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Research Chair in
Entrepreneurship and
Innovation Management
Research Chair in
Entrepreneurship and
Innovation Management
1
Growth of New Technology Ventures:
Insights from a Comparison of German
and Canadian Spin-offs
Achim Walter and Sandra Schillo
Research Chair in
Entrepreneurship and
Innovation Management
2
Definition Academic Spin-Off
Academic spin-offs are
- business ventures that were
- founded by (former) scientists of a research institution
- to commercialize technology from that institution.
Research Chair in
Entrepreneurship and
Innovation Management
MP3-Standard (invented by the Fraunhofer
Institute for Integrated Circuits, 1998)
France / Japan
Source: Henzler/Späth, Countdown für Deutschland, Fraunhofer 2007
German inventions … … but commercialized abroad
Research Chair in
Entrepreneurship and
Innovation Management
4
Research Spin-offs are Often NOT Ready for Market!
Idea Concept Design Prototype Product
% of Spin-offs
founded with …
40%
Total Fraunhofer
Society
Helmholtz
Association
Max Planck
Society
Leibniz
Association
( n=81)
Source: http://www.acatech.de; German Academy for Science and Engineering
Research Chair in
Entrepreneurship and
Innovation Management
5
Developing a business opportunity based on a raw technology:
High market uncertainty
Lack of size and complementary assets
Limited business experience of founders
Major Challenge for Academic Spin-Off
Problem:
Many spin-offs fail in developing marketable products despite
promising technology
Research Chair in
Entrepreneurship and
Innovation Management
6
„When the winds of change are blowing, some people …
„… build shelters“
… ; others build windmills!“
Source: Siemens Corporate Technology
Basic assumption:
In stormy times it is better
to be
- proactive,
- innovative, and
- risk taking
Research Chair in
Entrepreneurship and
Innovation Management
Technological Competition & Entrepreneurial Orientation – Precursors to Spin-Off Growth ?
Original Paper:
Schillo and Walter, “Importance of Technological Evolution
and Entrepreneurial Orientation for Academic Spin-Offs in
Canada and Germany” R&D Management Conference,
Manchester, UK, 2010
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Slides adapted for this presentation
Research Chair in
Entrepreneurship and
Innovation Management
Research Question
Can the company’s research environment
provide useful guidance for a spin-off’s
strategic orientation?
Data Set
72 Canadian spin-offs
94 German spin-offs
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Research Chair in
Entrepreneurship and
Innovation Management
Technological Competition
Technological competition is an important aspect that most new
ventures need to understand in order to take advantage of
market opportunities to grow (little empirical evidence)
Different levels of competition necessitate different strategies for
success
Literature does not provide clear guidance on the direction of fit:
Should companies be more entrepreneurial
in highly competitive research environments ?
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Research Chair in
Entrepreneurship and
Innovation Management
Entrepreneurial Orientation (EO) Previous work identifies five dimensions of EO
– Innovativeness
– Pro-activeness
– Competitive Aggressiveness
– Autonomy
– Risk-Taking
EO relates positively to company success in many contexts, but not all
(moderators)
Some evidence of differences in EO across countries
Firm behavior that is more entrepreneurial should make a difference
between those firms that grow and others that do not grow,
especially when they operate in a dynamic or hostile environment.
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Research Chair in
Entrepreneurship and
Innovation Management
Regression Models & Results
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- *
+ ***
- t
Canada N=72
Growth in
Total Sales Entrepreneurial
Orientation
Technological
Competition
+* Growth in
Total Sales Entrepreneurial
Orientation
Technological
Competition
n.s.
n.s.
Germany N=94
t : p<.10 *: p<.05 **: p<.01
***: p<.001
Research Chair in
Entrepreneurship and
Innovation Management
5
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15
Low High
Entrepreneurial Orientation
Technological Competition High (n.s.)
Technological Competition Low (***)
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Low High
Entrepreneurial Orientation
Technological Competition High (t)
Technological Competition Low (t)
Interaction Effects Canada Germany
In Canada: EO is helpful independently of technological developments In Germany: Companies fare better if adapted to competitive environment Best option for Canadian companies: highly entrepreneurial in field with little competition
Growth in Total Sales (log) Growth in Total Sales (log)
Research Chair in
Entrepreneurship and
Innovation Management
Neither the German nor the Canadian data that we collected fully
confirmed the main hypothesis that it is EO per se that is responsible
for Spin-Off success!
Summary & Conclusion
EO is a resource consuming process!
We think academic spin-offs are hampered due to limited pools of
resources. These limitations include limited national technology
infrastructures and limited market capacities for the development
of new technologies.
Our data very much suggest that factors in the environment of the
spin-offs moderate the impact of EO and performance much more than
has been acknowledged so far.
Research Chair in
Entrepreneurship and
Innovation Management
Implications for Canada
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Canadian spin-offs should be highly entrepreneurial. – Design policies and programs to support entrepreneurial orientation
Entrepreneurial spin-offs may choose to look for niches
in fields with less technological competition.
Should national priorities focus on high-tech
entrepreneurship in less competitive fields ?
Research Chair in
Entrepreneurship and
Innovation Management
Discussion
Thank You!
Achim Walter, Christian-Albrechts-University of Kiel (CAU), Germany: [email protected]
Sandra Schillo, Innovation-Impact, Ottawa, Canada: [email protected]
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