Abstract

Innovative new ventures are at the heart of economic development, particularly when these startups are created by employee, academic, and user innovators. We synthesize across literature streams examining each phenomena to document distinctions between firms originating from different “knowledgecontexts.” We then integrate the knowledge context into Teece’s (1986) theoretical framework identifying factors that impact a firm’s ability to profit from innovation. Doing so allows us to develop stylized facts and predictive propositions pertaining to differences in the innovative contributions, roles played in shaping industrial dynamics and evolution, and performance outcomes for startups stemming from the three entrepreneurial origins. These propositions provide unique insights into the causes of patterns of industry evolution, contribute to theory in the areas of entrepreneurship and industry evolution, and yield important policy and managerial implications.

Abstract

Scholars have long been interested in new industry emergence, highlighting that it could often be impeded by uncertainty across four dimensions: technology, demand, ecosystem, and institutions. Building on the insight that uncertainty stems from partial knowledge, we develop a conceptual framework that utilizes a temporal and a process perspective for knowledge generation and aggregation. Industry emergence through key milestones—commercialization, firm takeoff and sales takeoff—is made possible by knowledge generation processes by diverse actors within and across uncertainty dimensions, and knowledge aggregation processes with appending, selecting, and collective mechanisms at play. Our conceptual framework integrates across disciplinary perspectives to shed light on both the development of an industry poised for future growth, and the bottlenecks that may delay or even impede industries from emergence.

Research Summary

We investigate the emergence of a global industry based on digital innovation by studying how the international expansion of pioneering firms relates to their characteristics and strategies for capability development and deployment. Using detailed archival data on mobile money, we classify pioneers that internationalize based on whether they were multinational diversifying entrants, developed country startups, or developing country startups. Our quantitative evidence suggests developing country startups that internationalize have the highest impact on the industry through subsequent platform launches. Digging deeper into the business histories of each firm, we uncover why: these startups “specialize in generality” by developing and deploying “bundled knowledge” capital consisting of technology, problem-solving and alliance management capabilities, thereby offsetting their physical capital scale and scope disadvantages relative to multinational diversifying entrants.

Managerial Summary

Our study demonstrates how pioneers in mobile money created and utilized capabilities for international expansion. We show that among pioneers who engaged in internationalization, developing country startups had a greater global footprint than both developed country startups and diversifying entrant multinationals, even though conventional wisdom might predict greater impact for the latter two types. We link such impact of developing country startups to their focus on developing “bundled knowledge” capital, consisting of technology, problem solving and alliance management capabilities which they could leverage in multiple countries. Not only did these firms grow through collaboration, they created and democratized access to needed financial services worldwide.

Abstract

As humans, crises give us pause, causing us to reevaluate our priorities, our interests, and our behaviors. They generate a need for quick thinking, innovation, and actions in support of the common good. The COVID-19 pandemic, striking in its worldwide grip on the human population, is just one example. Natural disasters such as storms, wildfires, earthquakes, and hurricanes and man-made disasters such as climate change; and social, political, and economic strife have and are altering how people live and work. The need for innovation in light of these challenges is immense. User entrepreneurship—“the commercialization of a new product and/or service by an individual or group of individuals who are also users of that product and/or service” (Shah and Tripsas, 2007, p. 123)—is one important source of such innovations. Users, driven by necessity, are often forced to innovate in times of crises. Our 2007 SEJ piece proposed a process model of user entrepreneurship that contrasted with the conventional model of entrepreneurship and documented the prevalence of user entrepreneurship in the juvenile products industry. A subsequent study showed that 46% of innovative startups (and 10.7% of all startups) that survive to 5 years or more are founded by user entrepreneurs (Shah, Smith, & Reedy, 2012). In this piece, we reflect on the role of user entrepreneurship in providing the innovations that might help us adapt to, as well as combat, crises—and suggest adjustments and extensions to the theory of user entrepreneurship that we proposed in our prior work.

Abstract

Scholars across disciplines increasingly hear calls for more open and collaborative approaches to scientific research. The concept of Open Innovation in Science (OIS) provides a framework that integrates dispersed research efforts aiming to understand the antecedents, contingencies, and consequences of applying open and collaborative research practices. While the OIS framework has already been taken up by science of science scholars, its conceptual underpinnings require further specification. In this essay, we critically examine the OIS concept and bring to light two key aspects: 1) how OIS builds upon Open Innovation (OI) research by adopting its attention to boundary-crossing knowledge flows and by adapting other concepts developed and researched in OI to the science context, as exemplified by two OIS cases in the area of research funding; 2) how OIS conceptualises knowledge flows across boundaries. While OI typically focuses on well-defined organisational boundaries, we argue that blurry and even invisible boundaries between communities of practice may more strongly constrain flows of knowledge related to openness and collaboration in science. Given the uptake of this concept, this essay brings needed clarity to the meaning of OIS, which has no particular normative orientation towards a close coupling between science and industry. We end by outlining the essay's contributions to OI and the science of science, as well as to science practitioners.

Abstract

Openness and collaboration in scientific research are attracting increasing attention from scholars and practitioners alike. However, a common understanding of these phenomena is hindered by disciplinary boundaries and disconnected research streams. We link dispersed knowledge on Open Innovation, Open Science, and related concepts such as Responsible Research and Innovation by proposing a unifying Open Innovation in Science (OIS) Research Framework. This framework captures the antecedents, contingencies, and consequences of open and collaborative practices along the entire process of generating and disseminating scientific insights and translating them into innovation. Moreover, it elucidates individual-, team-, organisation-, field-, and society-level factors shaping OIS practices. To conceptualise the framework, we employed a collaborative approach involving 47 scholars from multiple disciplines, highlighting both tensions and commonalities between existing approaches. The OIS Research Framework thus serves as a basis for future research, informs policy discussions, and provides guidance to scientists and practitioners.

Abstract

In this essay, we explore how strategic management research and practice could benefit from considering the benefits and challenges obtainable through working with user communities. User communities represent a unique organizing structure for the exchange of ideas and knowledge: they are composed primarily of users working collaboratively, voluntarily, and with minimal oversight to freely and openly develop and exchange knowledge around a common artifact. The prevalence of user communities appears to be on the rise, as evidenced by communities across a variety of fields including software, Legos, sports equipment, and automobiles. The innovation literature has begun to document the power of user communities as a source of open innovation, yet the broader strategic implications of user communities remain underexplored: existing research coupled with examples suggests that user communities can be used to enact both differentiation and low-cost strategies. We discuss the benefits that user communities can provide and the challenges they can create for firms, develop a framework for understanding the differences between how user communities and firms are organized and operate, and theorize the conditions under which user communities will emerge and function, thereby illustrating the relevance and import of user communities to firms and the strategic management literature.

Abstract

This study examines motivations and team building processes of employee entrepreneurs in the disk-drive industry. Our inductive, grounded theory building approach uncovers that ringleaders—founders who spearhead spinout creation—are driven by a nonpecuniary desire to create in a fertile environment, when they encounter frictions within the parent firm. Cofounders share the desire to create, but ensure departure on good terms to retain the option of returning to paid employment as a safeguard against entrepreneurial risk. We uncover an endogenous team building process in which more successful founding teams engage in “workplace instrumentality”—creating workplaces through deliberate selection of cofounders who have complementary functional knowledge, but are similar in that they possess superior problem-solving abilities, best-in-class talent, and common workplace values.

Research Summary

Industry evolution scholars define industry inception as the first instance of product commercialization, focusing on subsequent time periods of growth and maturity. Left understudied are the triggers, actors, and actions preceding industry inception. We integrate recent research in a preliminary framework, conceptualizing the incubation stage as activated by a “trigger” event—a scientific discovery, unmet user need, or mission-oriented grand challenges—and continuing through the first instances of product commercialization. We focus on illuminating actions of multiple and heterogeneous actors that help reduce high technological and demand uncertainty, thereby shaping industry structure and strategic action post-commercialization. To point, although the actors may be different, their actions follow a similar theme. We hope this framework spurs future research investigating the understudied incubation stage of new industries.

Managerial Summary

Numerous visionaries—inventors, entrepreneurs, scientists, users, managers, policy makers, and others—spend decades laying the groundwork that leads to the creation of new industries. Their contributions are critical, yet have received little systematic attention. Here, we illuminate their actions during the understudied “incubation” stage sparked by a trigger event and culminating in the first instance of product commercialization. We begin by documenting three triggers: scientific and technological discoveries, unmet user needs, and mission-oriented grand challenges. We show that following a trigger event, visionaries solve the technological problems required to transform an innovative idea into a viable commercial product and engage potential adopters and stakeholders; they do this by both applying their existing knowledge base and engaging in experimentation. Their efforts set the stage for subsequent commercialization efforts.

Abstract

Universities are widely recognized as a critical source of technological innovation and are heralded for the entrepreneurial ventures cultivated within their walls. To date, most research has focused on academic entrepreneurship—new ventures that spin out of academic laboratories. However, universities also give rise to startups that do not directly exploit knowledge generated within academic laboratories. Such firms—and the societal and economic benefits they create—are an important contribution of modern universities. We propose a framework for understanding the full scope of university entrepreneurship and its driving factors, with the goal of providing scholars, university administrators, and policymakers with insights regarding the resources required to foster entrepreneurship from within the ivory tower.

Abstract

Users are an important source of innovation. Scholars have suggested that established firms will gain valuable innovative insights by working with user innovators. However, no study compares the extent to which knowledge sourced from innovative users, as compared to other external sources of knowledge, triggers the creation of new technologies and commercial products within established firms. This leaves established firms with little guidance when it comes to choosing where to search for external knowledge that ignites innovation. Based on existing empirical work in the literature on user innovation, we build a theoretical framework that explains why user knowledge will provide established firms with more ‘useful’ innovative insights than will other sources of knowledge. We test this claim in the context of corporate venture capital investment in the medical device industry. We find that established firms incorporate more knowledge from user innovators than from other sources of external knowledge into their patents and highly innovative products. Accessing the knowledge contained in user-generated innovations enriches the product development outcomes of established firms. We trace the flow of knowledge from start-ups to established firms using both an established method based on backward patent citation data and a novel algorithmic method that compares the content of regulatory documents.

Abstract

We build on multiple theoretical perspectives to investigate the unique and joint effects of individual- and opportunity-level factors affecting job creation in new firms. We tested hypotheses using survey data from individuals who transitioned from unemployment to self-employment under the auspices of a German public policy program. Our findings reveal that an entrepreneur’s breadth of knowledge has a negative influence on the firm’s job creation, whereas the entrepreur’s leadership experience has a positive influence. However, as the sector-specific labor requirements of a business opportunity increase, both breadth of knowledge and leadership experience allow founders to operate their firms with fewer employees.

Abstract

New firms are endowed with knowledge and experience at birth through the human capital of their founder(s). Existing empirical research suggests that this pre-entry knowledge and experience will influence the firm’s chances of survival; however, the mechanisms underlying this relationship have yet to be investigated. We seek to better understand and unpack this relationship. Specifically, we study the extent to which a founder’s pre-entry knowledge of the business activity and pre-entry management experience influence the effectiveness of two subsequent learning activities—namely, early-stage business planning and product-line change. Our findings suggest that pre-entry knowledge and management experience increase firm survival through moderating the effects of these subsequent learning activities. We also find that learning activities are not always beneficial; in our sample, early-stage business planning is associated with decreased firm survival, and product line change is associated with increased firm survival. We examine these patterns using survey data collected from 436 individuals in the Munich region who founded their own firms as an alternative to continued unemployment. Our results have theoretical implications for the entrepreneurship, evolutionary economics, and organizational learning literatures.

Abstract

We develop a process model of how users, an understudied source of entrepreneurship, create, evaluate, share, and commercialize their ideas. We compare and contrast our model to the classic model of the entrepreneurial process, highlighting the emergent and collective nature of the user’s entrepreneurial process. Users are often ‘accidental’ entrepreneurs who happen upon an idea through their own use and then share it with others; more specifi cally, the development of an idea and subsequent experimentation, adaptation, and preliminary adoption often occur before that idea is formally evaluated as the basis of a commercial venture. Users also tend to engage in collective creative activity prior to fi rm formation—often within the social context provided by user communities—that results in the improvement of ideas. Finally, we provide detailed data on the prevalence of user entrepreneurship in the juvenile products industry.

Abstract

Qualitative methods for data collection and analysis are not mystical, but they are powerful, particularly when used to build new or refine existing theories. This article provides an introduction to qualitative methods and an overview of tactics for ensuring rigor in qualitative research useful for the novice researcher, as well as more experienced researchers interested in expanding their methodological repertoire or seeking guidance on how to evaluate qualitative research. We focus our discussion on the qualitative analytical technique of grounded theory building, and suggest that organizational research has much to gain by coupling of use of qualitative and quantitative research methods.

Abstract

Open source software projects rely on the voluntary efforts of thousands of software developers, yet we know little about why developers choose to participate in this collective development process. This paper inductively derives a framework for understanding participation from the perspective of the individual software developer based on data from two software communities with different governance structures. In both communities, a need for software-related improvements drives initial participation. The majority of participants leave the community once their needs are met, however, a small subset remains involved. For this set of developers, motives evolve over time and participation becomes a hobby. These hobbyists are critical to the long-term viability of the software code: They take on tasks that might otherwise go undone and work to maintain the simplicity and modularity of the code. Governance structures affect this evolution of motives. Implications for firms interested in implementing hybrid strategies designed to combine the advantages of open source software development with proprietary ownership and control are discussed.

Abstract

This study contributes to our understanding of the innovation process by bringing attention to and investigating the process by which innovators outside of firms obtain innovation-related resources and assistance. This study is the first to explicitly examine how user-innovators gather the information and assistance they need to develop their ideas and how they share and diffuse the resulting innovations. Specifically, this exploratory study analyzes the context within which individuals who belong to voluntary special-interest communities develop sports-related consumer product innovations. We find that these individuals often prototype novel sports-related products and that they receive assistance in developing their innovations from fellow community members. We find that innovation-related information and assistance, as well as the innovations themselves, are freely shared within these communities. The nature of these voluntary communities, and the “institutional” structure supporting innovation and free sharing of innovations is likely to be of interest to innovation researchers and managers both within and beyond this product arena.