Entrepreneurial renewal in a peripheral region: the case of a winter automotive-testing cluster in Sweden

This research paper generates new insights into renewal processes that may occur in peripheral regions. Key findings are presented from an explorative study on a regionally clustered automotive-testing industry, located in northern Sweden. The findings suggest that despite theoretically unfavourable conditions it is possible to progress regional industry after a peripheral setting's socio-economic relapses. Moreover, this research shows how, notwithstanding the importance of profitable service offerings, an entrepreneurial environment can be encouraged within a peripheral region and subsequent renewal achieved by advancing local networks, improving internationalization and enhancing local infrastructures related to a service-based regional industry. Consequently this research offers us a glimpse into a pioneering service-based renewal case which, in essence, differs from previously reported entrepreneurship scholarship.     

Sponsored spin-offs,industrial growth and change

This paper focuses on the role of sponsored spin-offs for industrial growth and dynamics. A sponsored spin-off is a firm born out of the venturing activities and the active involvement of an established organization; in this paper the latter in the form of retained partial ownership in the new firm. Sponsored spin-offs are one mechanism whereby the respective potential advantages of large and new firms may be exploited. Little is known about the nature and magnitude of contributions by existing firms to the creation of new technology-based firms and the effects these new firms have on innovation, change and renewal.In this paper, an empirical sample of 101 Swedish IPO firms is used in the analysis of three research questions. (1) Are sponsored spin-offs an important mechanism for the creation of new technology-based firms? (2) Are sponsored spin-off firms important for industrial growth? (3) Are sponsored spin-offs influencing industrial renewal and change? The results add to the understanding of how, and to what degree the venturing activities of existing firms contribute to the creation of new firms, as well as how and to what extent these spin-offs differ from other new firms in terms of their impact on industrial growth and change.     

Regional engagement of locally anchored firms and its influence on socio-economic development in two peripheral regions over time

Abstract

This article sets out to explore the ways locally anchored firms in peripheral regions influence regional social capital through regional engagement and how this contributes to socio-economic development. Through regional engagement firms shape regional contexts by generating concrete outcomes, such as setting up schools (structural aspect) and by possibly influencing regional bonding and bridging social capital (social aspect). To examine the effects of regional engagement and its possible influence on bonding and bridging social capital of regional firms, an analytical framework is developed distinguishing between inclusive/exclusive agency for inclusive/exclusive benefit. This article focuses on regional engagement in two Swiss peripheral regions, which have followed different development paths in spite of their common institutional framework and geographical proximity. This study aims to gain insight into the ‘how’ of regional engagement and its influence on regional social capital and to examine the assumption of higher levels of regional social capital in a dynamic region from a long-term perspective (ca. 1850–2015). The findings of the qualitative research show that the dynamic Rhine Valley indeed disposes of higher levels of regional social capital than the less dynamic Toggenburg, which is related to the willingness of firms and other actors to collaborate for regional interests.     

The challenge of constructing regional advantages in peripheral areas: The case of marine biotechnology in Tromsø, Norway

The idea of constructing regional advantage (CRA) has recently been emphasized by scholars as a new way for firms to gain competitiveness in a globalizing learning economy. The rationale behind the idea is that advantages in a regional industry can be constructed by proactive public–private partnership. This article uses, and examines the relevance of, the CRA framework in analysing the development and functioning of the marine biotechnology industry in Tromsø, which is a fairly peripheral region in Norway. Despite the fact that much effort has been put into education and R&D at the University of Tromsø and related research institutes, and the fact that many public policy tools have intended to create a blooming marine biotechnology industry in the area, the results have so far been meagre. This article explains the rather weak results in terms of the number of firms and jobs in the marine biotechnology industry in Tromsø as being due to a lack of synthetic knowledge on how to industrialize research results and little spillover of market knowledge. With regard to more general theoretical lessons linked to the CRA framework, this article argues for seeing the concept of related variety in a broader industrial and geographical sense in peripheral regions.     

Global value chains,local collective action and corporate social responsibility: a review of empirical evidence

A key debate in the corporate social responsibility (CSR) literature is the tension between global pressures and local responses. Developing country suppliers often grumble that CSR compliance adds costs. Yet, local collective action, articulated through industry associations, can potentially reduce costs and promote local embeddedness of CSR initiatives. Through case study analysis, this paper considers how demands for CSR compliance prompted collective action responses in selected developing country export industries. We argue that differences in collective responses can be partially explained by how local export industries are inserted into global value chains. We distinguish between ‘highly visible’ value chains, led by internationally well known brands as lead firms, and relatively ‘less visible’ chains, where external CSR pressures come from a variety of sources, including less dominant lead firms, international/national regulatory frameworks and national media. This differentiation suggests a possible trade‐off between the independence and the embeddedness of collective CSR initiatives. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

FOREIGN DIRECT INVESTMENT AND REGIONAL PRODUCTIVITY SPILLOVERS IN US MANUFACTURING

This research examines how inward foreign direct investment (FDI) impacts manufacturing productivity in select industries across US regions. Although some evidence has documented the phenomenon of knowledge spillovers to national economies, little is known about how the regional penetration of foreign investment affects the productivity performance of local firms. The analysis proceeds in a novel fashion by adjusting aggregate data on industry operating statistics to "net out" the contaminating influence of foreign firms producing in each of the host regional economies. A cross section of state-by-industry observations is used to estimate labor productivity, controlling for FDI penetration both by region and by industry. In general, the results demonstrate that domestic firms do not reap productivity gains as a result of a larger presence of foreign affiliates. Related research efforts, although not specifically concerned with the regional transmission of FDI spillovers, offer corroborative support for these findings.     

Co‐evolution in Strategic Renewal Behaviour of British,Dutch and French Financial Incumbents: Interaction of Environmental Selection,Institutional Effects and Managerial Intentionality*

abstract How do incumbent firms and environments co‐evolve and how are firm‐level adaptation and selection at industry level interrelated? Can and do large established organizations renew themselves to adapt to their environment? Three single‐lens theories, relating to environmental selection, institutional theory, managerial intentionality, and a co‐evolutionary perspective are used to investigate strategic renewal of incumbent firms. We derive propositions and distinguish between three dimensions of strategic renewal and develop metrics to investigate our propositions in a multi‐level, multi‐country, longitudinal study of the European financial services industry. Our results provide the following insights. From an environmental selection perspective, we found incumbents have a preference for exploitation renewal actions. Country institutional environments appear to explain to what extent incumbents prefer internal and/or external renewal actions. Managerial intentionality seems to explain outlier behaviour and firm‐specific frequency and timing of renewal actions. From a co‐evolutionary perspective, interaction effects explain deviations from predictions derived from the single‐lens theories applied in this paper.     

Open standards,vertical disintegration and entrepreneurial opportunities: How vertically-specialized firms entered the U.S. semiconductor industry

This paper shows how the emergence of open standards has created large numbers of entrepreneurial opportunities in the semiconductor industry by enabling vertical specialization. Integrating data on firms and technology evolution, we find a gradual increase in the percentage of firms represented by newly-founded “de novo” entrepreneurial startups, instead of “de alio” ones, as open standards emerged in semiconductor products and processes over the life of the industry. This standardization reduced transaction costs and fostered specialization, thus facilitating the entry of vertically-specialized new ventures. Vise versa, the rise of such new ventures further pushed the adoption of open standards, and the vertical disintegration of the industry. Our theory on how standardization creates opportunities for new ventures and our analysis of the semiconductor industry contribute to the technology entrepreneurship literature, as well as the industry architecture literature that has primarily focused on the impact of standardization on the disintegration of vertically-integrated incumbents.     

Emerging (internet) industry and agglomeration: Internet entrepreneurs coping with uncertainty

Emerging industries are not rare elements in the economy; rather, they constitute a permanent feature in constantly developing and changing economic environments. However, the emergence of new industries is rarely painless or particularly straightforward processes; actors involved in these processes are confronted with uncertainties of which some are exclusive to emerging industries. A distinctive example of these processes was the emergence of the internet industry in Sweden and the agglomeration of internet firms in central Stockholm. Through three levels of uncertainty: (1) the newness of the technology introduced to the public and the emerging markets; (2) the process of developing new markets and approaching new customers and (3) the renegotiating of pre-existing structures and flexible ways of organizing work and labour, this article argues that agglomerations or local urban milieus play a crucial role to actors (internet entrepreneurs) coping with uncertainty. Agglomerations or urban milieus compose a necessary infrastructure for (1) negotiating industrial legitimacy, and thus establishing structures and procedures in the emerging industry; (2) discovering market opportunities and (3) informal relations necessary in making flexible labour markets efficient.     

Italian industrial districts as cognitive systems: Are they still reproducible?

Adopting a knowledge-based perspective, this study develops a framework of how Italian industrial districts (IDs) operate and evolve as cognitive systems. First, we analyse the mechanisms that facilitate knowledge diffusion across firms within IDs, the enabler of cross-firm knowledge transfer (absorptive capacity) and the process of producing new knowledge by combination. Within this analysis, we consider the formation of new firms resulting from the break-away of human resources from existing district firms (spin-offs) as a particular form of knowledge transfer and production within districts. Knowledge production by combination may take place not only within boundaries of IDs, but also involve external sources. We suggest that innovations made by combining internal and external knowledge have played an important role in shaping the evolutionary trajectories of IDs. Finally, again from the cognitive perspective, we address the issue of how globalization impacts on district systems, concentrating on the positive role that two different types of local actors play in their reproduction and evolution: the global–local firms and institutions providing knowledge-intensive business services.     

Institutional endowment,localized capabilities and the emergence of SMEs: from mining to recycling,the case of Freiberg (Saxony)

This paper analyses the development of the emerging SME-based recycling and environmental technology sector in the region of Freiberg in the former centrally planned economy of the German Democratic Republic. The author analyses a relatively successful process of economic renewal resulting from a combination of endogenous assets and exogenous impulses, set within a socio-economic context often seen as unconducive to the creation of new and innovative firms. The analysis has three distinct but interlocking strands of explanation: long-term historical assets and localized capabilities; the restructuring of existing local research institutes; and public policies in support of environmental protection and applied research. The paper analyses how processes of learning and unlearning, and the existence of tacit and formal knowledge, supported by a strong social capital reinforced during years of communism, contributed to the development of the new sector. Overall, the analysis privileges an historical perspective in highlighting a process of long-term continuity in the accumulation of skills and entrepreneurial abilities, combined with a process of industrial transformation and renewal.     

Green technology innovation: Anatomy of exploration processes from a learning perspective

This paper examines how established firms use their core competences to diversify their business by exploring and ultimately developing green technologies. In contrast to start‐ups dedicated to a green mission, diversifying into green markets by developing new products based on existing core competences has proven to be challenging. This is because the exploration processes to find a match between green technology opportunities and internal competences is complex and new to most established firms. This paper gains insights into exploration processes for green technologies and the learning modes and outcomes linked to these processes. We examined exploration processes at the microlevel in an embedded case study of an engineering firm using a combination of the “fireworks” innovation process model and organizational learning theory. First, we found that developing green technologies involves a long‐term exploratory process without guarantee of (quick) success and likely involves many exploration failures. Second, as exploration unfolds along multiple technology trajectories, learning occurs in individual exploration paths (on‐path), when new paths are pursued (path‐initiation), and when knowledge from one path is spilled over to subsequent paths (across‐paths). Third, to increase their chances for success, firms can increase the efficiency of exploration by fostering a failure‐friendly organizational culture, deliberately experimenting, and purposefully learning from failures.     

Concentration ratios,strategy and performance: The case of the Norwegian telecommunications industry

This article explores how changes in industry structure are reflected in changes in performance and strategy. A set of interrelated hypotheses is proposed and examined in one industry (the Norwegian telecommunications industry). Increasing competition was found to be positively related to increasing industry concentration but negatively related to new entries and performance as measured by value added. Large and small firms were found to vary in performance, and they are seemingly applying different strategies in coping with stagnating market opportunities.     

Sustainable entrepreneurship and the Sustainable Development Goals: Community-led initiatives,the social solidarity economy and commons ecologies

The social solidarity economy is an approach to the production and consumption of goods, services and knowledge that promises to address contemporary economic, social and environmental crises more effectively than business as usual. The paper employs the concept of commons ecologies to examine the practices, relationships and interactions among actors and organisations in the social solidarity economy, as well as between them and the mainstream economy, which shape the field and its degree of autonomy in relation to capitalism, through a process defined as boundary commoning. Such process shapes both local and regional commons ecologies, as well as the participation of local and regional actors in wider networks at national, international and global levels. The paper takes a case study-based approach to identify practices, relationships and interactions of commons ecologies in relation to selected community-led initiatives in the UK, Portugal, Brazil and Senegal. Each case study illuminates different qualities of local/regional commons ecologies and their forms of engagement with wider networks. Further, the paper shows that these cases demonstrate how the social solidarity economy may facilitate delivery of the Sustainable Development Goals in a distinctive way. In each case, SSE acts as a vehicle for expressing participants' values and principles consistent with those underlying the SDGs. Local implementation of SDGs is thus an in-built feature of these commons ecologies. The participation of community-led initiatives in international and global networks offers opportunities to learn from local level experiences and successes, potentially strengthening SDG implementation more generally.     

Collectively created opportunities in emerging ecosystems: The case of solar service ventures

This study suggests that in the entrepreneurial communities of emerging industries, individual entrepreneurs may simultaneously create opportunities that spill over to others and discover opportunities already created by others. Extant opportunity literature, focused on single actors and their personal networks or on the information function of market prices, is largely mute on the role of opportunities in value networks with distributed entrepreneurial efforts. Ecosystem theory, a literature stream that seldom intersects opportunity literature, contributes with a conceptual framework to study the question. The paper seeks to shed light on how opportunities are created or discovered by new ventures as they are involved in the interlinked endeavor of forming a new ecosystem.The study examines five case studies of US ventures in the early phase of the solar service industry, an industry in which entrepreneurs offer customers access to solar panels as a service rather than as a product. These ventures inadvertently created an industry ecosystem together, as they could not protect the value created by their business partners׳ new knowledge, or by the emerging social webs between partners. They shaped opportunities together, passing value back and forth amongst themselves. This paper offers fundamental observations on how opportunity creation and discovery is distributed among a community of entrepreneurs as a business ecosystem grows.     

Industry Event Participation and Network Brokerage among Entrepreneurial Ventures

Despite the recognition that network brokerage is beneficial for entrepreneurial ventures, little is known about its antecedents. This study examines how participation in industry events (e.g. conferences) relates to entrepreneurs' brokerage positions in informal industry networks and how these positions, in turn, impact new venture performance. Using a unique dataset of 45 events and subsequent network relations among entrepreneurs from 90 firms in the open source software industry, results indicate that: (1) entrepreneurs who participated in heterogeneous events or who bridged between events with few common participants were more likely to be brokers; (2) the relationship between event bridging and brokerage was stronger for entrepreneurs with broader prior career experiences; and (3) network brokerage mediated the event participation–performance link. It appears that events may limit structural opportunities for brokerage and that individual differences matter for exploiting these opportunities. Overall, this study increases understanding of how and when particular networking behaviours are beneficial for entrepreneurs.     

Activism for Corporate Responsibility: Conceptualizing Private Regulation Opportunity Structures

In this article, we examine how private regulatory initiatives (PRIs) – which define standards for corporate responsibility (CR) issues and sometimes monitor their application by firms – create opportunities and constraints for activist groups aiming to push firms towards more stringent CR activities. Drawing on social movement theory, we conceptualize how private regulation opportunity structures affect such CR‐based activist groups' targets and tactics at both the firm and field levels. At the field level, we argue that both radical and reformative activist groups direct most of their time and resources towards PRIs with comparatively more stringent standards. At the firm level, while radical activist groups are likely to target firms participating in more stringent PRIs, reformative activist groups target firms participating in less stringent PRIs, or those that do not participate in PRIs at all. When facing unfavourable opportunity structures, CR‐based activist groups tend either to advocate the creation of new PRIs or to shift their activities to pressure other focal points. This article contributes to moving beyond extant literature's emphasis of PRIs as settlements of contentious firm–activist interactions towards also viewing them as starting points for activist groups aiming to push firms towards a more substantive CR engagement.     

Knowlege networks for innovation in small Scottish software firms

This paper examines the emergence of small indigenous software companies in Scotland, focusing on the strengths and weaknesses of the region's socio-economic infrastructure as a foundation for innovative new business ventures. Following a brief review of some of the accepted wisdom on high-tech start-ups and regional economic development the paper provides some background information on the Scottish region, comparing new firms in the software industry with the foreign multinationals that dominate the local IT industry. A framework - the ‘sociotechnical constituencies’ approach - is then proposed that allows the author to examine networks of specialist knowledge that underlie new business development. Agglomeration effects and the influence of ‘clusters’ of complementary types of knowledge, expertise and innovative competencies at the regional level are at the heart of the analysis. The framework is applied to a sample of local firms, looking at how ‘learning’ via sociotechnical networks underlies their evolution. Policy-makers' attempts to boost the region's new business birth rate and promote the hoped-for ‘silicon glen’ effect are viewed in the light of the study's findings.     

The changing role of network ties and critical capabilities in an international new venture’s early development

The importance of networks for firm internationalization has been pointed out for several decades. Especially for small and new firms, networks have been found to be an important tool to gain access to resources and to overcome liabilities of newness, smallness and foreignness. Yet, there is a lack of understanding regarding which types of capabilities are developed through networking and how and when networks are used. The aim of this article is to explore how and when different networking activities develop critical capabilities during different phases of an international new venture’s early development. The article is based on a longitudinal, in-depth case study of a Swedish international new venture from the medical-technology industry. We find that the development process is greatly affected by how the individual key actors leverage their network ties to develop critical capabilities – they use existing network ties and different indirect ties during the pre-founding, start-up and establishment of production phases. During the commercialization and sales growth phases, however, many new network ties are developed. The heterogeneity of the individual actors’ backgrounds plays an important role during the different developmental phases. We conclude by advancing a number of propositions in relation to how critical capabilities are developed through networking during different developmental phases.