SCENARIOS OF RESEARCH-BASED SPIN-OFFS
DEVELOPMENT IN THE NATIONAL INNOVATION SYSTEM
Anna Pobol*
Belarusian State University, Department of Theoretical and Institutional
Economy, Lecturer
Gorny pereulok 6-24, Minsk, Belarus; Phone: +375 (29) 7099599; E-mail:
anna.pobol@tut.by
Research-based spin-off (RSO) entrepreneurship (companies launched by
researchers with the aim to commercialize the technologies developed by them
during research in the public sector) is a relatively young phenomenon generally
in the world, having an only 60 years-old history, and a very young phenomenon
in the transformation economies, dating back to the collapse of the Soviet
Union. The evolution of the organizational form and of the ways of interaction
of RSOs with the surrounding national innovation system (NIS) and the world
technological system is thereof an issue of a large scientific interest.
This paper presents the results of 15 case studies of research-based-spinoffs undertaken in Belarus and complemented with over 20 expert interviews
with policy-makers and innovation infrastructure managers in Belarus, Estonia
and France. Investigated has been the role of research-based spin-off
entrepreneurship in the formation of the NIS in a transitive economy. We argue
this role to be different from the role of RSOs in the NISes of developed
economies. In this paper we particularly focus on the development of relations
between the RSOs, universities and public research institutes parent to RSOs,
and large corporate business.
1. Growth and market
To be or not to be.
Various studies share the opinion that significant capital investments are a
primary condition for extension of the science-intensive enterprise activity, since
R&D is increasingly expensive. Obviously, some of the young research
enterprises will not manage to attract the large external investments and will
have to cease their existence.
From the viewpoint of the national economy, not RSOs as the concrete
economic subjects are important but the innovative products of their activity –
the technologies – as well as the basis of these products – the competence of
researchers. Provided the concrete RSO ceases its legal existence, its
technological knowledge and competences may be preserved or lost for the
national economy.
The intellectual basis is lost if:
*
This is a working paper; the author kindly asks to contact her in case of citing.
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- researchers migrate to the other sector of economy, where their
technological competence and R&D experience are not applied (e.g., trade);
- researchers migrate to the other country, where their technological
competences are applied and rewarded (or not applied but the labour is
rewarded).
Because RSOs are established by the intellectual elite of the country in the
given technological field, this scenario means that the NIS can fully loose the
capabilities to create innovations in this technological field.
The intellectual basis can be preserved if:
- researchers establish another company or start working fort he other
domestic enterprise, applying their innovation experience and the technological
competence;
- researchers work as employees of the foreign enterprise’ R&D
department in the territory of the domestic country.
It is important to stress that not only is it necessary to preserve and
continue to use the passive knowledge (e.g. via lecturing), but also the active
knowledge of the innovators about the mechanisms of linking the technology to
industry and introduction of it.
To grow or not to grow.
Successful scenarios of RSO development assume that the innovators
manage to find the new ways of additional financing for their activity. Realistic
here have proven to be the following scenarios:
- transformation into a joint stock company or transfer of part of the
stockes to the business-angel or venture capitalists who finances the growth of
the company;
- attraction of the foreign capital and transformation of the company into
the joint or foreign company;
- disappearance as an independent economic subject and transit into the
ownership of the large innovation-oriented enterprise e.g. as an R&D
department (the latter can be both a domestic enterprise or a multinational
corporation).
At home or abroad? Local versus international market.
Important dimensions for the enterprise development is the geography of
its market. Provided that the enterprise possesses a growth potential, a most
strongly influencing factor which forms the geography of its market, is the
factor of demand: availability of demand; its complexity, and its solvency.
Because in the countries where the traditions of industrial and applied
R&Ds are lacking (like Estonia in particular fields, or Kazahstan) also few are
the advanced users of technologies, this may become a serious barrier for RSOs
in enlargement of their local markets and survival in form of technologyintensive companies. On the other hand, this may serve as an incentive for them
to internationalise their activity, provided that the necessary competencies are
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there and the level of technological innovations of the company is able to meet
competition.
As Ove Granstrand (1998) notes, the successful scenario of the technologybased firms development is connected with their technological diversification,
by means of which these firms become multinational. Also these companies
have an incentive to economize on the increasing costs of the new technologies.
To do this, they can follow the strategies of internationalization at the markets of
both resources and products; technology related business diversification,
marketing and search for the external technologies; R&D rationalization and
technology related partnership, as Granstrand.
Conversely, where the market is deep and capacious (as Russia for some
Belarusian RSOs), the activity internationalization option is rather perceived by
RSOs as a redundant risk; a favorable scenario for development of these firms
will rather follow the path of “cultivating the newground” of the large domestic
or neighbor market.
Finally, the local market can also be a factor which geographically localises
the efficiency of the company. Markets can be (geographically) specialized by
complexity of innovation servicing and absorption capacity: beyond the definite
markets some technological products might be non-reclaimed, resources might
be inaccessible, and thus RSOs might be inefficient outside of these markets.
2. Cooperation
Cooperation within the NIS.
It has been found, that the schemes of RSOs relationships with parent
universities and public research institutions vary between the countries, and
especially at the early stage they influence significantly the success of
technologies commercialisation process.
Research-based spin-offs can generally emerge with, or without saving the
link to parent organisation. In some countries it is this relationship which
determines whether the new technology-based company will wear an official
status of spin-off and hence will have definite rights and authorities, or be a
“simple innovative company”. So, in Estonia, in order to receive a status of a
spin-off, the company has to be registered in a national database and to sign a
contract about the trademark with an authorized department of the university
parent to spin-off. Additionally, if the research team of the RSO is gathered
from different universities, the company can still be registered only as a spin-off
of a single organization. Such approach, which we cannot consider a best
practice, is led by the strivings of universities to regulate the intellectual
property related payments from spin-off. Logically enough, there exist definite
rules regulating the relations of the registered spin-offs with the parent
university. For example, a scientists is receives a right to establish a company
only in the case if his services are not competitive to the university activity.
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We will consider the reasons why reseachers might prefer to preserve the
tight linkages with the parent universities; to transform their relations into the
‘loose ties’ collaboration, the reasons for a scenario when the relations with a
parent organization are quitted and for a scenario when the spin-off process does
not happen.
Main reasons for grounding the university spin-off and support of strong
linkages with the parent organization.
1. Spatial closeness to university: colleagues, students, and infrastructure.
2. Easy possibility to rent squares or combine usage of infrastructure
(inventory, machinery) for both academic and research aims, which is also not
for free, but there exist special regulations for spin-offs and the transaction costs
are as a rule lower.
3. In many countries the universities, more than other subjects of
economy, possess international contacts. For small economies, where the
volume of demand for a highly specialized or high-tech products is very limited,
access to the international market is a very important asset. Here the trademark
of parent university occurs to be very useful, as well as the inherited database
and personal contacts.
4. One can have a common bookkeeping account, services on room
cleaning and guarding, information and communication infratrsucture.
5. Good relationships with university management, “with director and the
stab”. “Mainly researchers launch the spin-off company to feel supported,
backed up”.
One can generalize this scenario by the words of one respondent: “Success
comes to the RSO only if the university wants this for the company”.
After considering the main arguments used for reasoning why the
university should hold control over the technologies commercialization, we will
explore the objective and environment-caused reasons for a scenario why the
innovative activity is organized under the framework of a parent organization
and no spin-off process occurs; and why the RSO quits the relations with a
parent organization.
Networking.
In spite of theoretically and empirically supported arguments for
networking, there also exist important objective factors which prevent or restrict
RSOs from networking.
Cooperation beyond the NIS.
Three schemes of RSOs’ intemediary role between domestic science,
domestic industry and foreign technologies and foreign corporations are studied:
subcontraction network; acquisition by a foreign company; learning by doing.
We show which role these scenarios of RSOs development may play in
overcoming of two main deficiencies of RSOs: resources contraints, and lack of
managerial skills.
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3. Evolutionary model of RSO development in the NIS
In a last part of the paper, an evolutionary model is suggested, which shows
the lifecycle of RSOs in a NIS in the conditions of the policy called by Clarysse,
Heirman, and Degroof (2001) a “supportive” one.
As research in the developed economies (where RSOs have managed to
develop up to the state of the mature companies) show, there also exists a stage
when the product of the RSO matures: the company “finds” some profile of the
product which corresponds to the market needs, and stops the radical
modifications of the product. However, simultaneously the requirements of the
market in technological innovations develop with an accelerating speed, and the
market will require either the new technology-based companies, or the reorientation of the old firms to the new technological products. From this strating
assumptions the descriptive evolutionary model is developed.
We refer to the fact that empirical works show that the profiles of RSOs
development are non-homogenous (OECD, 2001) – and explain it by the not
ideally “supportive” environment and by the NIS specifics.
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