The Analysis and Discussion of Results
4.3 Deeper Analysis
4.3.1 Introduction
In this this paragraph, a deeper analysis will be carried out, which will attempt to elucidate the reasons for the differences in the answers obtained by the administration of this questionnaire to different types of entrepreneurs. In Chapter 3 we have already noted that the sample of companies is quite variegated, with many different sectors present in the Bologna business environment. In paragraph 4.2 we focussed on the answers given by the whole sample, trying to interpret the results, in terms of means and variances to every single construct and question investigated by the questionnaire. Now we will continue this research focussing on the differences in the answer given by groups of entrepreneurs who present similar features.
Entrepreneurs can be classified into types according to many different aspects of their activity. One of these is the sector which the company they founded belongs to. This classification was found not to be appropriate however because we noted that it was not possible to divide the sample spinoffs into only two groups, given that the 34 spinoffs belonged to 11 different sectors. Another possible classification might have been made by separating those entrepreneurs who had obtained a Ph.D. from those who terminated their academic studies with a simple degree. However this categorization too was found not to be appropriate, due to the fact that in Italy Ph.D. programs were only introduced in the early 1980’s; and as a consequence the older entrepreneurs in this sample usually did not have a Ph.D. and yet in spite of this fact often were of professorial rank. Hence a division of the sample based on the level of academic qualification would have been distorted by a bias caused by the age of the entrepreneurs.
Finally three different classifications were adopted: 1) Academics and public sector researchers versus the rest.
2) Entrepreneurs with prior experience of founding a company versus novices in this field.
3) Professors versus researchers and doctoral students.
In the first classification the aim was to investigate the peculiar characteristics of the entrepreneurs with a background that was academic or in a public research centre. These two institutions were assimilated to one another in this category for reasons of their posessing very similar features. Thus the contrast was to be between academic entrepreneurs and non-academic entrepreneurs.
In the second categorization, the aim was to try to find out whether having prior experience as company founder has an effect on the subsequent founding of other new ventures.
In the third and last segmentation, the focus is entirely concentrated on the employees of the University and Public Research Centres. An attempt was made try to distinguish the concrete differences between two main categories of employees in the academic world: professors and researchers. This is a constant dichotomy of this world, which is why professors who definitely posess greater experience, and more hierarchical and economic power, are compared in the category with researchers and doctoral students who are expected to have more energy, dynamism and creativity.
Differences in statistical means and variations have been checked using T- Student tests, which allows us to compare two samples with different numerosity.
Let us begin this deeper analysis with the first categorization.
4.3.2 Academics & Public Sector Researchers versus the Rest:
In this subparagraph data concerning these two categories of interviewees will be compared and possible differences will be explored. The first consideration to be introduced is that these two groups are not really equivalent in terms of numerosity. In fact, 60 interviewees were academics or public sector researchers in Bologna (UB or PRC staff and faculty members), while only 17 are not. Actually of these 60 entrepreneurs, 52 are members of the faculty of the University of Bologna, one is a docent of the University of Ferrara, six are civil servants with the CNR, and only one is an employee of the ENEA. This data is summarized in Figure 9.
Figure 9 - Status of the employees
68% 8%
22% 1%
1%
UNIBO employees CNR employees UNIFE employee
ENEA employee others
source: author’s compilation
“The rest” were people not employees of either a university or of a public research centres, who most probably were only engaged in work for the private sector. As has been said, these two samples are quite different in size, but a comparison between them has a certain importance in understanding the differences between the strictly academic entrepreneurs and non-academic entrepreneurs who were simply working for a public research spinoff.
A comparison between the most significative results of these two categories for all the data investigated by this questionnaire will be presented in Table 23. In it
we see the mean values of the categories for the specific construct are presented in columns. The esults are given either in the form of a percentual value, or in the form of mean of the Likert scale scores (1-7).
From Table 23 below it is possible to see which are the means for all constructs and the main questions asked in the questionnaire. Most of these items do not present a particularly relevant gap, whereas a few items register great differences. The first item analyzed is whether the interviewee had registered any patents. This question already presents a remarkable gap between the two means. One out of two U & PRC employees have registered a patent, while this percentage is only 30% for those who were not. Some explanations could be advanced for this result. I would suggest, as an explanation for this gap, that if academics and PRC employees, who also work in a public research spinoff, are more likely to have registered a patent just because a spinoff is one of the most profitable ways to exploit a patent for university faculty members. On the other hand “the rest” may have joined a new venture of a friend or colleague, simply because they considered that venture to be profitable, even if they did’t hold a patent.
Another remarkable difference can be found in the measure of passion, where “the rest” present results 16.3% higher than U & PRC employees. As for this item, the explanation proposed is that U & PRC employees also had another job at a University or in a public research centre, therefore, they did not always consider their job in a spinoff as their primary passion. On the other hand, others were more likely to invest all their energies and all their passion in their work in the spinoff they worked for, as in almost every case (16 out of 17) they worked for it full-time. In fact, the item “Part-time employee” is the one which presents the largest gap of the whole list with a limited 10% of employees of a university or PRC who answered that their job in the spinoff is full-time, while this percentage is 94.22% among “the rest”.
Other remarkable differences can be found in the question as to whether their annual revenue had changed one year after the establishment of the spinoff. Here, U & PRC employees answered yes only in 46% of cases, whereas this percentage climbs to 76% for “the rest”. It can be asserted that the remainder were more likely not to have a job when they established the spinoff, or to have had only a precarious one, whereas U & PRC employees were more likely to already have had a job. This assumption seems to be confirmed by the fact that the non-public sector employees registered a higher increase in their annual income than that registered by U & PRC
employees (28% vs 21%). This difference does not imply that spinoffs founded by “the rest” were more profitable than those established by “U & PRC employees”, because U & PRC employees are more likely to have already had a higher income (19 of them are Associate or Full Professors); therefore, the same profits created by a spinoff would have represented a higher percentual increase of a lower income than on a higher one.
Other differences were reported in the three questions concerning supports: “availability of public institutions to invest in spinoff equity”; “opportunity to use public institution laboratories and infrastructures”; “synergies between public research institutions and private firms”. All three of these can be explained in the same way. University faculty and those employe by public research centres perceived a greater degree of support from public institutions, than the remainder. Actually, “the rest” often did not even know that their company was a public research spinoff (because in this thesis companies where one of the founders was a faculty member have also been included as university spinoffs). Hence, it was to be expected that “the rest” would feel that there was a lower availability of public institutions to invest in equity, to allow them to use their public laboratories and infrastructure, and fewer synergies between public institutions and private companies.
As for motivations, it may be noted that financial gain is a more important as a motivation for the remainder than for the academics, whereas the creation of new job opportunities is the leading motivational factor for faculty members with an impressive 92.86%. The opportunity to commercialize research results is an important factor for both categories and it registers a high percentages in both cases. It is quite exceptional to have brought to ones notice the fact that the wish for independence and an intolerance toward hierarchical order is higher for the non-academics (47%) than for U&PRC employees (28%), but this may be explained by the fact that a large part of the academics had already reached higher hierarchical positions before they even considered starting their spinoffs and therefore did not perceive this as a problem. Only 30% of the U & PRC employees perceived insecurity in their previous job as an important motive in setting up a spinoff, whereas this percentage climbs to the 53% for the non-academics. Most Italian doctoral students definitely do not have a particularly great sense of job security, but then the percentage of decreased incomes in this category also included researchers, associate professors and full professors, who had much more secure positions.
As for past job experience, the great difference for the item “university researcher” is too obvious to need an explanation. It is also important to make evident the fact that apart from the items highlighted in yellow, all other constructs investigated by this questionnaire do not present great differences.
Table 23 - Comparison between University and Public Research Centre employees & the Rest
University and Public Research Centers employees (n=60)
The Rest (n=17) Are you the holder of a patent? (% of yes) 50.00% 29.41%
Part-time employee 90.00% 5.88%
Have your already founded other companies? (% yes) 30.00% 29.41% Managerial and technical competence 3.61 3.86 Organizational competence 5.73 5.53
Tenacity 5.56 5.54
Passion 3.57 4.55
Generic risk taking propensity 2.58 2.20 Financial risk taking propensity 3.71 3.09
Propensity to Gamble 1.58 1.16
Entrepreneurial innovativeness (EO) 5.70 5.91 Entrepreneurial proactiveness (EO) 5.59 6.07 Entrepreneurial risktaking (EO) 4.44 4.82
Attitudes (1-10) 6.40 6.46
Attitudes (risky) 3.54 3.47
Subjective norms 5.42 5.60
Perceived behavioral control 3.72 3.47 Did your annual revenue changed one year after the
establishment of the spinoff? (% of yes) 46.67% 76.47% How much did your annual income change? 21.04% 28.08%
Future Expectations
Expected change in 2007 sales revenues with respect
to 2006 24.47% 20.47%
Expected change in 2008 sales revenues with respect
to 2007 21.03% 17.50%
Expected change in 2007 # of employees with respect
to 2006 21.79% 17.67%
Expected change in 2008 # of employees with respect
to 2007 21.24% 12.76%
Obstacles
Difficulty in access to capital 4.40 4.00 Difficulty in access to distribution channels 3.52 4.00 Difficulty in access to suppliers and production firms 2.72 2.82 Difficulty in recruiting qualified technical personnel 3.17 2.94 Difficulty in access to qualificated managerial staff 3.38 3.35 Difficulty in access to commercial staff 3.77 3.94 Lack of intellectual property protection systems 2.88 1.76
Lack of laws and policies in fostering entrepreneurship 4.05 3.88
total obstacles 3.49 3.34
Support Measures
Regional public funds (eg. Priitt, Spinner) 4.97 5.18 National public funds (eg. Law 297) 3.23 3.24 International public funds (eg. EU fundings) 3.72 4.18 Availability of public institutions to invest in spinoff
equity
3.97 2.82 Business plan competitions 2.97 3.53 Availability of Technology Transfer Offices and centers
for innovation support
3.67 4.18 Support mechanisms for patent activity 2.83 2.71 Opportunities to use public institution laboratories and
infrastructure
5.50 4.71 Possibility to be hosted in academic incubators 4.23 4.29 Commercial opportunities offered by the sector 4.22 5.06 Favourable legislative environment 3.20 3.06 Synergies between public research institutions and
private firms 4.77 3.29
total supports 3.94 3.85
Environmental and Competitive strategy
Environmental heterogeneity 5.16 5.69 Environmental dynamism 4.46 4.91 Quality (competitive strategy) 5.13 4.75 Breadth (competitive strategy 4.52 4.62 Cost reduction (competitive strategy) 4.60 4.50
Motivation for establishing a new venture
Opportunity to earn a higher income 56.67% 76.47% Wish of independence and intolerance towards
hierachical order 28.33% 47.06%
Lack of consideration of your own merit and ideas by
previous boss 6.67% 5.88%
Possibility of pursuing business ideas outside of the
principal market of the previous employer 56.67% 29.41% Difficulty in obtaining promotion 35.00% 52.94% Insecurity of previous job 30.00% 52.94% Uncertainty about the future of the previous job (failure
or rationalization risk) 13.33% 41.18% Lack of other job possibilities 10.00% 5.88% Opportunity to market research results 86.79% 82.35% Creation of new job opportunities 92.86% 53.85%
Past Experience (% of yes)
Production technician or engineer 3.33% 23.53% Design technician or engineer 15.00% 35.29% Administrative employee 5.00% 5.88%
Marketing 1.67% 5.88%
Sales 5.00% 0.00%
Finance 0.00% 0.00%
Logistics and Distribution 5.00% 0.00%
General Manager 10.00% 11.76%
Consultant / Self-employed 35.00% 41.18% University Researcher 75.00% 29.41% Public Research Center Researcher 21.67% 17.65%
4.3.3 Prior Experience in the Establishment of a New Venture
In this sub-paragraph, data concerning prior experience in company establishment was investigated. The two categories compared here were (1) the entrepreneurs who had already founded other companies previously versus (2) those who had not founded a company previously. It emerged that more than two thirds of the entrepreneurs were involved in their first experience of establishing a new venture, where those who had already founded other companies were less than 30% of this sample.
An even more remarkable difference between these two categories was demonstrated and this is highlighted in yellow in Table 24. It may be noted that those who had previous experience in company establishment were also those who had registered at least one patent in 54% cases, whereas, this percentage drops to 31% for the latter category. Items in light yellow, indicate that differences are not large, but nontheless they are not insignificant either, so that there may be some sort of correlation between them, however this could not be assertained with certainty because of the small size of the sample. Further research with a larger sample might show whether this correlation really exists or not. For example, those who had previously founded other companies were more commonly part-time employees, and this may be due to the fact that they had also to divide their time among other companies they had also founded. Moreover, they present a higher level of managerial, technical and organizational competence, and this they had probably acquired during their previous company establishment experience(s).
It is important also to highlight the fact that between these two categories passion does not change as much as it did in the analysis of paragraph 4.3.2. Therefore, it is possible to conclude that passion does not have a correlation with prior experience in terms of successful company establishment. Neither it seems does tenacity, nor does entrepreneurial orientation have a correlation to or depend on prior new company establishment experience, whereas a propensity for risk taking seems to be higher in those who lack prior experience (2.63 vs 2.13). This result is quite important because it shows that entrepreneurs have a greater propensity for exposure to risk in their first new venture attempt, and then subsequently lose it gradually in their latter enterprises. Nevertheless, in considering their attitude toward growth and innovation, both groups a make similar evaluations of the risk involved.
Entrepreneurs with previous experience appear to focus their competitive strategy on cost reduction more than the inexperienced do.
As far as motives are concerned, money appears to be more important for novices than for the experienced. “Lack of consideration of your merit and ideas” is an item which did not receive a particularly high score in either category, nevertheless remarkable differences are encountered here. In fact, those without previous experience rate this motivation as theirs only in less than 2% cases, whereas this percentage is 18% for the experienced entrepreneurs. Similarly, the possibility of pursuing business ideas outside of the principal market of the previous employer receives much higher scores from experienced (64%) rather than from inexperienced entrepreneurs (45%).
64% of experienced entrepreneurs had also been consultants or self-employed at one time, whereas this percentage drops to 25% for the inexperienced. Experienced entrepreneurs had a wider background of general management; in fact, it is noteworthy that almost one third of them had been employed in this position at one time, while this figure drops to the 3% for the inexperienced.
Table 24
Prior experience in company establishment
Had previously founded other companies (n=22)
Have never founded any other company
previously (n=55) Are you the holder of a patent? (% of yes) 54.55% 30.91% Part-time employee 77.27% 69.09% Employees of a university or a PRC 86.46% 80.00% Managerial and technical competence 3.90 3.58 Organizational competence 5.90 5.61
Tenacity 5.62 5.51
Passion 3.63 3.87
Generic risk taking 2.13 2.63
Financial risk taking 3.38 3.65
Propensity to gamble 1.53 1.46
Entrepreneurial innovativeness (EO) 5.59 5.83 Entrepreneurial proactiveness (EO) 5.67 5.69 Entrepreneurial risktaking (EO) 4.33 4.58
Attitudes (1-10) 6.36 6.44
Attitude to risk 3.75 3.44
Subjective norms 5.36 5.52
Perceived behavioral control 3.73 3.64 Did your annual revenue change in the year after
the establishment of the spinoff? (% of yes) 50.00% 52.73% How much did it change? 10.91% 27.80%
Future Expectations
Expected change in 2007 sales revenues with
respect to 2006 21.90% 24.24%
Expected change in 2008 sales revenues with
respect to 2007 22.14% 19.55%
Expected change in 2007 # of employees with
respect to 2006 24.11% 19.43%
Expected change in 2008 # of employees with
respect to 2007 25.38% 16.95%
Obstacles
Difficulty in access to capital 3.86 4.49 Difficulty in access to distribution channels 3.64 3.62 Difficulty in access to suppliers and production
firms 2.86 2.69
Difficulty in access to qualified technical
personnel 3.05 3.15
Difficulty in access to qualified managerial staff 3.27 3.42 Difficulty in access to commercial staff 4.00 3.73 Lack of intellectual property protection systems 2.77 2.58 Lack of laws and policies fostering
entrepreneurship 3.82 4.09
total obstacles 3.41 3.47
Supports
Regional public funds (eg. Priitt, Spinner) 4.95 5.04 National public funds (eg. Law 297) 3.41 3.16 International public funds (eg. EU fundings) 3.86 3.80 Availability of public institutions to invest in
spinoff equity
3.95 3.62 Business plan competitions 2.59 3.29 Availability of Technology Transfer Offices and
centers for innovation support
3.95 3.71 Support mechanisms for patenting activity 2.73 2.84 Opportunity to use public institutions’ laboratories
and infrastructures
4.64 5.60 Possibility of being hosted in academic
‘incubators’
4.00 4.35 Commercial opportunities offered by the sector 3.91 4.60 Favourable legislative environment 3.05 3.22 Synergies between public research institutions
and private firms 4.77 4.31
Total supports 3.82 3.96
Environmental Heterogeneity 5.05 5.36 Environmental Dynamism 4.50 4.58 Quality (competitive strategy) 4.92 5.10 Breadth (competitive strategy) 4.53 4.66 Cost Reduction (competitive strategy) 5.24 4.31
Motivations for establishing a new venture
Opportunity to earn a higher income 45.45% 67.27% Wish for independence and intolerance towards
hierachical order 27.27% 34.55%
Lack of consideration of your own merit and
Opportunity to pursue business ideas outside of
the principal market of the previous employer 63.64% 45.45% Difficulty of obtaining promotion in chosen career 36.36% 40.00% Insecurity of previous job 27.27% 38.18% Uncertainty of the future of the previous job
(failure or rationalization risk) 13.64% 21.82% Lack of other job Opportunities 4.55% 10.91% Opportunity to commercialize reasearch results 90.00% 84.00% Creation of new job opportunities 88.89% 81.08%