Entrepreneurship played an important role during the transition period in the early 1990s in Slovenia. More recently, public policy has once again
recognized it as an important actor in the process of improving the nation’s competitive position. Indeed, global competitiveness yearbooks such as the World Competitiveness Yearbook 2004 (IMD, 2005) persistently demon- strate the overall national perception that the current business environment is not supportive of entrepreneurship. The broader business and entrepre- neurship environment characteristically lacks business literacy, is often envious, and harbours extremely negative attitudes to business failures.
This research has aimed to illustrate the building of the institutional frame- work to foster the development of technology entrepreneurship in Slovenia. Throughout the chapter we have identified several obstacles which may eventually depress the facilitative role of a publicly financed entrepreneurship support environment. We discuss each in turn.
First, the perception of general public support received during the early development of high-technology-based firms is particularly low because there are no accessible leverages to direct financial support from the gov- ernment to the most productive employment. We suggest the partial real- location of financial resources directed to support research at universities and research institutes to potentially more profitable marketable projects in start-up companies.
Second, a relatively small share of firms is introducing innovation and the lack of innovative activities is especially evident among smaller firms.
For those firms that do innovate, the effective use of inputs in the innova- tion process seems to be a problem. The statistical data indicate that firms are falling behind in their ability to increase value added through innova- tion efforts. Cooperation with other firms and research institutions seems to have no effect on the knowledge stock offirms and questions are being raised regarding the absorptive capacities offirms. Whereas the innovation intensity of SMEs is higher than that of large firms, the latter are more suc- cessful in creating innovation output. Moreover, there is a substantial gap between Slovenia and the old EU when comparing this output. To improve the absorptive capacity of the firms and increase the effectiveness of inno- vative expenditures in creating innovative output, two competencies need to be strengthened. The quality of human capital should be improved by encouraging the availability of highly skilled individuals with technical knowledge, by supporting their employment and the training of other employees by designing a supportive tax system, and by stimulating uni- versities to provide applicable knowledge to students (see Wakkee et al., ch. 9 in this book). In addition, the knowledge stock of firms should be complemented by knowledge generated in research institutions. These link- ages should be strengthened and rethought in the light of the financing of publicly funded research institutions and by encouraging universities to be more open to collaboration with industry.
Third, although technology entrepreneurs and public policy agree that further cooperation among education, training institutions, engineers and production managers should lead to an increase in the stock of entrepre- neurial knowledge and techno-entrepreneurial capabilities, they disagree on the design of public policy measures and their implementation to achieve such goals. Techno-entrepreneurs suggest that innovation policy should aim to strengthen the absorptive capacity offirms and create mech- anisms encouraging successful projects for cooperation in innovation. A potential solution may lay in the development of a national innovation system that acknowledges and embeds the national cultural determinants of inter-firm cooperation and the existing ties with the EU markets. In the last 15 years, Slovenian firms have largely built research cooperation and business relationship networks with business partners from these markets.
With Slovenia becoming a full EU member,firms should focus even more strongly on their relationships with European markets in order to profit from EU-sponsored programmes for building national, regional, sector and technological innovation systems.
Finally, global polls on social values such as the Global Competitiveness Report 2004(IMD, 2005) highlight the importance of achieving a social consensus on the need for the faster pace of change in Slovenia. Moreover, Slovenian society has to attribute a greater social value to entrepreneurship to encourage risk taking and to reward the social contribution of entre- preneurial ventures. Overall, public policy has designed an extensive entre- preneurship support environment which at times even appears to be overinstitutionalized, however its effectiveness and marginal returns largely depend on the soft, culture-related determinants of the level of entrepre- neurial activity.
NOTES
1. An intermediary economy is best described as being in an investment-driven phase of devel- opment. Efficiency in producing standard products and services becomes the dominant source of competitive advantage. Heavy investments in efficient infrastructure, a business- friendly government administration, strong investment incentives and better access to capital allow major improvements in productivity. Technology is accessed through licen- sing, joint ventures, foreign direct investment and imitation (Porter et al., 2004).
2. A few notes on the terminology used when describing the firms’ innovation activities are in order. Innovation activities include R&D within the firm and R&D contracted out, acqui- sition of the machinery and equipment needed for innovations, the preparation of produc- tion and the accompanying training of employees, and marketing activities needed to introduce the innovation. Expenditures regarding these activities (innovation expenditures) can be considered as innovation inputs and are referred to as innovation intensity when cal- culated as a share of total sales of the firm. When only R&D expenditures are taken into account, R&D intensity is used. The results of innovation activities are innovative products.
They are new or significantly improved products, based on the results of new technological developments, new combinations of existing technology or the utilization of other know- ledge acquired by the firm. Product innovations should be new to the firm concerned, but do not necessarily have to be new to the market. To enable a comparison between the firms, the results of innovation activities are depicted as innovation outputs, calculated as the share of sales due to innovative products in total sales (OECD, 1997).
3. Note that direct comparisons of the results between the Slovenian innovation activities survey and those published for EU countries have to be treated with caution: the method- ology and data processing might differ slightly. In addition, the averages for a country are affected by the structure of manufacturing industry (with some industries having a greater propensity to innovate than others and larger firms having a greater propensity to inno- vate than smaller ones).
4. Since the data on innovation expenditures in services are less reliable they are not presented here.
5. The relationship between the innovative activities and the size of a firm also depends on the industry conditions, but the analysis controlled for that with the use of industry dummies.
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understanding interaction at the academic–industry interface
Michael C. Brennan and Pauric McGowan
INTRODUCTION
The widely reported importance of high-tech-based start-up firms (Tidd et al., 2005) is based on the observation that such firms contribute dispro- portionate added value to national and regional economies when compared to conventional start-ups. Such a contribution can be measured in a variety of ways – for example wealth creation, job creation and export perfor- mance. Such performance is based in part on the knowledge competence of the individual entrepreneurs who create such firms and in particular the often implicit or hidden relationships between high-tech entrepreneurs and academia. While the merit of researching such a relationship initially appears counterintuitive – in that such entrepreneurs would appear to gain little from a relationship with large, often traditional bureaucratic organi- zations – there is evidence that this relationship is extremely important in high-tech and knowledge-based firms (Cooper, 2000).
Academia and individual academic institutions are a primary source of new knowledge production and innovation. High-tech entrepreneurs inter- act with academia in subtle and informal knowledge exchanges that are not always identifiable or appreciated by university managers. This knowledge exchange activity is becoming increasingly important given the changing role of universities within modern economies. We suggest that understand- ing knowledge exchange activity as part of a knowledge marketplace is an important foundational research activity in supporting high-tech start-ups at a regional and national level. The research domain that encompasses such foundational research can be broadly defined as academic entrepre- neurship. Further, that the investigation of academic entrepreneurship between European regions and nations is of immense importance given the competitive pressures that the European Union faces from other global blocs and fast-growing economies.
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In this chapter we consciously attempt to make sense of academic know- ledge and entrepreneurship within academic institutions as the basis for better understanding interaction with the wider knowledge market. This is important as there is a reported lack of interaction between academic insti- tutions and their regions in terms of high-tech entrepreneurship (see Lasch et al., ch. 5 in this volume, concerning the situation in France). Certainly within the United Kingdom (UK) interest in academic entrepreneurship has grown exponentially over recent years and in particular since the year 2000.
Such interest can be attributed to a large extent to government policy and funding priorities. For example, the University Challenge Fund that pro- vides venture capital for university-linked entrepreneurial ventures and the Science Enterprise Challenge aimed at promoting entrepreneurship among science, engineering and technology students (OST, 2001). Of particular interest is the predicted outcome of the Science Enterprise Challenge and the anticipated growth in academic entrepreneurship in the UK: an esti- mated 40,000 students to receive some form of entrepreneurship education and the creation of 700 spin-out companies. Such targets take place within an overall aim of increasing ‘awareness of the importance of business enterprise at all universities’ and ‘to legitimise commercial activity as a valid aspect of academic life’ (ibid.: 1)
We believe that the stated policy objective of moving to a ‘third stream of funding’ (that is, enterprise funding in addition to traditional teaching and research funding), will involve a much greater number of academics and students becoming involved in entrepreneurship and interaction with high-tech ventures, for example, through:
● consultancy;
● public sector contracts;
● private sector contracts;
● joint ventures;
● spin-out firms;
● spin-in firms; and
● intellectual capital management.
Such interaction and venturing activity has clear implications for the knowledge marketplace in regional and national economies. Indeed, the above takes place within a wider debate concerning the role of universities in society and in particular the relationship among universities, industry and government – the so-called ‘triple helix’ (Etzkowitz, 2003) for fostering innovation.
The aim of this study was to investigate entrepreneurship among estab- lished and prospective academic entrepreneurs. In particular, we were
interested in the dynamics of the knowledge marketplace within which such academic entrepreneurs operate. The study also builds on our previous work (Brennan et al., 2005) which more fully explores the streams of research literature that contribute to the domain. The following summa- rizes the key parts of the chapter and the research process. In the literature review section, an attempt is made to define the scope of academic entre- preneurship with reference to three streams of complementary research. Of necessity the literature cited is representative and ‘genealogical’ rather than broad based and comparative. The methodology section details the three- stage process used to investigate academic entrepreneurs and prospective academic entrepreneurs in a single university setting. In the discussion and management implications section, the results are explored and the implica- tions of the study discussed in terms of how they add to an understanding of the knowledge marketplace.
Given that little theoretical work has been done on academic entrepre- neurs within universities (as opposed to academic spin-out firms) it was decided to focus exclusively on one university rather than include rela- tionships with other parts of innovation clusters in the wider regional or national economy. This is clearly a limitation but one that is justified in an attempt to understand knowledge use within one institutional setting. As such it might be considered as investigating a subliminal phenomenon that adds to previous research on university spin-out firms (Birley, 2002;
Shane, 2004).
In terms of outcomes, the chapter suggests different ways in which aca- demics can better understand their own approach to academic entrepre- neurship with regard to how they use knowledge and their relationship with their host university. Such an understanding is clearly also of interest to high-tech firms in how they interface with academics who are located within universities. This has implications for university managers and the practical ways in which they can promote entrepreneurship – or at least reduce barriers to entrepreneurship taking place. At a theoretical level, the proposed typology of academic entrepreneurs is offered as a clarification of what to date have been contradictory definitions of the aca- demic entrepreneur.