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Technological entrepreneurship and small business innovation programs

Kropp, Fredric & Zolin, Roxanne (2008) Technological entrepreneurship and small business innovation programs. In Ghosh, Amithaba (Ed.) Impact of Government Policies on Marketing Strategies. ICFAI Press, Hyderabad, India, pp. 10-34.

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Abstract

High-tech start-ups and technology development firms, also known as technological entrepreneurs, play an important role in the American economy, enhancing global competitiveness through innovation. These firms are integral to a number of industries in-cluding, artificial intelligence, biotechnology, software, and the telecommunications industry (Zahra 1996a). As technology adopters, they use new technologies for product and process innovation; as technology developers, they initiate the commerciali-zation of new technologies (Clarysse and Moray 2004). Though they may be idea rich, technological entrepreneur typically are resource poor, often lacking the operating capital to intensively research an interesting idea, to develop the idea into a prototype, and/or to commercialize the product.

Government involvement in early stages of technological entrepreneurship, especially through technological research and devel-opment programs, such as the Small Business and Innovation Research (SBIR) program, can assist in the technological entrepre-neurial process. These programs provide seed money to research an interesting new technology and to develop a working prototype. A better understanding of its role in the process of assisting technology entrepreneurs in developing and commercializ-ing technology could help government programs, like SBIR, facilitate the process. The SBIR program operates in ten Federal gov-ernment departments and agencies and typically funds over $1 billion in technology development programs annually.

Using a model developed by Lumpkin and Dess (1996), this paper explores the conceptual role that government technology pro-grams can play in facilitating the process of technological entrepreneurship. It examines the relationships between the components of a firm’s entrepreneurial orientation and the firm’s willingness to participate in the SBIR program. It also explores some of the ways SBIR funding can impact the environmental factors in which the firm operates. Finally it explores some of the ways partici-pation in the SBIR program can impact a firm’s organizational structure, and, ultimately, the firm’s performance.

Entrepreneurial Orientation refers to the organizational processes, methods, styles, practices, and decision-making activities em-ployed by entrepreneurs that lead to new entry (Stevenson and Jarillo 1990, Lumpkin and Dess 1996, Lumpkin and Dess 2001). Lumpkin and Dess (1996) identify five components of an entrepreneurial orientation: autonomy, innovativeness, risk-taking, pro-activeness, and competitive aggressiveness. Environmental factors include dynamism, munificence, complexity, and industry characteristics. Organizational factors include size, structure, strategy, strategy-making processes, culture, and top management team characteristics. We extend organizational factors to also include the effect of firm resources. We expand the performance measures mentioned by Lumpkin and Dess (1996) --- sales growth, market share, profitability, overall performance, and stake-holder satisfaction --- to explicitly include commercialization, technology transfer, and survival.

A series of propositions are developed for entrepreneurial orientation and the willingness to participate in a program like SBIR. There are direct positive relationships between willingness to participate in SBIR and innovativeness, proactiveness, and competitive aggressiveness. As participation in a government program can be seen to offer easier access to venture capital in exchange for compliance with regulations we posit inverse relationships between willingness to participate and the autonomy and risk-taking components of an entrepreneurial orientation.

A series of propositions are developed for the relationship between SBIR and environmental factors, SBIR can have positive ef-fects on dynamism if the innovations funded are radical in nature; can positively affect munificence if the industry is tightly de-fined, and can enhance industry competitiveness. In turn, these changes in environment will make it more likely that a technology entrepreneur will develop and commercialize a technology.

While participation in a program like SBIR can impact many of the organizational factors, we posit that the biggest direct impact of SBIR is to enhance firm resources. The impact of SBIR on other components of the organizational factors will be indirect, through firm resources. Survival rates, rates of commercialization, and rates of technology transfer are posited to be higher for technology firms that participate in programs such as SBIR than for comparable firms which do not participate in the programs.

Future research directions are discussed.

Impact and interest:

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ID Code: 10946
Item Type: Book Chapter
Additional Information: For more information about this book please refer to the publisher's website (see link) or contact the author.
Keywords: entrepreneurship, technology entrepreneurs, entrepreneurial orientation, technology development and commercialization, Small Business Innovation Research, SBIR
Subjects: Australian and New Zealand Standard Research Classification > STUDIES IN HUMAN SOCIETY (160000) > POLICY AND ADMINISTRATION (160500) > Research Science and Technology Policy (160511)
Divisions: Current > Research Centres > Australian Centre for Entrepreneurship
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Copyright Owner: Copyright 2008 Academy of Marketing Science
Deposited On: 28 Nov 2007
Last Modified: 29 Feb 2012 23:50

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