The Rising New Generation of High-tech Entrepreneurs

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The Rising New Generation of High-tech Entrepreneurs
   1 T HE RISING NEW GENERATION OF HIGH - TECH ENTREPRENEURS :  AN EXPLORATORY STUDY   Paolo Giacon Department of Industrial Engineering and Management (DIMEG) University of Padua Via Venezia 1, 35100, Padova, Italy tel: 0039.049.8277473 Abstract Who are the high-technology entrepreneurs: superheroes or jack-of-all-trades? Is there a new generation of young entrepreneurs who “think different” and use new and unexpected perspectives to imagine their business, products and mission? This paper presents some empirical evidences emerging from a multiple case study composed by 20 Italian technology intensive firms. After a review of the high-technology entrepreneur topic, some typologies of the Italian high-tech entrepreneurs are analyzed and finally an elementary classification is proposed in order to clarify the difference between “old” and “new way” entrepreneurship. New trends, behaviours, strategies and business models are explored in order to contribute to the academic debate and the practical knowledge about high-technology entrepreneurship. The last section of the paper suggests a future research agenda. keywords: high-tech entrepreneur, technology intensive entrepreneurship, case study, jack-of-all-trades, classification   2 1. Introduction If a hippie was asked what the hippie culture is, he would answer “a way of life”. If a high-tech entrepreneur was asked to define what a high-tech business is, he would answer “a way of entrepreneurship”. In fact, in small firms, he is not only an innovator (Schumpeter 1934), a pioneer of technology and science fields, a founder, a capitalist, but he is also a careful organizer and a smart manager. Many roles and functions in a single agent: this is really a particular way of being entrepreneur (Oakey 2003, Westhead et al. 2005). Innovative technologies, new business models, ambitious challenges shaped by the knowledge economy and finally the tremendous international competition generate in our countries the need of new people ready to manage successful ideas and founding new business ventures. A novel effort is required to the academic communities and to practitioners in order to describe, highlight and encourage the new generation of high-tech small entrepreneurs who are the real engine of the most successful and innovative businesses in Europe. They are called “new generation” not because of their age status: they are “new” because of their innovative way of thinking. Borrowing the famous payoff used and worldwide diffused by Apple, we could say that the rising new generation of high-tech entrepreneurs is composed by agents of change who are able to think different and use another perspective to imagine their business, their product, their missions. “ The ones who see things differently. […]they change things. They invent. They imagine. They heal. They explore. They create. They inspire. ” (see note 1) The figure and the role of the high-tech entrepreneurs have always attracted not only journalists, media experts and story writers, but even many academics and scholars. Is there a thin red line which links James Watt and Bill Gates? Guglielmo Marconi and Sergej Brin? Benjamin Franklin, and Robert Swanson? All of them have been real pioneers: they had a great idea, they started in a small firm context and at the end they have been real agents of change , thus innovators. It is not the aim of this paper to describe their lives and enterprises because they are already popular and well studied. The aims of this work are the following. Focusing our attention on HTSF entrepreneurs, exploring new trends, behaviours, strategies and business models adopted; presenting some empirical evidence on high-tech entrepreneurship in the Italian context; and contributing to the academic debate on depicting the profile of the new generation of high-tech entrepreneurs. Studying success stories in new industries , in start-up firms during technological innovation waves and in areas of new product innovations in markets still to come, are one of the main challenge of the academic community that focus on high-tech businesses. The internet, biotech and nanotechnologies and many other new industries are per se interesting for the analysis of how new firms emerge and compete (Cassia et al. 2006) Technological entrepreneurship plays a central role in regional transformation (Venkataraman 2004) and high tech small firms are one of the main asset of the globalized economy and the knowledge society. They are not only an important source of profit and employment, but the real locus of innovation. In fact some of them create new technology and contribute to the progress of science, while all of them include scientific applications and technologies in products or processes. New organizational structures, innovative market strategies, pioneer entrepreneurs, are just some of the most evident characteristics of the new technology-based business models which are the real engine of economic change. As Porter (1998) suggested: high-tech businesses “ are vital to the upgrading of the competitive advantage, […] because they feed the  process of innovation .” Adopting a life cycle model of the firm, small and medium firms are indeed very interesting for scholars and academics, because great players and future champions usually start their evolution as young, small, smart and simple enterprises. There is growing attention by policymakers on supporting the birth and the development of high-tech industrial clusters and single enterprises (Foo and Foo 2000). Recognizing the rising role of high-tech entrepreneurship, many governments proposed different policies for supporting research, and fostering development, innovation and collaboration between universities, public research agencies and small firms, trying to replicate the history of areas like Silicon Valley,   3 Cambridgeshire and Boston Route 128.   In Italy, which is the scenario considered in this paper, there are many agencies and public centres, financed directly by central or local governments, that support single innovation projects and the collaboration between universities and firms. During last months, the Government started an impressive and ambitious program called “Industria 2015” as main instrument of high-tech industrial policy and implementation of the triple helix model (Leydersdorff and Etkowitz 1998, Etkowitz and Klofsten 2005). The program is articulated in organic projects which are designed to encourage the development of a specific type of products and services with a highly innovative content in strategic areas for the development of the country, based on the technological and production targets identified by the Government: energy efficiency, sustainable mobility, life sciences and biotech ,new technologies for typical “made in Italy” products, innovative technologies for culture, arts and tourism. An opportunity for all the high-tech entrepreneurs who need support for putting their ideas in concrete form and creating new products, markets or technologies. This paper presents particular evidences from some small and medium Italian high-tech firms, focusing on the role and the traits of the entrepreneur, which is, thus, our unit of analysis. Entrepreneurship is a complex phenomenon. Since the seminal works by Baumol (1968), Low and McMillan (1988), Bull and Winter (1993), Shane and Venkataraman (2000), Gartner (2001), Zahara and Dess (2001) the boundaries of this research field are still in the middle of an exciting debate involving academics, scholars and practitioners. It’s a field where different disciplines, paradigms, perspectives converge: high-tech entrepreneurship can be considered as a particular subset of the main entrepreneurship topic. Reading both rationalistic and constructivist contributions, we can conclude that entrepreneurship is not a pure phenomenon who can be studied exactly (like supply chain or accounting or new product development), but it’s a research field who need to take in account personal skills, psychological motivations, environments conditions. Especially in HT industries, where new markets or niches are created, where ideas become real products, and where the future of our economies and societies is shaped, entrepreneurship is a hybrid phenomenon. Taxonomies (Pavitt 1984, Koberg 1996) and classifications of industries, business models, firms and entrepreneurs, tend to summarize and fix characteristics and properties, in the same time they risk to limit and reduce the richness and newness of the entrepreneurial phenomenon. Thus, following the suggestion of Gummeson (2006) , quantitative studies need to be enriched by continuous qualitative and exploratory studies in order to shape an interactive approach which can be useful for both comprehension and prediction. “Research includes a combination of perceptions of reality based on real world data, attitudes, received theory, and persona, whether these are expressed as numbers, equations, letters or words.” (Gummeson 2006). The rest part of the paper is divided into six sections. The following one is dedicated to an extensive literature review focusing on some theories and results regarding the skills and the traits of high-tech entrepreneurs. The third section presents a theoretical framework used for single and cross case analysis. The framework is enriched by the specification of the Italian context and the presentation of four entrepreneurial typologies. Section four is dedicated to the description of the adopted methodologies, the research protocol and the single case studies. Empirical evidences are shown in the fifth section of this paper, while conclusions and future research agenda are in the last one. 2. The high-tech entrepreneur: superhero or jack-of-all-trades? Studying high-tech entrepreneurship means finding why and how technologically innovative small and medium firms grow, compete, collaborate and adapt to change in their environments. High-tech entrepreneurs are knowledge creators, agents of change, both pragmatic and visionaries: they usually present long range planning ability and a high degree of flexibility, because they are problem solvers who need to cope with an ever changing environment (Dosi and Malerba 1996). Innate talent or balanced acquired skills? The debate is still on. They have been studied through different theories, research paradigms, methodologies and models. In this literature review we   4 present the following contributions: the “traits” perspective, the “single industry” perspective, the frequency perspective, the hagiographic approach, the constructivist approach, the Lazear’s theory and the Oakey’s model. Why it is so difficult to study entrepreneurs? Because they are complex units (constructivists maybe would use the words human being) acting on a complex system. The need of high technology management adds complexity to the entrepreneurial research field. Complexity , turbulence, uncertainty (McGee and Sawyer 2003) are some of the main environment conditions who make difficult studying the HT entrepreneurship. Especially in Italy, where some dominant influencing factors are: the role of family, the influence of occupation experience and career, the availability of information and knowledge networks and finally the gender, age, social class, education, marital status and the ethnicity of the entrepreneur (Di Minin et al. 2003). Since the famous citation by Say, Cantillon and the physiocratic school, the entrepreneur has been recognized as a key actor in the economies and societies. While Kirzner (1973) recognizes her/his ability to spot opportunities by creative alertness, the main role assigned by Schumpeter to the entrepreneur is being agent of change, thus innovator. The Schumpeterian entrepreneur changes the technological possibilities, alters convention through innovative activity and , hence move production constraints (Deakins and Freel 2006 ). Many other contributions focus their attention on some traditional entrepreneurship topics: the responsibility ,the willingness to calculate and accept risks: the imagination and the creation, the pro-activity (McClelland 1961). Deakins and Freel collected many suggestions about the characteristics of technology intensive entrepreneurs, both from empirical research and different theories : need of achievement , calculated risk taking, high internal locus of control, creativity, innovation, need for autonomy, tolerance of ambiguity, vision, self efficacy. As far the author knows, no contribution states that those elements have been falsified in the subset composed by the high-technology entrepreneurs. Human wisdom tends to categorize. Phenomenon are classified, taxonomies are created. This conceptual routine is useful for learning and for a rational comprehension of the economic and social behaviours. Following this assumption scholars and academics tried to describe and predict the characteristics, traits and skills of the successful entrepreneur. Many “traits” theory, born after the seminal work by McClelland (1961) tried to describe and fix the core traits of entrepreneurs. During last years these proposals have been criticized by other theories which assert the uniqueness of every enterprise/entrepreneur and highlight the importance of environmental factors despite fixed and predictable personal skills. According to this perspective MCPhee (2000) says that “Each business start-up takes place against a backdrop of uniquely intertwined events and the personality of each individual entrepreneur si unique”, while Delmar (2000): “the research results have been poor and it has been difficult to discover any specific traits of entrepreneurial behaviour. And finally Glancey and McQuaid (2000) “Research has failed to identify any traits which are associated specifically with entrepreneurs”. If from one hand we agree with the impossibility to set definitely the traits of the successful entrepreneur, using a nomotethic approach, to the other hand, we should admit the importance that research activity contributes to design robust and shared models. Traits and models are useful to summarize, predict and explain the behaviour, the choices, the reasons and the ways entrepreneurs act, even if they focus only on some aspects of the entrepreneur ‘s ontology. Technology intensive firms are often considered as a single set, because they present common problems and behaviours ( risk of technological obsolescence, financing, continuous need of research and innovation, marketing strategies, knowledge and intellectual property rights management). Sometimes problems which are tipical of a particular industry, does not affect another. For example the time needed to develop a new drug is not comparable with the time to design and develop a new electronic device. So many academics studied technology intensive entrepreneurship in single industries. For example cyber-entrepreneurship (Carrier et al 2004), nanotech-entrepreneurship, or biotech founders or managers (Mueller et al. 2004), internet based business owners (Colombo and Delmastro 2004), green-tech entrepreneurs. This (industry-based) distinction can help on focusing on the different problems of each industry.
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