Evaluating innovation investment outcomes of government venture funding: a longitudinal, multi-level, multi-source analysis of small firms in the U.S.

The study examines the role of government venture funding in facilitating entrepreneurship and innovation. In particular, the study integrates financial and behavioural perspectives in a unified framework to analyse the determinants and outcomes of innovation investments designed to help small firms commercialise their research and development activities. On the one hand, it draws upon real options reasoning theory to understand the effects of various resource allocation strategies on investment yield and firm performance. On the other hand, it uses signalling theory and the attention- based view to examine which individual-, project- and firm-level characteristics affect early- and late- stage funding allocation decisions, and whether these signals are also accurate predictors of investment yield and firm performance. To investigate government investment patterns, 367 projects from 275 firms that participated in the Small Business Innovation Research (SBIR) programme administered by the National Health Institute in the U.S. were analysed over a seven-year period from 2006 to 2012 using a combination of statistical and econometric techniques. First, the study finds that the formal real options reasoning (ROR) structure evident in the composition and execution of the government venture funding programme is only intuitively underpinned by the real options logic of decision-making. The results reveal that high initial funding commitment and continuation of government venture funding have a diminishing effect on return on investment, whereas consistent matching of funding decisions in line with ROR allows to extract value from staged investments. Second, drawing on signalling theory and attention-based view helps uncover discrepancies between prescribed and actual investment behaviour. Third, to benefit from options-like investments, firms require different combinations of skills and capabilities depending on their experience and the target performance outcome. In sum, the study adds to the empirical body of literature analysing the tension between economic logic of efficient resource allocation and behavioural and cognitive effects on rational sense- making. The analysis delineates boundary conditions of real options reasoning in the context of government venture funding, which provides important implications for strategic management theory and research policy

Digital maturity survey for Wales 2017

The Welsh Government and Cardiff Business School were successful in 2015 in gaining European Regional Development Funding (ERDF) for a programme of business support to assist Small and Medium Enterprises (SMEs) across Wales to engage with superfast broadband infrastructure, other e-connectivity and consequently enabled technologies. This programme of support – The Superfast Broadband Business Exploitation (SBBE) programme - went live in January 2016 for a period of five years. Cardiff Business School is providing a research and intelligence function surrounding the programme of business support. The first substantive output from the research and intelligence function was to provide a report on the methods to be followed in developing a Digital Dashboard for Wales and a resulting economic impact assessment showing how SMEs have benefited from services levered by superfast broadband (WERU, 2016). This report then provides details of WERU’s first annual Digital Maturity Survey (2016). It sets out the results from a survey of 166 businesses in Wales, including their adoption of superfast broadband, their infrastructure and IT capabilities, and performance. The framework adopted for the annual digital maturity survey is set out in the Figure 0-1 below. This framework has been developed from a review of existing studies on digital maturity, and is intended to reflect the processes by which superfast broadband adoption both shapes, and is shaped by a businesses’ resources, the use and exploitation of broadband, and the subsequent performance impact. The main findings of the Digital Maturity Survey 2016 are that: - Most SMEs that participated in the survey have standard broadband, while only a third have adopted superfast broadband (defined as SMEs being able to achieve download speeds of at least 24Mbps). The majority of standard broadband users, however, are aware of, or interested in superfast broadband. Superfast broadband adoption rates vary significantly by business size, industry sector, geographical area and region. SMEs with superfast broadband are more likely to engage in innovation activity than standard broadband users. Innovation focus, however, is not influenced by broadband type, with both standard and superfast broadband users innovating in new service and products. - Only 15% of responding businesses had a dedicated IT budget. Although medium sized businesses have the highest average expenditure on broadband subscriptions in absolute terms, micro businesses have a higher average spend per employee on monthly broadband subscriptions. As businesses grow larger, high IT investment does not lead to improvements in performance amongst respondents. - Most SMEs have access to staff with adequate IT skills and capabilities. Nearly 60% of sampled SMEs employed staff with intermediate and above IT skills, 50% of SMEs have staff with knowledge of using cloud enabled services at business, and nearly two thirds of businesses in the whole sample have access to IT support. - SMEs with high IT capability – defined by the level of SMEs’ human IT-related resources - are concentrated in the information and communication and business services sectors. Micro and young SMEs, however, are the most digitally advanced businesses; yet their access to superfast broadband was reported to be constrained by its high associated costs. - SMEs are more confident in using e-commerce than wider digital technologies. Even businesses with high IT capability find it difficult to successfully implement digital technologies in their business. Overall, the more digitally mature businesses in the sample tended to perform better in terms of growth and innovation

Digital maturity survey for Wales 2016

The Welsh Government and Cardiff Business School were successful in 2015 in gaining European Regional Development Funding (ERDF) for a programme of business support to assist Small and Medium Enterprises (SMEs) across Wales to engage with superfast broadband infrastructure, other e-connectivity and consequently enabled technologies. This programme of support – The Superfast Broadband Business Exploitation (SBBE) programme - went live in January 2016 for a period of five years. Cardiff Business School is providing a research and intelligence function surrounding the programme of business support. The first substantive output from the research and intelligence function was to provide a report on the methods to be followed in developing a Digital Dashboard for Wales and a resulting economic impact assessment showing how SMEs have benefited from services levered by superfast broadband (WERU, 2016). This report then provides details of WERU’s first annual Digital Maturity Survey (2016). It sets out the results from a survey of 166 businesses in Wales, including their adoption of superfast broadband, their infrastructure and IT capabilities, and performance. The framework adopted for the annual digital maturity survey is set out in the Figure 0-1 below. This framework has been developed from a review of existing studies on digital maturity, and is intended to reflect the processes by which superfast broadband adoption both shapes, and is shaped by a businesses’ resources, the use and exploitation of broadband, and the subsequent performance impact. The main findings of the Digital Maturity Survey 2016 are that: - Most SMEs that participated in the survey have standard broadband, while only a third have adopted superfast broadband (defined as SMEs being able to achieve download speeds of at least 24Mbps). The majority of standard broadband users, however, are aware of, or interested in superfast broadband. Superfast broadband adoption rates vary significantly by business size, industry sector, geographical area and region. SMEs with superfast broadband are more likely to engage in innovation activity than standard broadband users. Innovation focus, however, is not influenced by broadband type, with both standard and superfast broadband users innovating in new service and products. - Only 15% of responding businesses had a dedicated IT budget. Although medium sized businesses have the highest average expenditure on broadband subscriptions in absolute terms, micro businesses have a higher average spend per employee on monthly broadband subscriptions. As businesses grow larger, high IT investment does not lead to improvements in performance amongst respondents. - Most SMEs have access to staff with adequate IT skills and capabilities. Nearly 60% of sampled SMEs employed staff with intermediate and above IT skills, 50% of SMEs have staff with knowledge of using cloud enabled services at business, and nearly two thirds of businesses in the whole sample have access to IT support. - SMEs with high IT capability – defined by the level of SMEs’ human IT-related resources - are concentrated in the information and communication and business services sectors. Micro and young SMEs, however, are the most digitally advanced businesses; yet their access to superfast broadband was reported to be constrained by its high associated costs. - SMEs are more confident in using e-commerce than wider digital technologies. Even businesses with high IT capability find it difficult to successfully implement digital technologies in their business. Overall, the more digitally mature businesses in the sample tended to perform better in terms of growth and innovation