climatic conditions, soil type and vegetation species. Hence representative faming system analysis was conducted for three sub-regions - the Upper Darling, the Murray-Darling and Far West. The regions were defined and described in terms of their resources, climate and the nature of agriculture. The main enterprises that farmers choose between were described and whole farm budgets and statements of assets and liabilities for the representative farms were developed. The representative farm models were used to compare traditional Merino based sheep enterprises with alternative sheep enterprises where meat was an important source of income. We found that the farming systems that have evolved in these areas are well suited to their respective environments and that the economic incentives to switch to more meat focussed sheep enterprises were not strong.Western Division, farming systems, economic, analysis, New South Wales, Farm Management, Land Economics/Use, Livestock Production/Industries, Production Economics, Research and Development/Tech Change/Emerging Technologies, Q160,