Small firm innovation performance and employee involvement.

It is known that small firms rely mainly on the CEO’s individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees’ knowledge. We study to which extent using CEOs, managers and non-managerial employees’ ideas enhances small firms’ innovation performance. A Heckman selection model on 305 small firms shows that not only CEO’s and managers’, but also non-managerial employees’ ideas contribute to innovation performance. However, contributions depend heavily on the individuals’ area of expertise and on whether product or process innovation is desired. Our findings enrich the current view on the entrepreneurial team, but also warn against the implementation of one-size-fits-all employee involvement programs in small firms.employee involvement; upper echelon; non-managerial employees; innovation performance; small firms;

'Don’t leave me this way!' Drivers of parental hostility and employee spin-offs’ performance

Many entrepreneurs commercialize an idea they initially developed as employees of an incumbent firm. While some face retaliatory reactions from their (former) employer, others are left alone or even supported. It is not clear, however, why some employee spin-offs face parental hostility while others do not, and to what extent this parental hostility affects employee spin-offs’ performance. Integrating the resource-based view with insights on competition and retaliation, we propose that parental hostility increases with the (perceived) competitive threat posed by an employee spin-off. Specifically, we advance employee spin-offs’ initial strategic actions (offering substitute products, hiring employees of the parent, and attempting to first develop the idea inside the parent) as key drivers of parental hostility and consequent spin-off performance. Results from a pooled dataset of 1083 employee spin-offs in Germany confirm that these initial strategic actions trigger parental hostility, which in turn, and contrary to expectations, positively affects employee spin-offs’ innovation and economic performance. These results advance the literature on employee spin-offs in several ways and have important practical implications

Simultaneous experimentation as an entrepreneurial strategy for emergent markets: Transcending the trade-off between flexibility and funding?.

The unpredictable nature of emergent markets implies that ventures entering such markets are confronted with technological and commercial uncertainty. Defining a viable business model under such circumstances is a complex and precarious endeavour. Previous research has either advanced the idea of focus – in order to attract resources and realize first mover advantages – or sequential experimentation financed through bootstrapping, implying limited resources during initial phases of the venture. As such, a trade-off between flexibility and resource acquisition has been introduced. Within this contribution we explore how ventures starting up in emergent industries can balance the attainment of financial resources with flexibility and business model adaptation. Based on a sequence analysis of six case studies, we identify two distinctive approaches to business development in emergent industries: focused commitment versus simultaneous experimentation. Our findings reveal that focused commitment is instrumental for acquiring resources but at the same time impedes flexibility, while simultaneous experimentation allows to attract resources while maintaining manoeuvring space for business model adaptation. An analytical comparison of both approaches suggests that simultaneous experimentation is indeed a more viable strategy when entering emergent industries.entrepreneurial opportunities; business model; uncertainty; commitment; experimentation;

Small firm innovation performance and employee involvement

It is known that small firms rely mainly on the CEO’s individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees’ knowledge. We study to which extent using CEOs, managers and non-managerial employees’ ideas enhances small firms’ innovation performance. A Heckman selection model on 305 small firms shows that not only CEO’s and managers’, but also non-managerial employees’ ideas contribute to innovation performance. However, contributions depend heavily on the individuals’ area of expertise and on whether product or process innovation is desired. Our findings enrich the current view on the entrepreneurial team, but also warn against the implementation of one-size-fits-all employee involvement programs in small firms

Staging innovation projects : (when) does it pay off?

Building on real options literature, this study shows that the use of a staged approach for the management of innovation projects affects the innovation output of firms differently depending on firm characteristics and ambitions. In particular, while staged project management increases the effect of inno- vation expenditures on new product sales for firms envisaging incremental or continuous innovations, this moderating effect is absent for firms aspiring radical innovations. In addition, while staged project management has a pos- itive moderating effect in firms with resource slack, this is not the case when firms are resource-constrained. We further investigate the underlying mecha- nisms to this latter finding by demonstrating that in resource-abundant firms staged project organization is associated with delaying projects until more information becomes available. Thereby these firms reap the waiting value inherent to real options reasoning. By contrast, resource-constrained firms using staged project management are shown to abandon a larger share of their innovation projects and to concentrate resources on fewer projects. It appears, however, that, due to budgetary pressure, they make the decision to abandon at a too early stage where uncertainty is insufficiently resolved. This can explain why there is no effect of staged project management on the sales of resource-constrained firms from new products. The paper contributes to theory development on when and why the staging of innovation projects affects the innovation output of firms and to the literature on real options reasoning in general

Environmental innovation and firm performance:How firm size and motives matter

There is limited understanding of the precise circumstances under which environmental actions-such as environmental innovation-contribute to firm performance. Building on the resource-based view and on stakeholder theory, this study argues that the general positive effect of environmental innovation on financial performance varies significantly with firm size and the motives underlying a firm's engagement in environmental innovation. Integrating survey data and lagged annual account data on 1761 Flemish companies, we find that larger firms benefit financially from environmental innovation driven by regulation or industry codes of conduct, while smaller firms benefit from environmental innovation introduced in response to customer demand. While it is increasingly accepted that environmental innovation relates positively with firm performance, the current study highlights important boundary conditions of this relationship

Linking science to technology: using bibliographic references in patents to build linkage schemes.

In this paper, we develop and discuss a method to design a linkage scheme that links the systems of science and technology through the use of patent citation data. After conceptually embedding the linkage scheme in the current literature on science-technology interactions and associations, the methodology and algorithms used to decelop the linkage scheme are discussed in detail. The method is subsequently tested on and applied to subsets of USPTO patents. The results point to highly skewed citation distributions, enabling us to discern between those fields of technology that are highly science-interactive and those fields where technology develoment is highly independent from the scientific literature base.Science; Patents; Systems; Data; Algorithms; Distribution;

Knowledge management practices for stimulating incremental and radical product innovation

This chapter focuses on the complexity of innovation strategies and the distinction between incremental and radical innovation in particular. It argues that the type of innovation asks for other types of knowledge to be created and shared and also focuses on the concepts of related and unrelated knowledge. The chapter suggests that certain knowledge management practices improve incremental product innovation performance, while others are more appropriate for radical product innovation. It also argues that the type of knowledge that is transferred and created plays a determining role in stimulating incremental versus radical innovation. Crucial to innovation and the subsequent development of sustainable competitive advantage is the organization’s ability to create and transfer knowledge. Tacit knowledge is considered to be the crucial ingredient of innovation and a source of sustained competitive advantage because it is unique, valuable, scarce and inimitable, and can only be acquired and exchanged through experience and interaction with others

The EU 2020 innovation indicator : a step forward in measuring innovation outputs and outcomes?

In October 2013, the European Commission presented a new indicator intended to capture innovation outputs and outcomes and thereby “support policy-makers in establishing new or reinforced actions to remove bottlenecks that prevent innovators from translating ideas into products and services that can be successful on the market”. This article aims to evaluate the usefulness of the new indicator against the background of the difficulties in measuring innovation outputs and outcomes. We develop a unique conceptual framework for measuring innovation outcomes that distinguishes structural change and structural upgrading as two key dimensions in both manufacturing and services. We conclude that the new indicator is biased towards a somewhat narrowly defined “high-tech” understanding of innovation outcomes. We illustrate our framework proposing a broader set of outcome indicators capturing also structural upgrading. We find that the results for the modified indicator differ substantially for a number of countries, with potentially wide-ranging consequences for innovation and industrial policies